Exhibit 4(c)
PREFERRED TRUST SECURITIES GUARANTEE
Between
TXU Europe Limited
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ..................................................1
SECTION 1.01 Definitions ..................................................1
ARTICLE II TRUST INDENTURE ACT ..........................................4
SECTION 2.01 Trust Indenture Act; Application .............................4
SECTION 2.02 Lists of Holders of Preferred Trust Securities ...............4
SECTION 2.03 Reports by the Trust Guarantee Trustee .......................5
SECTION 2.04 Periodic Reports to Trust Guarantee Trustee ..................5
SECTION 2.05 Evidence of Compliance with Conditions Precedent .............5
SECTION 2.06 Events of Default; Waiver ....................................5
SECTION 2.07 Event of Default; Notice .....................................5
SECTION 2.08 Conflicting Interests ........................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF TRUST GUARANTEE TRUSTEE .........6
SECTION 3.01 Powers and Duties of the Trust Guarantee Trustee .............6
SECTION 3.02 Certain Rights of Trust Guarantee Trustee 8
SECTION 3.03 Not Responsible for Recitals or Issuance of Preferred
Trust Securities Guarantee .................................9
ARTICLE IV TRUST GUARANTEE TRUSTEE ..................................... 9
SECTION 4.01 Trust Guarantee Trustee; Eligibility ........................ 9
SECTION 4.02 Compensation and Reimbursement ..............................10
SECTION 4.03 Appointment, Removal and Resignation of Trust Guarantee
Trustee ...................................................11
ARTICLE V GUARANTEE ...................................................12
SECTION 5.01 Guarantee ...................................................12
SECTION 5.02 Waiver of Notice and Demand .................................12
SECTION 5.03 Obligations Not Affected ....................................12
SECTION 5.04 Rights of Holders ...........................................13
SECTION 5.05 Guarantee of Payment ........................................13
SECTION 5.06 Subrogation .................................................13
SECTION 5.07 Independent Obligations .....................................14
SECTION 5.08 Additional Amounts ..........................................14
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION ...................15
SECTION 6.01 Limitation of Transactions ..................................15
SECTION 6.02 Subordination ...............................................15
ARTICLE VII TERMINATION .................................................15
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ARTICLE VIII MISCELLANEOUS ...............................................16
SECTION 8.01 Successors and Assigns ......................................16
SECTION 8.02 Amendments ..................................................16
SECTION 8.03 Consolidations and Mergers ..................................16
SECTION 8.04 Notices .....................................................16
SECTION 8.05 Benefit .....................................................18
SECTION 8.06 Interpretation ..............................................18
SECTION 8.07 Governing Law ...............................................18
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CROSS-REFERENCE TABLE*
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Section of Section of
Trust Indenture Act Preferred
of 1939, as amended Trust
Securities Guarantee
- - - - ---------- ---------
310(a) .........................................................4.01(a)
310(b) .........................................................4.01(c), 2.08
310(c) .........................................................Inapplicable
311(a) .........................................................2.02(b)
311(b) .........................................................2.02(b)
311(c) .........................................................Inapplicable
312(a) .........................................................2.02(a)
312(b) .........................................................2.02(b)
313 ............................................................2.03
314(a) .........................................................2.04
314(b) .........................................................Inapplicable
314(c) .........................................................2.05
314(d) .........................................................Inapplicable
314(e) .........................................................1.01, 2.05,
3.02
314(f) .........................................................2.01, 3.02
315(a) .........................................................3.01(d)
315(b) .........................................................2.07
315(c) .........................................................3.01
315(d) .........................................................3.01(d)
316(a) .........................................................5.04(a), 2.06
316(b) .........................................................5.03
316(c) .........................................................2.02
317(a) .........................................................Inapplicable
317(b) .........................................................Inapplicable
318(a) .........................................................2.01(b)
318(b) .........................................................2.01
318(c) .........................................................2.01(a)
- - - - -------------
* This Cross-Reference Table does not constitute part of the Preferred Trust
Securities Guarantee and shall not affect the interpretation of any of its terms
or provisions.
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PREFERRED TRUST SECURITIES GUARANTEE AGREEMENT
This PREFERRED TRUST SECURITIES GUARANTEE AGREEMENT ("Preferred Trust
Securities Guarantee"), dated as of ____________, is executed and delivered by
TXU Europe Limited, a private limited company incorporated under the laws of
England and Wales (the "Guarantor"), and The Bank of New York, as trustee (the
"Trust Guarantee Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Trust Securities (as defined herein) of TXU
Europe Capital I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _____________among the Trustees named therein,
TXU Europe Limited, as Depositor, and the several Holders (as defined therein),
the Issuer is issuing as of the date hereof $_____________ aggregate Liquidation
Amount of its __% Trust Originated Preferred Securities (the "Preferred Trust
Securities") representing undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, in order to enhance the value of the Preferred Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Trust Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred Trust
Securities Guarantee for the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Preferred Trust Securities
Guarantee, the terms set forth below shall, unless the context otherwise
requires, have the following meanings. Capitalized or otherwise defined terms
used but not otherwise defined herein shall have the meanings assigned to such
terms in the Trust Agreement or Partnership Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"Common Trust Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the principal trust office of the Trust
Guarantee Trustee in the Borough of Manhattan, The City of New York, which
office at the date hereof is located at _________________________________.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Preferred Trust Securities Guarantee.
"Finance Subsidiary" means any wholly-owned subsidiary of the
Guarantor the principal purpose of which is to raise capital for the Guarantor
by issuing securities that are guaranteed by the Guarantor and the proceeds of
which are loaned to or invested in the Guarantor or one or more of its
affiliates.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Trust Securities, to the
extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions (as defined in the Trust Agreement) that are required to be
paid on such Preferred Trust Securities but only if and to the extent that the
Property Trustee has available in the Payment Account funds sufficient to make
such payment, (ii) the redemption price (the "Redemption Price"), and all
accrued and unpaid Distributions to the date of redemption, with respect to the
Preferred Trust Securities called for redemption by the Issuer but only if and
to the extent that the Property Trustee has available in the Payment Account
funds sufficient to make such payment, (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Preferred Partnership Securities to the Holders in
exchange for Preferred Trust Securities as provided in the Trust Agreement or
upon a redemption of all of the Preferred Trust Securities, the lesser of (a)
the aggregate of the Liquidation Amount of all Preferred Trust Securities and
all accrued and unpaid Distributions on the Preferred Trust Securities to the
date of payment but only if and to the extent that the Property Trustee has
available in the Payment Account funds sufficient to make such payment, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). The term Guarantee Payments shall include any Additional Amounts
(as defined in Section 5.08 hereof) payable by the Guarantor in respect of
payments under the Preferred Trust Securities Guarantee.
"Holder" means a Person in whose name a Preferred Trust Security or
Preferred Trust Securities is registered in the Securities Register; provided,
however, that in determining whether the holders of the requisite percentage of
Preferred Trust Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"Majority in Liquidation Amount of the Preferred Trust Securities"
means a vote by Holders, voting separately as a class, of more than 50% of the
aggregate Liquidation Amount of all Preferred Trust Securities.
"Officer's Certificate" means a certificate signed by any Director,
the President, any Vice President, the Treasurer, or any Assistant Treasurer of
the Guarantor, and delivered to the Trust Guarantee Trustee. Any Officer's
Certificate or Opinion of Counsel delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall include:
(a) a statement that the director, officer or counsel signing the
Officer's Certificate or the Opinion of Counsel has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each director, officer or counsel in rendering the
Officer's Certificate or the Opinion of Counsel;
(c) a statement that each such director, officer or counsel has made
such examination or investigation as, in such director's, officer's or counsel's
opinion, is necessary to enable such director, officer or counsel to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such director,
officer or counsel, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust Guarantee Trustee or the Guarantor or an Affiliate of the
Guarantor, or an employee or any thereof, who shall be acceptable to the
Guarantee Trustee.
"Partnership" means TXU Europe Funding I, L.P.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of _________ __, ____, among
TXU Europe Limited, a private limited company incorporated under the laws of
England and Wales, as general partner, ________________________, as initial
limited partner and such other persons who become limited partners as provided
therein.
"Preferred Partnership Securities" means those securities representing
limited partnership interests in the Partnership.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company, unincorporated organization or
government, or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Corporate Trust Department
of the Trust Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" means any payment in respect of indebtedness of
the Guarantor for money borrowed, except for any such indebtedness that is by
its terms subordinated to or pari passu with Guarantor's guarantees of the debt
instruments purchased by the Partnership (the "Subsidiary Debentures"), as the
case may be.
"Successor Trust Guarantee Trustee" means a successor Trust Guarantee
Trustee possessing the qualifications to act as Trust Guarantee Trustee under
Section 4.01.
"Trust Guarantee Trustee" means The Bank of New York until a Successor
Trust Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Preferred Trust Securities Guarantee and
thereafter means each such Successor Trust Guarantee Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Trust Securities together with the
Preferred Trust Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Trust Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required or deemed to be part of
this Preferred Trust Securities Guarantee and shall, to the extent applicable,
be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred Trust
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED TRUST SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the Trust
Guarantee Trustee (a) semiannually, not later than ________ and ______ in each
year, a list, in such form as the Trust Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (b) at such other
times as the Trust Guarantee Trustee may request in writing, within 30 days
after the receipt by the Guarantor of any such request, a List of Holders as of
a date not more than 15 days prior to the time such list is furnished; provided
that, the Guarantor shall not be obligated to provide such List of Holders at
any time the List of Holders does not differ from the most recent List of
Holders given to the Trust Guarantee Trustee by the Guarantor. The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trust Guarantee Trustee shall comply with its obligations
under Section 311(a) of the Trust Indenture Act, subject to the provisions of
Section 311(b) of the Trust Indenture Act, and Section 312(b) of the Trust
Indenture Act.
SECTION 2.03 REPORTS BY THE TRUST GUARANTEE TRUSTEE. Not later than
________ in each year, commencing ________________, the Trust Guarantee
Trustee shall provide to the Holders such reports, if any, as are required by
Section 313(a) of the Trust Indenture Act in the form and in the manner provided
by Section 313(a) of the Trust Indenture Act. Any such report shall be dated as
of the next preceding _________ 15. The Trust Guarantee Trustee shall also
comply with the requirements of Sections 313(b), (c) and (d) of the Trust
Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO TRUST GUARANTEE TRUSTEE. The
Guarantor shall provide to the Trust Guarantee Trustee such documents, reports
and information, if any, as required by Section 314 of the Trust Indenture Act
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Trust Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this Preferred Trust
Securities Guarantee as and to the extent required by Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer or director and any opinion of counsel required to be given by counsel,
in each case pursuant to Section 314(c) of the Trust Indenture Act, shall be
given in the form of an Officer's Certificate, and an Opinion of Counsel,
respectively.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
Liquidation Amount of Preferred Trust Securities may, by vote, on behalf of all
of the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Trust Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Trust Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, a notice of such Event of Default known to the Trust
Guarantee Trustee, unless such default shall have been cured or waived before
the giving of such notice, provided that the Trust Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors or Responsible
Officers of the Trust Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Trust Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless a Responsible Officer of the Trust Guarantee
Trustee charged with the administration of the Trust Agreement shall have
received written notice of such Event of Default.
SECTION 2.08 CONFLICTING INTERESTS. The Trust Agreement and the
Indenture (For Unsecured Debt Securities) dated as of May 1, 1999 of TXU Eastern
Funding Company and TXU Europe Limited to The Bank of New York, as trustee,
shall be deemed to be specifically described in this Preferred Trust Securities
Guarantee for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUST GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE TRUST GUARANTEE TRUSTEE.
(a) This Preferred Trust Securities Guarantee shall be held by the
Trust Guarantee Trustee for the benefit of the Holders, and the Trust Guarantee
Trustee shall not transfer this Preferred Trust Securities Guarantee or any
rights hereunder to any Person except a Holder exercising his or her rights
pursuant to Section 5.04 or to a Successor Trust Guarantee Trustee on acceptance
by such Successor Trust Guarantee Trustee of its appointment to act as Successor
Trust Guarantee Trustee. The right, title and interest of the Trust Guarantee
Trustee shall automatically vest in any Successor Trust Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not convincing
documents have been executed and delivered pursuant to the appointment of such
Successor Trust Guarantee Trustee.
(b) The Trust Guarantee Trustee, prior to the occurrence of any Event
of Default and after the curing or waiving of all Events of Default that may
have occurred, shall undertake to perform such duties and only such duties as
are specifically set forth in this Preferred Trust Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred Trust
Securities Guarantee against the Trust Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06), and is actually known to a Responsible Officer of the Trust Guarantee
Trustee, the Trust Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Preferred Trust Securities Guarantee, and use the
same degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Preferred Trust Securities Guarantee shall be
construed to relieve the Trust Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Trust Guarantee
Trustee shall be determined solely by the express provisions of this Preferred
Trust Securities Guarantee, and the Trust Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Preferred Trust Securities Guarantee, and no implied covenants
or obligations shall be read into this Preferred Trust Securities Guarantee
against the Trust Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Trust
Guarantee Trustee, the Trust Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trust Guarantee Trustee and
conforming to the requirements of this Preferred Trust Securities Guarantee; but
in the case of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Trust Guarantee Trustee, the
Trust Guarantee Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Trust Guarantee;
(ii) the Trust Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Trust
Guarantee Trustee, unless it shall be proved that the Trust Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Trust Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in Liquidation Amount
of the Preferred Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trust Guarantee
Trustee, or exercising any trust or power conferred upon the Trust Guarantee
Trustee under this Preferred Trust Securities Guarantee; and
(iv) no provision of this Preferred Trust Securities Guarantee
shall require the Trust Guarantee Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if the Trust
Guarantee Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of
this Preferred Trust Securities Guarantee or adequate indemnity, reasonably
satisfactory to the Trust Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly provided, every provision of this
Preferred Trust Securities Guarantee relating to the conduct or affecting the
liability of or affording protection to the Trust Guarantee Trustee shall be
subject to the provisions of Sections 3.01(b) and 3.01(c).
SECTION 3.02 CERTAIN RIGHTS OF TRUST GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Trust Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Preferred Trust Securities Guarantee shall be sufficiently evidenced by an
Officer's Certificate;
(iii) whenever, in the administration of this Preferred Trust
Securities Guarantee, the Trust Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting to take any
action hereunder, the Trust Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and rely upon an Officer's Certificate which, upon receipt of such request from
the Trust Guarantee Trustee, shall be promptly delivered by the Guarantor;
(iv) the Trust Guarantee Trustee may consult with counsel of its
choice, and the written advice or Opinion of Counsel with respect to legal
matters shall be full and complete authorization and protection in respect of
any action which is within the scope of such advice or opinion taken, suffered
or omitted by it hereunder in good faith and in accordance with such advice or
opinion; such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees; the Trust Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of this
Preferred Trust Securities Guarantee from any court of competent jurisdiction;
(v) the Trust Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred Trust
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Trust Guarantee Trustee such adequate security
and indemnity as would satisfy a reasonable person in the position of the Trust
Guarantee Trustee, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Trust Guarantee Trustee; provided that, nothing contained in this Section
3.02(a)(v) shall be taken to relieve the Trust Guarantee Trustee, upon the
occurrence and continuance of an Event of Default, of its obligation under the
last sentence of Section 3.01(b) to exercise the rights and powers vested in it
by this Preferred Trust Securities Guarantee;
(vi) the Trust Guarantee Trustee shall not be bound except in
the case of manifest error to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trust Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(vii) the Trust Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trust Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(viii) whenever in the administration of this Preferred Trust
Securities Guarantee the Trust Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Trust Guarantee Trustee (1) may request instructions
from the Holders of a Majority in Liquidation Amount of the Preferred Trust
Securities, (2) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (3) shall be protected in
relying on or acting in accordance with such instructions;
(ix) the Trust Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including any financing
or continuation statement or any tax or securities form) (or any re-recording,
refiling or re-registration thereof); and
(x) the Trust Guarantee Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Preferred Trust Securities Guarantee.
(b) No provision of this Preferred Trust Securities Guarantee shall be
deemed to impose any duty or obligation on the Trust Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Trust Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Trust Guarantee Trustee shall be construed to be a duty to act
in accordance with such power or authority.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED
TRUST SECURITIES GUARANTEE.
The recitals contained in this Preferred Trust Securities Guarantee
shall be taken as the statements of the Guarantor, and the Trust Guarantee
Trustee does not assume any responsibility for their correctness. The Trust
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Trust Securities Guarantee.
ARTICLE IV
TRUST GUARANTEE TRUSTEE
SECTION 4.01 TRUST GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Trust Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes of
this Section 4.01(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Trust Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Trust Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.03(c).
(c) If the Trust Guarantee Trustee has acquired or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Trust Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Trust Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Trust Guarantee Trustee shall
from time to time agree in writing for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trust Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trust Guarantee Trustee in
accordance with the provisions of this Preferred Trust Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify each of the Trust Guarantee Trustee and any
predecessor Trust Guarantee Trustee for, and to hold it harmless from and
against, any and all loss, damage, claim, liability or expense, including taxes
(other than taxes based upon the income of the Trust Guarantee Trustee) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance of the trusts created by, or the administration of, this
Preferred Trust Securities Guarantee, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Guarantor
under this Section, the Trust Guarantee Trustee shall be entitled upon 5 days
prior notice in writing to the Guarantor to exercise a lien prior to the
Preferred Trust Securities upon all the property and funds held or collected by
the Trust Guarantee Trustee as such, except funds held in trust for the payment
of principal of, and premium (if any) or interest on, particular obligations of
the Guarantor under this Preferred Trust Securities Guarantee.
The provisions of this Section shall survive the termination of this
Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUST GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall have
occurred and be continuing, the Trust Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Trust Guarantee Trustee shall not be removed until a Successor
Trust Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Trust Guarantee Trustee and
delivered to the Guarantor.
(c) The Trust Guarantee Trustee appointed to office shall hold office
until a Successor Trust Guarantee Trustee shall have been appointed or until its
removal or resignation. The Trust Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Trust Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Trust Guarantee Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trust Guarantee Trustee and delivered to the
Guarantor and the resigning Trust Guarantee Trustee.
(d) If no Successor Trust Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60 days after
delivery to the Guarantor of an instrument of resignation or removal, the Trust
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Trust Guarantee Trustee. Such court
may thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Trust Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Trust Guarantee Trustee and each appointment of a Successor Trust
Guarantee Trustee to all Holders in the manner provided in Section 8.03 hereof.
Each notice shall include the name of the Successor Trust Guarantee Trustee and
the address of its Corporate Trust Office.
(f) No Trust Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Trust Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of this Preferred Trust Securities Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment, any
right to require a proceeding first against the Trust Guarantee Trustee, Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Preferred Trust Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Trust Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Trust Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Trust Securities (other than pursuant
to the terms of the Trust Agreement);
(c) any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Preferred Trust Securities, or any action on the
part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred Trust
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Trust Guarantee Trustee, the Property
Trustee or the Holders to give notice to, or obtain consent of, the Guarantor or
any other Person with respect to the happening of any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly acknowledges
that: (i) this Preferred Trust Securities Guarantee will be deposited with the
Trust Guarantee Trustee to be held for the benefit of the Holders; (ii) if an
Event of Default has occurred and is continuing, the Trust Guarantee Trustee has
the right to enforce this Preferred Trust Securities Guarantee on behalf of the
Holders; (iii) the Holders of a Majority in Liquidation Amount of the Preferred
Trust Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trust Guarantee
Trustee in respect of this Preferred Trust Securities Guarantee or exercising
any trust or power conferred upon the Trust Guarantee Trustee under this
Preferred Trust Securities Guarantee; and (iv) if the Trust Guarantee Trustee
fails to enforce this Preferred Trust Securities Guarantee, any Holder may
enforce this Preferred Trust Securities Guarantee, or institute a legal
proceeding directly against the Guarantor to enforce the Trust Guarantee
Trustee's rights under this Preferred Trust Securities Guarantee without first
instituting a legal proceeding against the Issuer, the Trust Guarantee Trustee,
or any other Person.
SECTION 5.05 GUARANTEE OF PAYMENT. This Preferred Trust Securities
Guarantee creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in
full (without duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall be subrogated to all,
if any, rights of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Preferred Trust Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred Trust
Securities Guarantee, if, at the time of any such payment, any amounts of
Guarantee Payments are due and unpaid under this Preferred Trust Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Trust Securities and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Trust Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.03.
SECTION 5.08 ADDITIONAL AMOUNTS. All payments made pursuant to the
Guarantee Payments 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 in
which the Guarantor is incorporated or organized ("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 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 Guarantor shall pay to the Holder of the Preferred Trust
Securities 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 Preferred Trust Securities 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 receipt of Guarantee
Payments;
(B) to, or to a Person on behalf of, a Holder who presents a
Senior Note of the first or Second 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 first or Second 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
Preferred Trust Security (when presentation is required) other than in The City
of New York.
(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 Preferred
Trust Security 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 Preferred
Trust Security be so issued.]
Such Additional Amounts will also not be payable where, had the beneficial owner
of the Preferred Trust Security (or any interest therein) been the Holder of the
Preferred Trust Security , 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 Guarantor shall determine that Additional Amounts will not be
payable because of the immediately preceding sentence, the Guarantor will inform
such Holder promptly after making such determination setting forth the reason(s)
thereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01 LIMITATION OF TRANSACTIONS. So long as any Preferred
Trust Securities remain outstanding, if (a) for any distribution period (as
defined in the Trust Agreement), full distributions on a cumulative basis on
any Preferred Trust Securities have not been paid when due or declared and set
apart for payment within the period of time allowed under the Trust Agreement,
(b) an Investment Event of Default by any Investment Affiliate in respect of
any Affiliate Investment Instrument has occurred and is continuing, or (c) the
Guarantor is in default of its obligations under the Preferred Trust Securities
Guarantee, the Partnership Guarantee or any Investment Guarantee which has not
been cured within the respective periods of time allowed under such guarantee,
then, during such period (i) the Guarantor shall not declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire, or
make a liquidation payment with respect to any of its capital stock or
comparable equity interest (except for dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, its
capital stock and conversations or exchanges of common stock of one class
into common stock of another class) and (ii) the Guarantor shall not make or
permit any Finance Subsidiary to make, any payments that would enable any
Finance Subsidiary to make, any payment of any dividends on, any distribution
with respect to, or any redemption, purchase or other acquisition of, or any
liquidation payment with respect to, any preferred security or comparable equity
interest of any Finance Subsidiary.
SECTION 6.02 SUBORDINATION. This Preferred Trust Securities Guarantee
will constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Investment Guarantees, except those made pari passu or
subordinate by their terms, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to all
common stock of the Guarantor. Nothing in this Section 6.02 shall apply to
claims of, or payments to, the Trust Guarantee Trustee under or pursuant to
Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. Subject to Section 4.02 hereof, this
Preferred Trust Securities Guarantee shall terminate and be of no further force
and effect upon: (i) full payment of the Redemption Price of all Preferred Trust
Securities, and all accrued and unpaid Distributions to the date of redemption,
(ii) the distribution of Preferred Partnership Securities to Holders in exchange
for all of the Preferred Trust Securities, or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Preferred Trust Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid with respect to Preferred
Trust Securities or under this Preferred Partnership Securities Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Preferred Partnership Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Preferred Trust Securities
then outstanding.
SECTION 8.02 AMENDMENTS. This Preferred Trust Securities Guarantee
may be amended only by an instrument in writing entered into by the Guarantor
and the Trust Guarantee Trustee. Except with respect to any changes which do not
materially adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Preferred Partnership Securities Guarantee may
only be amended with the prior approval of the Holders of at least a majority in
aggregate Liquidation Amount of all the outstanding Preferred Trust Securities.
The provisions of Article VI of the Trust Agreement concerning meetings of
Holders shall apply to the giving of such approval. Nothing herein contained
shall be deemed to require that the Trust Guarantee Trustee enter into any
amendment of this Preferred Trust Securities Guarantee.
SECTION 8.03 CONSOLIDATIONS AND MERGERS. The Guarantor may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation or other entity;
provided, that in any such case, (i) either the Guarantor shall be the
continuing entity, or the successor entity shall be a corporation or other
entity organized and existing under the laws of England and Wales, or any state
of the United States of America and such successor entity shall expressly assume
the due and punctual payment of the Guarantee Payments payable pursuant to
Section 5.01 hereof and the due and punctual performance and observance of all
of the covenants and conditions of this Preferred Trust Securities Guarantee to
be performed by the Guarantor by a separate guarantee satisfactory to the Trust
Guarantee Trustee, executed and delivered to the Trust Guarantee Trustee by such
entity, and (ii) the guarantor or such successor entity, as the case may be,
shall not, immediately after such merger or consolidation, or such sale, lease
or conveyance, be in default in the performance of any such covenant or
condition.
SECTION 8.04 NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trust Guarantee Trustee
and the Holders of the Preferred Trust Securities:
TXU Europe Limited
The Adelphi
1-11 John Adam Street
London, England WC2N 6HT
Facsimile No: 44 20 78 798082
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative Trustees, at
the Issuer's (and the Administrative Trustees') address set forth below or such
other address as the Administrative Trustees on behalf of the Issuer may give
notice of to the Guarantee Trustee and the Holders:
TXU Europe Capital I
c/o TXU Europe Limited
The Adelphi
1-11 John Adam Street
London, England WC2N 6HT
Facsimile No: 44 20 78 798082
Attention: Administrative Trustees
(c) if given to the Trust Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice of to the
Guarantor and the Holders of the Preferred Trust Securities:
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.05 BENEFIT. This Preferred Trust Securities Guarantee is
solely for the benefit of the Holders and, subject to Section 3.01(a), is not
separately transferable from the Preferred Trust Securities.
SECTION 8.06 INTERPRETATION. In this Preferred Trust Securities
Guarantee, unless the context otherwise requires:
(a) a term defined anywhere in this Preferred Trust Securities
Guarantee has the same meaning throughout;
(b) all references to "the Preferred Trust Securities Guarantee" or
"this Preferred Trust Securities Guarantee" are to this Preferred Trust
Securities Guarantee as modified, supplemented or amended from time to time;
(c) all references in this Preferred Trust Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Trust
Securities Guarantee unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Trust Securities Guarantee unless otherwise defined
in this Preferred Trust Securities Guarantee or unless the context otherwise
requires;
(e) a reference to the singular includes the plural and vice versa;
and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.07 GOVERNING LAW. THIS PREFERRED TRUST SECURITIES GUARANTEE
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS PREFERRED TRUST SECURITIES GUARANTEE is executed as of the day
and year first above written.
TXU Europe Limited
By:
------------------------
Name:
Title:
The Bank of New York,
as Trust Guarantee Trustee
By:
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Name:
Title: