Exhibit 4(y)
C L I F F O R D LIMITED LIABILITY PARTNERSHIP
C H A N C E
CONFORMED COPY
TXU EASTERN FUNDING COMPANY
as Issuer
TXU EUROPE LIMITED
as Guarantor
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
And
UBS AG, acting through its business group UBS WARBURG
-------------------------------------------------
REMARKETING AGREEMENT
relating to the issue of
(pound)301,000,000 35 Put 5 Resettable Securities due 2035
by TXU EASTERN FUNDING COMPANY under its
(euro)2,000,000,000 Euro Medium Term Note Programme
unconditionally and irrevocably guaranteed by
TXU EUROPE LIMITED
-------------------------------------------------
CONTENTS
CLAUSE PAGE
1. Interpretation...........................................................2
2. Appointment And Obligations Of Determination Agents......................3
3. Termination Of Appointment...............................................6
4. Representations And Warranties...........................................7
5. Undertakings Of The Issuer...............................................8
6. Guarantee................................................................9
7. Costs....................................................................10
8. General..................................................................10
9. Assignment...............................................................10
10. Notices..................................................................11
11. Law And Jurisdiction.....................................................12
THIS AGREEMENT is made on 29 November 2000
BETWEEN:
(1) TXU EASTERN FUNDING COMPANY, a company with unlimited liability
incorporated under the laws of England and whose registered office is at
The Adelphi, 1-11 John Adam Street, London WC2N 6HT (the "ISSUER");
(2) TXU EUROPE LIMITED, a company with limited liability incorporated under the
laws of England and whose registered office is at The Adelphi, 1-11 John
Adam Street, London WC2N 6HT (the "GUARANTOR"); and
(3) MORGAN STANLEY & CO. INTERNATIONAL LIMITED ("MSIL") and UBS AG, acting
through its business group UBS WARBURG ("UBS WARBURG" and, together with
MSIL, the "REMARKETING DEALERS").
WHEREAS:
(A) The Issuer proposes to issue(pound)301,000,000 35 Put 5 Resettable
Securities Due 2035 (the "NOTES") constituting a tranche of medium term
notes, Series 4, described in a Pricing Supplement dated 27 November 2000
(the "PRICING SUPPLEMENT"). The Notes will be issued and the terms and
conditions thereof (the "CONDITIONS") established in accordance with a
Trust Deed dated 15 December 1999 made between the Issuer, the Guarantor
and The Law Debenture Trust Corporation p.l.c., as supplemented by a First
Supplemental Trust Deed dated 29 November 2000 (the "SUPPLEMENTAL TRUST
DEED") made between the same parties, and the Pricing Supplement.
(B) The Issuer has agreed to appoint MSIL and UBS Warburg as Determination
Agents in relation to the Notes on the terms herein contained.
The parties agree as follows:
1. INTERPRETATION
1.1 Terms defined in the Pricing Supplement and the Supplemental Trust Deed
shall have the same meanings herein.
1.2 In this Agreement, a reference to:
(a) a statutory provision includes a reference to the statutory provision
as modified or re-enacted or both from time to time and any
subordinate legislation thereunder;
(b) a person includes a reference to that person's legal personal
representatives, successors and assigns;
(c) a time of day is a reference to the time in London, unless a contrary
indication appears; and
(d) a clause or schedule, unless the context otherwise requires, is a
reference to a clause of or schedule to this Agreement.
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1.3 The headings in this Agreement do not affect its interpretation.
2. APPOINTMENT AND OBLIGATIONS OF DETERMINATION AGENTS
2.1 The Issuer hereby appoints MSIL and UBS Warburg as its agents (in such
capacity, the "DETERMINATION AGENTS") in relation to the Notes for the
purpose of the Interest Reset Procedure.
2.2 On the terms, but subject to the conditions, of this Agreement MSIL and UBS
Warburg hereby accept the appointment as Determination Agents.
2.3 The following provisions of this Clause 2.3 shall apply if a Purchase
Notice (as defined in the Supplemental Trust Deed) is given to the Trustee
and Issuing and Paying Agent not less than fifteen Business Days prior to
the Interest Reset Date as contemplated in Clause 2.1(i) of the
Supplemental Trust Deed:
(i) No later than the sixth Business Day preceding the Interest Reset
Date, the Determination Agents will provide each Reference
Securities Dealer with: (a) a copy of the Pricing Supplement, (b)
the most recently published offering circular of the Issuer
published in relation to its (EURO)2,000,000,000 Euro Medium Term
Note Programme, (c) a written request for a Bid (as defined
below) from such Reference Securities Dealer to be submitted to
the Determination Agents at 11.00 a.m. (London time) on the Bid
Date (as defined below) and (d) the Determination Agents'
estimate of the Reference Bond Price (as defined below).
(ii) At or about 11.00 a.m. (London time) on the Business Day
preceding the Bid Date, the Determination Agents will calculate
the Reference Bond Price (as defined below), notify each
Reference Securities Dealer of the Reference Bond Price and
request a Bid (as defined below) from each Reference Securities
Dealer.
(iii) By 11.30 a.m. (London time) on the Bid Date, the Determination
Agents will notify the Issuer in writing of: (a) the Bid received
from each Reference Securities Dealer; and (b) the Reference Bond
Price, as determined by the Determination Agents in their sole
discretion
(iv) Unless the Interest Reset Procedure shall be terminated, the
Determination Agents shall select from all the Bids received from
the Reference Securities Dealers the Bid (the "SELECTED BID")
quoting the lowest annual interest rate (the "LOWEST BID RATE"),
and if there is more than one such Bid, the Determination Agents
shall be entitled to select one of them at their sole discretion.
MSIL and UBS Warburg (severally where only one exercises such
entitlement or together (and in equal shares) where both exercise
such entitlement) shall have the right (but shall be under no
obligation) to match the Selected Bid, in which case such
matching Bid shall be the Selected Bid.
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(v) If: (a) fewer than two Bids are received by the Determination
Agents; and/or (b) the Determination Agents in their absolute
discretion determine that there is a Market Disruption Event (as
defined below) on the Bid Date; and/or (c) the Notes shall have
been redenominated pursuant to Paragraph 9 of the Pricing
Supplement and/or (d) an Event of Default shall have occurred
and/or (e) the Determination Agents shall have received notice
from the Issuer at any time prior to their selection of the
Selected Bid that the Issuer wishes to terminate the Interest
Reset Procedure, then the Interest Reset Procedure shall be
terminated, the Issuer shall (and the Determination Agents may)
give notice to the Trustee and the Issuing and Paying Agent (as
contemplated in Clause 2.1(ii) of the Supplemental Trust Deed) of
such termination and the Notes shall be redeemed by the Issuer in
accordance with Paragraph 44(B) of the Pricing Supplement.
The following provisions of this Clause 2.3 shall apply only
where the Interest Reset Procedure has not been terminated.
(vi) The Determination Agents will determine the Interest Reset Rate
(the "INTEREST RESET RATE") to be the Lowest Bid Rate.
(vii) No later than 11.30 a.m. (London time) on the Bid Date, the
Determination Agents will notify the Reference Securities Dealer
whose Bid is the Selected Bid of such fact.
(viii) As soon as practicable after determining the Interest Reset
Rate as aforesaid, the Determination Agents will calculate the
Interest Amount payable in respect of each Denomination of Notes
for each Interest Period.
(ix) The Determination Agents will cause the Interest Rate and the
Interest Amount to be notified to the Issuer, the Paying Agents,
the Trustee and the Noteholders as soon as possible after
determination thereof and in any event in accordance with
Condition 5(g).
For the purposes of the foregoing provisions:
All determinations by the Determination Agents shall (in the absence
of manifest error) be final and binding.
"REFERENCE SECURITIES DEALERS" means up to five financial institutions
comprising MSIL and UBS Warburg and up to three additional financial
institutions agreed between the Issuer and the Determination Agents
and which, at the time of agreement, deal in the Issuer's debt
securities and which shall agree to participate in the Interest Reset
Procedure.
"REFERENCE SWAP DEALERS" means up to five financial institutions
comprising MSIL and UBS Warburg and up to three additional financial
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institutions agreed between the Issuer and the Determination Agents
which are leading swap dealers.
"BID" means an irrevocable written offer given by a Reference
Securities Dealer at or about 11.00 a.m. (London time) on the Bid Date
to purchase all the Notes outstanding at the Reference Bond Price for
settlement on the Interest Reset Date such offer to be conditional on
the acquisition of the Notes by MSIL and UBS Warburg under the
Purchase Rights, to be expressed as an annual fixed rate of interest
(being the rate which such Reference Securities Dealer requires to be
payable on the Notes until the Maturity Date), to be given on an
"all-in" basis and to be expressed to be open for at least 30 minutes.
"BID DATE" means the third Business Day preceding the Interest Reset
Date.
"MARKET DISRUPTION EVENT" means the occurrence of any of the following
events in the judgement of the Determination Agents: (a) a suspension
or material limitation in trading in securities generally on the
London Stock Exchange or the establishment of minimum prices on such
exchange; (b) a general moratorium on commercial banking activities
declared by the Bank of England or the Financial Services Authority;
(c) any material adverse change in the existing financial, political
or economic conditions in the United Kingdom which has a material and
adverse effect on the trading of the Notes; (d) an outbreak, or
escalation, of major hostilities involving the United Kingdom or the
declaration of a national emergency or war by the Government of the
United Kingdom; or (e) any material disruption of the United Kingdom
Gilt market, the United Kingdom corporate bond market or banking
system; provided, in each case, that in the sole judgement of the
Determination Agents the effect of the foregoing makes it impractical
to conduct the Interest Reset Procedure.
"REFERENCE BOND PRICE" means an amount as determined by the
Determination Agents on the Bid Date equal to the discounted present
value to the Interest Reset Date of a bond with a maturity date of 30
November 2035 bearing interest payable annually on a 30/360 day count
basis at 6.25% per annum and a principal amount equal to the Nominal
Amount of the Notes and assuming a discount rate equal to the
Reference Swap Yield.
"REFERENCE SWAP YIELD" means the percentage rate per annum determined
by the Determination Agents on the basis of the annual swap rate
quotations provided by the Reference Swap Dealers at approximately
11.00 a.m. (London time) on the Business Day preceding the Bid Date
and, for this purpose, the annual swap rate means the bid rate for the
annual fixed leg of a fixed-for-floating Sterling interest rate swap
transaction (quoted on a 30/360 day unadjusted day count basis and
assuming the application of the Following Business Day Convention (as
defined in the 2000 ISDA Definitions (the "DEFINITIONS")) with a term
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commencing on the Interest Reset Date and ending on 30 November 2035
with a notional amount of (pound)301,000,000 with an acknowlEdged
dealer of good credit in the swap market, where the floating leg is
equivalent to GBP-LIBOR-BBA (as defined in the Definitions) with a
Designated Maturity (as defined in the Definitions) of three months on
an Actual/365 (as defined in the Definitions) day count basis. The
Reference Swap Yield will be the arithmetic average of such
quotations, eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest).
2.4 Each Determination Agent may, in connection with its services hereunder (a)
rely upon the terms of any notice, communication or other document believed
by it to be genuine; and (b) engage and pay for the advice or services of
any lawyers or other experts whose advice or services it considers
necessary and rely upon any advice so obtained (and such Determination
Agent shall be protected and shall incur no liability as against the Issuer
in respect of any action taken, or permitted to be taken, in accordance
with such advice and in good faith).
2.5 The Determination Agents shall only be obliged to perform the duties set
out herein and in the Conditions and such other duties as are necessarily
incidental thereto. Neither Determination Agent shall be under any
fiduciary duty towards any person other than the Issuer, be responsible for
or liable in respect of any act or omission of any other person or be under
any obligation towards any person other than the Issuer. The determination
of the Determination Agents shall be made in good faith and shall be final
and binding in the absence of manifest error.
2.6 Each Determination Agent may purchase, hold and dispose of Notes and may
enter into any transaction with any holders of Notes or with any other
person in the same manner as if it had not been appointed as the agent of
the Issuer in relation to the Notes.
2.7 The Issuer shall indemnify and hold harmless each Determination Agent and
their respective officers and employees from and against all actions,
claims, costs, damages, liabilities and losses, and costs and expenses
related thereto (including, without limitation, legal fees and any
applicable value added tax) relating to or arising out of its appointment
or the exercise of its powers and duties hereunder which it suffers or
incurs otherwise than by reason of its own default, gross negligence or
wilful misconduct. This Clause 2.7 shall survive the termination of this
Agreement and the payment in full of all obligations under the Notes and
this Agreement, whether by purchase, repurchase, redemption or otherwise.
3. TERMINATION OF APPOINTMENT
3.1 Each Determination Agent may resign its appointment at any time, such
resignation to be effective upon delivery to the Issuer (with a copy to the
Trustee) of notice of such resignation. Following the resignation of a
Determination Agent, the Issuer may with the prior written approval of the
other Determination Agent appoint a successor Determination Agent and shall
forthwith give notice of any such appointment to the Trustee and the
Holders.
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3.2 Any successor Determination Agent appointed by the Issuer shall execute and
deliver to the resigning Determination Agent an instrument accepting such
appointment and thereupon such successor Determination Agent shall without
any further act or instrument become vested with all the rights,
immunities, duties and obligations of the resigning Determination Agent
hereunder. Pending the appointment of a successor Determination Agent, the
determinations and other actions of the continuing Determination Agent
shall be effective as if made or taken by both Determination Agents.
3.3 Upon any resignation taking effect under Clause 3.1 or any termination
under Clause 3.2, the relevant Determination Agent shall be released and
discharged from its obligations under this Agreement (save that it shall
remain entitled to the benefit of and subject to Clauses 2.6 and 2.7).
3.4 Any legal entity into which a Determination Agent is merged or converted or
any legal entity resulting from any merger or conversion to which such
Determination Agent is a party shall, to the extent permitted by applicable
law, be the successor to such Determination Agent without any further
formality, whereupon the Issuer and such successor Determination Agent
shall acquire and become subject to the same rights and obligations between
themselves as if they had entered into an agreement in the form of this
Agreement. Notice of any such merger or conversion shall forthwith be given
by such successor to the Issuer and the Trustee.
4. REPRESENTATIONS AND WARRANTIES
4.1 Each party represents and warrants to the other party that:
(a) it is duly organised and validly existing under the laws of the
jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing;
(b) it has the power to execute, deliver and perform its obligations under
this Agreement and has taken all necessary action to authorize such
execution, delivery and performance;
(c) such execution, delivery and performance do not violate or conflict
with any law applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets.
(d) all governmental and other consents that are required to have been
obtained by it with respect to this Agreement have been obtained and
are in full force and effect and all conditions of any such consents
have been complied with;
(e) its obligations under this Agreement constitute its legal, valid and
binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
7
application (regardless of whether enforcement is sought in a
proceeding in equity or at law));
(f) there is not pending or, to its knowledge, threatened against it or
any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality,
validity or enforceability against it of this Agreement or its ability
to perform its obligations under this Agreement;
(g) it is acting for its own account, and it had made its own independent
decisions to enter into this Agreement and as to whether this
Agreement is appropriate or proper for it based upon its own judgment
and upon advice from such advisers as it has deemed necessary. It is
not relying on any communication (written or oral) of the other party
as investment advice or as a recommendation to enter into this
Agreement; it being understood that information and explanations
related to the terms and conditions of this Agreement shall not be
considered investment advice or a recommendation to enter into this
Agreement. No communication (written or oral) received from another
party shall be deemed to be an assurance or guarantee as to the
expected results of this Agreement;
(h) it is capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands
and accepts, the terms, conditions and risks of this Agreement. It is
also capable of assuming, and assumes, the risks of this Agreement;
and
(i) no other party is acting as a fiduciary for or an adviser to it in
respect of this Agreement.
4.2 The Issuer represents and warrants to the Remarketing Dealers that no Event
of Default has occurred and is continuing and no such event or circumstance
would occur as a result of its entering into or performing its obligations
under this Agreement.
5. UNDERTAKINGS OF THE ISSUER AND THE GUARANTOR
Each of the Issuer and the Guarantor hereby undertakes with each
Remarketing Dealer as follows:
(a) it will use all reasonable efforts to maintain in full force and
effect all consents of any governmental or other authority that are
required to be obtained by it with respect to this Agreement and shall
use all reasonable efforts to obtain any that become necessary in the
future;
(b) it shall comply in all material respects with all applicable laws and
orders to which it may be subject if failure so to comply would
materially impair its ability to perform its obligations under this
Agreement;
(c) without the prior approval of each Remarketing Dealer, it will not
purchase any of the Notes.
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6. GUARANTEE
6.1 The Guarantor irrevocably and unconditionally guarantees to the Remarketing
Dealers the due and punctual performance of each obligation of the Issuer
contained in this Agreement. The Guarantor shall pay to the Remarketing
Dealers from time to time on demand any sum of money which the Issuer is at
any time liable to pay to the Remarketing Dealers under or pursuant to this
Agreement and has failed to pay such sum when due and which remains unpaid
at the time the demand is made. The Guarantor's obligations under this
clause are primary obligations and not those of a mere surety. If an
obligation of the Issuer is void, voidable or unenforceable for any reason,
the Guarantor's obligations under this clause are unaffected and the
Guarantor shall perform the Issuer's obligations as if it were primarily
liable for the performance.
6.2 The Guarantor's obligations under this clause are continuing obligations
and are not satisfied, discharged or affected by an intermediate payment or
settlement of account by, or a change in the constitution or control of, or
the insolvency of, or bankruptcy, winding up or analogous proceedings
relating to, the Issuer.
6.3 The Guarantor's liability under this clause is not affected by an
arrangement which the Remarketing Dealers may make with the Issuer or with
another person which (but for this clause) might operate to diminish or
discharge the liability of or otherwise provide a defence to a surety.
6.4 Without affecting the generality of the foregoing provisions, the
Remarketing Dealers may at any time as they think fit and without reference
to the Guarantor:
(a) grant a time for payment or grant another indulgence or agree to an
amendment, variation, waiver or release in respect of an obligation of
the Issuer under this Agreement;
(b) give up, deal with, vary, exchange or abstain from perfecting or
enforcing other securities or guarantees held by the Remarketing
Dealers;
(c) discharge a party to other securities or guarantees held by the
Remarketing Dealers and realise all or any of those securities or
guarantees; and
(d) compound with, accept compositions from and make other arrangements
with the Issuer or a person or persons liable on other securities or
guarantees held or to be held by the Remarketing Dealers.
6.5 So long as the Issuer is under any actual or contingent obligation under
this Agreement the Guarantor shall not exercise a right which it may at any
time have by reason of the performance of its obligations under Clause 6.1
to be indemnified by the Issuer, to claim a contribution from another
surety of the Issuer's obligations or to take the benefit (wholly or partly
and by way of subrogation or otherwise) of any of the Remarketing Dealers'
rights under this Agreement or of any other security taken by the
Remarketing Dealers in connection with this Agreement.
6.6 The Guarantor's liability under Clause 6.1 is not affected by the avoidance
of an assurance, security or payment or a release, settlement or discharge
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which is given or made on the faith of an assurance, security or payment,
in either case, under an enactment relating to bankruptcy or insolvency.
7. COSTS
Except where this Agreement provides otherwise, each party shall pay its
own costs relating to the negotiation, preparation, execution and
implementation by it of this Agreement and of each document referred to in
it.
8. GENERAL
8.1 This Agreement constitutes the entire agreement, and supersedes any
previous agreement, between the parties relating to the subject matter of
this Agreement.
8.2 A variation of this Agreement is valid only if it is in writing and signed
by or on behalf of each party.
8.3 A failure to exercise or delay in exercising a right or remedy provided by
this Agreement or by law does not constitute a waiver of the right or
remedy or a waiver of other rights or remedies. No single or partial
exercise of a right or remedy provided by this Agreement or by law prevents
further exercise of the right or remedy or the exercise of another right or
remedy.
8.4 The rights and remedies contained in this Agreement are cumulative and not
exclusive of rights or remedies provided by law.
8.5 Each date, time or period referred to in this Agreement is of the essence.
If the parties agree in writing to vary a date, time or period, the varied
date, time or period is of the essence.
8.6 Save as otherwise expressly provided herein, this agreement does not create
any partnership between any of the parties or makes a party the agent of
another party for any purpose, and a party has no authority or power to
bind, to contract in the name of, or to create a liability for another
party in any way or for any purpose.
8.7 Except to the extent that they have been performed, the provisions of this
Agreement remain in force notwithstanding any assignment as contemplated
herein.
9. ASSIGNMENT
9.1 Save as otherwise provided herein, a party may not assign or transfer or
purport to assign or transfer a right or obligation, or subcontract the
performance of any of its obligations, under this Agreement. The foregoing
restriction shall not restrict the rights of the Remarketing Dealers to
sell or otherwise deal with Notes to be acquired pursuant to the Purchase
Rights.
9.2 Each party is entering into this Agreement for its benefit and not for the
benefit of another person.
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10. NOTICES
10.1 All notices and other communications hereunder shall be delivered in
person, sent by letter, telex or fax or communicated by telephone (subject,
in the case of communication by telephone, to written confirmation
dispatched within 24 hours) to the address given below:
(a) if to the Issuer, to it at:
PO Box 40
Wherstead Park
Ipswich
Suffolk
1P9 2AQ
Tel: 01473 555 060
Fax: 01573 555 034
Attention: Group Treasurer
(b) if to the Guarantor, to it at:
PO Box 40
Wherstead Park
Ipswich
Suffolk
1P9 2AQ
Tel: 01473 555 060
Fax: 01573 555 034
Attention: Group Treasurer
(c) if to MSIL at:
20 Cabot Square
Canary Wharf
London E14 4QW
Tel:+ 44 (020) 7677 7240
Fax:+ 44 (020) 7677 7999
Attention: Syndicate Desk
(d) if to UBS Warburg at:
1 Finsbury Avenue
London EC2M 2PP
Tel:+ 44 (020) 7567 2479
Fax:+ 44 (020) 7568 3349
Attention: MTNs and Private Placements
or, in any case, to such other address, telex number or fax number or for
the attention of such other person or department as the addressee has by
prior notice to the sender specified for the purpose.
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10.2 Every notice or other communication sent in accordance with Clause 10.1
shall be effective as follows:
(e) if sent by letter or fax, upon receipt by the addressee;
(f) if sent by telex, upon receipt by the sender of the addressee's
answerback at the end of transmission; and
(g) if sent by fax, upon receipt by the sender of a fax transmission
report.
provided that any such notice or other communication which would otherwise
take effect after 4.00 p.m. on any particular day shall not take effect
until 10.00 a.m. on the immediately succeeding business day in the place of
the addressee.
11. LAW AND JURISDICTION
11.1 This Agreement is governed by, and shall be construed in accordance with,
English law.
11.2 Each of the parties hereto agrees for the benefit of the Determination
Agents that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceedings, and to settle any disputes,
which may arise out of or in connection with this Agreement (respectively,
"PROCEEDINGS" and "DISPUTES") and, for such purposes, irrevocably submits
to the jurisdiction of such courts.
11.3 The Issuer irrevocably waives any objection which it might now or hereafter
have to the courts of England being nominated as the forum to hear and
determine any Proceedings and to settle any Disputes, and agrees not to
claim that any such court is not a convenient or appropriate forum.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
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EXECUTION PAGE
THE ISSUER
TXU EASTERN FUNDING COMPANY
By: Howard Goodbourn
THE GUARANTOR
TXU EUROPE LIMITED
By: Howard Goodbourn
THE DETERMINATION AGENTS
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By: Duncan A McInnes
UBS AG, acting through its business group, UBS WARBURG
By: C.M. Stewart Jonathan Phillips