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Exhibit 4(a)
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
of
DELPHI FUNDING L.L.C.
among
DELPHI FINANCIAL GROUP, INC.,
as Managing Member,
CHESTNUT INVESTORS III, INC.,
as Resigning Member,
and
THE HOLDERS OF CAPITAL SECURITIES DESCRIBED HEREIN,
as Members
Dated as of March 25, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions. ........................................................ 1
ARTICLE II
CONTINUATION OF THE COMPANY
SECTION 2.1 Continuation......................................................... 8
SECTION 2.2 Name. ............................................................... 8
SECTION 2.3 Term................................................................. 9
SECTION 2.4 Registered Office.................................................... 9
SECTION 2.5 Registered Agent..................................................... 9
SECTION 2.6 Principal Office..................................................... 9
SECTION 2.7 Treatment as Partnership............................................. 9
SECTION 2.8 Allocation of Profits and Losses..................................... 9
SECTION 2.9 Assets of Company.................................................... 10
SECTION 2.10 Initial Contribution of Company Property; Organizational Expenses... 10
SECTION 2.11 Issuance of the Capital Securities.................................. 10
SECTION 2.12 Issuance of the Common Securities; Subscription and Purchase of
Debentures........................................................................ 10
SECTION 2.13 Purpose............................................................. 10
SECTION 2.14 Management and Control; Authorization to Enter into Certain
Transactions...................................................................... 11
SECTION 2.15 Members............................................................. 13
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 Payment Account...................................................... 14
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 Distributions........................................................ 15
SECTION 4.2 Redemption........................................................... 16
SECTION 4.3 Subordination of Common Securities................................... 18
SECTION 4.4 Payment Procedures................................................... 19
SECTION 4.5 Tax Returns and Reports.............................................. 19
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Company........................ 19
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions............... 19
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Page
ARTICLE V
LLC SECURITIES CERTIFICATES
SECTION 5.1 Initial Membership; Resignation of Chestnut.......................... 20
SECTION 5.2 The LLC Securities Certificates...................................... 20
SECTION 5.3 Execution and Delivery of LLC Securities Certificates................ 20
SECTION 5.4 Registration of Transfer and Exchange of Capital Securities
Certificates...................................................................... 20
SECTION 5.5 Mutilated, Destroyed, Lost or Stolen LLC Securities Certificates..... 21
SECTION 5.6 Persons Deemed Securityholders....................................... 22
SECTION 5.7 Access to List of Securityholders' Names and Addresses............... 22
SECTION 5.8 Maintenance of Office or Agency. .................................... 22
SECTION 5.9 Appointment of Paying Agent.......................................... 22
SECTION 5.10 Ownership of Common Securities by Group............................. 23
SECTION 5.11 Book-Entry Capital Securities Certificates; Common Securities
Certificate....................................................................... 23
SECTION 5.12 Notices to Clearing Agency.......................................... 24
SECTION 5.13 Definitive Capital Securities Certificates. ........................ 24
SECTION 5.14 Rights of Securityholders........................................... 25
SECTION 5.15 CUSIP Numbers....................................................... 27
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 Limitations on Voting Rights......................................... 28
SECTION 6.2 Notice of Meetings................................................... 29
SECTION 6.3 Meetings of Capital Securityholders.................................. 29
SECTION 6.4 Voting Rights........................................................ 29
SECTION 6.5 Proxies, etc......................................................... 29
SECTION 6.6 Securityholder Action by Written Consent............................. 30
SECTION 6.7 Record Date for Voting and Other Purposes............................ 30
SECTION 6.8 Acts of Securityholders.............................................. 30
ARTICLE VII
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 7.1 Dissolution Upon Expiration Date..................................... 31
SECTION 7.2 Early Dissolution.................................................... 31
SECTION 7.3 Termination.......................................................... 32
SECTION 7.4 Liquidation.......................................................... 32
SECTION 7.5 Mergers, Consolidations, Amalgamations or Replacements of the
Company........................................................................... 34
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Page
ARTICLE VIII
BOOKS AND RECORDS
SECTION 8.1 Books and Records; Accounting........................................ 35
SECTION 8.2 Financial Statements................................................. 35
SECTION 8.3 Fiscal Year.......................................................... 35
SECTION 8.4 Inspection of Records................................................ 35
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Limitation of Rights of Securityholders.............................. 35
SECTION 9.2 Liability of the Common Securityholder............................... 36
SECTION 9.3 Amendment........................................................... 36
SECTION 9.4 Separability......................................................... 37
SECTION 9.5 Governing Law........................................................ 37
SECTION 9.6 Payments Due on Non-Business Day..................................... 37
SECTION 9.7 Successors........................................................... 37
SECTION 9.8 Headings............................................................. 38
SECTION 9.9 Reports, Notices and Demands......................................... 38
SECTION 9.10 Acceptance of Terms of Agreement, Guarantee and Indenture........... 38
SECTION 9.11 Counterparts........................................................ 39
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AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Delphi Funding
L.L.C. (the "Company"), dated as of March 1, 1997 (this "Agreement"), among
Delphi Financial Group, Inc., a Delaware corporation ("Group"), Chestnut
Investors III, Inc., a Delaware corporation ("Chestnut"), and the Holders of
Capital Securities (as hereinafter defined), as members.
WITNESSETH:
WHEREAS, Group and Chestnut have heretofore duly formed a limited liability
company pursuant to the Delaware Act (as defined below) by the entering into a
certain Limited Liability Company Agreement, dated as of March 28, 1994 (the
"Original LLC Agreement"), and by the execution and filing with the Secretary of
State of the State of Delaware of the Certificate of Formation, filed on [March
28, 1994] (the "Certificate of Formation"), attached as parts of Exhibit A; and
WHEREAS, Group and Chestnut desire to continue the Company as a limited
liability company pursuant to the Delaware Act and amend and restate the
Original LLC Agreement in its entirety as set forth herein to provide for, among
other things, (i) the issuance of the Common Securities by the Company to Group,
(ii) the issuance and sale of the Capital Securities by the Company pursuant to
the Underwriting Agreement, (iii) the acquisition by the Company from Group of
all of the right, title and interest in the Debentures and (iv) the resignation
of Chestnut as a member of the Company;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original LLC
Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Agreement; and
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(c) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to LLC Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by Group on a Like Amount of Debentures for such
period.
"Additional Sums" has the meaning specified in [Section 10.6] of the
Indenture.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect 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" means this Amended and Restated Limited Liability Company
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto.
"Authentication Agent" means Wilmington Trust Company, a Delaware banking
corporation, as transfer agent for the Company (or any successor transfer agent
for the Company approved by it in writing).
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its
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property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due and its willingness to be adjudicated a bankrupt, or the taking
of corporate action by such Person in furtherance of any such action.
"Book-Entry Capital Securities" means a beneficial interest in the Capital
Securities Certificates, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 5.11.
"Book-Entry Capital Securities Certificates" means the Capital Securities
Certificates representing Book-Entry Capital Securities.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which Group or the
Corporate Trust Office of the Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing ownership
of Capital Securities, substantially in the form attached as Exhibit B.
"Capital Security" means a limited liability company interest in the
Company, having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Certificate Depository Agreement" means the agreement among the Company,
Group and The Depository Trust Company, as the initial Clearing Agency, dated on
or prior to the Closing Date, relating to the LLC Securities Certificates,
substantially in the form attached as Exhibit C, as the same may be amended and
supplemented from time to time.
"Certificate of Formation" has the meaning specified in the recitals
hereof, as such may be amended from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means ________ __, 1997.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it, then the body performing
such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit D.
"Common Security" means a common limited liability company interest in the
Company having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Company" means the Delaware limited liability company continued hereby and
identified on the cover page to this Agreement.
"Company Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing.
"Corporate Trust Office" means, with respect to the Debenture Trustee, the
principal office of the Debenture Trustee located in New York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Maturity Date" means the date specified pursuant to the terms of
the Debentures as the date on which the principal of the Debentures is due and
payable, as such date may be shortened pursuant to the terms of the Debentures.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture, and any successor trustee appointed
as provided therein.
"Debentures" means the $103,093,000 aggregate principal amount of Group's
___% Junior Subordinated Deferrable Interest Debentures, Series A, issued
pursuant to the Indenture.
"Definitive Capital Securities Certificates" means either or both (as the
context requires) of (a) Capital Securities Certificates issued as Book-Entry
Capital Securities Certificates as provided in Section 5.11(a) and (b) Capital
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
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"Delaware Act" means the Delaware Limited Liability Company Act, Chapter 18
of Title 6 of the Delaware Code, 6 Del. C. 18-101, et seq., as it may be amended
from time to time.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the LLC Securities as
provided in Section 4.1.
"Early Dissolution Event" has the meaning specified in Section 7.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Company in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Company in the payment of any Redemption Price of any
LLC Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Managing Member in this Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is dealt with in clause (b) or (c) above), and the continuation of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the defaulting Managing Member by the holder of
at least 25% in aggregate Liquidation Amount of the outstanding Capital
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under this
Agreement; or
(e) the occurrence of a Bankruptcy Event with respect to the Managing
Member.
"Expiration Date" has the meaning specified in Section 7.1.
"Guarantee" means the Guarantee Agreement executed and delivered by Group
and Wilmington Trust Company, a Delaware banking corporation, as trustee,
contemporaneously with the execution and delivery of this Agreement, for the
benefit of the Holders of the LLC Securities, as amended from time to time.
"Group" has the meaning specified in the preamble to this Agreement.
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"Indenture" means the Subordinated Indenture, dated as of March 1, 1997,
between Group and the Debenture Trustee, as trustee, as amended or supplemented
from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of LLC Securities, LLC
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed, or which will contemporaneously
mature, the proceeds of which will be used to pay the Redemption Price of such
LLC Securities, and (b) with respect to a distribution of Debentures to Holders
of LLC Securities in connection with a dissolution or liquidation of the
Company, Debentures having a principal amount equal to the Liquidation Amount of
the LLC Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per LLC Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of LLC Securities in connection with a dissolution and liquidation of
the Company pursuant to Section 7.4(a).
"Liquidation Distribution" has the meaning specified in Section 7.4(d).
"LLC Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"LLC Security" means any one of the Common Securities or the Capital
Securities.
"Managing Member" means Group, in its capacity as the Member that hold all
of the outstanding Common Securities.
"Member" means any member of the Company under the Delaware Act, which
includes the Managing Member and the Holders of Capital Securities from time to
time.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for, or an employee of, the Company or the Managing Member.
"Original LLC Agreement" has the meaning specified in the recitals to this
Agreement.
"Outstanding", when used with respect to LLC Securities, means, as of the
date of determination, all LLC Securities theretofore executed and delivered
under this Agreement, except:
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(a) LLC Securities theretofore cancelled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
(b) LLC Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Paying Agent for the Holders of
such LLC Securities; provided that, if such LLC Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Agreement; and
(c) LLC Securities which have been paid or in exchange for or in lieu of
which other LLC Securities have been executed and delivered pursuant to this
Agreement, including pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by Group or any Affiliate of Group shall be disregarded and
deemed not to be Outstanding, except that the foregoing shall not apply at any
time when all of the outstanding Capital Securities are owned by Group and/or
any such Affiliate. Capital Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Managing Member the pledgee's right so to act with respect
to such Capital Securities and that the pledgee is not Group or any Affiliate of
Group.
"Owner" means (i) with respect to the Capital Securities, each Person who
is the beneficial owner of a Book-Entry Capital Securities Certificate as
reflected in the records of the Clearing Agency or, if a Clearing Agency
Participant is not the beneficial owner, then as reflected in the records of a
Person maintaining an account with such Clearing Agency (directly or indirectly,
in accordance with the rules of such Clearing Agency) and (ii) with respect to
the Common Securities, the Holders thereof.
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9 and shall initially be Wilmington Trust Company, a Delaware
banking corporation.
"Payment Account" means a segregated non-interest-bearing special account
maintained by the Company with a commercial bank in the name of the Paying Agent
for the benefit of the Securityholders in which all amounts paid in respect of
the Debentures will be held and from which the Company, through the Paying
Agent, shall make payments to the Securityholders in accordance with Sections
4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
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"Redemption Date" means, with respect to any LLC Security to be redeemed,
the date fixed for such redemption by or pursuant to this Agreement; provided
that each Debenture Redemption Date and the Debenture Maturity Date shall be a
Redemption Date for a Like Amount of LLC Securities.
"Redemption Price" means, with respect to any LLC Security, the Liquidation
Amount of such LLC Security, plus accumulated and unpaid Distributions to but
excluding the Redemption Date, plus the amount of the premium, if any, paid by
Group upon the concurrent redemption of Debentures having a principal amount
equal to the Liquidation Amount of such LLC Security.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a LLC Security or
LLC Securities are registered in the Securities Register; provided, however,
that in determining whether the Holders of the requisite amount of Capital
Securities have voted on any matter provided for in this Agreement, then for the
purpose of any such determination, so long as Definitive Capital Securities
Certificates have not been issued, the term Securityholders or Holders as used
herein shall refer to the Owners.
"Underwriting Agreement" means the Underwriting Agreement, dated March
[20], 1997, and the Pricing Agreement, dated March [20], 1997, collectively,
each among the Company, Group and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
ARTICLE II
CONTINUATION OF THE COMPANY
SECTION 2.1 Continuation.
The Members hereby agree to continue the Company as a limited liability
company under and pursuant to the Delaware Act and agree that the rights, duties
and liabilities of the Members shall be as provided in the Delaware Act, except
as otherwise provided herein.
SECTION 2.2 Name.
The name of the Company heretofore formed and continued hereby is "Delphi
Funding L.L.C." The business of the Company shall be conducted under such name
or, upon compliance with all applicable laws, under such other name or names as
the Managing Member may from time to time determine in its sole discretion.
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SECTION 2.3 Term.
The term of the Company commenced on the date the Certificate of Formation
was filed in the office of the Secretary of State of the State of Delaware and
shall continue until ________ __, 2027, unless dissolved before such date in
accordance with the provisions of this Agreement.
SECTION 2.4 Registered Office.
The address of the registered office of the Company in the State of
Delaware is c/o Delphi Financial Group, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 2.5 Registered Agent.
The name and address of the registered agent of the Company for service of
process on the Company in the State of Delaware is Delphi Financial Group, Inc.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 2.6 Principal Office.
The principal office of the Company initially shall be at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇. The Managing Member may change the Company's principal office from time
to time in its sole discretion; provided that such change has no material
adverse effect upon any Member.
SECTION 2.7 Treatment as Partnership.
The Members agree that it is intended that the Company shall be treated as
a partnership for United States Federal income tax purposes and that this
Agreement and all acts of the Members thereof shall, to the fullest extent
permitted by the Delaware Act, be interpreted and construed accordingly.
SECTION 2.8 Allocation of Profits and Losses.
The profits and losses of the Company (other than the allocation of profits
to the Holders of the Capital Securities in amounts equal to the accrued
Distributions on such securities) shall be allocated entirely to the Managing
Member.
SECTION 2.9 Assets of Company.
The assets of the Company shall consist solely of the Company Property.
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SECTION 2.10 Initial Contribution of Company Property; Organizational
Expenses.
The Company acknowledges receipt from Group and Chestnut in connection with
the Original LLC Agreement of the sum of $10 each, which constituted the initial
Company Property. Group shall pay organizational expenses of the Company as they
arise or shall promptly reimburse the Company for any such expenses paid by the
Company. Group shall make no claim upon the Company Property for the payment of
such expenses.
SECTION 2.11 Issuance of the Capital Securities.
As of March __, 1997, the Managing Member, on behalf of the Company and
pursuant to the Original LLC Agreement, executed and delivered the Underwriting
Agreement. On the Closing Date, the Managing Member, on behalf of the Company,
shall execute in accordance with Section 5.2 and deliver to the Underwriters
named in the Underwriting Agreement Capital Securities Certificates, registered
in the name of the nominee of the initial Clearing Agency, in an aggregate
amount of 100,000 Capital Securities having an aggregate Liquidation Amount of
$100,000,000, against receipt by the Company of an aggregate purchase price of
$100,000,000 plus accrued distributions from March __, 1997 on such Capital
Securities.
SECTION 2.12 Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, the Managing Member, on behalf of the Company, shall
execute in accordance with Section 5.2 and deliver to Group Common Securities
Certificates, registered in the name of Group, in an aggregate amount of 3,093
Common Securities having an aggregate Liquidation Amount of $3,093,000 against
receipt by the Company of an aggregate purchase price therefor of $3,093,000
plus accrued distributions from March __, 1997 on such Common Securities.
Contemporaneously therewith, the Managing Member, on behalf of the Company,
shall subscribe to and purchase from Group Debentures, registered in the name of
the Company and having an aggregate principal amount equal to $103,093,000, and,
in satisfaction of the purchase price plus accrued interest from March __, 1997
for such Debentures, the Company shall deliver to Group the sum of $103,093,000
(being the sum of the amounts delivered pursuant to (i) the second sentence of
Section 2.11 and (ii) the first sentence of this Section).
SECTION 2.13 Purpose.
The sole purpose of the Company is (a) to issue and sell LLC Securities,
(b) to use the proceeds from such sale to acquire the Debentures and (c) to
engage in those activities necessary or incidental thereto. The Company shall
not engage in any "financial or insurance business" within the meaning of
section 7704(d)(2) of the Code or in any other trade or business.
SECTION 2.14 Management and Control; Authorization to Enter into Certain
Transactions.
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(a) Except as otherwise provided herein, the business and affairs of the
Company shall be managed, and all actions required under this Agreement shall be
determined, solely and exclusively by the Managing Member, which shall have all
rights and powers on behalf and in the name of the Company to perform all acts
necessary or desirable to the objects and purposes of the Company. The Managing
Member shall conduct the affairs of the Company in accordance with the terms of
this Agreement.
(b) Subject to the limitations set forth in paragraph (c) of this Section,
the Managing Member on behalf of the Company shall have the authority to enter
into all transactions and agreements determined by the Managing Member to be
appropriate in exercising the authority, express or implied, otherwise granted
to them under this Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following, all in the name and on behalf of
the Company:
(i) issuing and selling the LLC Securities;
(ii) entering into, and executing, delivering and performing the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of the
Company;
(iii) registering the Capital Securities under the Securities Act of
1933, as amended, and under state securities or blue sky laws;
(iv) listing the Capital Securities upon such national securities
exchange or exchanges or automated quotation system or systems, if any, as
shall be determined by the Managing Member and registering the Capital
Securities under the Securities Exchange Act of 1934, as amended, and
preparing and filing all periodic and other reports and other documents
pursuant to the foregoing;
(v) entering into, and executing, delivering and performing the
Underwriting Agreement providing for the sale of the Capital Securities and
the Pricing Agreement relating thereto;
(vi) establishing the Payment Account;
(vii) purchasing the Debentures;
(viii) collecting interest, principal and any other payments made in
respect of the Debentures in the Payment Account;
(ix) distributing through the Paying Agent amounts owed to the
Securityholders in respect of the LLC Securities;
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(x) exercising all of the rights, powers and privileges of a holder of
the Debentures including, subject to the provisions of this Agreement, the
granting or approval of waivers, consents or amendments or fights or powers
relating thereto and the execution of appropriate documents to evidence
such waivers, consents or amendments;
(xi) distributing the Company Property in accordance with the terms of
this Agreement;
(xii) sending notices and other information regarding the LLC
Securities and the Debentures to the Securityholders in accordance with
this Agreement;
(xiii) appointing a Paying Agent and Securities Registrar in
accordance with this Agreement;
(xiv) registering transfers of the LLC Securities in accordance with
this Agreement;
(xv) to the extent provided in this Agreement, winding up the affairs
of and liquidating the Company and the executing and filing a certificate
of cancellation with the Secretary of State of the State of Delaware;
(xvi) taking any action incidental to the foregoing as the Managing
Member may from time to time determine is necessary or advisable to give
effect to the terms of this Agreement for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder).
(c) So long as this Agreement remains in effect, the Company (or the
Managing Member acting on behalf of the Company) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Company (or the Managing Member on
behalf of the Company) shall not (i) acquire any investments or engage in any
activities not authorized by this Agreement, (ii) sell, assign, transfer,
exchange, mortgage, pledge, set-off or otherwise dispose of any of the Company
Property or interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Company to be
taxable as a corporation for United States federal income tax purposes, (iv)
incur any indebtedness for borrowed money or issue any other debt, (v) take or
consent to any action that would result in the placement of a Lien on any of the
Company Property, (vi) invest any proceeds received by the Company from holding
the Debentures, but shall distribute all such proceeds to Holders of LLC
Securities pursuant to the terms of this Agreement and of the LLC Securities,
(vii) acquire any assets other than the Company Property, (viii) possess any
power or otherwise act in such a way as to vary the Company Property, (ix)
possess any power or otherwise act in such a way as to vary the terms of the LLC
Securities in any way whatsoever (except to the extent expressly authorized in
this Agreement or by the terms of the LLC Securities) or (x) issue any
securities or other evidences of
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beneficial ownership of, or beneficial interest in, the Company other than the
LLC Securities. The Managing Member shall defend all claims and demands of all
Persons at any time claiming any Lien on any of the Company Property adverse to
the interest of the Company or the Securityholders in their capacity as
Securityholders.
(d) Persons dealing with the Company are entitled to rely conclusively upon
the power and authority of the Managing Member herein set forth.
(e) Except as otherwise expressly provided herein, no Owner or Holder of
Capital Securities, in its capacity as a Member, shall take part in the
day-to-day management, operation or control of the business and affairs of the
Company. The Beneficial Owners and Holders of Capital Securities, in their
capacity as Members of the Company, shall not be agents of the Company and shall
not have any right, power or authority to transact any business in the name of
the Company or to act for or on behalf of or to bind the Company.
(f) Notwithstanding anything herein to the contrary, the Managing Member is
authorized and directed to conduct the affairs of the Company and to operate the
Company so that the Company will not be taxable as a corporation for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of Group for United States federal income tax purposes. In this
connection, the Managing Member is authorized to take any action, not
inconsistent with applicable law, the Certificate of Formation or this
Agreement, that the Managing Member determines in its discretion to be necessary
or desirable for such purposes, as long as such action does not adversely affect
in any material respect the interests of the Holders of the Capital Securities.
SECTION 2.15 Members.
(a) The LLC Securities represent limited liability company Member interests
in the Company. The Company shall have two classes of Members, one represented
by the Capital Securities and the other represented by the Common Securities.
The Capital Securities and the Common Securities shall have such relative
rights, powers and duties as are provided for in this Agreement.
(b) A Person shall be admitted as a Member and shall become bound by the
terms of this Agreement, without execution of this Agreement, if such Person (or
a representative authorized by such Person orally, in writing or by other action
such as payment for an interest) complies with the conditions for becoming a
Member as set forth in Section 2.15(c) and requests (which request shall be
deemed to have been made upon acquisition of a Capital Security from the Company
or upon an assignment of a Capital Security from another Person) that the
records of the Company (maintained by or on behalf of the Company) reflect such
admission.
The Company shall be notified promptly of any change in the Holders of
Capital Securities. The Company will reflect the admission of a Member in the
records of the Company
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(maintained by or on behalf of the Company) as soon as is reasonably practicable
after either of the following events: (i) in the case of a Person acquiring a
Capital Security directly from the Company, at the time of payment therefor, and
(ii) in the case of an assignment of a Capital Security, upon notification
thereof (the Company being entitled to assume, in the absence of knowledge to
the contrary, that proper payment has been made by the assignee).
(c) Whether acquiring a Capital Security directly from the Company or by
assignment, a Person shall be admitted as a Member upon becoming a Holder of a
Capital Security and the reflection of such Person's admission as a Member in
the records of the Company (maintained by or on behalf of the Company). The
consent of any other Member shall not be required for the admission of a Member.
(d) Each Member waives any and all rights that it may have to maintain an
action for partition of the Company's property.
(e) The Managing Member shall have no right to resign from the Company. Any
other Member may only resign from the Company prior to the dissolution or
winding-up of the Company upon the transfer and assignment of its Capital
Securities in accordance with the provisions of this Agreement. A resigning
Member shall not be entitled to receive any distribution and shall not otherwise
be entitled to receive the fair value of its interest in the Company represented
by its Capital Securities except as otherwise expressly provided for in this
Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 Payment Account.
(a) On or prior to the Closing Date, the Company shall establish the
Payment Account. Transactions in the Payment Account shall be permitted solely
for the purpose of making deposits and withdrawals in accordance with this
Agreement. All monies and other property deposited or held from time to time in
the Payment Account shall be held by the Company in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Company shall deposit in the Payment Account, promptly upon
receipt, all payments of principal of or interest or premium on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Company.
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ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 Distributions.
(a) Distributions from Company Property (including of Additional Amounts)
will be made on the LLC Securities at the rate and on the dates that payments of
interest (including of Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the LLC Securities shall be cumulative, and will
accumulate whether or not there are funds of the Company available for the
payment of Distributions. Distributions shall accrue from ________ __,
1997, and, except in the event (and to the extent) that Group exercises its
right to defer the payment of interest on the Debentures pursuant to the
Indenture, shall be payable semi-annually in arrears on ________ __ and
________ __, commencing on ________ __, 1997. If any date on which a
Distribution is otherwise payable on the LLC Securities is not a Business
Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date (each date on which Distributions
are payable in accordance with this Section 4.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when due
(and before giving effect to Additional Amounts, if applicable),
Distributions on the LLC Securities shall be payable at a rate of ___% per
annum of the Liquidation Amount of the LLC Securities. The amount of
Distributions payable for any Distribution period shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial Distribution period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day
months. The amount of Distributions payable for any period shall include
the Additional Amounts, if any.
(iii) Distributions on the LLC Securities shall be made by the Company
from the Payment Account and shall be payable on each Distribution Date
only to the extent that the Company has funds then on hand and available in
the Payment Account for the payment of such Distributions.
(b) Distributions on the LLC Securities with respect to a Distribution Date
shall be payable to the Holders thereof as they appear on the Securities
Register for the LLC Securities on the relevant record date, which shall be one
Business Day prior to such Distribution Date; provided, however, that in the
event that the Capital Securities do not remain in book-entry-only
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form, the relevant record date shall be 15 days prior to the relevant
Distribution Date (whether or not such record date is a Business Day).
(c) Notwithstanding anything to the contrary herein contained, the Company
shall not make any distribution under this Agreement to the extent that the
distribution would violate the provisions of Section 18-607 or 18-804 of the
Delaware Act.
SECTION 4.2 Redemption.
(a) On each Debenture Redemption Date and the Debenture Maturity Date, the
Company shall redeem a Like Amount of LLC Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Company by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date to each Holder of LLC Securities to be redeemed, at such
Holder's address appearing in the Security Register; provided no such notice
need be given for any redemption on the Debenture Maturity Date. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding LLC Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular LLC Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such LLC Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) if the Capital Securities are no longer in book-entry-only form,
the place and address where the Holders shall surrender their Capital
Securities Certificates.
(c) The LLC Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption or
payment at stated maturity of Debentures. Redemptions of the LLC Securities
shall be made and the Redemption Price shall be payable on each Redemption Date
only to the extent that the Company has funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Company gives a notice of redemption in respect of any Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
subject to Section 4.2(c), the
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Company will, so long as the Capital Securities are in book-entry-only form,
irrevocably deposit with the Clearing Agency for the Capital Securities funds
sufficient to pay the applicable Redemption Price and will give such Clearing
Agency irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof. If the Capital Securities are no longer in book-entry-only
form, the Company, subject to Section 4.2(c), will irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price and will
give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof upon surrender of their Capital
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any LLC Securities called for redemption
shall be payable to the Holders of such LLC Securities as they appear on the
Securities Register for the LLC Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights of
Securityholders holding LLC Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without interest
thereon, and such LLC Securities will cease to be outstanding. In the event that
any date on which any Redemption Price is payable is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of any LLC
Securities called for redemption is improperly withheld or refused and not paid
either by the Company or by Group pursuant to the Guarantee, Distributions on
such LLC Securities will continue to accrue, at the then applicable rate, from
the Redemption Date originally established by the Company for such LLC
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
(e) Payment of the Redemption Price on the LLC Securities shall be made to
the recordholders thereof as they appear on the Securities Register for the LLC
Securities on the relevant record date, which shall be one Business Day prior to
the relevant Redemption Date; provided, however, that in the event that the
Capital Securities do not remain in book-entry-only form, the relevant record
date shall be the date fifteen days prior to the relevant Redemption Date.
(f) Subject to Section 4.3, if less than all the Outstanding LLC Securities
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of LLC Securities to be redeemed shall be allocated on a pro rata basis (based
on Liquidation Amounts) among the Common Securities and the Capital Securities.
The particular Capital Securities to be redeemed shall be selected on a pro rata
basis (based upon Liquidation Amounts) not more than 60 days prior to the
Redemption Date by the Company from the Outstanding Capital Securities not
previously called for redemption, by such method as the Managing Member shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000
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or an integral multiple of $1,000 in excess thereof) of the Liquidation Amount
of Capital Securities of a denomination larger than $1,000. The Managing Member
shall promptly notify the Security Registrar in writing of the Capital
Securities selected for redemption and, in the case of any Capital Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities shall relate, in the
case of any Capital Securities redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Capital Securities that has been or is to
be redeemed.
SECTION 4.3 Subordination of Common Securities.
Payment of Distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, the LLC Securities, as applicable, shall be made,
subject to Section 4.2(f), pro rata among the Common Securities and the Capital
Securities based on the Liquidation Amount of the LLC Securities; provided,
however, that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Capital Securities then called for
redemption, shall have been made or provided for, and all funds immediately
available to the Company shall first be applied to the payment in full in cash
of all Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Capital Securities then due and payable.
SECTION 4.4 Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Capital Securities shall be made by wire transfer, direct deposit
or check mailed to the address of the Person entitled thereto as such address
shall appear on the Securities Register or, if the Capital Securities are held
by a Clearing Agency, such Distributions shall be made to the Clearing Agency in
immediately available funds, which shall credit the relevant Persons' accounts
at such Clearing Agency on the applicable Distribution Dates. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed in writing between the Company and the Common Securityholder.
SECTION 4.5 Tax Returns and Reports.
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(a) The Company shall prepare (or cause to be prepared), at Group's
expense, and file all United States federal, state and local tax and information
returns and reports required to be filed by or in respect of the Company. In
this regard, the Company shall (a) prepare and file (or cause to be prepared and
filed) the appropriate Internal Revenue Service Form required to be filed in
respect of the Company in each taxable year of the Company and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service form, if any, and the information required
to be provided by the Company on such form. The Company shall comply with United
States federal withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Securityholders under the
LLC Securities.
(b) Group is hereby designated as the Company's "Tax Matters Partner" under
Code Section 6231(a)(7) and shall have all the powers and responsibilities of
such position as provided in the Code. Group is specifically directed and
authorized to take whatever steps Group, in its discretion, deems necessary or
desirable to perfect such designation, including filing any forms or documents
with the Internal Revenue Service and taking such other action as may from time
to time be required under the regulations issued under the Code.
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Company.
Upon receipt under the Debentures of Additional Sums, the Company shall
promptly pay any taxes, duties or governmental charges of whatsoever nature
(other than withholding taxes) imposed on the Company by the United States or
any other taxing authority.
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder (or an Owner with
respect to the Holder's Capital Securities) has directly received pursuant to
[Section 5.9] of the Indenture or Section 5.14 of this Agreement or the
Guarantee.
ARTICLE V
LLC SECURITIES CERTIFICATES
SECTION 5.1 Initial Membership; Resignation of Chestnut.
Upon the formation of the Company and the contribution by Group and
Chestnut pursuant to Section 2.10 and until the issuance of the LLC Securities,
and at any time during which no LLC Securities are outstanding, Group and
Chestnut shall be the sole members of the Company. Effective upon the issuance
of the LLC Securities, Chestnut shall be deemed to have resigned as a member of
the Company.
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SECTION 5.2 The LLC Securities Certificates.
The Capital Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $500 Liquidation Amount and integral multiples thereof. The LLC
Securities Certificates shall be executed on behalf of the Company by manual or
facsimile signature of a Managing Member and, if executed on behalf of the
Company by facsimile, countersigned by the Authentication Agent by the manual
signature of an authorized signatory thereof. LLC Securities Certificates
bearing the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of a Managing
Member or, if executed on behalf of the Company by facsimile, countersigned by
the Authentication Agent by the manual signature of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf
of the Authentication Agent, shall be validly issued and entitled to the
benefits of this Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the delivery of such LLC
Securities Certificates or did not hold such offices at the date of delivery of
such LLC Securities Certificates. A transferee of a LLC Securities Certificate
shall become a Securityholder, and shall be entitled to the rights and subject
to the obligations of a Securityholder hereunder, upon due registration of such
LLC Securities Certificate in such transferee's name pursuant to Sections 5.4,
5.11 and 5.13.
SECTION 5.3 Execution and Delivery of LLC Securities Certificates.
On the Closing Date, the Company shall cause LLC Securities Certificates,
in an aggregate Liquidation Amount as provided in Sections 2.11 and 2.12, to be
executed on behalf of the Company and delivered to or upon the written order of
Group in authorized denominations.
SECTION 5.4 Registration of Transfer and Exchange of Capital Securities
Certificates.
The Company shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering LLC Securities Certificates and transfers and exchanges of Capital
Securities Certificates (the "Securities Register") in which the transfer agent
and registrar designated by the Company (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Capital Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Capital Securities
Certificates as herein provided. Wilmington Trust Company, a Delaware banking
corporation, shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Managing Member shall execute on behalf of the Company (and if executed on
behalf of the Company by a facsimile signature, such certificate shall be
countersigned by the Authentication Agent as provided in Section 5.2) and
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deliver, in the name of the designated transferee or transferees, one or more
new Capital Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Managing
Member. The Securities Registrar shall not be required to register the transfer
of any Capital Securities that have been called for redemption during a period
beginning at the opening of business 15 days before the day of selection for
such redemption.
At the option of a Holder, Capital Securities Certificates may be exchanged
for other Capital Securities Certificates in authorized denominations of the
same class and of a like aggregate Liquidation Amount upon surrender of the
Capital Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Managing Member or, if such
Capital Securities Certificates so presented or surrendered was executed by the
Managing Member by facsimile signature, to the Authentication Agent and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Capital Securities Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Managing Member or the Securities Registrar in accordance with such Person's
customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.
SECTION 5.5 Mutilated, Destroyed, Lost or Stolen LLC Securities
Certificates.
If (a) any mutilated LLC Securities Certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any LLC Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Managing Member such security or indemnity as may be required by them to save
each of them harmless, then in the absence of notice that such LLC Securities
Certificate shall have been acquired by a bona fide purchaser, the Managing
Member, on behalf of the Company shall execute by manual or facsimile signature
and, if executed on behalf of the Company by facsimile signature, such
certificate shall be countersigned by the Authentication Agent, and make
available for delivery, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen LLC Securities Certificate, a new LLC Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new LLC Securities Certificate under this Section, the Company
or the Securities Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate LLC Securities Certificate issued pursuant to this
Section shall constitute conclusive evidence of a limited liability company
interest in the Company, as if
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originally issued, whether or not the lost, stolen or destroyed LLC Securities
Certificate shall be found at any time.
SECTION 5.6 Persons Deemed Securityholders.
The Company or the Securities Registrar shall treat the Person in whose
name any LLC Securities Certificate shall be registered in the Securities
Register as the owner of such LLC Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Company nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.7 Access to List of Securityholders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold the
Managing Member accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 5.8 Maintenance of Office or Agency.
The Company shall maintain an office or offices or agency or agencies where
Capital Securities Certificates may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of
the LLC Securities Certificates may be served. The Company initially designates
Wilmington Trust Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, as its principal corporate trust
office for such purposes. The Company shall give prompt written notice to the
Securityholders of any change in the location of the Securities Register or any
such office or agency.
SECTION 5.9 Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Managing Member. Any Paying Agent shall have the revocable power to withdraw
funds from the Payment Account for the purpose of making the Distributions
referred to above. The Managing Member may revoke such power and remove the
Paying Agent if they determine in their sole discretion that the Paying Agent
shall have failed to perform its obligations under this Agreement in any
material respect. The Paying Agent shall initially be Wilmington Trust Company,
and any co-paying agent chosen by Wilmington Trust Company and acceptable to the
Managing Member. Any Person acting as Paying Agent shall be permitted to resign
as Paying Agent upon 30 days' written notice to the Company. In the event that
Wilmington Trust Company shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the Managing
Member shall appoint a successor that is acceptable to them to act as Paying
Agent (which shall be a bank or trust company). Such successor Paying Agent or
any additional Paying Agent appointed by
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the Managing Member shall execute and deliver to the Company an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Company that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Company and upon resignation or removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Company. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
SECTION 5.10 Ownership of Common Securities by Group.
On the Closing Date, Group shall acquire and retain beneficial and record
ownership of the Common Securities. To the fullest extent permitted by law,
other than a transfer in connection with a consolidation or merger of Group into
another Person, or any conveyance, transfer or lease by Group of its properties
and assets substantially as an entirety to any Person, pursuant to [Section 8.1]
of the Indenture, any attempted transfer of the Common Securities shall be void.
Each Common Securities Certificate shall contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11 Book-Entry Capital Securities Certificates; Common Securities
Certificate.
(a) The Capital Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Capital Securities Certificate or
Certificates representing Book-Entry Capital Securities, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Company. Such Capital Securities Certificate or Certificates shall initially be
registered on the Securities Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no Owner will receive a Definitive Capital
Securities Certificate representing such Owner's interest in such Capital
Securities, except as provided in Section 5.13. Unless and until Definitive
Capital Securities Certificates have been issued to Owners pursuant to Section
5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
(ii) the Securities Registrar and the Managing Member shall be
entitled to deal with the Clearing Agency for all purposes of this
Agreement relating to the Book-Entry Capital Securities (including the
payment of the Liquidation Amount of and Distributions on the Capital
Securities evidenced by Book-Entry Capital Securities Certificates and the
giving of instructions or directions to Owners of Capital Securities
evidenced by Book-Entry Capital Securities Certificates) as the sole Holder
of Capital Securities evidenced by Book-Entry Capital Securities
Certificates and shall have no obligations to the Owners thereof;
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(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Agreement, the provisions of this Section
5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Capital Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Capital Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Capital
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to Group in the form of a definitive Common
Securities Certificate.
SECTION 5.12 Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Agreement, unless and until Definitive Capital Securities
Certificates shall have been issued to Owners pursuant to Section 5.13, the
Company shall give all such notices and communications specified herein to be
given to Owners to the Clearing Agency, and shall have no obligations to the
Owners.
SECTION 5.13 Definitive Capital Securities Certificates.
If (a) the Clearing Agency notifies the Company that it is no longer
willing or able to properly discharge its responsibilities with respect to the
Capital Securities Certificates, and the Managing Member is unable to locate a
qualified successor, (b) the Managing Member at its option elects to terminate
the book-entry system through the Clearing Agency or (c) after the occurrence of
a Debenture Event of Default, Owners of Capital Securities Certificates
representing beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Company in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interest
of the Owners of Capital Securities Certificates, then the Company shall notify
the Clearing Agency, and the Clearing Agency, in accordance with its customary
rules and procedures, shall notify all Clearing Agency Participants for whom it
holds Capital Securities of the occurrence of any such event and of the
availability of the Definitive Capital Securities Certificates to Owners of such
class or classes, as applicable, requesting the same. Upon surrender to the
Company of the typewritten Capital Securities Certificate or Certificates
representing the Book-Entry Capital Securities by the Clearing Agency,
accompanied by registration instructions, the Managing Member shall execute the
Definitive Capital Securities Certificates in accordance with the instructions
of the Clearing Agency which, if executed on behalf of the Company by facsimile,
shall be countersigned by a transfer agent or its agent. Neither the Securities
Registrar nor the Managing Member shall be liable for any delay in
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delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Capital Securities Certificates, the Company shall recognize the Holders of the
Definitive Capital Securities Certificates as Securityholders. The Definitive
Capital Securities Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Managing Member that meets the requirements of any stock exchange or
automated quotation system on which the Capital Securities are then listed or
approved for trading, as evidenced by the execution thereof by the Managing
Member.
SECTION 5.14 Rights of Securityholders.
(a) The legal title to the Company Property is vested exclusively in the
Company (in its capacity as such) in accordance with Section 2.9, and the
Securityholders shall not have any right or title therein other than the limited
liability company interest in the Company conferred by their LLC Securities and
they shall have no right to call for any partition or division of property,
profits or rights of the Company except as described below. The LLC Securities
shall be personal property giving only the rights specifically set forth therein
and in this Agreement. The LLC Securities shall have no preemptive or similar
rights and when issued and delivered to Securityholders against payment of the
purchase price therefor will be fully paid and nonassessable by the Company. No
Holder of Capital Securities, in its capacity as a Member of the Company, shall
be obligated personally for any debt, obligation or liability of the Company
solely by reason of being a Member of the Company.
(b) For so long as any Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have such right by a notice in writing to the Company and the
Debenture Trustee; and upon any such declaration such principal amount of and
the accrued interest on all of the Debentures shall become immediately due and
payable as set forth in the Indenture, provided that the payment of principal,
premium and interest on such Debentures shall remain subordinated to the extent
provided in the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of a majority in Liquidation Amount of the Capital
Securities, by written notice to the Company, may rescind and annul such
declaration and its consequences if:
(i) Group has paid or deposited with the Debenture Trustee a sum
sufficient to pay
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(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Company, their agents and
counsel; and
(ii) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
[Section 5.14] of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal, premium or interest (unless all Events of Default with respect to the
Debentures, other than the non-payment of the principal of the Debentures which
has become due solely by such acceleration, have been cured or annulled as
provided in [Section 5.2] of the Indenture and Group has paid or deposited with
the Debenture Trustee a sum sufficient to pay all overdue installments of
interest (including any Additional Interest (as defined in the Indenture)) on
the Debentures, the principal of (and premium, if any, on) any Debentures which
have become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and all sums paid or advanced by
the Debenture Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee and the Company,
their agents and counsel) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Debenture. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
Upon receipt by the Company of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which is represented by Book-Entry Capital Securities
Certificates, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Company receives such
notice. The Holders of Outstanding Capital Securities on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case
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may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Agreement and
the Indenture, upon a Debenture Event of Default specified in [Section 5.1(1) or
5.1(2)] of the Indenture, any Holder of Capital Securities shall have the right
to institute a proceeding directly against Group, pursuant to [Section 5.9] of
the Indenture, for enforcement of payment to such Holder of the principal amount
of or premium or interest on Debentures having a principal amount equal to the
Liquidation Amount of the Capital Securities of such Holder (a "Direct Action").
Except as set forth in Section 5.14(b) and this Section 5.14(c), the Holders of
Capital Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Debentures.
SECTION 5.15 CUSIP Numbers.
The Company in issuing the Capital Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Company shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Capital Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Capital Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14 and 9.3 and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Company or the obligations of
the parties hereto.
(b) So long as any Debentures are held by the Company, the Company shall
not (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust or power
conferred on the Debenture Trustee with respect to such Debentures, (ii) waive
any past default which is waiveable under [Section 5.14]
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of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Company without the prior written consent of each Holder of Capital Securities.
The Company shall not revoke any action previously authorized or approved by a
vote of the Holders of Capital Securities, except by a subsequent vote of the
Holders of Capital Securities. The Company shall notify all Holders of the
Capital Securities of any notice of default received from the Debenture Trustee
with respect to the Debentures. In addition to obtaining the foregoing approvals
of the Holders of the Capital Securities, prior to taking any of the foregoing
actions, the Company shall, at the expense of Group, obtain an Opinion of
Counsel experienced in such matters to the effect that such action shall not
cause the Company to be taxable as a corporation for United States federal
income tax purposes.
(c) If any proposed amendment to this Agreement provides for, or the
Company otherwise proposes to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the Capital
Securities, whether by way of amendment to the Agreement or otherwise, or (ii)
the dissolution, winding-up or termination of the Company, other than pursuant
to the terms of this Agreement, then the Holders of Outstanding Capital
Securities as a class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least a majority in Liquidation Amount of the Outstanding
Capital Securities. Notwithstanding any other provision of this Agreement, no
amendment to this Agreement may be made if, as a result of such amendment, it
would cause the Company to be taxable as a corporation for United States federal
income tax purposes.
SECTION 6.2 Notice of Meetings.
Notice of all meetings of the Capital Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Company pursuant to
Section 9.9 to each Capital Securityholder of record, at his registered address,
at least 15 days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so considered whether
or not stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.
SECTION 6.3 Meetings of Capital Securityholders.
No annual meeting of Securityholders is required to be held. The Company,
however, shall call a meeting of Capital Securityholders to vote on any matter
as to which Capital Securityholders are entitled to a vote upon the written
request of the Capital Securityholders of
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record of 25% of the Outstanding Capital Securities (based upon their
Liquidation Amount) and the Managing Member may, at any time in its discretion,
call a meeting of Capital Securityholders to vote on any matters as to which
Capital Securityholders are entitled to vote.
Capital Securityholders of record of 50% of the Outstanding Capital
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Capital Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Capital
Securityholders of record present, in person or by proxy, holding at least a
majority of the Outstanding Capital Securities (based upon their Liquidation
Amount) held by holders of record of Outstanding Capital Securities present,
either in person or by proxy, at such meeting shall constitute the action of the
Capital Securityholders, unless this Agreement requires a greater number of
affirmative votes.
SECTION 6.4 Voting Rights.
Securityholders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their LLC Securities in respect of any matter
as to which such Securityholders are entitled to vote.
SECTION 6.5 Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Company, or with such other
officer or agent of the Company as the Managing Member may direct, for
verification prior to the time at which such vote shall be taken. Proxies may be
solicited in the name of the Managing Member or one or more officers of the
Managing Member. Only Securityholders of record shall be entitled to vote. When
LLC Securities are held jointly by several Persons, any one of them may vote at
any meeting in person or by proxy in respect of such LLC Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such LLC Securities. A proxy
purporting to be executed by or on behalf of a Securityholder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than three
years after its date of execution.
SECTION 6.6 Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding at least a majority of all
Outstanding LLC Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger
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proportion thereof as shall be required by any express provision of this
Agreement) shall consent to the action in writing.
SECTION 6.7 Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the LLC Securities in respect of which a record date is not
otherwise provided for in this Agreement, or for the purpose of any other
action, the Company may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of a
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.8 Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or taken
by Securityholders or Owners may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders or
Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to the Managing Member. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Managing Member, if
made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Managing Member receiving the same deems sufficient.
The ownership of Capital Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any LLC Security shall bind every future
Securityholder of the same LLC Security and the Securityholder of every LLC
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered
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to be done by the Managing Member or the Company in reliance thereon, whether or
not notation of such action is made upon such LLC Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular LLC Security may do so with
regard to all or any part of the Liquidation Amount of such LLC Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the Managing
Member with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, consent, waiver or other Act of such
Securityholder under this Article VI, then the determination of such matter by
the Managing Member, in good faith, shall be conclusive with respect to such
matter.
ARTICLE VII
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 7.1 Dissolution Upon Expiration Date.
Unless earlier dissolved, the Company shall automatically dissolve on
________ __, 2052 (the "Expiration Date"), and thereafter of the Company
Property shall be distributed in accordance with Section 7.4.
SECTION 7.2 Early Dissolution.
The first to occur of any of the following events is an "Early Dissolution
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Company from Group at any time to dissolve
the Company and to distribute the Debentures to Securityholders in exchange for
the Capital Securities (which direction is optional and wholly within the
discretion of Group);
(c) the redemption of all of the Capital Securities in connection with the
redemption or maturity of all of the Debentures; and
(d) the entry of an order for dissolution of the Company by a court of
competent jurisdiction.
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SECTION 7.3 Termination.
As soon as is practicable after the occurrence of an event referred to in
Section 7.1 or Section 7.2, and upon the completion of the winding up and
liquidation of the Company, the Managing Member (who is hereby authorized to
take such action) shall file a certificate of cancellation with the Secretary of
State of the State of Delaware terminating the Company and, upon such filing,
the respective obligations and responsibilities of the Managing Member and the
Company continued hereby shall terminate.
SECTION 7.4 Liquidation.
(a) If an Early Dissolution Event specified in clause (a), (b) or (d) of
Section 7.2 occurs or upon the Expiration Date, the Company shall be wound up
and liquidated by the Managing Member as expeditiously as the Managing Member
determines to be possible by distributing, after satisfaction or the making of
reasonable provisions for the payment of liabilities to creditors of the Company
as provided by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 7.4(d). Notice of liquidation shall be given by
the Company by first-class mail, postage prepaid mailed not later than 30 nor
more than 60 days prior to the Liquidation Date to each Holder of LLC Securities
at such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the CUSIP Number of the LLC Securities;
(ii) state the Liquidation Date;
(iii) state that from and after the Liquidation Date, the LLC
Securities will no longer be deemed to be Outstanding and any LLC
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iv) provide such information with respect to the mechanics by which
Holders may exchange LLC Securities Certificates for Debentures, or if
Section 7.4(d) applies receive a Liquidation Distribution, as the Managing
Member shall deem appropriate.
(b) Except where Section 7.2(c) or 7.4(d) applies, in order to effect the
liquidation of the Company and distribution of the Debentures to
Securityholders, the Managing Member shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding LLC Securities Certificates.
(c) Except where Section 7.2(c) or 7.4(d) applies, after the Liquidation
Date, (i) the LLC Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of LLC Securities Certificates, upon surrender
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of such certificates to the Company or its agent for exchange, (iii) the
Managing Member shall use its best efforts to have the Debentures listed on each
exchange or automated quotation system (if any) as the Capital Securities are
then listed or traded, (iv) any LLC Securities Certificates not so surrendered
for exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last Distribution
Date on which a Distribution was made on such LLC Securities Certificates until
such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of LLC
Securities Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding LLC Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of LLC Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
7.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Managing Member not to be practical, the Company
shall be dissolved and wound up by the Managing Member and the Company Property
shall be liquidated by the Managing Member. In such event, on the date of the
dissolution of the Company, Securityholders will be entitled to receive out of
the assets of the Company available for distribution to Securityholders, after
satisfaction of liabilities to creditors of the Company as provided by
applicable law, an amount equal to the Liquidation Amount per LLC Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If, upon any such dissolution, the
Liquidation Distribution can be paid only in part because the Company has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Company on the LLC Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The Holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution pro rata
(determined as aforesaid) with Holders of Capital Securities, except that, if a
Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities.
SECTION 7.5 Mergers, Consolidations, Amalgamations or Replacements of the
Company.
The Company may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Article VII. At the request of the Managing Member and without the
consent of the Holders of the Capital Securities, the Company may merge with or
into, consolidate, amalgamate, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to a limited liability
company organized as such under the laws of any State; provided, that (i) such
successor entity expressly assumes all of the obligations of the Company with
respect to the Capital Securities and substitutes for the Capital Securities
other securities having substantially the same rights, powers and privileges and
other terms as the Capital Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Capital Securities rank in
priority with respect to distributions and payments upon
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liquidation, redemption and otherwise, (ii) the Managing Member expressly
appoints the managing members of such successor entity possessing the same
powers and duties as the Managing Member, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or automated quotation system
on which the Capital Securities are then listed or traded, if any, (iv) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
Holders of the Capital Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose identical to that of
the Company, (vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Managing Member has received an
Opinion of Counsel to the effect that such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities (including
any Successor Securities) in any material respect and (viii) Group, or any
successor permitted pursuant to Section 5.10 hereof, owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Company shall not, except
with the consent of Holders of 100% in Liquidation Amount of the Capital
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other Person or permit any other Person to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Company or the
successor entity to be taxable as a corporation for United States federal income
tax purposes.
ARTICLE VIII
BOOKS AND RECORDS
SECTION 8.1 Books and Records; Accounting.
The Managing Member shall keep or cause to be kept at the address of any of
the Managing Member (or at such other place as the Managing Member shall advise
the Holders of Capital Securities in writing) true and full books and records
regarding the status of the business and financial condition of the Company.
SECTION 8.2 Financial Statements.
The Managing Member shall, as soon as available after the end of each
fiscal year, cause to be prepared and mailed to each Holder of Capital
Securities the unaudited financial statements
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of the Company for such fiscal year prepared in accordance with generally
accepted accounting principles.
SECTION 8.3 Fiscal Year.
The fiscal year of the Company shall, for all purposes (except as otherwise
required by the Code), begin on January 1 and end on December 31 of each year.
SECTION 8.4 Inspection of Records.
Upon reasonable notice to the Managing Member, the records of the Company
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder. Notwithstanding the foregoing, the Managing Member may, to the
maximum extent permitted by law, keep confidential from the Securityholders any
information the disclosure of which the Managing Member reasonably believe is
not in the best interest of the Company or could damage the Company or its
business or which the Company or the Managing Member are required by law or by
an agreement with any Person to keep confidential.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in LLC Securities
shall not operate to terminate this Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim an accounting, take any action or bring any proceeding in any court for
a partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION 9.2 Liability of the Common Securityholder.
The Holder of the Common Securities shall be liable for all of the debts
and obligations of the Company (other than with respect to the Securities) to
the extent not satisfied out of the Company's assets.
SECTION 9.3 Amendment.
(a) This Agreement may be amended from time to time by the Managing Member
without the consent of Holders of the Capital Securities (i) to cure any
ambiguity, correct or
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supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Agreement, which shall not be inconsistent with the
other provisions of this Agreement, (ii) to modify, eliminate or add to any
provisions of this Agreement to such extent as shall be necessary to ensure that
the Company will not be taxable as a corporation at all times that any LLC
Securities are outstanding or (iii) to modify, eliminate or add to any
provisions of this Agreement to such extent as shall be necessary to meet the
requirements of any national securities exchange or automated quotations system
on which the Company seeks to list the Capital Securities; provided, however,
that in the case of clause (i), (ii) or (iii), such action shall not adversely
affect in any material respect the interests of any holder of Capital
Securities, and any amendments of this Agreement shall become effective when
notice thereof is given to the holders of Capital Securities.
(b) Except as provided in Section 9.3(c) hereof, any provision of this
Agreement may be amended by the Managing Member with (i) the consent of LLC
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the LLC Securities then Outstanding and (ii) receipt by the Company
of an Opinion of Counsel to the effect that such amendment or the exercise of
any power granted to the Managing Member in accordance with such amendment will
not result in the Company being taxable as a corporation for United States
federal income tax purposes.
(c) In addition to and notwithstanding any other provision in this
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Agreement may
not be amended to (i) change the amount or timing of any Distribution on the LLC
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the LLC Securities as of a specified date or (ii)
restrict the right of a Securityholder to institute suit for the enforcement of
any such payment on or after such date; notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 9.3 may not be amended.
(d) Notwithstanding any other provisions of this Agreement, the Company
shall not amend this Agreement in any way which would cause the Company to be
taxable as a corporation for United States federal income tax purposes.
(e) Notwithstanding anything in this Agreement to the contrary, without the
consent of Group, this Agreement may not be amended in a manner which imposes
any additional obligation on Group.
(f) In the event that any amendment to this Agreement is made, the Company
shall promptly provide to Group a copy of such amendment.
SECTION 9.4 Separability.
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In case any provision in this Agreement or in the LLC Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 9.5 Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE COMPANY AND THE MANAGING MEMBER WITH RESPECT TO THIS
AGREEMENT AND THE LLC SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
SECTION 9.6 Payments Due on Non-Business Day.
If the date fixed for any payment on any LLC Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
SECTION 9.7 Successors.
This Agreement shall be binding upon and shall inure to the benefit of any
successor to the Securityholders and Group, including any successor by operation
of law. Except in connection with a consolidation, merger or sale involving
Group that is permitted under [Article Eight] of the Indenture and pursuant to
which the assignee agrees in writing to perform Group's obligations hereunder,
Group shall not assign its obligations hereunder.
SECTION 9.8 Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Agreement.
SECTION 9.9 Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Agreement is required or permitted to be given or served to or upon any
Securityholder may be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed to such Capital Securityholder as such
Securityholder's name and address may appear on the Securities Register. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to
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have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any provision of this
Agreement is required or permitted to be given or served to or upon the Company
or the Managing Member shall be given in writing addressed (until another
address is published by the Company) as follows: (a) with respect to the
Company, to _________________________________________, (b) with respect Group,
to __________________________________________, and (c) with respect to Chestnut,
to _________________________________________. Such notice, demand or other
communication to or upon the Company or the Managing Member shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Company or the Managing Member.
SECTION 9.10 Acceptance of Terms of Agreement, Guarantee and Indenture.
THE RECEIPT AND ACCEPTANCE OF A LLC SECURITY OR ANY INTEREST THEREIN BY OR
ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH LLC
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND
SHALL CONSTITUTE THE AGREEMENT OF THE COMPANY, SUCH SECURITYHOLDER AND SUCH
OTHERS THAT THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE COMPANY AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
SECTION 9.11 Counterparts.
This Agreement may contain more than one counterpart of the signature page
and this Agreement may be executed by the affixing of the signature of each of
Group and Chestnut on one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated
Limited Liability Company Agreement to be executed as of the day and year first
above written.
DELPHI FINANCIAL GROUP, INC.,
as Managing Member
By: _______________________________
Name:
Title:
Attest:
______________________________
Name:
Title:
CHESTNUT INVESTORS III, INC.,
as Resigning Member
By: _______________________________
Name:
Title:
Attest:
______________________________
Name:
Title:
44
STATE OF )
) : ss.:
COUNTY OF )
On the ___ day of _________, 199_, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ________________ of Delphi Financial Group, Inc., one of the
corporations described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto pursuant to authority of the Board of
Directors of said corporation.
_______________________________
Notary Public
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the ___ day of _________, 199_, before me personally came _____________,
to me known, who, being by me duly sworn, did depose and say that he/she is
________________ of Chestnut Investors III, Inc., one of the corporations
described in and which executed the foregoing instrument, and that he/she signed
his/her name thereto pursuant to the bylaws of said corporation.
45
EXHIBIT A
CERTIFICATE OF FORMATION
OF
DELPHI FUNDING, L.L.C.
A-1
46
EXHIBIT B
This Capital Security is a Global Certificate within the meaning of the
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depository or its nominee only in the limited
circumstances described in the Agreement and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Capital Security is presented by an authorized representative
of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇) to Delphi Funding,
L.L.C. or its agent for registration of transfer, exchange or payment, and any
Capital Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depositary Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
CERTIFICATE NUMBER
NUMBER OF CAPITAL SECURITIES
P-
CUSIP NO.
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
DELPHI FUNDING, L.L.C.
___% CAPITAL SECURITIES,
SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Delphi Funding, L.L.C., a limited liability company formed under the laws
of the State of Delaware (the "Company"), hereby certifies that _______________
(the "Holder") is the
B-1
47
registered owner of ___________ (__) capital securities of the Company
representing limited liability company interests in the Company and designated
the Delphi Funding, L.L.C. ___% Capital Securities, Series A (liquidation amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Company, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.4 of the Agreement (as defined
below). The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Capital Securities are set forth in, and this
certificate and the Capital Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Limited Liability Company Agreement of the Company, dated as of March
1, 1997, as the same may be amended from time to time (the "Agreement"),
including the designation of the terms of Capital Securities as set forth
therein. The Holder is entitled to the benefits of the Guarantee Agreement
entered into by Delphi Financial Group, Inc., a Delaware corporation, and
Wilmington Trust Company, as guarantee trustee, dated as of March 1, 1997 (the
"Guarantee"), to the extent provided therein. The Company will furnish a copy of
the Agreement and the Guarantee to the Holder without charge upon written
request to the Company at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Agreement and
is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Managing Member of the Company has executed this
certificate this _____ day of March, 1997.
DELPHI FINANCIAL GROUP, INC.
By: _______________________________
Name:
Managing Member
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48
This certificate evidences the Capital Securities of the Company referred
to in the within-mentioned Agreement.
Dated:
_________________________________,
as Authentication Agent
By: _______________________________
Name:
Title:
B-3
49
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Capital Security Certificate on the books of the
Company. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Capital
Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant
to S.E.C. Rule 17Ad-15.
B-4
50
EXHIBIT C
LETTER OF REPRESENTATIONS
C-1
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EXHIBIT D
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
DELPHI FUNDING, L.L.C.
___% Common Securities
(Liquidation Amount $1,000 per Common Security)
Delphi Funding, L.L.C., a limited liability company created under the laws
of the State of Delaware (the "Company"), hereby certifies that_________________
(the "Holder") is the registered owner of ______ common securities of the
Company representing limited liability company interests in the Company and
designated the ___% Common Securities (Liquidation Amount $1,000 per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Agreement (as defined below) the Common Securities are not transferable and any
attempted transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences, obligations and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Limited Liability Company
Agreement of the Company dated as of March 1, 1997, as the same may be amended
from time to time (the "Agreement") including the designation of the terms of
the Common Securities as set forth therein. The Company will furnish a copy of
the Agreement to the Holder without charge upon written request to the Company
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Agreement and
is entitled to the benefits thereunder and by acceptance hereof agrees to the
provisions of (i) the Guarantee Agreement entered into by Delphi Financial
Group, Inc., a Delaware corporation ("Group"), and Wilmington Trust Company, a
Delaware banking corporation ("Wilmington Trust Company"), as guarantee trustee,
dated as of March 1, 1997 and (ii) the Indenture entered into by Group and
Wilmington Trust Company, as trustee, dated as of March 1, 1997.
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52
IN WITNESS WHEREOF, the Managing Member of the Company has executed this
certificate.
DELPHI FINANCIAL GROUP, INC.
By: _______________________________
Name:
Managing Member
D-2