THE COMPANIES ACT 1985
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COMPANY LIMITED BY SHARES
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NEW
ARTICLES OF ASSOCIATION
of
TXU EUROPE LIMITED*
Registered in England - No. 3505836
(Adopted by Special Resolution passed on 22 May 1998)
1 PRELIMINARY
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1.1 In these Articles:
"THE ACT" means the Companies Act 1985 (as amended)
"TABLE A" means Table A in the Companies (Tables A to
F) Regulations 1985 as amended by the Companies (Tables
A to F) (Amendment) Regulations 1985. Reference to
regulations are to regulations in Table A.
* The name of the Company was changed from ERRORFREE LIMITED TO
TU FINANCE (No. 1) LIMITED on 26 February 1998 by Special
Resolution passed on 25 February 1998, from TU FINANCE (No. 1)
LIMITED to TXU EASTERN HOLDINGS LIMITED on 17 December 1998 by
Special Resolution passed on 16 December 1998 and from TXU
EASTERN HOLDINGS LIMITED on 12 August 1999 by Special Resolution
passed on 6 August 1999.
"THE STATUTES" means the Act and any statutory
modification or re-enactment thereof for the time being
in force and every other Act for the time being in
force concerning companies and affecting the company.
1.2 Subject as hereinafter provided, the regulations
contained in Table A shall apply to the company.
1.3 Regulations 69, 73 to 78 inclusive, 101 and 118 shall
not apply to the company, but the Articles hereinafter
contained and the remaining regulations of Table A,
subject to the modifications hereinafter expressed,
shall constitute the regulations of the company.
2 SHARE CAPITAL
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2.1 The share capital of the company at the date of the
adoption of these Articles is US$3,000,000,000
denominated in US dollars divided into 3,000,000,000
Ordinary Shares of US$1 each and L100 denominated in
sterling divided into 100 Deferred Shares of L1 each.
2.2 The following rights and restrictions shall be attached
to the Deferred Shares:
(a) As regards income
The holders of the Deferred Shares shall not be
entitled to receive any dividend out of the
profits of the company available for distribution
and resolved to be distributed in respect of any
financial year or any other income or right to
participate therein.
(b) As regards capital
On a distribution of assets on a winding-up or
other return of capital (otherwise than on
conversion or redemption or purchase by the
company of any of its shares) the holders of the
Deferred Shares shall be entitled to receive the
amount paid up on their shares after there shall
have been distributed (in cash or specie) to the
holders of the Ordinary Shares the amount of
L100,000,000 in respect of each Ordinary Share
held by them respectively. For this purpose
distributions in currency other than sterling
shall be treated as converted into sterling, and
the value for any distribution in specie shall be
ascertained in sterling, in each case in such
manner as the directors or the company in general
meeting may approve. The Deferred Shares shall
not entitle the holders thereof to any further or
other right of participation in the assets of the
company.
(c) As regards voting
The holders of Deferred Shares shall not be
entitled to receive notice of or to attend (either
personally or by proxy) any general meeting of the
company or to vote (either personally or by proxy)
on any resolution to be proposed thereat.
(d) Variation
The rights attached to the Deferred Shares shall
not be deemed to be varied or abrogated by the
creation or issue of any new shares ranking in
priority to or pari passu with or subsequent to
such shares.
(e) Repurchase
Notwithstanding any other provision of these
Articles, the company shall have the power and
authority at any time to purchase all or any of
the Deferred Shares for an aggregate consideration
of L1.
2.3 Subject to the provisions of Articles 2.4 and 2.5 and to
any directions which may be given by the company in
general meeting, the directors may generally and
unconditionally exercise the power of the company
to allot relevant securities (within the meaning of
section 80(2) of the Act) and without prejudice to the
generality of the foregoing any shares unissued at
the date of adoption of these Articles and any shares
hereafter created shall be under the control of the
directors, who may allot, grant options over or otherwise
dispose of the same to such persons (including the
directors themselves) on such terms and at such times as
they may think proper, provided that no shares shall be
issued at a discount.
2.4 The maximum nominal amount of share capital which or in
respect of which the directors may allot, grant options
or subscription or conversion rights, create, deal or
otherwise dispose of in accordance with this Article
shall be US$3,000,000,000 or such other amount as shall be
authorised by the company in general meeting.
2.5 The authority conferred on the directors by Articles
2.3 and 2.4 shall expire on the day preceding, the fifth
anniversary of the date of adoption of these Articles.
2.6 Pursuant to section 95(l) of the Act the directors may allot
equity securities (within the meaning of section 94 of the
Act) pursuant to the authority in Articles 2.3 and 2.4 as
if section 89(l) of the Act did not apply to the allotment.
3 GENERAL MEETINGS
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3.1 Regulation 37 shall be modified by:
(a) the substitution of the words "four weeks" for the
words "eight weeks"; and
(b) the deletion of the second sentence thereof and by
the addition at the end of the regulation of the
following sentence: "The holder of a majority of
the issued Ordinary Shares shall be entitled at
any time to call a general meeting".
3.2 For all purposes of these Articles apart from the
company has only one member, a general meeting of the
company or of the holders of any class of its shares
shall be valid and effective for all purposes if one
person being a duly authorised representative of two or
more corporations each of which is a member entitled to
vote upon the business to be transacted is present.
Regulation 40 of Table A shall be modified accordingly.
If, and for so long as, the company has only one
member, that member or the proxy for that member or,
where that member is a corporation, its duly authorised
representative shall be a quorum at any general
meeting of the company or of the holders of any class
of shares. Regulation 40 of Table A shall be modified
accordingly.
3.3 A resolution in writing in accordance with regulation
53 shall be deemed to have been duly executed on behalf
of a corporation if signed by one of its directors or
its secretary. In the case of a share held by joint
holders the signature of any one of them on behalf of
all such joint holders shall be sufficient for the
purposes of that regulation. The directors shall cause
a record of each resolution in writing, and of the
signatures to it, to be entered in a book in the same
way as minutes of proceedings of a general meeting of
the company and to be signed by a director or the
secretary of the company.
3.4 A proxy shall be entitled to vote on a show of hands
and regulation 54 shall be modified accordingly.
3.5 The instrument appointing a proxy and (if required by
the directors) any authority under which it is executed
or a copy of the authority, certified notarially or in
some other manner approved by the directors, may be
delivered to the office (or to such other place or to
such person as may be specified or agreed by the
directors) before the time for holding the meeting or
adjourned meeting at which the person named in the
instrument proposes to act or, in the case of a poll
taken subsequently to the date of the meeting or
adjourned meeting, before the time appointed for the
taking of the poll, and an instrument of proxy which is
not so delivered shall be invalid. The directors may
at their discretion treat a faxed or other machine made
copy of an instrument appointing a proxy as such an
instrument for the purpose of this article. Regulation
62 of Table A shall not apply.
4 POWERS AND DUTIES OF DIRECTORS
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4.1 Subject to the provisions of the Statutes, a director
may be interested directly or indirectly in any
contract or arrangement or in any proposed contract or
arrangement with the company or with any other company
in which the company may be interested and he may hold
and be remunerated in respect of any office or place of
profit (other than the office of auditor of the company
or any subsidiary thereof) under the company or any
such other company and he or any firm of which he is a
member may act in a professional capacity for the
company or any such other company and be remunerated
therefor. Notwithstanding his interest a director may
vote on any matter in which he is interested and be
included for the purpose of a quorum at any meeting at
which the same is considered and he may retain for his
own benefit all profits and advantages accruing to him.
Regulations 94 and 95 shall be modified accordingly.
5 APPOINTMENT, REMOVAL AND DISQUALIFICATION OF DIRECTORS
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5.1 Without prejudice to the powers of the company under
section 303 of the Act to remove a director by Ordinary
Resolution, the holder or holders for the time being of
more than one half of the issued Ordinary Shares of the
company shall have the power from time to time and at
any time to appoint any person or persons as a director
or directors and to remove from office any director
howsoever appointed. Any such appointment or removal
shall be effected by an instrument in writing signed by
the member or members making the same or (in the case
of a member being a corporation) signed on its behalf
by one of its directors or its secretary and shall take
effect upon lodgment at the registered office of the
company.
5.2 The office of a director shall be vacated if he is
removed from office under Article 5.1. Regulation 81
shall be modified accordingly.
5.3 Unless and until otherwise determined by the company by
Ordinary Resolution, either generally or in any
particular case, no director shall vacate or be
required to vacate his office as a director on or by
reason of his attaining or having attained the age of
70, and any person proposed to be appointed a director
shall be capable of being appointed as a director
notwithstanding that he has attained the age of 70, and
no special notice need be given of any resolution for
the appointment as a director of a person who shall
have attained the age of 70, and it shall not be
necessary to give to the members notice of the age of
any director or person proposed to be appointed as
such.
5.4 Regulation 88 shall be modified by the deletion of the
third sentence thereof.
6 ROTATION OF DIRECTORS
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6.1 The directors shall not be liable to retire by
rotation, and accordingly the second and third
sentences of regulation 79 shall be deleted.
7 ALTERNATE DIRECTORS
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7.1 Any director (other than an alternate director) may
appoint any other director, or any other person who is
willing to act, to be an alternate director and may
remove from office an alternate director so appointed
by him. Regulation 65 of Table A shall not apply.
7.2 Any appointment or removal of an alternate director
under Table A shall be delivered at the registered
office of the company.
7.3 If his appointor is for the time being absent from the
United Kingdom or otherwise not available the signature
of an alternate director to any resolution in writing
of the directors shall be as effective as the signature
of his appointor. An alternate director shall be
deemed to be a director for the purpose of signing
instruments pursuant to Article 10. Save as aforesaid,
an alternate director shall not have power to act as a
director nor shall he be deemed to be a director for
the purposes of these Articles.
7.4 An alternate director shall be entitled to contract and
be interested in and benefit from contracts or
arrangements with the company and to be repaid expenses
and to be indemnified to the same extent mutatis
mutandis as if he were a director, but he shall not be
entitled to receive from the company in respect of his
appointment as alternate director any remuneration,
except only such part (if any) of the remuneration
otherwise payable to his appointor as such appointor
may by notice in writing to the company from time to
time direct.
8 PROCEEDINGS OF DIRECTORS
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8.1 Any director or member of a committee of the directors
may participate in a meeting of the directors or such
committee by means of conference telephone or similar
communications equipment whereby all persons
participating in the meeting can hear each other and
participation in a meeting in this manner shall be
deemed to constitute presence in person at such
meeting.
8.2 The following sentence shall be inserted after the
first sentence of regulation 72: "Any committee shall
have power unless the directors direct otherwise to co-
opt as a member or members of the committee any person
or persons although not being a director of the
company."
8.3 For a signed resolution under regulation 93 to be
effective it shall not be necessary for it to be signed
by a director who is prohibited by the Articles or by
law from voting thereon. Regulation 93 shall be
modified accordingly.
8.4 The directors may delegate any of their powers (with
power to sub-delegate) to committees consisting of such
person or persons (whether directors or not) as they
think fit. Regulation 72 of Table A shall be modified
accordingly and references in Table A to a committee of
directors or to a director as a member of such a
committee shall include a committee established under
this article or such person or persons.
9 THE SEAL
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9.1 If the company has a seal, it shall only be used with
the authority of the directors or a committee of the
directors. The directors may determine who shall sign
any instrument to which the seal is affixed and unless
otherwise so determined it shall be signed by a
director and by the secretary or second director. The
obligation under regulation 6 relating to the sealing
of share certificates shall apply only if the company
has a seal.
9.2 If the company has a common seal, the company may also
have an official seal for use abroad under the
provisions of the Act, where and as the directors shall
determine, and the company may by writing under the
common seal appoint any agents or agent, committees or
committee abroad to be the duly authorised agents of
the company, for the purpose of affixing and using such
official seal, and may impose such restrictions on the
use thereof as may be thought fit. Wherever in these
Articles reference is made to the common seal of the
company, the reference shall, when and so far as may be
applicable, be deemed to include any such official seal
as aforesaid.
10 NOTICES
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10.1 Every director of the company shall be entitled to
receive notices of general meetings (at his usual
address or such other address as he may notify to the
company) in addition to the persons so entitled under
the Statutes. The words "but otherwise no such member
shall be entitled to receive any notice from the
Company" in the last sentence of regulation 112 shall
be deleted.
10.2 Any notice required by these Articles to be given by
the company may be given by any visible form on paper,
including telex, facsimile and electronic mail, and a
notice communicated by such forms of immediate
transmission shall be deemed to be given at the time it
is transmitted to the person to whom it is addressed.
Regulations 111 and 112 shall be modified accordingly.
10.3 In the first sentence of regulation 112 the words "(or
at such other address, whether within or outside the
United Kingdom, as he may supply to the company for
that purpose)" shall be inserted after "registered
address".
10.4 A notice posted to an address outside the United
Kingdom shall be deemed, unless the contrary is proved,
to be given at the expiration of 7 days after the
envelope containing it was posted and regulation 115
shall be amended accordingly.
10.5 Regulation 116 shall be modified by the substitution of
the words "the address, if any, whether within or
outside the United Kingdom" for the words "the address,
if any, within the United Kingdom" in the first
sentence thereof.
11 INDEMNITY
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11.1 Subject to the provisions of, and so far as may be
consistent with, the Statutes, but without prejudice to
any indemnity to which a director may be otherwise
entitled, every director, auditor, secretary or other
officer of the company shall be entitled to be
indemnified by the company against all costs, charges,
losses, expenses and liabilities incurred by him in the
execution and/or discharge of his duties and/or the
exercise of his powers and/or otherwise in relation to
or in connection with his duties, powers or office
including (without prejudice to the generality of the
foregoing) any liability incurred by him in defending
any proceedings, civil or criminal, which relate to
anything done or omitted or alleged to have been done
or omitted by him as an officer or employee of the
company and in which judgment is given in his favour
(or the proceedings are otherwise disposed of without
any finding or admission of any material breach of duty
on his part) or in which he is acquitted or in
connection with any application under any statute for
relief from liability in respect of any such act or
omission in which relief is granted to him by the
Court.