EXHIBIT 4.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
CONSUMERS FUNDING LLC,
a Delaware Limited Liability Company
(the "Company")
ARTICLE I
General Provisions
1.01 Registered Office. The registered office of the Company in
this state shall be The Corporation Trust Company, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801. The member of the Company
(the "Member") may change said registered office from one location to
another in the State of Delaware.
1.02 Other Offices. The Company may have an office at 212 W.
Michigan Avenue, Jackson, Michigan or at any other offices that may at any
time be established by the Member at any place or places within or outside
the State of Delaware.
1.03 Purpose; Nature of Business Permitted; Powers. The Company
is organized primarily for the object and purpose of purchasing
securitization property, investing in investment securities, issuing
securitization bonds and entering into related credit enhancement
transactions. The Company shall possess and may exercise all the powers and
privileges granted by the Delaware Limited Liability Company Act of the
State of Delaware (the "Act") or by any other law or by this Agreement,
together with any powers incidental thereto, insofar as such powers and
privileges are necessary or convenient to the conduct, promotion or
attainment of the business purposes or activities of the Company.
1.04 Limited Liability Company Agreement; Certificate of
Formation. This document (the "Agreement") shall constitute a "limited
liability company agreement" within the meaning of the Act. The Certificate
of Formation of this Company (the "Certificate of Formation") was filed
with the Secretary of State of the State of Delaware on October 11, 2000.
ARTICLE II
Capital
2.01 Initial Capital. The initial capital of the Company shall
be the sum of cash contributed to the Company by the Member in the amount
set out opposite the name of the Member on Schedule A hereto, as amended
from time to time and incorporated herein by this reference.
2.02 Capital Account. A Capital Account shall be established
and maintained for the Member on the Company's books (the "Capital
Account").
2.03 Interest. No interest shall be paid or credited to the
Member on its Capital Account or upon any undistributed profits left on
deposit with the Company.
ARTICLE III
Member
3.01 Powers. Subject to the provisions of the Certificate of
Formation, this Agreement and the Act, all powers shall be exercised by or
under the authority of, and the business and affairs of the Company shall
be controlled by, the Member pursuant to Section 3.05. The Member may
delegate any or all such powers to the Managers. Without prejudice to such
general powers, but subject to the same limitations, it is hereby expressly
declared that the Member shall have the following powers:
First - To select and remove the Managers and all officers,
agents and employees of the Company, prescribe such powers and duties for
them as may be consistent with the Act and other applicable law, the
Certificate of Formation and this Agreement, fix their compensation, and
require from them security for faithful service.
Second - To conduct, manage and control the affairs and
business of the Company, and to make such rules and regulations therefor
consistent with the Act and other applicable law, the Certificate of
Formation and this Agreement.
Third - To change the registered office of the Company in
Delaware from one location to another; to fix and locate from time to time
one or more other offices of the Company; and to designate any place within
or without the State of Delaware for the conduct of the business of the
Company.
3.02 Compensation of Member. The Company shall have authority
to pay to the Member reasonable compensation for the Member's services to
the Company. It is understood that the compensation paid to the Member
under the provisions of this Section shall be determined without regard to
the income of the Company, shall not be deemed to constitute distributions
to the recipient of any profit, loss or capital of the Company and shall be
considered as an operating expense of the Company.
3.03 Bank Accounts. From time to time, the Member may designate
a person or persons, whether such persons be the Member or not, to open and
maintain one or more bank accounts; rent safety deposit boxes or vaults;
sign checks, written directions, or other instruments to withdraw all or
any part of the funds belonging to the Company and on deposit in any
savings account or checking account; negotiate and purchase certificates of
deposit, obtain access to the Company safety deposit box or boxes, and
generally sign such forms on behalf of the Company as may be required to
conduct the banking activities of the Company.
3.04 Other Ventures. It is expressly agreed that the Member and
any affiliates, officers, directors, managers, stockholders, partners or
employees of the Member, may engage in other business ventures of every
nature and description, whether or not in competition with the Company,
independently or with others, and the Company shall not have any rights in
and to any independent venture or activity or the income or profits derived
therefrom.
3.05 Actions by the Member. All actions of the Member may be
taken by written resolution of the Member which shall be signed on behalf
of the Member by an authorized officer of the Member and filed with the
records of the Company.
ARTICLE IV
Common Interest
4.01 General. "Common Interest" means the interest in the
Company. The Common Interest of the Member in the Company constitutes
personal property and shall be freely transferable upon registration of
such transfer on the books of the Company in accordance with the procedures
established for such purpose by the Managers of the Company. The Common
Interest of the Member in the Company shall be evidenced by a certificate
in the form set forth in Schedule B hereto.
4.02 Distributions. The Member shall be entitled to receive,
out of the assets of the Company legally available therefor, when, as and
if declared by the Managers, distributions payable in cash in such amounts,
if any, as the Managers shall declare.
4.03 Rights on Liquidation, Dissolution or Winding Up.
(a) In the event of any liquidation, dissolution or
winding up of the Company, the Member shall be entitled to all remaining
assets of the Company available for distribution to the Member after
payment of all liabilities, debts and obligations of the Company.
(b) Neither the sale of all or substantially all of the
property or business of the Company, nor the merger or consolidation of the
Company into or with another Company or other entity, shall be deemed to be
a dissolution, liquidation or winding up, voluntary or involuntary, for the
purpose of this Section 4.03.
4.04 Redemption. The Common Interest shall not be redeemable.
4.05 Voting Rights. The Member shall have the sole right to
vote on all matters as to which members of a limited liability company
shall be entitled to vote pursuant to the Act and other applicable law.
ARTICLE V
Managers
5.01 Managers.
(a) The management of the Company's business shall be
vested in the managers of the Company (the "Managers") who shall be
appointed by the Member. The Member hereby appoints the persons identified
on Schedule C to initially be the Managers and Officers of the Company.
(b) Each Manager shall be elected by the Member and shall
hold office for the term for which elected and until a successor has been
appointed and qualified.
(c) The Managers shall be obliged to devote only as much
of their time to the Company's business as shall be reasonably required in
light of the Company's business and objectives. A Manager shall perform his
or her duties as a Manager in good faith, in a manner he or she reasonably
believes to be in the best interests of the Company, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances.
(d) The Managers shall act by the affirmative vote of a
majority of the Managers. Each Manager shall have the authority to sign
agreements and other instruments on behalf of the Company without the
joinder of any other Manager.
(e) Any action may be taken by the Managers without a
meeting if authorized by the written consent of a majority of the Managers.
(f) Every Manager is an agent of the Company for the
purpose of its business, and the act of every Manager, including the
execution in the Company name of any instrument for carrying on the
business of the Company, binds the Company, unless such act is in
contravention of the Certificate of Formation or this Agreement or unless
the Manager so acting otherwise lacks the authority to act for the Company
and the person with whom he or she is dealing has knowledge of the fact
that he or she has no such authority.
5.02 Powers of the Managers. The Managers shall have the right
and authority to take all actions which the Managers deem necessary, useful
or appropriate for the day-to-day management and conduct of the Company's
business.
The Managers may exercise all powers of the Company and do all
such lawful acts and things which are not directed or required to be
exercised or done by either: (i) the Member; (ii) the Act or other
applicable law; (iii) the Certificate of Formation; or (iv) this Agreement.
All instruments, contracts, agreements and documents providing for the
acquisition or disposition of property of the Company shall be valid and
binding on the Company if executed by one or more of the Managers. All
instruments, contracts, agreements and documents of whatsoever type
executed on behalf of the Company shall be executed in the name of the
Company by one or more Managers.
5.03 Compensation. The Company may pay to any Manager
compensation for such Manager's services rendered to the Company. Such
compensation shall be treated as expenses of the Company and shall not be
deemed to constitute distributions to the recipient of any profit, loss or
capital of the Company.
5.04 Removal of Managers.
(i) The Member may remove any Manager with or
without cause at any time.
(ii) Any removal of a Manager shall become
effective on such date as may be specified by the Member and in a
notice delivered to any remaining Managers or the Manager elected to
replace the removed Manager (except that it shall not be effective on
a date earlier than the date such notice is delivered to the
remaining or newly elected Manager). Should a Manager be removed who
is also the Member, the Member shall continue to participate in the
Company as the Member and receive its share of the Company's income,
gains, losses, deductions and credits pursuant to this Agreement.
5.05 Resignation of Manager. A Manager may resign as a Manager
at any time by notice to the Member. Such resignation shall be effective as
set forth in such notice.
5.06 Vacancies. Any vacancies among the Managers may be filled
by the Member.
ARTICLE VI
Allocations of Profits and Losses
All profits and losses of the Company for any fiscal period
shall be allocated and credited to the Member's Common Interest.
ARTICLE VII
Expenses
Except as otherwise provided in this Agreement, the Company
shall be responsible for all expenses and the allocation thereof including
without limitation:
(a) all expenses incurred by the Member or its affiliates
in organizing the Company;
(b) all expenses related to the payment of the principal
of and interest on the securitization bonds issued by the Company;
(c) all expenses related to the business of the Company
and all routine administrative expenses of the Company, including the
maintenance of books and records of the Company, the preparation and
dispatch to the Member of checks, financial reports, tax returns and
notices required pursuant to this Agreement;
(d) all expenses incurred in connection with any
litigation or arbitration involving the Company (including the cost
of any investigation and preparation) and the amount of any judgment
or settlement paid in connection therewith;
(e) all expenses for indemnity or contribution payable by
the Company to any person;
(f) all expenses incurred in connection with the
collection of amounts due to the Company from any person;
(g) all expenses incurred in connection with the
preparation of amendments to this Agreement;
(h) all expenses incurred in connection with the
liquidation, dissolution and winding up of the Company; and
(i) all expenses otherwise allocated in good faith to the
Company by the Managers.
ARTICLE VIII
Accounting and Records
8.01 Records and Accounting. The books and records of the
Company shall reflect all Company transactions and shall be appropriate and
adequate for the Company's business. The fiscal year of the Company for
financial reporting and for federal income tax purposes shall be the
calendar year.
8.02 Access to Accounting Records. All books and records of the
Company shall be maintained at any office of the Company or at the
Company's principal place of business, and the Member, and its duly
authorized representative, shall have access to them at such office of the
Company and the right to inspect and copy them at reasonable times.
8.03 Tax Elections. The Managers shall make the following
elections on behalf of the Company:
(a) To elect the calendar year as the Company's fiscal
year if permitted by applicable law;
(b) To elect the accrual method of accounting;
(c) To elect to treat all organization and start-up costs
of the Company as deferred expenses amortizable over 60 months under
Section 195 of the Code; and
(d) To elect with respect to such other federal, state
and local tax matters as the Managers shall agree upon from time to time.
8.04 Annual Tax Information. The Managers shall cause the
Company to deliver to the Member all information necessary for the
preparation of the Member's federal income tax return.
8.05 Tax Matters Member. The Member shall communicate and
negotiate with the Internal Revenue Service on any tax matter on behalf of
the Member and the Company.
ARTICLE IX
Perpetual Existence
The Company shall have a perpetual existence. So long as any of
the Company's securitization bonds shall remain outstanding, the sole
Member shall not be entitled to consent to the dissolution of the Company.
ARTICLE X
Indemnification
10.01 Indemnity. Subject to the provisions of Section 10.04
hereof, the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the Company, by
reason of the fact that such person is or was a Manager, Member, officer,
controlling person, employee, legal representative or agent of the Company,
or is or was serving at the request of the Company as a member, manager,
director, officer, partner, shareholder, controlling person, employee,
legal representative or agent of another limited liability company,
partnership, corporation, joint venture, trust or other enterprise, against
expenses, including attorneys' fees, judgment, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with the action, suit or proceeding if such person acted in good faith and
in a manner which such person reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to a criminal
action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful.
10.02 Indemnity for Actions By or In the Right of the Company.
Subject to the provisions of Section 10.04 hereof, the Company shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
rights of the Company to procure a judgment in its favor by reason of the
fact that he is or was a Member, Manager, officer, controlling person,
employee, legal representative or agent of the Company, or is or was
serving at the request of the Company as a member, manager, director,
officer, partner, shareholder, controlling person, employee, legal
representative or agent of another limited liability company, corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including amounts paid in settlement and attorneys' fees actually and
reasonably incurred by such person in connection with the defense or
settlement of the actions or suit if such person acted in good faith and in
a manner which such person reasonably believed to be in or not opposed to
the best interests of the Company. Indemnification may not be made for any
claim, issue or matter as to which such person has been adjudged by a court
of competent jurisdiction, after exhaustion of all appeals therefrom, to be
liable to the Company or for amounts paid in settlement to the Company,
unless and only to the extent that the court in which the action or suit
was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person
is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
10.03 Indemnity If Successful. The Company may indemnify a
Member, Manager, officer, employee or agent of the Company against
expenses, including attorneys' fees, actually and reasonably incurred by
him or her in connection with the defense of any action, suit or proceeding
referred to in Sections 10.01 and 10.02 or in defense of any claim, issue
or matter therein, to the extent that such person or entity has been
successful on the merits.
10.04 Expenses. Any indemnification under Sections 10.01 and
10.02, as well as the advance payment of expenses permitted under Section
10.05 unless ordered by a court or advanced pursuant to Section 10.05
below, must be made by the Company only as authorized in the specific case
upon a determination that indemnification of the Member, Manager, officer,
employee or agent is proper in the circumstances. The determination must be
made:
(a) By the Member if the Member was not a party to the
act, suit or proceeding; or
(b) If the Member was a party to the act, suit or
proceeding by independent legal counsel in a written opinion.
10.05 Advance Payment of Expenses. The expenses of the Member
and each Manager incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Company as they are incurred and in advance
of the final disposition of the action, suit or proceeding, upon receipt of
an undertaking by or on behalf of the Member or such Manager's to repay the
amount if it is ultimately determined by a court of competent jurisdiction
that the Member or such Manager is not entitled to be indemnified by the
Company. The provisions of this subsection do not affect any rights to
advancement of expenses to which personnel other than the Member or the
Managers may be entitled under any contract or otherwise by law.
10.06 Other Arrangements Not Excluded. The indemnification and
advancement of expenses authorized in or ordered by a court pursuant to
this Article 10:
(a) Does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under
the Certificate of Formation or any agreement, decision of the Member or
otherwise, for either an action of a Member, Manager, officer, employee or
agent in the official capacity of such person or an action in another
capacity while holding such position, except that indemnification, unless
ordered by a court pursuant to Section 10.05 above, may not be made to or
on behalf of the Member or any Manager if a final adjudication established
that its acts or omissions involved intentional misconduct, fraud or a
knowing violation of the law and was material to the cause of action; and
(b) Continues for a person who has ceased to be a Member,
Manager, officer, employee or agent and inures to the benefit of the
successors, heirs, executors and administrators of such a person.
ARTICLE XI
Miscellaneous Provisions
11.01 Amendments. This Limited Liability Company Agreement may be
amended by written instrument executed by the Member and the Company.
11.02 Applicable Law. This Agreement, and its application,
shall be governed by he laws of the State of Delaware.
11.03 Headings. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define,
or limit the scope, extent or intent of this Agreement or any provisions
contained herein.
11.04 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be deemed invalid,
illegal or unenforceable to any extent, the remainder of this Agreement and
the application thereof shall not be affected and shall be enforceable to
the fullest extent permitted by law.
11.05 Assigns. Each and all of the covenants, terms, provisions
and agreements contained in this Agreement shall be binding upon and inure
to the benefit of the Member, and its successors and assigns.
IN WITNESS WHEREOF, this Limited Liability Company Agreement is
hereby executed by the undersigned as the sole Member of the Company as of
October 11, 2000.
CONSUMERS ENERGY COMPANY
By:
------------------------------------
Name: David A. Mikelonis
Title:Senior Vice President
and General Counsel
SCHEDULE A
Schedule of Capital Contributions of Member
COMMON INTEREST
CAPITAL COMMON INTEREST CAPITAL
MEMBER'S NAME CONTRIBUTION PERCENTAGE ACCOUNT
------------- ------------ ---------- -------
Consumers Energy Company $1,000 100% $1,000
SCHEDULE B
CERTIFICATE OF COMMON INTEREST
of
CONSUMERS FUNDING LLC
A Limited Liability Company
Organized under the Laws of the State of Delaware
This Certificate is issued and shall be held subject to the
provisions of the Certificate of Formation of CONSUMERS FUNDING LLC, a
Limited Liability Company organized under the laws of the State of Delaware
(the "Company"), filed on October 11, 2000 with the Secretary of State of
the State of Delaware, and the Limited Liability Company Agreement dated
October 11, 2000 of the Company, as each may be amended from time to time.
This Certificate of Common Interest certifies that Consumers Energy
Company is the registered holder of the entire Common Interest of the
Company, which Common Interest shall be transferable only on the books of
the Company by the holder hereof in person or by a duly authorized attorney
upon surrender of this Certificate with a proper endorsement.
IN WITNESS WHEREOF, this Company has caused this Certificate to be
signed by one of its duly authorized Managers this 11th day of October,
2000.
Title: Manager
CONSUMERS FUNDING LLC
For Value Received the undersigned hereby sells, assigns and
transfers unto the entire Common Interest of the Company represented
by the within Certificate and does hereby irrevocably constitute and
appoint
Attorney, to transfer said Common Interest on the books of the
Company with full power of substitution in the premises.
Dated:
-----------------------
SCHEDULE C
Initial Managers
Names
1) Alan M. Wright
2) David A. Mikelonis
3) Thomas A. McNish
Initial Officers
Names Titles
1) Alan M. Wright Chief Executive Officer
Chief Financial Officer
2) Dennis DaPra Controller
3) Thomas A. McNish Secretary
4) Laura L. Mountcastle Treasurer
