Exhibit 4(s)
GUARANTEE AGREEMENT
Between
TXU Electric Company
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
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TABLE OF CONTENTS
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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 Guarantee Trustee..............................4
SECTION 2.04 Periodic Reports to 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.........................................5
ARTICLE III Powers, Duties and Rights of Guarantee Trustee.....................6
SECTION 3.01 Powers and Duties of the Guarantee Trustee....................6
SECTION 3.02 Certain Rights of Guarantee Trustee...........................7
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee.........9
ARTICLE IV Guarantee Trustee..................................................10
SECTION 4.01 Guarantee Trustee; Eligibility...............................10
SECTION 4.02 Compensation and Reimbursement...............................10
SECTION 4.03 Appointment, Removal and Resignation of 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..................................................14
SECTION 5.07 Independent Obligations......................................14
ARTICLE VI Subordination......................................................14
SECTION 6.01 Subordination................................................14
ARTICLE VII Termination.......................................................14
SECTION 7.01 Termination..................................................14
ARTICLE VIII Miscellaneous....................................................15
SECTION 8.01 Successors and Assigns.......................................15
SECTION 8.02 Amendments...................................................15
SECTION 8.03 Notices......................................................15
SECTION 8.04 Benefit......................................................16
SECTION 8.05 Interpretation...............................................16
SECTION 8.06 Governing Law................................................17
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CROSS-REFERENCE TABLE*
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Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
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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)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
is executed and delivered by TXU Electric Company, a Texas
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corporation (the "Guarantor"), and The Bank of New York, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Trust Securities (as defined herein) of [Name of
Trust], 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
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therein, TXU Electric Company, as Depositor, and the several Holders (as defined
therein), the Issuer is issuing as of the date hereof $ _ aggregate
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Liquidation Amount of its % Trust Originated Preferred Securities (the
----
"Initial 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 the event and to the extent the over-allotment option
granted by the Issuer and Guarantor pursuant to the Underwriting Agreement dated
is exercised by the underwriters referred to therein, the
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Issuer will issue up to $ additional aggregate Liquidation Account of
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its % Trust Originated Preferred Securities (the "Option Preferred Trust
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Securities", together with the Initial Preferred Trust 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, the Initial Preferred Trust Securities are to be issued for
sale by the Issuer and the proceeds are to be invested in $ principal
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amount of Debentures (as defined in the Trust Agreement) and the Option
Preferred Trust Securities are to be issued for sale by the Issuer and the
proceeds are to be invested in up to $__________ in principal amount of
Debentures; and
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 of Debentures, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement for the benefit of the Holders
from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Guarantee Agreement, 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 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.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"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 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 Debentures 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 upon maturity or redemption of the Debentures as
provided in the Trust Agreement), 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").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"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 the Chairman of
the Board, a Vice Chairman of the Board, the President, any Vice President, the
Treasurer, or any Assistant Treasurer of the Guarantor, and delivered to the
Guarantee Trustee. Any Officer's Certificate or Opinion of Counsel delivered
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with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that the 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 officer in rendering the Officer's
Certificate or the Opinion of Counsel;
(c) a statement that each such officer or counsel has made such
examination or investigation as, in such officer's or counsel's opinion, is
necessary to enable such 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 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 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.
"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 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.
"Subordinated Indenture" means the Indenture (for Unsecured
Subordinated Debt Securities relating to Trust Securities) dated as of
, between the Guarantor (the "Debenture Issuer") and The Bank of
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New York, as trustee, pursuant to which the Debentures are issued, together with
any indenture supplemental thereto.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement 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
Guarantee Trustee (a) semiannually, not later than and in
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each year commencing in the year , a list, in such form as the
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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 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 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 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 GUARANTEE TRUSTEE. Not later than
in each year, commencing , , the Guarantee Trustee
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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 September 15. The Guarantee Trustee shall also comply with
the requirements of Sections 313(b), (c) and (d) of the Trust Indenture Act.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Guarantee Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
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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 Guarantee Trustee such evidence of compliance
with any conditions precedent provided for in this Guarantee Agreement 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 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
Guarantee Agreement, 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 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 Guarantee
Trustee, unless such default shall have been cured or waived before the
giving of such notice, provided that the 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 Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer of the 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. For purposes of Section
310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the
Guarantee Trustee shall not be deemed to have a conflicting interest arising
from its capacity as trustee in respect of (i) the Subordinated Indenture, (ii)
the Trust Agreement, (iii) the Indenture (For Unsecured Subordinated Debt
Securities relating to Trust Securities), dated as of December 1, 1995 of the
Guarantor to The Bank of New York, as trustee, (iv) the Guarantee Agreement,
dated as of December 1, 1995 between the Guarantor, and The Bank of New York, as
trustee, (v) the Amended and Restated Trust Agreement, dated as of December 1,
1995 between the Guarantor, as depositor, The Bank of New York, The Bank of New
York (Delaware), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ , ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as trustees and the several Holders defined therein, (vi)
the Guarantee Agreement, dated as of December 1, 1995 between the Guarantor, and
The Bank of New York, as trustee, (vii) the Amended and Restated Trust
Agreement, dated as of December 1, 1995 between the Guarantor, as depositor, The
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Bank of New York, The Bank of New York (Delaware), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ , ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as trustees and the
several Holders defined therein, (viii) the Guarantee Agreement, dated as of
December 1, 1995 between the Guarantor, and The Bank of New York, as trustee,
(ix) the Amended and Restated Trust Agreement, dated as of December 1, 1995
between the Guarantor, as depositor, The Bank of New York, The Bank of New York
(Delaware), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ , ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as trustees and the several Holders defined therein, (x) the
Guarantee Agreement, dated as of January 30,1997 between the Guarantor, and The
Bank of New York, as trustee, (xi) the Amended and Restated Trust Agreement,
dated as of January 30,1997 between the Guarantor, as depositor, The Bank of New
York, The Bank of New York (Delaware), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as trustees and the several
Holders defined therein, (xii) the Guarantee Agreement, dated as of January
30,1997 between the Guarantor, and The Bank of New York, as trustee, (xiii) the
Amended and Restated Trust Agreement, dated as of January 30,1997 between the
Guarantor, as depositor, The Bank of New York, The Bank of New York (Delaware),
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ as trustees and the several Holders defined therein or (xiv) the
Indenture (For Unsecured Debt Securities) dated as of August 1, 1997 of the
Guarantor to The Bank of New York, as trustee.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement or any rights hereunder to any Person
except a Holder exercising his or her rights pursuant to Section 5.04 or to
a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed
and delivered pursuant to the appointment of such Successor Guarantee
Trustee.
(b) The 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 Guarantee Agreement, and no implied
covenants or obligations shall be read into this Guarantee Agreement
against the 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 Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee Agreement, 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.
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(c) No provision of this Guarantee Agreement shall be construed to
relieve the 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 Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement, and no
implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the 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 Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically required
to be furnished to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the 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 Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require the
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
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Guarantee Agreement relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the
provisions of Sections 3.01(b) and 3.01(c).
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SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the 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
Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the 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 Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the 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 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 Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration
of this Guarantee Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the
position of the 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 Guarantee Trustee;
provided that, nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the 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 Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound 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
8
indebtedness or other paper or document, but the Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(vii) the 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 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 Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the 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 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 rerecording, refiling or re-registration thereof); and
(x) the 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 Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the 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 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
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 GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a 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 Guarantee Trustee shall cease to be eligible to
so act under Section 4.01(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act
after giving effect to the provisions of Section 2.08 hereof, the 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 Guarantee Trustee from time to time such reasonable
compensation as the Guarantor and the 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
Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with the provisions of this Guarantee Agreement (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
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(c) to indemnify each of the Guarantee Trustee and any predecessor
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 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
Guarantee Agreement, 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 Guarantee Trustee shall have a lien prior to the
Preferred Trust Securities upon all the property and funds held or collected by
the 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 Guarantee Agreement.
The provisions of this Section shall survive the termination of this
Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall have
occurred and be continuing, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor 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
Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
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Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
(f) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor 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 Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the 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 Guarantee Agreement 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 an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Subordinated Indenture);
(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;
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(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 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 Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) if an Event of Default has
occurred and is continuing, the Guarantee Trustee has the right to enforce this
Guarantee Agreement 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 Guarantee Trustee in respect of this Guarantee Agreement or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) if the Guarantee Trustee fails to enforce this Guarantee
Agreement, any Holder may enforce this Guarantee Agreement, or institute a legal
proceeding directly against the Guarantor to enforce the Guarantee Trustee's
rights under this Guarantee Agreement without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee, or any other Person.
SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee Agreement 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 Guarantee Agreement; 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 Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. 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.
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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 Guarantee Agreement notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement 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 Debentures, 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 6.01 shall apply to claims of, or payments to, the Guarantee
Trustee under or pursuant to Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. Subject to Section 4.02 hereof, this
Guarantee Agreement 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 Debentures 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 Guarantee Agreement 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 Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement 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.
Except in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eleven of the Subordinated Indenture,
the Guarantor shall not assign its obligations hereunder.
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SECTION 8.02 AMENDMENTS. This Guarantee Agreement may be amended
only by an instrument in writing entered into by the Guarantor and the 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 Guarantee Agreement may only be amended with the prior approval
of the Holders of not less than 66 2/3% 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 Guarantee
Trustee enter into any amendment of this Guarantee Agreement.
SECTION 8.03 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 Guarantee Trustee
and the Holders of the Preferred Trust Securities:
TXU Electric Company
Energy Plaza
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
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:
[Name of Trust]
c/o TXU Electric Company
Energy Plaza
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Administrative Trustees
(c) if given to the 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
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
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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 8.04 BENEFIT. This Guarantee Agreement 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 8.05 INTERPRETATION. In this Guarantee Agreement, unless the
context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(b) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(d) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement 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 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT 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.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
TXU Electric Company
By:
------------------------------------
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By:
------------------------------------
Name:
Title:
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