Exhibit 4(a)
LIMITED LIABILITY COMPANY AGREEMENT
OF
TXU TRANSITION BOND COMPANY LLC
A DELAWARE LIMITED LIABILITY COMPANY
(THE "COMPANY")
ARTICLE I
GENERAL PROVISIONS
SECTION 1.01 Registered Office. The registered office of the Company
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in this state shall be Corporation Service Company, 0000 Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000. The member of the Company (the "Member") may change
said registered office from one location to another in the State of Delaware.
SECTION 1.02 Other Offices. The Company may have an office at Energy
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Plaza, 0000 Xxxxx Xxxxxx, Xxxxx 0-000, Xxxxxx, Xxxxx 00000 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.
SECTION 1.03 Purpose; Nature of Business Permitted; Powers. The
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Company is organized primarily for the object and purpose of purchasing
transition property, investing in investment securities, issuing transition
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.
SECTION 1.04 Limited Liability Company Agreement; Certificate of
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Formation. This document (the "Agreement") shall constitute a "limited liability
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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 November 30, 1999.
ARTICLE II
CAPITAL
SECTION 2.01 Initial Capital. The initial capital of the Company
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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 reference.
SECTION 2.02 Capital Account. A Capital Account shall be established
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and maintained for the Member on the Company's books (the "Capital Account").
SECTION 2.03 Interest. No interest shall be paid or credited to the
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Member on its Capital Account or upon any undistributed profits left on deposit
with the Company.
ARTICLE III
MEMBER
SECTION 3.01 Powers. Subject to the provisions of the Certificate of
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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 as are 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.
SECTION 3.02 Compensation of Member. The Company shall have
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authority to pay to the Member reasonable compensation for the Member's services
to the Company. It is understood that the compensation paid to the Member under
the provisions of this Section shall be determined without regard to the income
of the Company, shall not be deemed to constitute distributions to the recipient
of any profit, loss or capital of the Company and shall be considered as an
operating expense of the Company.
SECTION 3.03 Bank Accounts. From time to time, the Member may
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designate a person or persons, whether such persons be the Member or not, to
open and maintain one or more bank accounts, to rent safety deposit boxes or
vaults, to 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, to negotiate and purchase certificates of deposit,
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to obtain access to the Company safety deposit box or boxes, and generally to
sign such forms on behalf of the Company as may be required to conduct the
banking activities of the Company.
SECTION 3.04 Other Ventures. It is expressly agreed that the Member
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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.
SECTION 3.05 Actions by the Member. All actions of the Member may be
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taken by written resolution of the Member which shall be signed by the Member or
on behalf of the Member by an authorized officer of the Member and filed with
the records of the Company.
ARTICLE IV
COMMON INTEREST
SECTION 4.01 General. "Common Interest" means the interest in the
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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.
SECTION 4.02 Distributions. The Member shall be entitled to receive,
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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.
SECTION 4.03 Rights on Liquidation, Dissolution or Winding Up.
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(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.
SECTION 4.04 Redemption. The Common Interest shall not be
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redeemable.
SECTION 4.05 Voting Rights. The Member shall have the sole right to
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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.
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ARTICLE V
MANAGERS
SECTION 5.01 Managers.
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(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 of the Company.
(b) Each Manager shall be appointed by the Member and shall hold office for
the term for which appointed 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.
SECTION 5.02 Powers of the Managers. The Managers shall have the
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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 as are not by the Act, other applicable law, the
Certificate of Formation or this Agreement directed or required to be exercised
or done by the Member. All instruments, contracts, agreements and documents
providing for the acquisition or disposition of property of the Company shall be
valid and binding on the Company if executed by one or more of the Managers. All
instruments, contracts, agreements and documents of whatsoever type executed on
behalf of the Company shall be executed in the name of the Company by one or
more Managers.
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SECTION 5.03 Compensation. The Company may pay to any Manager
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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.
SECTION 5.04 Removal of Managers.
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(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 appointed 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-appointed 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.
SECTION 5.05 Resignation of Manager. A Manager may resign as a
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Manager at any time by notice to the Member. Such resignation shall be effective
as set forth in such notice.
SECTION 5.06 Vacancies. Any vacancies among the Managers may be
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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 transition 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;
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(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
SECTION 8.01 Records and Accounting. The books and records of the
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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.
SECTION 8.02 Access to Accounting Records. All books and records of
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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.
SECTION 8.03 Tax Elections. The Managers shall make the following
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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
Internal Revenue Code of 1986, as amended; and
(d) To elect with respect to such other federal, state and local tax matters
as the Managers shall agree upon from time to time.
SECTION 8.04 Annual Tax Information. The Managers shall cause the
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Company to deliver to the Member all information necessary for the preparation
of the Member's federal income tax return.
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SECTION 8.05 Tax Matters Member. The Member shall communicate and
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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 transition bonds shall remain outstanding, the Member shall not be
entitled to consent to the liquidation, dissolution or winding up of the
Company.
ARTICLE X
INDEMNIFICATION
SECTION 10.01 Indemnity. Subject to the provisions of Section 10.04
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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,
judgments, 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.
SECTION 10.02 Indemnity for Actions By or In the Right of the
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Company. Subject to the provisions of Section 10.04 hereof, the Company shall
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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 right of the
Company to procure a judgment in its favor by reason of the fact that he or she
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
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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.
SECTION 10.03 Indemnity If Successful. The Company may indemnify a
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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.
SECTION 10.04 Expenses. Any indemnification under Sections 10.01 and
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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.
SECTION 10.05 Advance Payment of Expenses. The expenses of the Member
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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 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.
SECTION 10.06 Other Arrangements Not Excluded. The indemnification
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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 such 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.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 Amendments. This Agreement may be amended by written
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instrument executed by the Member and the Company.
SECTION 11.02 Applicable Law. This Agreement, and its application,
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shall be governed by the laws of the State of Delaware.
SECTION 11.03 Headings. The headings in this Agreement are inserted
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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.
SECTION 11.04 Severability. If any provision of this Agreement or the
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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.
SECTION 11.05 Assigns. Each and all of the covenants, terms,
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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 Agreement is hereby executed by the
undersigned as the Member of the Company as of November 30, 1999.
TXU ELECTRIC COMPANY
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Treasurer
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SCHEDULE A
Schedule of Capital Contributions of Member
COMMON INTEREST
COMMON
CAPITAL INTEREST
MEMBER'S NAME CONTRIBUTION PERCENTAGE CAPITAL ACCOUNT
TXU Electric Company $1,000 100% $1,000
SCHEDULE B
Form of Common Interest Certificate
CERTIFICATE OF COMMON INTEREST
OF
TXU TRANSITION BOND COMPANY LLC
A LIMITED LIABILITY COMPANY
This Certificate is issued and shall be held subject to the provisions of the
Certificate of Formation of TXU TRANSITION BOND COMPANY LLC, a limited liability
company organized under the laws of the State of Delaware (the "Company"), filed
on November 30, 1999 with the Secretary of State of the State of Delaware, and
the Limited Liability Company Agreement, dated as of November 30, 1999, of the
Company, as each may be amended from time to time.
This Certificate of Common Interest certifies that TXU Electric 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, the Company has caused this Certificate to be signed by one
of its duly authorized Managers this 30th day of November, 1999.
TXU ELECTRIC COMPANY
By:
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Name:
Title:
TXU TRANSITION BOND COMPANY LLC
For Value Received the undersigned hereby sells, assigns and transfers
unto
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the entire Common Interest of the Company represented by the within Certificate
and does hereby irrevocably constitute and appoint
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Attorney, to transfer said Common Interest on the books of the Company with full
power of substitution in the premises.
Dated:
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SCHEDULE C
Initial Managers
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxx
