TXU EASTERN FUNDING COMPANY
TXU EASTERN HOLDINGS LIMITED
OFFICER'S CERTIFICATE
Kirk R. Oliver, an authorized attorney of TXU Eastern
Funding Company, a private unlimited company duly incorporated
and existing under the laws of England and Wales (the "Company"),
and Michael J. McNally, a Director of the Company, pursuant to
the authority granted in the Board Resolutions of the Company
dated February 19, 1999, and Sections 201, 301, 1601 and 1602 of
the Indenture defined herein, and Kirk R. Oliver, an authorized
attorney of TXU Eastern Holdings Limited, a private limited
company duly incorporated and existing under the laws of England
and Wales (the "Guarantor"), and Michael J. McNally, a Director
of the Guarantor, pursuant to the authority granted in the Board
Resolutions of the Guarantor, dated February 19, 1999 and Section
201 of the Indenture defined herein, do hereby certify to The
Bank of New York (the "Trustee"), as Trustee under the Indenture
of the Company (For Unsecured Debt Securities) dated as of May 1,
1999 (the "Indenture") that:
1. The securities of the third series to be issued under the
Indenture shall be designated "6.45% Senior Notes due May
15, 2005" (the "Senior Notes of the Third Series"). The
Senior Notes of the Third Series will be unconditionally
guaranteed by the Guarantor, as to payment of principal,
premium, if any, and interest and Additional Amounts, if
any. The securities of the fourth series to be issued under
the Indenture shall be designated "6.45% Exchange Senior
Notes due May 15, 2005" (the "Senior Notes of the Fourth
Series", and together with the Senior Notes of the Third
Series, the "Senior Notes of the Third and Fourth Series").
(The term "Senior Notes of Third or Fourth Series" shall
refer to either Senior Notes of the Third Series or Senior
Notes of the Fourth Series, except as otherwise noted.) All
capitalized terms used in this certificate which are not
defined herein but are defined in Exhibit A, Exhibit B,
Exhibit C or Exhibit D shall have the meanings therein; all
capitalized terms used in this certificate or Exhibit A,
Exhibit B, Exhibit C or Exhibit D which are not defined
herein or therein but are defined in the Indenture shall
have the meanings set forth in the Indenture.
2. The Senior Notes of the Third Series initially shall be
issued in substantially the form thereof set forth in
Exhibit A hereto. The Senior Notes of the Third Series
shall have such terms and provisions as are provided herein,
in the Indenture and in the forms thereof set forth in
Exhibits A or B hereto, whichever is applicable, and shall
be issued in substantially such form. The Senior Notes of
the Fourth Series shall have such terms and provisions as
are provided herein, in the Indenture and in the forms
thereof set forth in Exhibits C or D hereto, whichever is
applicable, and shall be issued in substantially such form.
3. The Senior Notes of the Third and Fourth Series shall mature
and the principal shall be due and payable together with all
accrued and unpaid interest thereon on May 15, 2005.
4. The Senior Notes of the Third and Fourth Series shall be
issued in the denominations of $10,000 and in integral
multiples of $1,000 in excess thereof; except that Senior
Notes of the Third Series issued or transferred to
institutional "accredited investors," as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act ("IAIs") will be in a minimum principal
amount of $250,000.
5. The Senior Notes of the Third and Fourth Series shall bear
interest as provided in Exhibit A, Exhibit B, Exhibit C or
Exhibit D, as applicable.
6. Each installment of interest on a Senior Note of the Third
and Fourth Series shall be payable on the dates specified in
Exhibit A, Exhibit B, Exhibit C or Exhibit D, as applicable.
7. The principal of (and premium, if any, on) and each
installment of interest on and any other amounts payable on
the Senior Notes of the Third and Fourth Series shall be
payable at, and registration and registration of transfers
and exchanges in respect of the Senior Notes of the Third
and Fourth Series may be effected at, the office or agency
of the Company in The City of New York and, for so long as
the Senior Notes of the Third and Fourth Series are listed
on the Luxembourg Stock Exchange, at the agency of the
Company in Luxembourg; provided that, in the case of
certificated Senior Notes of the Third or Fourth Series,
payment of interest may be made at the option of the Company
by check mailed to the address of the Persons entitled
thereto, except that payment of interest, if any, in respect
of any certificated registered Senior Notes of the Third or
Fourth Series may also be made, in the case of a Holder of
an aggregate principal amount in excess of $50,000,000, by
wire transfer to a U.S. Dollar account maintained by the
Holder with a bank in the United States; provided that such
Holder elects payment by wire transfer by giving written
notice to the Trustee or a Paying Agent to such effect
designating such account no later than 15 days immediately
preceding the relevant due date for payment (or such other
date as the Trustee may accept in its discretion). In the
case of Senior Notes of the Third and Fourth Series issued
in global bearer form, interest shall be paid upon
presentation of the applicable Senior Note of such Series to
a Paying Agent; the Paying Agent shall mark the original
Senior Note of such Series in the appropriate box on the
interest payment schedule included therein to indicate that
the interest payment has been made.
8. Notices and demands to or upon the Company or the Guarantor
in respect of the Senior Notes of the Third and Fourth
Series may be served at the office or agency of the Company
in The City of New York.
9. The Corporate Trust Office of the Trustee will initially be
the agency of the Company in The City of New York for
payments, registration and registration of transfers and
exchanges and service of notices and demands with respect to
the Senior Notes of the Third and Fourth Series and the
Company hereby appoints the Trustee as its agent for all
such purposes, and the Corporate Trust Office of Kredietbank
SA Luxembourgeoise ("Kredietbank") at 43, Boulevard Royal L-
2955, Luxembourg, initially will be the agency of the
Company in Luxembourg; provided, however, that the Company
reserves the right to change, by one or more Officer's
Certificates, any such office or agency and such agent,
provided the Company will always have a paying agent
location in The City of New York and, for so long as any
Senior Notes of the Third or Fourth Series are listed on the
Luxembourg Stock Exchange, in Luxembourg. The Trustee
initially will be the Security Registrar and the Paying
Agent for the Senior Notes of the Third and Fourth Series.
10. The following constitute additional Events of Default with
respect to the Senior Notes of the Third and Fourth Series:
(a) The entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect
of a Principal Subsidiary of the Guarantor in an
involuntary case or proceeding under any applicable
bankruptcy, insolvency, or other similar law or (2) a
decree or order adjudging a Principal Subsidiary of the
Guarantor a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons other
than a Principal Subsidiary of the Guarantor seeking
arrangement, adjustment or composition of or in respect
of a Principal Subsidiary of the Guarantor under any
applicable bankruptcy, insolvency, or other similar
law, or appointing a custodian, receiver, liquidator,
administrator, assignee, trustee, sequestrator or other
similar official for a Principal Subsidiary of the
Guarantor or for any substantial part of its property,
or ordering the winding up or liquidation of its
affairs (other than for the purpose of a solvent
amalgamation, reorganization or similar transaction not
involving disposal of all or substantially all of its
assets for the benefit of creditors other than the
Guarantor or its Subsidiaries), and any such decree or
order for relief or any such other decree or order
shall have remained unstayed and in effect for a period
of 90 consecutive days;
(b) The commencement by a Principal Subsidiary of the
Guarantor of a voluntary case or proceeding under any
applicable bankruptcy, insolvency, or other similar law
or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by a Principal
Subsidiary of the Guarantor to the entry of a decree or
order for relief in respect of such Principal
Subsidiary of the Guarantor in a case or proceeding
under any applicable bankruptcy, insolvency, or other
similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against such Principal
Subsidiary of the Guarantor, or the filing by a
Principal Subsidiary of the Guarantor of a petition or
answer or consent seeking relief under any applicable
bankruptcy, insolvency, or other similar law, or the
consent by a Principal Subsidiary of the Guarantor to
the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator,
administrator, assignee, trustee, sequestrator or
similar official of such Principal Subsidiary of the
Guarantor or of any substantial part of its property,
or the consent by a Principal Subsidiary of the
Guarantor to the winding up or liquidation of its
affairs (other than for the purpose of a solvent
amalgamation, reorganization or similar transaction not
involving disposal of all or substantially all of its
assets for the benefit of creditors other than the
Guarantor or its Subsidiaries) or the making by a
Principal Subsidiary of the Guarantor of an assignment
for the benefit of creditors, or the admission by a
Principal Subsidiary of the Guarantor in writing of
inability to pay its debts generally as they become
due, or the authorization of such action by the Board
of Directors of such Principal Subsidiary of the
Guarantor;
(c) Default in the payment when due of indebtedness for
money borrowed exceeding $50,000,000 of the Company,
the Guarantor or any Principal Subsidiary of the
Guarantor; and
(d) Failure of the Company or the Guarantor to pay
Additional Amounts (as defined herein) on any Note of
the Third or Fourth Series within 30 days after it is
due.
For the purposes of (a), (b) and (c) above, a "Principal
Subsidiary" means a Subsidiary of the Guarantor whose gross
assets are 25% or more of the Guarantor's consolidated gross
assets or whose gross revenues are 25% or more of the
Guarantor's consolidated gross revenues.
11. The Senior Notes of the Third Series will be redeemable as
provided in the forms thereof attached hereto as Exhibit A
or Exhibit B, as applicable; the Senior Notes of the Fourth
Series will be redeemable as provided in the forms thereof
attached hereto as Exhibit C or Exhibit D, as applicable.
12. Notwithstanding Section 106 of the Indenture, notice to a
Holder of Senior Notes of the Third or Fourth Series in
bearer, global form shall be given sufficiently if given to
such Holder in writing by the Trustee, if the Trustee knows
the identity of such Holder, or in such other manner as the
Trustee deems necessary or desirable; provided, however,
that so long as the Senior Notes of the Third and Fourth
Series are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange so require, notices
to Holders of the Senior Notes of the Third and Fourth
Series will be published in a leading daily newspaper having
general circulation in Luxembourg (which is expected to be
the Luxemburger Wort).
13. The Senior Notes of the Third Series will be initially
issued pursuant to Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"), as one or more
global Senior Notes of the Third Series in bearer form and
shall be issued to the Book-Entry Depositary (as defined in
the Deposit Agreement by and between The Bank of New York,
as Book-Entry Depositary, and TXU Eastern Funding Company,
as Issuer, dated as of May 13, 1999 (the "Deposit
Agreement")). The Senior Notes of the Third Series shall
contain restrictions on transfer, substantially as described
in the forms set forth in Exhibit A or Exhibit B hereto.
Each Senior Note of the Third Series, whether in a global
form or in a certificated form, shall bear the non-
registration legend and the registration rights legend in
substantially the form thereof set forth in Exhibit A or
Exhibit B hereto, unless otherwise agreed by the Company,
such agreement to be confirmed in writing to the Trustee.
Nothing in the Indenture, the Senior Notes of the Third
Series or this certificate shall be construed to require the
Company to register any Senior Notes of the Third Series
under the Securities Act, unless otherwise expressly agreed
by the Company, confirmed in writing to the Trustee, or to
make any transfer of such Senior Notes of the Third Series
in violation of applicable law; provided, however, that the
Company will enter into a registration rights agreement (the
"Registration Rights Agreement") with the initial purchasers
of the Senior Notes of the Third Series, confirmed in
writing to the Trustee, pursuant to which, among other
things, the Senior Notes of the Third Series may be
exchanged for the Senior Notes of the Fourth Series
registered under the Securities Act or, failing such
registration, the Senior Notes of the Third Series will be
registered under the Securities Act.
14. It is contemplated that the Book-Entry Depositary will issue
to The Depository Trust Company ("DTC"), New York, New York,
one or more Book-Entry Interests (as defined in the Deposit
Agreement), which together will represent a 100% interest in
the global Senior Notes of the Third or Fourth Series. The
Trustee, the Security Registrar and the Company will have no
responsibility under the Indenture for transfers of
beneficial interests in the Senior Notes of the Third and
Fourth Series.
In connection with any transfer of beneficial interests in
the Senior Notes of the Third Series, the Trustee, the
Security Registrar and the Company shall be under no duty to
inquire into, may conclusively presume the correctness of,
and shall be fully protected in relying upon the
certificates and other information (in the forms attached
hereto as Exhibit E, for use in connection with the transfer
of beneficial interests in the Senior Notes of the Third
Series, or in the form attached at the rear of Exhibit B,
for use in connection with the transfer of Senior Notes of
the Third Series in certificated form, or otherwise)
received from the Holders and any transferees of any
beneficial interests in the Senior Notes of the Third Series
or certificated Senior Notes of the Third Series regarding
the validity, legality and due authorization of any such
transfer, the eligibility of the transferee to receive such
beneficial interests in such Senior Note and any other facts
and circumstances related to such transfer.
15. No service charge shall be made for the registration of
transfer or exchange of the Senior Notes of the Third and
Fourth Series; provided, however, that the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
with the exchange or transfer.
16. Additional Amounts. All payments of principal and interest
------------------
(including Additional Interest, as defined in the
Registration Rights Agreement, and payments of discount and
premium, if any) with respect to the Senior Notes of the
Third and Fourth Series and all payments made pursuant to
the Guarantee shall be made free and clear of, and without
withholding or deduction for or on account of, any present
or future taxes, duties, assessments or governmental charges
of whatever nature imposed, levied, collected, withheld or
assessed by or within any supranational federation to which
a Jurisdiction of Incorporation belongs or any Jurisdiction
of Incorporation (or any political subdivision or taxing
authority thereof or therein) or any jurisdiction in which
the Company or the Guarantor is managed or has a place of
business (each, a "Taxing Jurisdiction") or by or within any
political subdivision thereof or any authority therein or
thereof having power to tax, unless such withholding or
deduction is required by law. In the event of any such
withholding or deduction ("Gross-Up Taxes"), the Company or
the Guarantor, as the case may be, shall pay to the Holder
of such Senior Notes of the Third or Fourth Series such
additional amount ("Additional Amount") as shall be
necessary in order that the amount received by such Holder
after withholding or deduction shall equal the amount that
would otherwise have been due to such Holder in the absence
of such withholding or deduction, except that no such
Additional Amounts shall be payable:
(A) to, or to a Person on behalf of, a Holder who is
liable for such Gross-Up Taxes with respect to the Senior
Notes of the Third or Fourth Series or the Guarantee, by
reason of such Holder having some connection with the
relevant Taxing Jurisdiction (including being a citizen or
resident or national of, or carrying on a business or
maintaining a permanent establishment in, or being
physically present in, such Taxing Jurisdiction) other than
the mere holding of a Senior Note of the Third or Fourth
Series or the receipt of principal and interest (including
payments of discount and premium, if any) in respect thereof
or in respect of the Guarantee;
(B) to, or to a Person on behalf of, a Holder who
presents a Senior Note of the Third or Fourth Series
(whenever presentation is required) for payment more than 30
days after the date on which payment first becomes due
except to the extent that such Holder would have been
entitled to such Additional Amounts on presenting such
Senior Note of the Third or Fourth Series for payment on the
last day of such period of 30 days;
(C) to, or to a Person on behalf of, a Holder who
presents a Senior Note of the Third or Fourth Series (when
presentation is required) other than at a Place of Payment
in The City of New York or, so long as the Senior Notes of
the Third or Fourth Series are listed on the Luxembourg
Stock Exchange, in Luxembourg;
(D) to, or to a Person on behalf of, a Holder who
would not be liable or subject to the withholding or
deduction by making a declaration of non-residence or
similar claim for exemption to the relevant tax authority;
or
(E) to, or to a Person on behalf of, a Holder of a
Senior Note of the Third or Fourth Series that is issued in
certificated form following and during the continuance of an
Event of Default if such Holder (or any predecessor Holder)
was one of the beneficial owners requesting that such
certificated Senior Notes of the Third or Fourth Series be
so issued.
Such Additional Amounts will also not be payable where, had
the beneficial owner of the Senior Note of the Third or
Fourth Series (or any interest therein) been the Holder of
the Senior Note of the Third or Fourth Series, it would not
have been entitled to payment of Additional Amounts by
reason of any one or more of clauses (A) through (E) above.
If the Company or the Guarantor, as applicable, shall
determine that Additional Amounts will not be payable
because of the immediately preceding sentence, the Company
or the Guarantor, as applicable, will inform such Holder
promptly after making such determination setting forth the
reason(s) therefor.
17. Special Redemption. If (a) the Company or the Guarantor
------------------
certifies to the Trustee prior to the giving of a notice as
provided below that it has or will become obligated to pay
Additional Amounts with respect to the Senior Notes of the
Third or Fourth Series as a result of either (x) any change
in, or amendment to, or clarification of, or announced
change to occur in the future in, the laws or regulations of
the Taxing Jurisdiction or any political subdivision or any
authority or agency thereof or therein having power to tax
or levy duties, or any change in the application or
interpretation of such laws or regulations, which change or
amendment becomes effective on or after the date of the
offering memorandum or (y) the issuance of certificated
registered Senior Notes of such Series pursuant to either
(i) an Optional Certificated Security Request, as defined in
the Deposit Agreement, (ii) the unwillingness or inability
of DTC to continue to hold the Book-Entry Interests with
respect to the global Senior Notes of such Series or
interests therein or DTC's ceasing to be a "clearing agency"
registered under the United States Securities Exchange Act
of 1934, as amended, and, in either case, a successor is not
appointed by the Company within 120 days, or (iii) the
unwillingness or inability of the Book-Entry Depositary to
continue to act as such and a successor is not appointed by
the Company within 120 days, and (b) such obligation cannot
be avoided by the Company or the Guarantor taking reasonable
measures available to it, and, prior to the giving of a
notice of redemption as hereinafter in this paragraph
provided, the Company or the Guarantor delivers to the
Trustee the certificate referred to in the last sentence of
this paragraph, then the Company shall have the right, at
its option, upon not less than 30 days nor more than 60
days' prior written notice of redemption to the Holders of
Senior Notes of such Series, to redeem the Senior Notes of
such Series, in whole but not in part, at the principal
amount thereof plus accrued and unpaid interest thereon, and
accrued Additional Amounts with respect thereto, if any,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the
Guarantor or the Company would be obligated to pay any such
Additional Amounts with respect to such Series. Prior to
the mailing of any notice of redemption pursuant to this
paragraph, the Company shall deliver to the Trustee a
certificate signed by an officer of the Company stating that
the obligation referred to in (a) above cannot be avoided by
the Guarantor or the Company taking reasonable measures
available to it, and the Trustee shall accept, and shall be
fully protected in relying upon, such certificate as
sufficient evidence of the condition precedent set out in
(b) above, in which event it shall be conclusive and binding
on the Holders.
18. If the Company shall make any deposit of money and/or
Eligible Obligations with respect to any Senior Notes of the
Third and Fourth Series, or any portion of the principal
amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's
Certificate described in clause (z) in the first paragraph
of said Section 701 unless the Company shall also deliver to
the Trustee, together with such Officer's Certificate,
either:
(A) an instrument wherein the Company, notwithstanding
the satisfaction and discharge of its indebtedness in
respect of the Senior Notes of the Third and Fourth Series,
shall assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee or
Paying Agent such additional sums of money, if any, or
additional Eligible Obligations (meeting the requirements of
Section 701), if any, or any combination thereof, at such
time or times, as shall be necessary, together with the
money and/or Eligible Obligations theretofore so deposited,
to pay when due the principal of and premium, if any, and
interest due and to become due and Additional Amounts, if
any, due and known to become due on such Senior Notes of the
Third and Fourth Series or portions thereof, all in
accordance with and subject to the provisions of said
Section 701; provided, however, that such instrument may
state that the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery to
the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a
result of a change in law occurring after the date of this
certificate, the Holders of such Senior Notes of the Third
and Fourth Series, or portions of the principal amount
thereof, will not recognize income, gain or loss for United
States federal income tax purposes as a result of the
satisfaction and discharge of the Company's indebtedness in
respect thereof and will be subject to United States federal
income tax on the same amounts, at the same times and in the
same manner as if such satisfaction and discharge had not
been effected.
19. The Company reserves the right to require legends on Senior
Notes of the Third Series as it may determine are necessary
to ensure compliance with the securities laws of the US and
the states therein and any other applicable laws.
20. Each of the undersigned has read all of the covenants and
conditions contained in the Indenture (including the
definitions in the Indenture relating thereto) relating to
the issuance of the Senior Notes of the Third and Fourth
Series and the Guarantees endorsed thereon and in respect of
compliance with which this certificate is made.
21. The statements contained in this certificate are based upon
the familiarity of each of the undersigned with the
Indenture, the documents accompanying this certificate, and
upon discussions by each of the undersigned with officers
and employees of the Company and the Guarantor familiar with
the matters set forth herein.
22. In the opinion of each of the undersigned, he has made such
examination or investigation as is necessary to enable him
to express an informed opinion whether or not such covenants
and conditions have been complied with.
23. In the opinion of each of the undersigned, such conditions
and covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a condition
precedent) to the authentication and delivery of the Senior
Notes of the Third Series and the Guarantees to be endorsed
thereon requested in the accompanying Company Order and
Guarantor Order and the establishment of the Senior Notes of
the Fourth Series have been complied with.
IN WITNESS WHEREOF, the undersigned have executed this
Officer's Certificate as of this 13th day of May, 1999.
/s/ Kirk R. Oliver
-------------------
Name: Kirk R. Oliver
Title: Authorized Attorney
/s/ Michael J. McNally
-----------------------
Name: Michael J. McNally
Title: Director
/s/ Kirk R. Oliver
-------------------
Name: Kirk R. Oliver
Title: Authorized Attorney
/s/ Michael J. McNally
-----------------------
Name: Michael J. McNally
Title: Director
EXHIBIT A
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES
REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES AND MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED OTHER THAN (A) (1) TO TXU EASTERN FUNDING COMPANY OR
TXU EASTERN HOLDINGS LIMITED, (2) IN A TRANSACTION ENTITLED TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (5) TO AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT, IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, AND THAT IS ACQUIRING THE
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (B) IN EACH CASE IN ACCORDANCE WITH ALL THE
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES"
[registration rights legend]
The Holder of this Security, by acceptance hereof, will be
deemed to have agreed to be bound by the provisions of the
Registration Rights Agreement dated May 13, 1999, among the
Company, the Guarantor and the initial purchasers of this
Security.
[FORM OF FACE OF SENIOR NOTE]
GLOBAL BEARER FORM
NO. . CUSIP NO. .
TXU EASTERN FUNDING COMPANY
6.45% SENIOR NOTES DUE MAY 15, 2005
TXU Eastern Funding Company, a corporation duly incorporated
and existing under the laws of England and Wales (herein referred
to as the "Company", which term includes any successor Person
under the Indenture), for value received, hereby promises to pay
to the bearer upon surrender hereof the principal sum of
$650,000,000 Dollars on May 15, 2005, and to pay interest on said
principal sum semi-annually in arrears on May 15 and November 15
of each year (each an Interest Payment Date) at the rate of 6.45%
per annum until the principal hereof is paid or made available
for payment. Interest on the Securities of this series shall be
computed on the basis of a 360-day year consisting of twelve 30-
day months and for any period shorter than a full month, on the
basis of the actual number of days elapsed in such period.
Interest on the Securities of this series will accrue from May
13, 1999, to the first Interest Payment Date (which shall be
November 15, 1999), and thereafter will accrue from the last
Interest Payment Date to which interest has been paid or duly
provided for. In the event that any Interest Payment Date is not
a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of such
delay) with the same force and effect as if made on the Interest
Payment Date. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will be paid upon
presentation to any Paying Agent; such Paying Agent shall mark
this Security in the appropriate box on the Interest Payment
Schedule included therein to indicate that the interest payment
has been made. Payments of any Defaulted Interest will be paid
to the bearer hereof at the time of presentation.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York and, for so long as the Securities of this
series shall be listed on the Luxembourg Stock Exchange, in
Luxembourg, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of
public and private debts.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TXU EASTERN FUNDING COMPANY
By:
-----------------------
[FORM OF GUARANTEE]
TXU Eastern Holdings Limited, a corporation
incorporated under the laws of England and Wales (the
"Guarantor", which term includes any successor under the
Indenture (the "Indenture") referred to in the Security upon
which this Guarantee is endorsed), for value received, hereby
unconditionally and irrevocably guarantees to the Holder of the
Security upon which this Guarantee is endorsed, the due and
punctual payment of the principal of, and premium, if any, and
interest and Additional Amounts, if any, on such Security when
and as the same shall become due and payable, whether at the
Stated Maturity, by declaration of acceleration, call for
redemption, or otherwise, in accordance with the terms of such
Security and of the Indenture, regardless of any defense, right
of set-off or counterclaim that the Guarantor may have (except
the defense of payment). In case of the failure of TXU Eastern
Funding Company, a corporation incorporated under the laws of
England and Wales (the "Company", which term includes any
successor under the Indenture), punctually to make any such
payment, the Guarantor hereby agrees to cause such payment to be
made punctually when and as the same shall become due and
payable, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise, and as if such
payment were made by the Company. The Guarantor's obligation to
make a guarantee payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holder of such
Security or to a Paying Agent, or by causing the Company to pay
such amount to such Holder or a Paying Agent.
Except as provided pursuant to Section 608 of the
Indenture, this Guarantee is an unsecured and unsubordinated
obligation of the Guarantor and shall at all times rank at least
pari passu with each other Guarantee issued pursuant to the
Indenture and, except as permitted by Sections 608 and 806 of the
Indenture, will rank at least pari passu with all other unsecured
unsubordinated indebtedness of the Guarantor.
The Guarantor hereby agrees that its obligations
hereunder shall be absolute and unconditional irrespective of,
and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or the Indenture, any failure
to enforce the provisions of such Security or the Indenture, any
extension of time for payment or performance by the Company as
provided by such Security or the Indenture, or any waiver,
modification or indulgence granted to the Company with respect
thereto, by the Holder of such Security or the Trustee or any
other circumstance which may otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor;
provided, however, that notwithstanding the foregoing, no such
waiver, modification or indulgence shall, without the consent of
the Guarantor, increase the principal amount of such Security, or
increase the interest rate thereon, or change any redemption
provisions thereof (including any change to increase any premium
payable upon redemption thereof) or change the Stated Maturity
thereof.
The Guarantor hereby waives the benefits of diligence,
presentment, demand for payment, any requirement that the Trustee
or the Holder of such Security exhaust any right or take any
action against the Company or any other Person, filing of claims
with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the
indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Guarantee will not be discharged in respect
of such Security except by complete performance of the
obligations contained in such Security and in this Indenture and
in this Guarantee. This Guarantee shall constitute a guarantee
of payment and not of collection. The Guarantor hereby agrees
that, in the event of a default in payment of principal, or
premium, if any, or interest, if any, on such Security, whether
at its Stated Maturity, by declaration of acceleration, call for
redemption, or otherwise, legal proceedings may be instituted by
the Trustee on behalf of, or by, the Holder of such Security,
subject to the terms and conditions set forth in the Indenture,
directly against the Guarantor to enforce this Guarantee without
first proceeding against the Company. The Guarantor agrees that
if, after the occurrence and during the continuance of an Event
of Default, the Trustee or any of the Holders are prevented by
applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on
the Securities, or to enforce or exercise any other right or
remedy with respect to the Securities, the Guarantor will pay to
the Trustee for the account of the Holders, upon demand therefor,
the amount that would otherwise have been due and payable had
such rights been permitted to be exercised by the Trustee or any
of the Holders.
The obligations of the Guarantor hereunder with respect
to such Security shall be continuing and irrevocable until the
date upon which the entire principal of, premium, if any, and
interest and Additional Amounts, if any, on such Security has
been, or has been deemed pursuant to the provisions of Article
Seven of the Indenture to have been, paid in full or otherwise
discharged.
The Guarantor shall be subrogated to all rights of the
Holder of each Security upon which its Guarantee is endorsed
against the Company in respect of any amounts paid by the
Guarantor on account of such Security pursuant to the provisions
of its Guarantee or the Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation
until the principal of, and premium, if any, and interest, if
any, and Additional Amounts, if any, on all Securities issued
under the Indenture shall have been paid in full.
This Guarantee shall remain in full force and effect
and continue notwithstanding any petition filed by or against the
Company for liquidation or reorganization, the Company becoming
insolvent or making an assignment for the benefit of creditors or
a receiver or trustee being appointed for all or any significant
part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or reinstated, as the
case may be, if at any time payment of the Security upon which
this Guarantee is endorsed, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by the Holder of such Security, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned on such Security, such Security shall, to the fullest
extent permitted by law, be reinstated and deemed paid only by
such amount paid and not so rescinded, reduced, restored or
returned.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security
upon which this Guarantee is endorsed shall have been manually
executed by or on behalf of the Trustee under the Indenture.
All terms used in this Guarantee which are defined in
the Indenture shall have the meanings assigned to them in such
Indenture.
This Guarantee shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this
Guarantee to be executed as of the date first written above.
TXU EASTERN HOLDINGS LIMITED
By:
-----------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein and the Guarantee thereof referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------
Authorized Signatory
[FORM OF REVERSE OF SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(For Unsecured Debt Securities), dated as of May 1, 1999 (herein,
together with any amendments thereto, called the "Indenture",
which term shall have the meaning assigned to it in such
instrument), among the Company, TXU Eastern Holdings Limited, as
Guarantor (herein called the "Guarantor," which term includes any
successor under the Indenture) and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on May 13, 1999,
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Guarantor, the
Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the
face hereof.
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series to be redeemed, and (ii) the sum of the present
values of the remaining scheduled payments of principal and
interest on such Securities from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 20 basis points, plus (b) accrued interest on the
principal amount of such Securities to the Redemption Date plus
(c) any accrued Additional Amounts.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Business Day," when used for purposes of calculating
the Redemption Price, shall mean a Business Day (as defined in
the Indenture) in New York City, New York.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for US Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated and their
respective successors; provided, however, that if either of the
foregoing shall cease to be a primary US Government securities
dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury
Dealer.
Notwithstanding Section 404 of the Indenture, the
Trustee shall give the bearer of this Security notice of any
redemption hereof in such manner as the Trustee deems necessary
or desirable. So long as the Securities are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of the Securities will be
published in a leading daily newspaper having general circulation
in Luxembourg (which is expected to be the Luxemburger Wort).
Upon payment of the Redemption Price, on and after the
Redemption Date interest and any Additional Amounts will cease to
accrue on the Securities of this series or portions thereof
called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the Notes
of the Securities of this series to be redeemed shall equal the
sum of (a) the greater of (i) 100% of the principal amount of
such Securities, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined in the
Indenture) plus 20 basis points plus accrued interest on the
principal amount hereof to the Redemption Date plus accrued
Additional Amounts, if any."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
If the Company or the Guarantor is required to pay
Additional Amounts with respect to Securities of this series, the
Company has the right to redeem this Security as set forth in the
Officer's Certificate described above.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture including the
Officer's Certificate described above.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Indenture contains terms, provisions and conditions
relating to the consolidation or merger of the Company or the
Guarantor with or into, and the conveyance or other transfer, or
lease, of assets to another Person and to the release and
discharge of the Company or the Guarantor, as the case may be, in
certain circumstances from such obligations.
The Securities of this series are issuable only in
registered form without coupons in denominations of $10,000 and
in integral multiples of $1,000 in excess thereof; except that
Securities of this series issued or transferred to institutional
"accredited investors," as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D of the Securities Act, will be in a minimum
principal amount of $250,000. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of
authorized denominations, as requested by the Holder surrendering
the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The bearer of this Security shall be treated as the
owner of it for all purposes, subject to the terms of the
Indenture. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
INTEREST PAYMENT SCHEDULE
Instructions to Paying Agent: Mark the box across from the
appropriate Interest Payment Date when the interest payable on
such date has been paid.
Interest Payment Date (Mark When Interest is Paid)
--------------------- ---------------------------
November 15, 1999 [ ]
May 15, 2000 [ ]
November 15, 2000 [ ]
May 15, 2001 [ ]
November 15, 2001 [ ]
May 15, 2002 [ ]
November 15, 2002 [ ]
May 15, 2003 [ ]
November 15, 2003 [ ]
May 15, 2004 [ ]
November 15, 2004 [ ]
PRINCIPAL PAYMENT SCHEDULE
PRINCIPAL AMOUNT OF THIS GLOBAL BEARER SENIOR NOTE
The outstanding aggregate principal amount of this Global Bearer
Senior Note is initially as shown on the face of this Global
Bearer Senior Note and, pursuant thereto, by the latest entry
made by or on behalf of the Issuer in the third column below.
Reductions in the principal amount of this Global Bearer Senior
Note following, among other things, partial redemptions, exchange
of an interest in this Global Bearer Senior Note for certificated
Senior Notes of this series, exchange of an interest in this
Global Bearer Senior Note for an interest in a Global Bearer
Senior Note of the Fourth Series, or exchange of an interest in
this Global Bearer Senior Note for another Global Bearer Senior
Note of this series of Securities, and increases in the principal
amount of this Global Bearer Senior Note following exchange of an
interest in another Global Bearer Senior Note of this series for
an interest in this Global Bearer Senior Note, are entered in the
second column below.
Outstanding
principal
amount of
this Global
Bearer
Senior Note
following
Amount of such Trustee's
(reduction)/ (reduction)/ Authentication
Date increase increase Signature
---- -------- -------- ---------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
------ ---------- ----------- ----------
EXHIBIT B
[non-registration legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES
REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES AND MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED OTHER THAN (A) (1) TO TXU EASTERN FUNDING COMPANY OR
TXU EASTERN HOLDINGS LIMITED, (2) IN A TRANSACTION ENTITLED TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (5) TO AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT, IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, AND THAT IS ACQUIRING THE
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (B) IN EACH CASE IN ACCORDANCE WITH ALL THE
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES"
[registration rights legend]
The Holder of this Security, by acceptance hereof, will be
deemed to have agreed to be bound by the provisions of the
Registration Rights Agreement dated May 13, 1999, among the
Company, the Guarantor and the initial purchasers of this
Security.
NO.. CUSIP NO. .
[FORM OF FACE OF CERTIFICATED SENIOR NOTE]
TXU EASTERN FUNDING COMPANY
6.45% SENIOR NOTES DUE MAY 15, 2005
TXU Eastern Funding Company, a corporation duly incorporated
and existing under the laws of England and Wales (herein referred
to as the "Company", which term includes any successor Person
under the Indenture), for value received, hereby promises to pay
to
or registered assigns, the principal sum of $650,000,000 Dollars
on May 15, 2005, and to pay interest on said principal sum semi-
annually in arrears on May 15 and November 15 of each year (each
an Interest Payment Date) at the rate of 6.45% per annum until
the principal hereof is paid or made available for payment.
Interest on the Securities of this series shall be computed on
the basis of a 360-day year consisting of twelve 30-day months
and for any period shorter than a full month, on the basis of the
actual number of days elapsed in such period. Interest on the
Securities of this series will accrue from May 13, 1999, to the
first Interest Payment Date (which shall be November 15, 1999),
and thereafter will accrue from the last Interest Payment Date to
which interest has been paid or duly provided for. In the event
that any Interest Payment Date is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of such delay) with the same force
and effect as if made on the Interest Payment Date. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the
15th day of the calendar month next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York and, for so long as this Security shall be
listed on the Luxembourg Stock Exchange, in Luxembourg, in such
coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private
debts.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TXU EASTERN FUNDING COMPANY
By:
-------------------------
[FORM OF GUARANTEE]
TXU Eastern Holdings Limited, a corporation
incorporated under the laws of England and Wales (the
"Guarantor", which term includes any successor under the
Indenture (the "Indenture") referred to in the Security upon
which this Guarantee is endorsed), for value received, hereby
unconditionally and irrevocably guarantees to the Holder of the
Security upon which this Guarantee is endorsed, the due and
punctual payment of the principal of, and premium, if any, and
interest on such Security when and as the same shall become due
and payable, whether at the Stated Maturity, by declaration of
acceleration, call for redemption, or otherwise, in accordance
with the terms of such Security and of the Indenture, regardless
of any defense, right of set-off or counterclaim that the
Guarantor may have (except the defense of payment). In case of
the failure of TXU Eastern Funding Company, a corporation
incorporated under the laws of England and Wales (the "Company",
which term includes any successor under the Indenture),
punctually to make any such payment, the Guarantor hereby agrees
to cause such payment to be made punctually when and as the same
shall become due and payable, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise,
and as if such payment were made by the Company. The Guarantor's
obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holder of
such Security or to a Paying Agent, or by causing the Company to
pay such amount to such Holder or a Paying Agent.
Except as provided pursuant to Section 608 of the
Indenture, this Guarantee is an unsecured and unsubordinated
obligation of the Guarantor and shall at all times rank at least
pari passu with each other Guarantee issued pursuant to the
Indenture and, except as permitted by Sections 608 and 806 of the
Indenture, will rank at least pari passu with all other unsecured
unsubordinated indebtedness of the Guarantor.
The Guarantor hereby agrees that its obligations
hereunder shall be absolute and unconditional irrespective of,
and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or the Indenture, any failure
to enforce the provisions of such Security or the Indenture, any
extension of time for payment or performance by the Company as
provided by such Security or the Indenture, or any waiver,
modification or indulgence granted to the Company with respect
thereto, by the Holder of such Security or the Trustee or any
other circumstance which may otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor;
provided, however, that notwithstanding the foregoing, no such
waiver, modification or indulgence shall, without the consent of
the Guarantor, increase the principal amount of such Security, or
increase the interest rate thereon, or change any redemption
provisions thereof (including any change to increase any premium
payable upon redemption thereof) or change the Stated Maturity
thereof.
The Guarantor hereby waives the benefits of diligence,
presentment, demand for payment, any requirement that the Trustee
or the Holder of such Security exhaust any right or take any
action against the Company or any other Person, filing of claims
with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the
indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Guarantee will not be discharged in respect
of such Security except by complete performance of the
obligations contained in such Security and in this Indenture and
in this Guarantee. This Guarantee shall constitute a guarantee
of payment and not of collection. The Guarantor hereby agrees
that, in the event of a default in payment of principal, or
premium, if any, or interest, if any, on such Security, whether
at its Stated Maturity, by declaration of acceleration, call for
redemption, or otherwise, legal proceedings may be instituted by
the Trustee on behalf of, or by, the Holder of such Security,
subject to the terms and conditions set forth in the Indenture,
directly against the Guarantor to enforce this Guarantee without
first proceeding against the Company. The Guarantor agrees that
if, after the occurrence and during the continuance of an Event
of Default, the Trustee or any of the Holders are prevented by
applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on
the Securities, the Guarantor will pay to the Trustee for the
account of the Holders, upon demand therefor, the amount that
would otherwise have been due and payable had such rights and
remedies been permitted to be exercised by the Trustee or any of
the Holders.
The obligations of the Guarantor hereunder with respect
to such Security shall be continuing and irrevocable until the
date upon which the entire principal of, premium, if any, and
interest and Additional Amounts, if any, on such Security has
been, or has been deemed pursuant to the provisions of Article
Seven of the Indenture to have been, paid in full or otherwise
discharged.
The Guarantor shall be subrogated to all rights of the
Holder of each Security upon which its Guarantee is endorsed
against the Company in respect of any amounts paid by the
Guarantor on account of such Security pursuant to the provisions
of its Guarantee or the Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation
until the principal of, and premium, if any, and interest, if
any, and Additional Amounts, if any, on all Securities issued
under the Indenture shall have been paid in full.
This Guarantee shall remain in full force and effect
and continue notwithstanding any petition filed by or against the
Company for liquidation or reorganization, the Company becoming
insolvent or making an assignment for the benefit of creditors or
a receiver or trustee being appointed for all or any significant
part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or reinstated, as the
case may be, if at any time payment of the Security upon which
this Guarantee is endorsed, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by the Holder of such Security, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned on such Security, such Security shall, to the fullest
extent permitted by law, be reinstated and deemed paid only by
such amount paid and not so rescinded, reduced, restored or
returned.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security
upon which this Guarantee is endorsed shall have been manually
executed by or on behalf of the Trustee under the Indenture.
All terms used in this Guarantee which are defined in
the Indenture shall have the meanings assigned to them in such
Indenture.
This Guarantee shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this
Guarantee to be executed as of the date first written above.
TXU EASTERN HOLDINGS LIMITED
By:
------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein and the Guarantee thereof referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
------------------------------
Authorized Signatory
[FORM OF REVERSE OF CERTIFICATED SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(For Unsecured Debt Securities), dated as of May 1, 1999 (herein,
together with any amendments thereto, called the "Indenture",
which term shall have the meaning assigned to it in such
instrument), among the Company, TXU Eastern Holdings Limited, as
Guarantor (herein called the "Guarantor," which term includes any
successor under the Indenture) and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on May 13, 1999,
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Guarantor, the
Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the
face hereof.
Each purchaser of this Security represents and agrees
as follows:
(1) it is acquiring the Security for its own account
or for an account with respect to which it exercises sole
investment discretion, and that it or such account, as the
case may be, is a Qualified Institutional Buyer (as defined
under the United States Securities Act of 1933, as amended
(the "Securities Act")), a foreign purchaser outside the
United States or an institutional "accredited investor"
acquiring the Security for investment purposes and not for
distribution;
(2) it acknowledges that the offer and sale of the
Security have not been registered under the Securities Act
and such Security may not be resold except as permitted
below;
(3) it understands and agrees that such Security is
being offered only in a transaction not involving any public
offering within the meaning of the Securities Act, and that
(A) if it decides to resell, pledge or otherwise transfer
the Security, the Security may be resold, pledged or
transferred only (i) to the Company or the Guarantor,
(ii) in a transaction entitled to an exemption from
registration provided by Rule 144 under the Securities Act
("Rule 144"), (iii) so long as such Security is eligible for
resale pursuant to Rule 144A under the Securities Act ("Rule
144A"), to a person whom the seller reasonably believes is a
Qualified Institutional Buyer that purchases for its own
account or for the account of a Qualified Institutional
Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (iv) in an
offshore transaction in accordance with Rule 904 of
Regulation S of the Securities Act, (v) to an institutional
"accredited investor" as defined in Rule 501(a)(1), (2),
(3), or (7) of Regulation D under the Securities Act
acquiring the Security, in a minimum principal amount of
$250,000, for investment purposes and not for distribution
(an "IAI Purchaser"), and (vi) pursuant to an effective
registration statement under the Securities Act, and (B) it
will, and each subsequent holder is required to, notify any
purchaser of the Security from it of the resale restrictions
referred to in (A) above, if then applicable. Before any
Security may be offered, sold, pledged or otherwise
transferred by a Qualified Institutional Buyer to a person
who is not a Qualified Institutional Buyer or by a purchaser
who purchases the Security in an offshore transaction in
accordance with Rule 904 of Regulation S of the Securities
Act (a "Regulation S Purchaser") to a person who is not a
Regulation S Purchaser, the transferee must provide the
Trustee with a written certification as to the compliance
with the transfer restrictions referred to above. If any
resale or other transfer of the Security is proposed to be
made pursuant to clause (v) above, the transferor shall
deliver a letter from the transferee (the form of which may
be obtained from the Company or the Trustee) to the Company,
the Guarantor and the Trustee, which shall provide among
other things, that the transferee is an institutional
"accredited investor" that is acquiring such Security for
investment purposes and not for distribution in violation of
the Securities Act. Each purchaser of this Security
acknowledges that the Company, the Guarantor and the Trustee
reserve the right prior to any offer, sale or other transfer
of such Security pursuant to clauses (ii), (iv) or (v) above
to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the
Company, the Guarantor and the Trustee that the proposed
sale complies with the foregoing restrictions. An IAI
Purchaser may not transfer its Interest in an Initial Senior
Note to another IAI Purchaser;
(4) it (i) is able to fend for itself in the
transactions contemplated by the offering memorandum dated
May 6, 1999; (ii) has such knowledge and experience in
financial and business matters as to be capable of
evaluating the merits and risks of its prospective
investment in Security; (iii) has the ability to bear the
economic risks of its prospective investment and can afford
the complete loss of such investment; and (iv) acknowledges
that it may be required to bear the financial risks of this
investment for an indefinite period of time;
(5) if it is (i) a purchaser in a sale that occurs
outside the U.S. within the meaning of Regulation S of the
Securities Act, or (ii) a "distributor," "dealer" or person
"receiving a selling concession, fee or other remuneration"
in respect of Securities sold, prior to the expiration of
the Restricted Period (as defined below), it acknowledges
that until the expiration of the Restricted Period any offer
or sale of the Security shall not be made by it to a U.S.
person or for the account or benefit of a U.S. person within
the meaning of Rule 902(k) of the Securities Act, except
offers or sales made pursuant to Rule 144A. The "Restricted
Period" means, with respect to the Security, the 40-day
period following the later of (i) the date on which such
Securities are first offered to persons other than
distributors (as defined in Regulation S) and (ii) the
original issue date of such Securities;
(6) if it is a foreign purchaser, it acknowledges
that, until the expiration of the Restricted Period, it may
not, directly or indirectly, reoffer, resell, pledge or
otherwise transfer a Security or any interest therein except
to a person who certifies in writing to the Trustee that
such transfer satisfies, as applicable, the requirements of
the legend on the Security and that none of the Securities
will be accepted for registration of any transfer prior to
the end of the Restricted Period unless the transferee has
first complied with the certification requirements described
in this paragraph;
(7) it acknowledges that no part of the funds to be
used to purchase the Security to be purchased by such
purchaser constitutes assets which are directly or
indirectly the assets of any employee benefit plan such the
use of such assets constitutes a non-exempt prohibited
transaction under the U.S. Employee Retirement Income
Security Act of 1974, as amended (ERISA), or the U.S.
Internal Revenue Code of 1986, as amended. As used in this
paragraph, the term "employee benefit plan" shall have the
meaning assigned to such term in Section 3 of ERISA;
(8) it understands that the Company, the Guarantor,
the initial purchasers, the Trustee, the Paying Agents and
others will rely upon the truth and accuracy of the
foregoing acknowledgements, representations and agreements
and agrees that if any of the acknowledgements,
representations and warranties deemed to have been made by
it by its purchase of the Security are no longer accurate,
it shall promptly notify the Company, the Guarantor and the
initial purchasers. If it is acquiring the Security as a
fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with
respect to each such account and it has full power to make
the foregoing acknowledgements, representations and
agreements on behalf of such account.
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series to be redeemed, and (ii) the sum of the present
values of the remaining scheduled payments of principal and
interest on such Securities from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 20 basis points, plus (b) accrued interest on the
principal amount of such Securities to the Redemption Date plus
(c) any accrued Additional Amounts.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Business Day," when used for purposes of calculating
the Redemption Price, shall mean a Business Day (as defined in
the Indenture) in New York City, New York.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for US Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated and their
respective successors; provided, however, that if either of the
foregoing shall cease to be a primary US Government securities
dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury
Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest and any Additional Amounts will cease to
accrue on the Securities of this series or portions thereof
called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the
Securities of this series to be redeemed shall equal the sum of
(a) the greater of (i) 100% of the principal amount of such
Securities, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined in the
Indenture) plus 20 basis points plus accrued interest on the
principal amount hereof to the Redemption Date plus accrued
Additional Amounts, if any."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
If the Company or the Guarantor is required to pay
Additional Amounts with respect to Securities of this series, the
Company has the right to redeem this Security as set forth in the
Officer's Certificate described above.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture including the
Officer's Certificate described above.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Indenture contains terms, provisions and conditions
relating to the consolidation or merger of the Company or the
Guarantor with or into, and the conveyance or other transfer, or
lease, of assets to another Person and to the release and
discharge of the Company or the Guarantor, as the case may be, in
certain circumstances from such obligations.
The Securities of this series are issuable only in
registered form without coupons in denominations of $10,000 and
in integral multiples of $1,000 in excess thereof; except that
Securities of this series issued or transferred to institutional
"accredited investors," as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D of the Securities Act, will be in a minimum
principal amount of $250,000. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of
authorized denominations, as requested by the Holder surrendering
the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
[CERTIFICATE OF TRANSFER]
6.45% SENIOR NOTES DUE MAY 15, 2005
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
[ --------------------------- ]
[ ]
[ --------------------------- ] -----------------------------
Name and address of assignee
must be printed or
typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocably
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
The undersigned certifies that said Security is being resold,
pledged or otherwise transferred as follows: (check one)
[ ] to the Company or the Guarantor;
[ ] to a Person whom the undersigned reasonably believes is a
qualified institutional buyer within the meaning of Rule
144A under the Securities Act of 1933, as amended (the
"Securities Act") purchasing for its own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or other transfer is being
made in reliance on Rule 144A;
[ ] in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act;
[ ] to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring the Security for investment
purposes and not for distribution (attach a copy of an
Accredited Investor Letter in the form provided by the
Company or Trustee signed by an authorized officer of the
transferee);
[ ] as otherwise permitted by the non-registration legend
appearing on this Security; or
[ ] as otherwise agreed by the Company or the Guarantor, as the
case may be, confirmed in writing to the Trustee, as
follows: [describe]
------------------------------------------------------------
------------------------------------------------------------
Dated:---------------------- ------------------------------
EXHIBIT C
[FORM OF FACE OF EXCHANGE NOTE]
GLOBAL BEARER FORM
NO._______________ CUSIP NO.__________
TXU EASTERN FUNDING COMPANY
6.45% EXCHANGE SENIOR NOTES DUE MAY 15, 2005
TXU Eastern Funding Company, a corporation duly incorporated
and existing under the laws of England and Wales (herein referred
to as the "Company", which term includes any successor Person
under the Indenture), for value received, hereby promises to pay
to the bearer upon surrender hereof, the principal sum of
$650,000,000 Dollars on May 15, 2005, and to pay interest on said
principal sum semi-annually in arrears on May 15 and November 15
of each year (each an Interest Payment Date) at the rate of 6.45%
per annum until the principal hereof is paid or made available
for payment. Interest on the Securities of this series shall be
computed on the basis of a 360 day year consisting of twelve 30-
day months and for any period shorter than a full month, on the
basis of the actual number of days elapsed in such period.
Interest on the Securities of this series will accrue from ., to
the first Interest Payment Date (which shall be .), and
thereafter will accrue from the last Interest Payment Date to
which interest has been paid or duly provided for. In the event
that any Interest Payment Date is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of such delay) with the same force
and effect as if made on the Interest Payment Date. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid upon presentation to the
Paying Agent; the Paying Agent shall mark this Security in the
appropriate box on the Interest Payment Schedule included therein
to indicate that the interest payment has been made. Payments of
any Defaulted Interest will be paid to the bearer hereof at the
time of presentation.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York and, for so long as the Securities of this
series shall be listed on the Luxembourg Stock Exchange, in
Luxembourg, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of
public and private debts.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TXU EASTERN FUNDING COMPANY
By:
-------------------------
[FORM OF GUARANTEE]
TXU Eastern Holdings Limited, a corporation
incorporated under the laws of England and Wales (the
"Guarantor", which term includes any successor under the
Indenture (the "Indenture") referred to in the Security upon
which this Guarantee is endorsed), for value received, hereby
unconditionally and irrevocably guarantees to the Holder of the
Security upon which this Guarantee is endorsed, the due and
punctual payment of the principal of, and premium, if any, and
interest on such Security when and as the same shall become due
and payable, whether at the Stated Maturity, by declaration of
acceleration, call for redemption, or otherwise, in accordance
with the terms of such Security and of the Indenture, regardless
of any defense, right of set-off or counterclaim that the
Guarantor may have (except the defense of payment). In case of
the failure of TXU Eastern Funding Company, a corporation
incorporated under the laws of England and Wales (the "Company",
which term includes any successor under the Indenture),
punctually to make any such payment, the Guarantor hereby agrees
to cause such payment to be made punctually when and as the same
shall become due and payable, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise,
and as if such payment were made by the Company. The Guarantor's
obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holder of
such Security or to a Paying Agent, or by causing the Company to
pay such amount to such Holder or a Paying Agent.
Except as provided pursuant to Section 608 of the
Indenture, this Guarantee is an unsecured and unsubordinated
obligation of the Guarantor and shall at all times rank at least
pari passu with each other Guarantee issued pursuant to the
Indenture and, except as permitted by Sections 608 and 806 of the
Indenture, will rank at least pari passu with all other unsecured
unsubordinated indebtedness of the Guarantor.
The Guarantor hereby agrees that its obligations
hereunder shall be absolute and unconditional irrespective of,
and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or the Indenture, any failure
to enforce the provisions of such Security or the Indenture, any
extension of time for payment by the Company as provided by such
Security, or any waiver, modification or indulgence granted to
the Company with respect thereto, by the Holder of such Security
or the Trustee or any other circumstance which may otherwise
constitute a legal or equitable discharge or defense of a surety
or guarantor; provided, however, that notwithstanding the
foregoing, no such waiver, modification or indulgence shall,
without the consent of the Guarantor, increase the principal
amount of such Security, or increase the interest rate thereon,
or change any redemption provisions thereof (including any change
to increase any premium payable upon redemption thereof) or
change the Stated Maturity thereof.
The Guarantor hereby waives the benefits of diligence,
presentment, demand for payment, any requirement that the Trustee
or the Holder of such Security exhaust any right or take any
action against the Company or any other Person, filing of claims
with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the
indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Guarantee will not be discharged in respect
of such Security except by complete performance of the
obligations contained in such Security and in this Indenture and
in this Guarantee. This Guarantee shall constitute a guarantee
of payment and not of collection. The Guarantor hereby agrees
that, in the event of a default in payment of principal, or
premium, if any, or interest, if any, on such Security, whether
at its Stated Maturity, by declaration of acceleration, call for
redemption, or otherwise, legal proceedings may be instituted by
the Trustee on behalf of, or by, the Holder of such Security,
subject to the terms and conditions set forth in the Indenture,
directly against the Guarantor to enforce this Guarantee without
first proceeding against the Company. The Guarantor agrees that
if, after the occurrence and during the continuance of an Event
of Default, the Trustee or any of the Holders are prevented by
applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on
the Securities, or to enforce or exercise any other right or
remedy with respect to the Securities, the Guarantor will pay to
the Trustee for the account of the Holders, upon demand therefor,
the amount that would otherwise have been due and payable had
such rights been permitted to be exercised by the Trustee or any
of the Holders.
The obligations of the Guarantor hereunder with respect
to such Security shall be continuing and irrevocable until the
date upon which the entire principal of, premium, if any, and
interest and Additional Amounts, if any, on such Security has
been, or has been deemed pursuant to the provisions of Article
Seven of the Indenture to have been, paid in full or otherwise
discharged.
The Guarantor shall be subrogated to all rights of the
Holder of each Security upon which its Guarantee is endorsed
against the Company in respect of any amounts paid by the
Guarantor on account of such Security pursuant to the provisions
of its Guarantee or the Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation
until the principal of, and premium, if any, and interest, if
any, and Additional Amounts, if any, on all Securities issued
under the Indenture shall have been paid in full.
This Guarantee shall remain in full force and effect
and continue notwithstanding any petition filed by or against the
Company for liquidation or reorganization, the Company becoming
insolvent or making an assignment for the benefit of creditors or
a receiver or trustee being appointed for all or any significant
part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or reinstated, as the
case may be, if at any time payment of the Security upon which
this Guarantee is endorsed, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by the Holder of such Security, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned on such Security, such Security shall, to the fullest
extent permitted by law, be reinstated and deemed paid only by
such amount paid and not so rescinded, reduced, restored or
returned.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security
upon which this Guarantee is endorsed shall have been manually
executed by or on behalf of the Trustee under the Indenture.
All terms used in this Guarantee which are defined in
the Indenture shall have the meanings assigned to them in such
Indenture.
This Guarantee shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this
Guarantee to be executed as of the date first written above.
TXU EASTERN HOLDINGS LIMITED
By:
-------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein and the Guarantee thereof referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------
Authorized Signatory
[FORM OF REVERSE OF EXCHANGE NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities), dated as of May 1, 1999 (herein,
together with any amendments thereto, called the "Indenture",
which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on May 13, 1999,
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof.
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series to be redeemed, and (ii) the sum of the present
values of the remaining scheduled payments of principal and
interest on such Securities from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 20 basis points, plus (b) accrued interest on the
principal amount of such Securities to the Redemption Date plus
(c) any accrued Additional Amounts.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Business Day," when used for purposes of calculating
the Redemption Price, shall mean a Business Day (as defined in
the Indenture) in New York City, New York.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for US Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated and their
respective successors; provided, however, that if either of the
foregoing shall cease to be a primary US Government securities
dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury
Dealer.
Notwithstanding Section 404 of the Indenture, the
Trustee shall give the bearer of this Security notice of any
redemption hereof in such manner as the Trustee deems necessary
or desirable. So long as the Securities are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of the Securities will be
published in a leading daily newspaper having general circulation
in Luxembourg (which is expected to be the Luxemburger Wort).
Upon payment of the Redemption Price, on and after the
Redemption Date interest and any Additional Amounts will cease to
accrue on the Securities of this series or portions thereof
called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the
Securities of this series to be redeemed shall equal the sum of
(a) the greater of (i) 100% of the principal amount of such
Securities, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined in the
Indenture) plus 20 basis points plus accrued interest on the
principal amount hereof to the Redemption Date plus accrued
Additional Amounts, if any."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
If the Company or the Guarantor is required to pay
Additional Amounts with respect to Securities of this series, the
Company has the right to redeem this Security as set forth in the
Officer's Certificate described above.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture, including the
Officer's Certificate described above.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $10,000 and
in integral multiples of $1,000 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The bearer of this Security shall be treated as the
owner of it for all purposes, subject to the terms of the
Indenture. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
INTEREST PAYMENT SCHEDULE
Instructions to Paying Agent: Mark the box across from the
appropriate Interest Payment Date when the interest payable on
such date has been paid.
Interest Payment Date (Mark When Interest is Paid)
--------------------- ----------------------------
November 15, 1999 [ ]
May 15, 2000 [ ]
November 15, 2000 [ ]
May 15, 2001 [ ]
November 15, 2001 [ ]
May 15, 2002 [ ]
November 15, 2002 [ ]
May 15, 2003 [ ]
November 15, 2003 [ ]
May 15, 2004 [ ]
November 15, 2004 [ ]
PRINCIPAL PAYMENT SCHEDULE
PRINCIPAL AMOUNT OF THIS GLOBAL BEARER SENIOR NOTE
The outstanding aggregate principal amount of this Global Bearer
Senior Note is initially as shown on the face of this Global
Bearer Senior Note and, pursuant thereto, by the latest entry
made by or on behalf of the Issuer in the third column below.
Reductions in the principal amount of this Global Bearer Senior
Note following, among other things, partial redemptions or
exchange of an interest in this Global Bearer Senior Note for
certificated Senior Notes of this series, and increases in the
principal amount of this Global Bearer Senior Note following
exchange of an interest in a Global Bearer Senior Note of the
Third Series for an interest in this Global Bearer Senior Note,
are entered in the second column below.
Outstanding
principal
amount of
this Global
Bearer
Senior Note
Amount of following
(reductio such Trustee's
n)/ (reduction)/ Authentication
Date increase increase Signature
---- -------- -------- ---------
------ -------- ----------- ------------
------ -------- ----------- ------------
------ -------- ----------- ------------
------ -------- ----------- ------------
------ -------- ----------- ------------
------ -------- ----------- ------------
------ -------- ----------- ------------
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------ -------- ----------- ------------
EXHIBIT D
NO._______________ CUSIP NO.__________
[FORM OF FACE OF CERTIFICATED EXCHANGE NOTE]
TXU EASTERN FUNDING COMPANY
6.45% EXCHANGE SENIOR NOTES DUE MAY 15, 2005
TXU Eastern Funding Company, a corporation duly incorporated
and existing under the laws of England and Wales (herein referred
to as the "Company", which term includes any successor Person
under the Indenture), for value received, hereby promises to pay
to
or registered assigns, the principal sum of $650,000,000 Dollars
on May 15, 2005, and to pay interest on said principal sum semi-
annually in arrears on May 15 and November 15 of each year (each
an Interest Payment Date) at the rate of 6.45% per annum until
the principal hereof is paid or made available for payment.
Interest on the Securities of this series shall be computed on
the basis of a 360 day year consisting of twelve 30-day months
and for any period shorter than a full month, on the basis of the
actual number of days elapsed in such period. Interest on the
Securities of this series will accrue from ., to the first
Interest Payment Date (which shall be .), and thereafter will
accrue from the last Interest Payment Date to which interest has
been paid or duly provided for. In the event that any Interest
Payment Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of such delay) with the same force and effect
as if made on the Interest Payment Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th
day of the calendar month next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York and, for so long as this Security shall be
listed on the Luxembourg Stock Exchange, in Luxembourg, in such
coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private
debts, provided, however, that, at the option of the Company,
interest on this Security may be paid by check mailed to the
address of the person entitled thereto, as such address shall
appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TXU EASTERN FUNDING COMPANY
By:
-------------------------
[FORM OF GUARANTEE]
TXU Eastern Holdings Limited, a corporation
incorporated under the laws of England and Wales (the
"Guarantor", which term includes any successor under the
Indenture (the "Indenture") referred to in the Security upon
which this Guarantee is endorsed), for value received, hereby
unconditionally and irrevocably guarantees to the Holder of the
Security upon which this Guarantee is endorsed, the due and
punctual payment of the principal of, and premium, if any, and
interest on such Security when and as the same shall become due
and payable, whether at the Stated Maturity, by declaration of
acceleration, call for redemption, or otherwise, in accordance
with the terms of such Security and of the Indenture, regardless
of any defense, right of set-off or counterclaim that the
Guarantor may have (except the defense of payment). In case of
the failure of TXU Eastern Funding Company, a corporation
incorporated under the laws of England and Wales (the "Company",
which term includes any successor under the Indenture),
punctually to make any such payment, the Guarantor hereby agrees
to cause such payment to be made punctually when and as the same
shall become due and payable, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise,
and as if such payment were made by the Company. The Guarantor's
obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holder of
such Security or to a Paying Agent, or by causing the Company to
pay such amount to such Holder or a Paying Agent.
Except as provided pursuant to Section 608 of the
Indenture, this Guarantee is an unsecured and unsubordinated
obligation of the Guarantor and shall at all times rank at least
pari passu with each other Guarantee issued pursuant to the
Indenture and, except as permitted by Sections 608 and 806 of the
Indenture, will rank at least pari passu with all other unsecured
unsubordinated indebtedness of the Guarantor.
The Guarantor hereby agrees that its obligations
hereunder shall be absolute and unconditional irrespective of,
and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or the Indenture, any failure
to enforce the provisions of such Security or the Indenture, any
extension of time for payment by the Company as provided by such
Security, or any waiver, modification or indulgence granted to
the Company with respect thereto, by the Holder of such Security
or the Trustee or any other circumstance which may otherwise
constitute a legal or equitable discharge or defense of a surety
or guarantor; provided, however, that notwithstanding the
foregoing, no such waiver, modification or indulgence shall,
without the consent of the Guarantor, increase the principal
amount of such Security, or increase the interest rate thereon,
or change any redemption provisions thereof (including any change
to increase any premium payable upon redemption thereof) or
change the Stated Maturity thereof.
The Guarantor hereby waives the benefits of diligence,
presentment, demand for payment, any requirement that the Trustee
or the Holder of such Security exhaust any right or take any
action against the Company or any other Person, filing of claims
with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the
indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Guarantee will not be discharged in respect
of such Security except by complete performance of the
obligations contained in such Security and in this Indenture and
in this Guarantee. This Guarantee shall constitute a guarantee
of payment and not of collection. The Guarantor hereby agrees
that, in the event of a default in payment of principal, or
premium, if any, or interest, if any, on such Security, whether
at its Stated Maturity, by declaration of acceleration, call for
redemption, or otherwise, legal proceedings may be instituted by
the Trustee on behalf of, or by, the Holder of such Security,
subject to the terms and conditions set forth in the Indenture,
directly against the Guarantor to enforce this Guarantee without
first proceeding against the Company. The Guarantor agrees that
if, after the occurrence and during the continuance of an Event
of Default, the Trustee or any of the Holders are prevented by
applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on
the Securities, or to enforce or exercise any other right or
remedy with respect to the Securities, the Guarantor will pay to
the Trustee for the account of the Holders, upon demand therefor,
the amount that would otherwise have been due and payable had
such rights been permitted to be exercised by the Trustee or any
of the Holders.
The obligations of the Guarantor hereunder with respect
to such Security shall be continuing and irrevocable until the
date upon which the entire principal of, premium, if any, and
interest and Additional Amounts, if any, on such Security has
been, or has been deemed pursuant to the provisions of Article
Seven of the Indenture to have been, paid in full or otherwise
discharged.
The Guarantor shall be subrogated to all rights of the
Holder of each Security upon which its Guarantee is endorsed
against the Company in respect of any amounts paid by the
Guarantor on account of such Security pursuant to the provisions
of its Guarantee or the Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation
until the principal of, and premium, if any, and interest, if
any, and Additional Amounts, if any, on all Securities issued
under the Indenture shall have been paid in full.
This Guarantee shall remain in full force and effect
and continue notwithstanding any petition filed by or against the
Company for liquidation or reorganization, the Company becoming
insolvent or making an assignment for the benefit of creditors or
a receiver or trustee being appointed for all or any significant
part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or reinstated, as the
case may be, if at any time payment of the Security upon which
this Guarantee is endorsed, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by the Holder of such Security, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned on such Security, such Security shall, to the fullest
extent permitted by law, be reinstated and deemed paid only by
such amount paid and not so rescinded, reduced, restored or
returned.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security
upon which this Guarantee is endorsed shall have been manually
executed by or on behalf of the Trustee under the Indenture.
All terms used in this Guarantee which are defined in
the Indenture shall have the meanings assigned to them in such
Indenture.
This Guarantee shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this
Guarantee to be executed as of the date first written above.
TXU EASTERN HOLDINGS LIMITED
By:
-------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein and the Guarantee thereof referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------
Authorized Signatory
[FORM OF REVERSE OF CERTIFICATED EXCHANGE NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities), dated as of May 1, 1999 (herein,
together with any amendments thereto, called the "Indenture",
which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on May 13, 1999,
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof.
The Securities of this series will be redeemable as a
whole at any time or in part, from time to time, at the option of
the Company, at a Redemption Price equal to the sum of (a) the
greater of (i) 100% of the principal amount of the Securities of
this series to be redeemed, and (ii) the sum of the present
values of the remaining scheduled payments of principal and
interest on such Securities from the Redemption Date to the
maturity date, computed by discounting such payments, in each
case, to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 20 basis points, plus (b) accrued interest on the
principal amount of such Securities to the Redemption Date plus
(c) any accrued Additional Amounts.
"Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of such
Securities of this series to be redeemed that would be utilized,
at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining terms of such
Securities of this series.
"Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Business Day," when used for purposes of calculating
the Redemption Price, shall mean a Business Day (as defined in
the Indenture) in New York City, New York.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for US Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such Business Day, the average of the
Reference Treasury Dealer Quotations actually obtained by the
Trustee for such Redemption Date.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated and their
respective successors; provided, however, that if either of the
foregoing shall cease to be a primary US Government securities
dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury
Dealer.
Notice of any redemption will be mailed at least 30
days but no more than 60 days before the Redemption Date to each
Holder of the Securities of this series to be redeemed.
Upon payment of the Redemption Price, on and after the
Redemption Date interest and any Additional Amounts will cease to
accrue on the Securities of this series or portions thereof
called for redemption.
The Company shall deliver to the Trustee before any
Redemption Date for the Securities of this series its calculation
of the Redemption Price applicable to such redemption. Except
with respect to the obligations of the Trustee expressly set
forth in the foregoing definitions of "Comparable Treasury Issue"
and "Comparable Treasury Price," the Trustee shall be under no
duty to inquire into, may presume the correctness of, and shall
be fully protected in acting upon the Company's calculation of
any Redemption Price of the Securities of this series.
In lieu of stating the Redemption Price, notices of
redemption of the Securities of this series shall state
substantially the following: "The Redemption Price of the
Securities of this series to be redeemed shall equal the sum of
(a) the greater of (i) 100% of the principal amount of such
Securities, and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
from the Redemption Date to the maturity date, computed by
discounting such payments, in each case, to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined in the
Indenture) plus 20 basis points plus accrued interest on the
principal amount hereof to the Redemption Date plus accrued
Additional Amounts, if any."
Except as provided herein, Article Four of the
Indenture shall apply to redemptions of the Securities of this
series.
If the Company or the Guarantor is required to pay
Additional Amounts with respect to Securities of this series, the
Company has the right to redeem this Security as set forth in the
Officer's Certificate described above.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture, including the
Officer's Certificate described above.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $10,000 and
in integral multiples of $1,000 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
[----------------------------]
[ ]
[----------------------------] ------------------------------
Name and address of assignee
must be printed or
typewritten.
-----------------------------------------------------------------
the within Security of the Company and does hereby irrevocably
constitute and appoint
-----------------------------------------------------------------
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
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Dated:-------------------- -----------------------------
EXHIBIT E
[CERTIFICATE OF TRANSFER]
TXU EASTERN FUNDING COMPANY
6.45% Senior Notes due May 15, 2005
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[----------------------------]
[ ]
[----------------------------] ------------------------------
Name and address of assignee
must be printed or
typewritten.
$----------------------------------------------------------------
principal amount of beneficial interest in the referred Security
of the Company and does hereby irrevocably constitute and appoint
-----------------------------------------------------------------
to transfer the said beneficial interest in such Security, with
full power of substitution in the premises.
The undersigned certifies that said beneficial interest in such
Security is being resold, pledged or otherwise transferred as
follows: (check one)
[ ] to the Company or the Guarantor;
[ ] to a Person whom the undersigned reasonably believes is a
Qualified Institutional Buyer within the meaning of Rule
144A under the Securities Act of 1933, as amended (the
"Securities Act") purchasing for its own account or for the
account of a Qualified Institutional Buyer to whom notice is
given that the resale, pledge or other transfer is being
made in reliance on Rule 144A;
[ ] in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act;
[ ] to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring said beneficial interest in
such Security for investment purposes and not for
distribution (attach a copy of an Accredited Investor Letter
in the form provided by the Company or the Trustee signed by
an authorized officer of the transferee);
[ ] as otherwise permitted by the non-registration legend; or
[ ] as otherwise agreed by the Company or the Guarantor, as the
case may be, confirmed in writing to the Trustee, as
follows: [describe]
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Dated:---------------------- ------------------------------