EXHIBIT 4(A)
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AMENDED AND RESTATED
TRUST AGREEMENT
among
TXU BUSINESS SERVICES COMPANY, as Initial Depositor,
TXU EUROPE LIMITED, as Successor Depositor,
__________________________, as Control Party,
and
THE BANK OF NEW YORK,
THE BANK OF NEW YORK (DELAWARE),
▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
--------------------,
--------------------,
and
____________________, as Trustees
Dated as of ________ __, 2000
TXU EUROPE CAPITAL I
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TABLE OF CONTENTS
Page
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ARTICLE I. Interpretation And Definitions....................................1
SECTION 1.01 Definitions..............................................1
ARTICLE II. Trust Indenture Act.............................................10
SECTION 2.01 Trust Indenture Act; Application........................10
SECTION 2.02 Lists of Holders........................................11
SECTION 2.03 Reports by the Property Trustee.........................11
SECTION 2.04 Periodic Reports to Property Trustee....................11
SECTION 2.05 Evidence of Compliance with Conditions Precedent........11
SECTION 2.06 Trust Enforcement Events; Waiver........................11
SECTION 2.07 Trust Enforcement Event; Notice.........................12
ARTICLE III. Organization...................................................13
SECTION 3.01 Name....................................................13
SECTION 3.02 Office..................................................13
SECTION 3.03 Purpose.................................................13
SECTION 3.04 Authority...............................................13
SECTION 3.05 Title to Property of the Trust..........................13
SECTION 3.06 Powers and Duties of the Administrative Trustees........14
SECTION 3.07 Prohibition of Actions by the Trust and the Trustees....16
SECTION 3.08 Powers and Duties of the Property Trustee...............17
SECTION 3.09 Certain Duties and Responsibilities of the
Property Trustee........................................19
SECTION 3.10 Certain Rights of Property Trustee......................20
SECTION 3.11 Delaware Trustee........................................22
SECTION 3.12 Execution of Documents..................................22
SECTION 3.13 Not Responsible for Recitals or Issuance of Preferred
Trust Securities........................................22
SECTION 3.14 Duration of Trust.......................................23
SECTION 3.15 Mergers.................................................23
i
ARTICLE IV. Successor Depositor.............................................25
SECTION 4.01 Responsibilities of the Successor Depositor.............25
SECTION 4.02 Indemnification and Expenses of the Trustees............25
ARTICLE V. Control Certificate..............................................26
SECTION 5.01 Issuance of the Control Certificate.....................26
SECTION 5.02 Transfer of the Control Certificate.....................26
SECTION 5.03 No Economic Interest in the Trust.......................26
SECTION 5.04 Certain Duties and Responsibilities.....................27
SECTION 5.05 Rights and Responsibilities of the Control Party........27
ARTICLE VI. Trustees........................................................28
SECTION 6.01 Number of Trustees......................................28
SECTION 6.02 Delaware Trustee........................................28
SECTION 6.03 Property Trustee; Eligibility...........................28
SECTION 6.04 Qualifications of Administrative Trustees and
Delaware Trustee Generally..............................29
SECTION 6.05 Administrative Trustees.................................29
SECTION 6.06 Delaware Trustee........................................29
SECTION 6.07 Appointment, Removal and Resignation of Trustees........30
SECTION 6.08 Vacancies among Trustees................................31
SECTION 6.09 Effect of Vacancies.....................................31
SECTION 6.10 Meetings................................................31
SECTION 6.11 Delegation of Power.....................................32
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business..................................32
ARTICLE VII.................................................................33
SECTION 7.01 Distributions...........................................33
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ARTICLE VIII. Issuance Of Preferred Trust Securities........................34
SECTION 8.01 Designation and General Provisions Regarding
the Preferred Trust Securities..........................34
SECTION 8.02 Redemption of Preferred Trust Securities................35
SECTION 8.03 Redemption Procedures...................................37
SECTION 8.04 Voting Rights of Preferred Trust Securities.............38
SECTION 8.05 Paying Agent............................................41
SECTION 8.06 Listing.................................................41
SECTION 8.07 Acceptance of Guarantee and Agreements, Limited
Partnership Agreement...................................41
ARTICLE IX. Dissolution And Liquidation Of The Trust........................41
SECTION 9.01 Dissolution of Trust....................................41
SECTION 9.02 Liquidation Distribution Upon Termination and
Dissolution of the Trust................................42
ARTICLE X. Transfer Of Interests............................................42
SECTION 10.01 Transfer of Preferred Trust Securities..................42
SECTION 10.02 Transfer of Certificates................................42
SECTION 10.03 Deemed Security Holders.................................43
SECTION 10.04 Book-Entry Interests....................................43
SECTION 10.05 Notices to Clearing Agency..............................44
SECTION 10.06 Appointment of Successor Clearing Agency................44
SECTION 10.07 Definitive Preferred Trust Security Certificates........44
SECTION 10.08 Mutilated, Destroyed, Lost or Stolen Certificates.......45
ARTICLE XI. Limitation Of Liability Of Holders, Trustees Or Others..........45
SECTION 11.01 Liability...............................................45
SECTION 11.02 Exculpation.............................................46
SECTION 11.03 Fiduciary Duty..........................................46
SECTION 11.04 Indemnification.........................................47
SECTION 11.05 Outside Businesses......................................49
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ARTICLE XII. Accounting.....................................................50
SECTION 12.01 Fiscal Year.............................................50
SECTION 12.02 Certain Accounting Matters..............................50
SECTION 12.03 Banking.................................................50
SECTION 12.04 Withholding.............................................51
ARTICLE XIII. Amendments And Meetings.......................................51
SECTION 13.01 Amendments..............................................51
SECTION 13.02 Meetings of the Holders; Action by Written Consent......53
ARTICLE XIV. Representations Of Property Trustee And Delaware Trustee.......55
SECTION 14.01 Representations and Warranties of Property Trustee......55
SECTION 14.02 Representations and Warranties of Delaware Trustee......55
ARTICLE XV. Miscellaneous...................................................56
SECTION 15.01 Notices.................................................56
SECTION 15.02 Governing Law...........................................57
SECTION 15.03 Intention of the Parties................................57
SECTION 15.04 Headings................................................57
SECTION 15.05 Successors and Assigns..................................57
SECTION 15.06 Partial Enforceability..................................58
SECTION 15.07 Counterparts............................................58
EXHIBITS
Exhibit A-1. ........................................................A-1
Exhibit A-2. ........................................................A-2
iv
TXU Europe Capital I
CROSS-REFERENCE TABLE*
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
--------------- ---------------
310(a)............................................................ 6.03(a)
310(b)............................................................ 6.03(c)
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(a)............................................................ 2.03
313(b)............................................................ 2.03
313(c)............................................................ 2.03
313(d)............................................................ 2.03
314(a)............................................................ 2.04
314(b)............................................................ Inapplicable
314(c)............................................................ 2.05
314(d)............................................................ Inapplicable
314(f)............................................................ Inapplicable
315(a)............................................................ 3.09(b)
315(b)............................................................ 2.07
315(c)............................................................ 3.09(a)
315(d)............................................................ 3.09(b)
316(a)............................................................ 8.04(b)
316(c)............................................................ 3.06(e)
317(a)............................................................ Inapplicable
317(b)............................................................ 8.05
318(a)............................................................ 2.01
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* This Cross-Reference Table does not constitute part of the Trust
Agreement and shall not affect the interpretation of any of its terms or
provisions.
AMENDED AND RESTATED TRUST AGREEMENT, dated as of __________________, 2000,
among (i) TXU Business Services Company, a corporation incorporated under the
laws of the State of Texas (the "Initial Depositor"), (ii) TXU Europe Limited, a
private limited company incorporated under the laws of England and Wales (the
"Successor Depositor"), (iii) The Bank of New York, a banking corporation duly
organized and existing under the laws of the State of New York, as trustee (the
"Property Trustee"), (iv) The Bank of New York (Delaware), a banking corporation
duly organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee"), (v) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ____________________,
____________________ and ____________________, each an individual, and each of
whose address is c/o TXU Business Services Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇ (each, an "Administrative Trustee" and collectively, the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees are referred to herein each as a "Trustee" and
collectively as the "Trustees"), (vi) __________________, a corporation
incorporated under the laws of the State of Delaware and a wholly-owned
subsidiary of TXU Europe (the "Control Party"), and (vii) the several Holders,
as hereinafter defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Initial Depositor, the Property Trustee, the Delaware Trustee
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as initial Administrative Trustee, have heretofore duly
declared and established a business trust, to be known as TXU Europe Capital I
(the "Trust"), pursuant to the Delaware Business Trust Act (as defined herein)
by the entering into of that certain Trust Agreement, dated as of November 22,
1999 (the "Original Trust Agreement"), and by the execution by the Property
Trustee, the Delaware Trustee and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as initial Administrative
Trustee, and the filing with the Secretary of State of the State of Delaware of
the Certificate of Trust, dated November 22, 1999; and
WHEREAS, the parties hereto desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein.
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
Interpretation And Definitions
SECTION 1.01 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Trust Agreement but not defined in
the preamble above have the respective meanings assigned to them in this Section
1.01;
1
(b) a term defined anywhere in this Trust Agreement has the same
meaning throughout;
(c) all references to "the Trust Agreement" or "this Trust Agreement"
are to this Trust Agreement as modified, supplemented or amended from time to
time;
(d) all references in this Trust Agreement to Articles, Sections and
Exhibits are to Articles and Sections of and Exhibits to this Trust Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Agreement unless otherwise defined in this Trust
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) a term used in this Trust Agreement and not otherwise defined
herein shall have the meaning ascribed to such term in the Partnership
Agreement.
"1940 Act" means the United States Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Additional Amounts" has the meaning set forth in the Indentures, the
Preferred Trust Securities Guarantee and the Partnership Guarantee.
"Administrative Trustee" has the meaning set forth in the first paragraph
of this Trust Agreement, or means any Person appointed as successor
Administrative Trustee pursuant to the terms of this Trust Agreement.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act, or any successor rule thereunder.
"Affiliate Investment Instruments" has the meaning set forth in Section 7.1
of the Limited Partnership Agreement.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book-Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through
book-entries by a Clearing Agency as set forth in Section 10.04 of this Trust
Agreement, or on the books of a Person maintaining an account within the
Clearing Agency (directly as a Clearing Agency Participant or as an individual
participant or otherwise, in each case in accordance with the rules of the
Clearing Agency).
"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.
2
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. Section 3801 et seq., as amended from time to time, or any successor
legislation.
"Certificate" means a Preferred Trust Security Certificate.
"Change in 1940 Act Law" means a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority on or after the Closing Date.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Trust Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book-entry transfers and pledges of beneficial interests in the
Preferred Trust Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book-entry transfers and pledges of beneficial interests in securities
deposited with the Clearing Agency.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the United States Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Trust Agreement such Commission is not existing
and performing the duties now assigned to it, then the body performing such
duties at such time.
"Compounded Preferred Entitlements" has the meaning set forth in Section
6.2(b) of the Limited Partnership Agreement.
"Control Certificate" has the meaning set forth in Section 5.01(a) of this
Trust Agreement.
"Control Party" has the meaning set forth in the first paragraph of this
Trust Agreement, or any Person appointed successor Control Party pursuant to the
terms of this Trust Agreement, which shall be a direct or indirect wholly-owned
subsidiary of TXU Europe organized under the laws of any State of the United
States.
"Corporate Trust Office" means the principal corporate trust office of the
Property Trustee located in New York, New York which at the date of execution of
this Trust Agreement is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder.
3
"Definitive Preferred Trust Security Certificates" has the meaning set
forth in Section 10.04 of this Trust Agreement.
"Delaware Trustee" has the meaning set forth in the first paragraph of this
Trust Agreement, or means any Person appointed Successor Delaware Trustee
pursuant to the terms of this Trust Agreement.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
11.04(b) of this Trust Agreement.
"Fiscal Period" has the meaning set forth in Section 1.1 of the Limited
Partnership Agreement.
"Fiscal Year" has the meaning set forth in Section 12.01 of this Trust
Agreement.
"General Partner" means TXU Europe Limited, in its capacity as the general
partner of the Partnership, its permitted successors, or any successor general
partner in the Partnership admitted as such pursuant to the Limited Partnership
Agreement.
"Global Certificate" has the meaning set forth in Section 10.04 of this
Trust Agreement.
"Holder" means a Person in whose name a Certificate representing a
Preferred Trust Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a TXU Europe Indemnified Person or a Fiduciary
Indemnified Person.
"Indentures" has the meaning set forth in Section 1.1 of the Limited
Partnership Agreement.
"Initial Debentures" has the meaning set forth in Section 7.1(b) of the
Limited Partnership Agreement.
"Initial Depositor" has the meaning set forth in the first paragraph of
this Trust Agreement.
"Investment Affiliate" means any corporation, partnership, limited
liability company or other entity (other than the Partnership or the Trust) that
(i) is controlled by TXU Europe and (ii) is not an Investment Company by reason
of Section 3(a) or 3(b) of the 1940 Act or is otherwise an eligible recipient of
funds directly or indirectly from the Trust pursuant to an order issued by the
Commission.
4
"Investment Company" means an investment company as defined in the 1940
Act.
"Investment Guarantee" means any guarantee on a subordinated basis by TXU
Europe with respect to payment of interest, principal and other payment terms of
Affiliate Investment Instruments.
"Legal Action" has the meaning set forth in Section 3.06(h) of this Trust
Agreement.
"Limited Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of TXU Europe Funding I, L.P. dated as of ________, 2000, as
the same may be amended from time to time in accordance with its terms.
"Liquidation Amount" means the stated liquidation amount of $25 per
Preferred Trust Security.
"List of Holders" has the meaning set forth in Section 2.02(a) of this
Trust Agreement.
"Majority in Liquidation Amount of the Preferred Trust Securities" means,
except as provided in the terms of the Preferred Trust Securities or by the
Trust Indenture Act, Holder(s) of more than 50% of the aggregate Liquidation
Amount of all outstanding Preferred Trust Securities.
"Ministerial Action" means, a ministerial action (such as filing a form or
making an election or pursuing some other similar reasonable measure) which in
the sole judgment of TXU Europe has or will cause no adverse effect on the
Trust, the Partnership, TXU Europe or the Holders and will involve no material
cost.
"Nasdaq" means The Nasdaq Stock Market.
"Officers' Certificate" means, with respect to any Person (who is not an
individual), a certificate signed by a director, the President, a Vice President
or the Treasurer, and by an Assistant Treasurer, the Secretary or an Assistant
Secretary of such Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:
(a) a statement that each such director or officer signing the
Officers' Certificate 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 such director or officer in rendering the
Officers' Certificate;
(c) a statement that each such director or officer has made such
examination or investigation as, in such director's or officer's opinion, is
necessary to enable such director or officer 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 or
officer, such condition or covenant has been complied with.
5
"100% in Liquidation Amount of the Preferred Trust Securities" means,
except as provided in the terms of the Preferred Trust Securities or by the
Trust Indenture Act, Holder(s) who are the record owners of 100% of the
aggregate Liquidation Amount of all outstanding Preferred Trust Securities.
"Original Trust Agreement" has the meaning set forth in the first clause of
this Trust Agreement.
"Partnership" means TXU Europe Funding I, L.P., a Delaware limited
partnership formed pursuant to the Limited Partnership Agreement.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of the Limited Partnership Agreement.
"Partnership Guarantee" means the Partnership Guarantee Agreement between
TXU Europe and The Bank of New York, as trustee, dated as of _________, 2000, in
favor of the holders of the Preferred Partnership Securities with respect to the
Preferred Partnership Securities, as amended or supplemented from time to time.
"Partnership Special Event" has the meaning set forth in Section 1.1 of the
Limited Partnership Agreement.
"Payment Amount" has the meaning set forth in Section 7.01(a) of this Trust
Agreement.
"Paying Agent" has the meaning set forth in Section 8.05 of this Trust
Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Entitlements" has the meaning set forth in Section 6.2(b) of the
Limited Partnership Agreement.
"Preferred Partnership Securities" has the meaning set forth in Section 1.1
of the Limited Partnership Agreement.
"Preferred Trust Securities Guarantee" means the Preferred Trust Securities
Guarantee Agreement between TXU Europe and The Bank of New York, as trustee,
dated as of _________________, 2000, for the benefit of the Holders, as amended
or supplemented from time to time.
"Preferred Trust Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant or otherwise, in each case in
accordance with the rules of such Clearing Agency).
6
"Preferred Trust Securities" has the meaning set forth in Section 8.01(a)
of this Trust Agreement.
"Preferred Trust Security Certificate" means a certificate representing a
Preferred Trust Security substantially in the form of Exhibit A-1.
"Property Account" has the meaning set forth in Section 3.08(c) of this
Trust Agreement.
"Property Trustee" has the meaning set forth in the first paragraph of this
Trust Agreement, or any Person appointed as Successor Property Trustee pursuant
to the terms of this Trust Agreement.
"Pro Rata" means, in reference to any distributions on or redemptions of
Preferred Trust Securities or the distribution of Preferred Partnership
Securities or any other payment with respect to Preferred Trust Securities in
connection with a Trust Special Event or liquidation of the Trust, to each
Holder according to the aggregate Liquidation Amount of the Preferred Trust
Securities held by the relevant Holder in relation to the aggregate Liquidation
Amount of all Preferred Trust Securities outstanding.
"Quorum" means a majority of the Administrative Trustees or, if there are
only two Administrative Trustees, both of them.
"Redemption/Distribution Notice" has the meaning set forth in Section
8.03(a) of this Trust Agreement.
"Redemption Price" has the meaning set forth in Section 8.02(a) of this
Trust Agreement.
"Registrar and Transfer Agent" means the Person appointed by the
Administrative Trustees to perform the functions described in Section 10.02 of
this Trust Agreement.
"Related Party" means, with respect to the Successor Depositor, any direct
or indirect wholly owned subsidiary of the Successor Depositor or any Person
that owns, directly or indirectly, 100% of the outstanding voting securities of
the Successor Depositor.
"Responsible Officer" means, with respect to any trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any vice president
(whether or not designated by a number or a word or words added before or after
the title "vice president"), the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, or any other officer of such 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 his
knowledge of and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the 1940 Act.
"Securities Act" means the United States Securities Act of 1933, as amended
from time to time, or any successor legislation.
7
"Special Representative" has the meaning set forth in Section 6.2(h)(i) of
the Limited Partnership Agreement.
"Successor Delaware Trustee" has the meaning set forth in Section
6.07(b)(ii) of this Trust Agreement.
"Successor Depositor" has the meaning set forth in the first paragraph of
this Trust Agreement, or any successor entity to TXU Europe by reason of merger,
consolidation or amalgamation, in its capacity as Successor Depositor.
"Successor Entity" has the meaning set forth in Section 3.15(b)(i) of this
Trust Agreement.
"Successor Property Trustee" has the meaning set forth in Section
6.07(b)(i) of this Trust Agreement.
"Successor Preferred Trust Securities" has the meaning set forth in Section
3.15(b)(i)(2) of this Trust Agreement.
"Super Majority" has the meaning set forth in Section 2.06(a)(ii) of this
Trust Agreement.
"Surrendering Party" has the meaning set forth in Section 5.02(a) of this
Trust Agreement.
"Tax Action" means (a) an amendment to, change in or announced proposed
change in the laws (or any regulations thereunder) of the United States, the
United Kingdom or any political subdivision or taxing authority thereof or
therein, (b) a judicial decision interpreting, applying or clarifying such laws
or regulations, (c) an administrative pronouncement or action that represents an
official position, including a clarification of an official position, of the
governmental authority or regulatory body making such administrative
pronouncement or taking such action, or (d) a threatened challenge asserted in
connection with an audit of TXU Europe or any of its Affiliates, the Partnership
or the Trust, or a threatened challenge asserted in writing against any other
taxpayer that has raised capital through the issuance of securities that are
substantially similar to the Affiliate Investment Instruments, the Preferred
Partnership Securities or the Preferred Trust Securities, which amendment or
change is adopted, or which proposed decision, pronouncement or change is
announced, or which action, clarification or challenge occurs on or after the
Closing Date.
"10% in Liquidation Amount of the Preferred Trust Securities" means, except
as provided in the terms of the Preferred Trust Securities or by the Trust
Indenture Act, Holder(s) who are the record owners of 10% or more of the
aggregate Liquidation Amount of all outstanding Preferred Trust Securities.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury Department, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
8
"Trust" has the meaning set forth in the first clause of this Trust
Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Amended and Restated Trust Agreement and any such modification, amendment
or supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Amended and Restated Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Enforcement Event" means the occurrence, at any time, of (i) the
Trust not making distributions on the Preferred Trust Securities equal to the
Preferred Entitlements, including any Compounded Preferred Entitlements, on the
Preferred Partnership Securities for ______ consecutive quarterly periods, (ii)
a default by TXU Europe in respect of any of its obligations under the Preferred
Trust Securities Guarantee or (iii) a Partnership Enforcement Event.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Investment Company Event" means that TXU Europe shall have requested
and received and shall have delivered to the Administrative Trustees an opinion
of nationally recognized independent legal counsel in the United States
experienced in such matters to the effect that as a result of the occurrence of
a Change in 1940 Act Law, there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the 1940 Act.
"Trust Liquidation" has the meaning set forth in Section 9.02 of this Trust
Agreement.
"Trust Redemption Tax Opinion" means an opinion of nationally recognized
independent tax counsel in the United States or the United Kingdom, as the case
may be, experienced in such matters to the effect that there has been a Trust
Tax Event, and that, as a result of the occurrence of such Trust Tax Event,
there is more than an insubstantial risk that interest payable by an Investment
Affiliate with respect to the Affiliate Investment Instruments issued by such
Investment Affiliate is not, or will not be, fully deductible by such Investment
Affiliate for United States federal income tax or United Kingdom corporation tax
or income tax purposes.
"Trust Special Event" means either a Trust Tax Event or a Trust Investment
Company Event.
"Trust Tax Event" means that TXU Europe (A) shall have requested, received
and delivered to the Administrative Trustees an opinion of nationally recognized
independent tax counsel in the United States or the United Kingdom, as the case
may be, experienced in such matters to the effect that there has been a Tax
Action which relates to any of the events described in clauses (i) through (iii)
below, and that, as a result of the occurrence of such Tax Action, there is more
than an insubstantial risk that (i) the Trust is, or will be, subject to United
States federal income tax or United Kingdom corporation tax or income tax with
respect to income accrued or received on the Preferred Partnership Securities,
(ii) the Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges, or (iii) interest payable by an
Investment Affiliate with respect to the Affiliate Investment Instruments issued
9
by such Investment Affiliate is not, or will not be, fully deductible by such
Investment Affiliate for United States federal income tax or United Kingdom
corporation tax or income tax purposes or (B) has certified to the
Administrative Trustees that, as a result of a Tax Action, Additional Amounts
are, or will be, payable with respect to any payments made in respect of the
Affiliate Investment Instruments, any Investment Guarantee, the Partnership
Guarantee or the Preferred Trust Securities Guarantee and has further certified
to the Administrative Trustees that it or any Investment Affiliate, as the case
may be, cannot avoid the requirement to pay such Additional Amounts by using its
reasonable efforts.
"Trustee" or "Trustees" means each Person who has signed this Trust
Agreement as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"TXU Europe" means TXU Europe Limited, a private limited company
incorporated under the laws of England and Wales, or any successor entity to TXU
Europe by reason of merger, consolidation or amalgamation, in its capacity as
guarantor under the Preferred Trust Securities Guarantee.
"TXU Europe Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, director, shareholder, member,
partner, employee, representative or agent of the Trust or its Affiliates.
"Underwriting Agreement" has the meaning set forth in Section 1.01 of the
Limited Partnership Agreement.
ARTICLE II.
Trust Indenture Act
SECTION 2.01 Trust Indenture Act; Application.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required and deemed to be part of this Trust Agreement
and shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed by the Trust
Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Preferred Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
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SECTION 2.02 Lists of Holders.
(a) Each of the Control Party and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee (i) within 14 days after
each record date for payment of distributions, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such record date, provided, that neither the
Control Party nor the Administrative Trustees on behalf of the Trust shall 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 Property Trustee by
the Control Party and the Administrative Trustees on behalf of the Trust, and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided, that the Property
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03 Reports by the Property Trustee.
Within 60 days after _______ of each year commencing ________, 2000, the
Property Trustee shall provide to the Holders such reports as are required by
Section 313(a) of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313(a) of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of Section 313 (b), (c) and (d) of the
Trust Indenture Act.
SECTION 2.04 Periodic Reports to Property Trustee.
Each of the Control Party and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information, if any, as are 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.
Each of the Control Party and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.06 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of Preferred Trust
Securities may, by vote, on behalf of all the Holders, waive any past Trust
Enforcement Event in respect of the Preferred Trust Securities and its
11
consequences, provided, that if the underlying event of default or Partnership
Enforcement Event:
(i) is not waivable under the Preferred Trust Securities
Guarantee or the Limited Partnership Agreement, the Trust Enforcement Event
under this Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than
a Majority in Liquidation Amount of the Preferred Trust Securities to be waived
under the Preferred Trust Securities Guarantee or of the holders of greater than
a Majority in Liquidation Preference of the Preferred Partnership Securities to
be waived under the Limited Partnership Agreement (a "Super Majority"), the
Trust Enforcement Event under this Trust Agreement may only be waived by the
vote of the Holders of at least the relevant Super Majority in Liquidation
Amount of the Preferred Trust Securities.
The foregoing provisions of this Section 2.06(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Trust Agreement and
the Preferred Trust Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Trust Enforcement
Event with respect to the Preferred Trust Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Trust Agreement, but no
such waiver shall extend to any subsequent or other default or Trust Enforcement
Event with respect to the Preferred Trust Securities or impair any right
consequent thereon.
(b) A waiver of Partnership Enforcement Events under the Limited
Partnership Agreement by the Property Trustee at the direction of the Holders
constitutes a waiver of the corresponding Trust Enforcement Event under this
Trust Agreement. The foregoing provisions of this Section 2.06(b) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Trust Agreement and the Preferred Trust Securities, as permitted by the Trust
Indenture Act.
SECTION 2.07 Trust Enforcement Event; Notice.
The Property Trustee shall, within 90 days after the occurrence of a Trust
Enforcement Event, transmit by mail, first class postage prepaid, to the
Holders, notices of all defaults with respect to the Preferred Trust Securities
actually known to a Responsible Officer of the Property Trustee, unless such
defaults have been cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.07 being hereby defined to be defaults as
defined in the Preferred Trust Securities Guarantee or the Limited Partnership
Agreement, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided, that
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Affiliate Investment Instruments or in the payment of any
sinking fund installment established for the Affiliate Investment Instruments,
the Property Trustee shall be fully protected in withholding such notice if and
so long as a Responsible Officer of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
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ARTICLE III.
Organization
SECTION 3.01 Name.
The Trust is named "TXU Europe Capital I," as such name may be modified
from time to time by the Administrative Trustees following written notice to the
Holders. The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Administrative Trustees.
SECTION 3.02 Office.
The address of the principal office of the Trust is c/o TXU Business
Services Company, Energy Plaza, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. On ten
Business Days written notice to the Holders, the Administrative Trustees may
designate another principal office.
SECTION 3.03 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue the
Control Certificate and the Preferred Trust Securities, (b) investing the gross
proceeds from the issuance of the Preferred Trust Securities to acquire the
Preferred Partnership Securities, and (c) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.04 Authority.
Subject to the limitations provided in this Trust Agreement and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Trust Agreement.
SECTION 3.05 Title to Property of the Trust.
Except as provided in Section 3.08 with respect to the Preferred
Partnership Securities and the Property Account or as otherwise provided in this
Trust Agreement, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial ownership interest in the assets
13
of the Trust. Without prejudice to the generality of the preceding sentence, all
income of the Trust shall, as it arises, be held in trust for the Holders
absolutely Pro Rata to their interests in Preferred Trust Securities, such
income to be distributed in accordance with the provisions of Article VII.
SECTION 3.06 Powers and Duties of the Administrative Trustees.
The Administrative Trustees (and, in the case of (b)(iii)-(vi) below,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as authorized representative of the Trust) shall have the
exclusive power, duty and authority to cause the Trust to engage in the
following activities:
(a) to issue and sell the Preferred Trust Securities in accordance
with this Trust Agreement and to execute and, after authentication by the
Property Trustee, deliver Preferred Trust Security Certificates; provided,
however, that the Trust may issue no more than one series of Preferred Trust
Securities, and, provided, further, that there shall be no interests in the
Trust other than the Preferred Trust Securities;
(b) in connection with the issue and sale of the Preferred Trust
Securities,
(i) to execute and file with the Commission a registration
statement on Form S-1 prepared by the Successor Depositor, including any
amendments thereto, pertaining to the Preferred Trust Securities, the Preferred
Partnership Securities, the Preferred Trust Securities Guarantee and the
Partnership Guarantee;
(ii) to execute and file any documents prepared by the Control
Party or take any acts as determined by the Control Party to be necessary in
order to qualify or register all or part of the Preferred Trust Securities in
any State of the United States in which the Control Party has determined to
qualify or register such Preferred Trust Securities for sale;
(iii) to execute and file an application, prepared by the
Successor Depositor, with The New York Stock Exchange, Inc. or any other
national securities exchange or the Nasdaq Stock Market's National Market for
the listing upon notice of issuance of the Preferred Trust Securities and the
Preferred Trust Securities Guarantee;
(iv) to execute and file with the Commission a registration
statement, including any amendments thereto, prepared by the Successor
Depositor, relating to the registration of the Preferred Trust Securities, the
Preferred Partnership Securities, the Preferred Trust Securities Guarantee and
the Partnership Guarantee under Section 12(b) or Section 12(g) of the Exchange
Act;
(v) to execute and enter into the Underwriting Agreement and
perform the duties and obligations of the Trust thereunder;
(vi) to execute the Limited Partnership Agreement;
(vii) to execute and enter into a letter of representations among
the Trust, DTC and the Property Trustee, as agent for the Trust; and
(viii) to take any other actions necessary or desirable to carry
out any of the foregoing activities;
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(c) to acquire the Preferred Partnership Securities with the proceeds
of the sale of the Preferred Trust Securities;
(d) to give the Successor Depositor, the Control Party, and the
Property Trustee prompt written notice of the occurrence of a Trust Special
Event; provided, that the Administrative Trustees shall consult with the
Successor Depositor, the Control Party, and the Property Trustee before taking
or refraining from taking any Ministerial Action in relation to a Trust Special
Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders and the Control Party as to such actions and applicable
record dates;
(f) to give prompt written notice to the Holders of any notice
received from the Partnership of the General Partner's election not to make a
current, quarterly distribution in respect of Preferred Entitlements on the
Preferred Partnership Securities under the Limited Partnership Agreement;
(g) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to this Trust Agreement;
(h) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.08(f), the Property Trustee has
the exclusive power to bring such Legal Action;
(i) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(k) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(l) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, Registrar and
Transfer Agent for the Preferred Trust Securities;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take any and all actions that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
15
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders or to enable the
Trust to effect the purposes for which the Trust was created;
(p) to take any action, or to take no action, not inconsistent with
this Trust Agreement, the Certificate of Trust of the Trust, or with applicable
law, that the Administrative Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.06, including, but not limited to:
(i) causing the Trust and the Control Party not to be deemed to
be an Investment Company required to be registered under the 1940 Act; and
(ii) taking no action which would cause the Trust to be
classified as other than a grantor trust for United States federal income tax
purposes or as other than a transparent entity for United Kingdom corporation
tax and income tax purposes;
provided, that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust.
The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees shall have none
of the powers or the authority of the Property Trustee set forth in Section
3.08.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.06 shall be reimbursed by the Partnership pursuant to Section 9.1 of
the Limited Partnership Agreement.
SECTION 3.07 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Trust Agreement. In particular, the Trust shall
not and the Trustees (including the Property Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Preferred Partnership Securities, but shall distribute all such proceeds to
Holders pursuant to the terms of this Trust Agreement;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
16
(iv) make any loans or incur any indebtedness or acquire any
securities other than the Preferred Partnership Securities;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Preferred Trust Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Preferred
Trust Securities;
(vii) other than as set forth herein, (A) cause the Special
Representative to direct the time, method and place of conducting any proceeding
for any remedy available to the Special Representative or exercising any trust
or power conferred upon the Special Representative with respect to the Preferred
Partnership Securities, the Affiliate Investment Instruments and the Investment
Guarantees, (B) cause the Special Representative to waive any past default that
is waivable under the Limited Partnership Agreement, the Affiliate Investment
Instruments or the Investment Guarantees, (C) cause the Special Representative
to exercise any right to rescind or annul any declaration that the principal of,
or other amounts in respect of, any Affiliate Investment Instrument or
Investment Guarantee is due and payable or (D) consent to any amendment,
modification or termination of the Limited Partnership Agreement or the
Preferred Partnership Securities where such consent shall be required; and
(viii) other than in connection with the dissolution and winding
up of the Trust pursuant to this Trust Agreement, file a certificate of
cancellation of the certificate of trust of the Trust.
SECTION 3.08 Powers and Duties of the Property Trustee.
(a) The legal title to the Preferred Partnership Securities shall be
owned by and held of record in the name of the Trust for the benefit of the
Holders.
(b) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of the Trust and under the
exclusive control of the Property Trustee on behalf of the Holders and, upon the
receipt of payments of funds made in respect of the Preferred Partnership
Securities held by the Trust, deposit such funds into the Property Account and
make payments to the Holders from the Property Account in accordance with
Section 7.01. Funds in the Property Account shall be held uninvested until
disbursed in accordance with this Trust Agreement. The Property Account shall be
an account that is maintained with a banking institution (including the Property
Trustee if it qualifies hereunder) authorized to exercise corporate trust powers
and having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by a United States federal or state authority;
(ii) engage in such Ministerial Action as shall be necessary or
appropriate to effect the redemption of the Preferred Trust Securities to the
extent the Preferred Partnership Securities are redeemed; and
17
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Preferred Trust
Securities, engage in such Ministerial Action as shall be necessary or
appropriate to effect the distribution of the Preferred Partnership Securities
to Holders upon the occurrence of a Trust Special Event.
(c) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Preferred Trust Securities.
(d) The Property Trustee may take any Legal Action which arises out of
or in connection with a Trust Enforcement Event of which a Responsible Officer
of the Property Trustee has actual knowledge or the Property Trustee's duties
and obligations under this Trust Agreement or the Trust Indenture Act.
(e) The Property Trustee on behalf of the Trust shall have the legal
power to exercise all of the rights, powers and privileges of a holder of
Preferred Partnership Securities and, if a Trust Enforcement Event occurs and is
continuing of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee may, for the benefit of Holders, enforce the
Trust's rights as holder of the Preferred Partnership Securities subject to the
rights of the Holders pursuant to this Trust Agreement.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders pursuant to this Trust Agreement; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.07.
(g) Subject to this Section 3.08, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.
(h) The Property Trustee must exercise the powers set forth in this
Section 3.08 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.03.
SECTION 3.09 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Trust Agreement and no implied covenants shall be
read into this Trust Agreement against the Property Trustee. In case a Trust
Enforcement Event has occurred (that has not been cured or waived pursuant to
Section 2.06) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Trust Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
18
(b) No provision of this Trust Agreement shall be construed to relieve
the Property 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 a Trust Enforcement Event and
after the curing or waiving of all such Trust Enforcement Events that may have
occurred:
(1) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Trust Agreement and the
Property Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Trust Agreement, and no
implied covenants or obligations shall be read into this Trust Agreement against
the Property Trustee;
(2) and in the absence of bad faith on the part of the
Property Trustee, the Property 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 Property Trustee and conforming to the
requirements of this Trust Agreement; but in the case of any such certificates
or opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) subject to the requirement of the Property Trustee
receiving a tax opinion as set forth in Section 8.04(d) or 8.04(e), as the case
may be, the Property 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 not less than 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 Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under this
Trust Agreement;
(iv) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or indemnity against such risk or
liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Preferred Partnership Securities
and the Property Account shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property Trustee
under this Trust Agreement and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Preferred Partnership Securities or the payment of any taxes or assessments
levied thereon or in connection therewith;
19
(vii) money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Property Account
maintained by the Property Trustee pursuant to Section 3.08(c)(i) and except to
the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Successor
Depositor with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for any default or misconduct of the Administrative
Trustees or the Successor Depositor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.09:
(i) the Property Trustee may conclusively 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 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 Control Party, Successor
Depositor or the Administrative Trustees acting on behalf of the Trust
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Control Party, Successor Depositor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, refilling or registration thereof;
(v) the Property Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect to
legal matters or advice within the scope of such experts' area of expertise
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 Successor Depositor
or any of its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any Holder pursuant to this Trust Agreement, unless (a)
such Holder shall have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Property
Trustee's agents, nominees or custodians) and liabilities that might be incurred
20
by it in complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee and (b) the Property
Trustee has obtained the legal opinions, if any, required by Section 8.04(d) or
8.04(e), as the case may be, of this Trust Agreement; provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of a Trust Enforcement Event, of its obligation
under Section 3.09;
(vii) the Property 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 indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders, and the signature of the
Property Trustee or its agents alone shall be sufficient and effective to
perform any such action and no third party shall be required to inquire as to
the authority of the Property Trustee to so act or as to its compliance with any
of the terms and provisions of this Trust Agreement, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders, which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Preferred Trust Securities as would be entitled to direct the Property Trustee
under the terms of the Preferred Trust Securities in respect of such remedy,
right or action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be fully
protected in conclusively relying on or acting in or accordance with such
instructions; provided, however, that the Property Trustee shall not be required
to take any action unless it shall have obtained such legal opinions, if any,
required by Sections 8.04(d) or 8.04(e), as the case may be, of this Trust
Agreement;
(xi) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement, and
(xii) the Property Trustee shall not be charged with knowledge of
any default or Trust Enforcement Event, as the case may be, with respect to the
Preferred Trust Securities unless either (A) a Responsible Officer of the
Property Trustee shall have actual knowledge of the default or Trust Enforcement
Event, as the case may be, or (B) written notice of such default or Trust
Enforcement Event, as the case may be, shall have been given to the Property
Trustee by the Successor Depositor, the Administrative Trustees or by any Holder
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of the Preferred Trust Securities; provided, however, that the Property Trustee
shall be deemed to have such actual knowledge if the default or Trust
Enforcement Event results from a failure to pay distributions on the Preferred
Trust Securities as provided herein.
(b) No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property 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 Property 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 Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any provision of this Trust Agreement, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Administrative Trustees or
the Property Trustee described in this Trust Agreement. Except as set forth in
Section 6.02, the Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Business Trust
Act.
SECTION 3.12 Execution of Documents.
Any Administrative Trustee or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as the authorized
representative of the Trust, is authorized to execute on behalf of the Trust any
documents that the Administrative Trustees have the power and authority to cause
the Trust to execute pursuant to Section 3.06.
SECTION 3.13 Not Responsible for Recitals or Issuance of Preferred Trust
Securities.
The recitals contained in this Trust Agreement and the Preferred Trust
Securities (except the Property Trustee's certificate of authentication) shall
be taken as the statements of the Initial Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or
sufficiency of this Trust Agreement or the Preferred Trust Securities. Neither
the Property Trustee nor any authenticating agent shall be accountable for the
use or application by the Trust of the Preferred Trust Securities or the
proceeds thereof.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have perpetual existence.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any Person, except as described in
Section 3.15(b) and (c) or Section 9.02.
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(b) The Trust may, with the consent of the Administrative Trustees or,
if there are more than two, a majority of the Administrative Trustees and
without the consent of the Holders, the Control Party, the Delaware Trustee or
the Property Trustee, consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any state of the United States; provided, that:
(i) if the Trust is not the survivor, such successor entity (the
"Successor Entity") either:
(1) expressly assumes all of the obligations of the Trust
under the Preferred Trust Securities; or
(2) substitutes for the Preferred Trust Securities other
securities having substantially the same terms as the Preferred Trust Securities
(the "Successor Preferred Trust Securities") so long as the Successor Preferred
Trust Securities rank the same as the Preferred Trust Securities rank with
respect to distributions, assets and payments upon liquidation, redemption and
otherwise;
(ii) the Successor Entity transfers to the Control Party,
directly or indirectly, a control certificate (or similar instrument) relating
to the Successor Entity;
(iii) the Control Party expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee with respect to the Preferred Partnership Securities;
(iv) the Preferred Trust Securities or any Successor Preferred
Trust Securities are listed, or any Successor Preferred Trust Securities will be
listed upon notification of issuance, on any national securities exchange or
with another organization on which the Preferred Trust Securities are then
listed or quoted;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Trust Securities
(including any Successor Preferred Trust Securities) to be downgraded by any
nationally recognized statistical securities rating organization;
(vi) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders (including any Successor Preferred Trust
Securities) in any material respect;
(vii) the Successor Entity has a purpose substantially identical
to that of the Trust;
(viii) TXU Europe, or a successor permitted by the Preferred
Trust Securities Guarantee, guarantees the obligations of the Successor Entity
under the Successor Preferred Trust Securities at least to the extent provided
by the Preferred Trust Securities Guarantee; and
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(ix) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Control Party has received an
opinion of a nationally recognized independent counsel to the Trust in the
United States or the United Kingdom, as the case may be, experienced in such
matters to the effect that:
(1) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease is lawful and may be properly undertaken by the
Trust and will not adversely affect the rights, preferences and privileges of
the Holders (including any holders of Successor Preferred Trust Securities) in
any material respect (other than with respect to any dilution of the Holders'
interest in the entity);
(2) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the Successor
Entity will be required to register as an Investment Company under the 1940 Act;
(3) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease the Trust (or the Successor Entity)
will not be classified as an association or a publicly traded partnership
taxable as a corporation for United States federal income tax purposes;
(4) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease the Partnership will not be
classified as an association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes or as a company for
United Kingdom corporation tax or income tax purposes; and
(5) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust (or the Successor Entity)
will not be classified as other than a transparent entity for United Kingdom
corporation tax and income tax purposes.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in Liquidation Amount of the Preferred Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust, the Successor Entity or the Partnership to be classified
as an association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes or as a company for United Kingdom
corporation tax and income tax purposes.
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ARTICLE IV.
Successor Depositor
SECTION 4.01 Responsibilities of the Successor Depositor.
In connection with the issuance and sale of the Preferred Trust Securities,
the Successor Depositor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-1, including any amendments thereto, pertaining
to the Preferred Trust Securities, the Preferred Partnership Securities, the
Preferred Trust Securities Guarantee and the Partnership Guarantee;
(b) to prepare for filing by the Trust an application to The New York
Stock Exchange, Inc. or any other national securities exchange or the Nasdaq
Stock Market's National Market for the listing upon notice of issuance of the
Preferred Trust Securities and the Preferred Trust Securities Guarantee; and
(c) to prepare for filing by the Trust with the Commission a
registration statement, including any amendments thereto, relating to the
registration of the Preferred Trust Securities, the Preferred Partnership
Securities, the Preferred Trust Securities Guarantee, and the Partnership
Guarantee under Section 12(b) or Section 12(g) of the Exchange Act.
SECTION 4.02 Indemnification and Expenses of the Trustees.
To the extent the Partnership fails to do so, the Successor Depositor
shall, to the fullest extent permitted by law, indemnify the Property Trustee
and the Delaware Trustee for, and to hold each of them harmless against, any
loss, liability or expense incurred without negligence or bad faith on the part
of the Property Trustee or the Delaware Trustee, as the case may be, arising out
of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending either of them against
any claim or liability in connection with the exercise or performance of any of
their respective powers or duties hereunder, and to pay to the Property Trustee
and the Delaware Trustee from time to time reasonable compensation for all
services hereunder. The provisions of this Section 4.02 shall survive the
resignation or removal of the Delaware Trustee or the Property Trustee or the
termination of this Trust Agreement.
ARTICLE V.
Control Certificate
SECTION 5.01 Issuance of the Control Certificate.
(a) One of the Administrative Trustees shall execute and deliver on
behalf of the Trust an instrument (the "Control Certificate") to the Control
Party, which instrument shall establish in the holder thereof certain voting,
administrative and appointment powers with respect to the Trust all as set forth
in this Trust Agreement.
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(b) The Control Certificate shall be substantially in the form of
Exhibit A-2 to this Trust Agreement, with such changes and additions, thereto or
deletions therefrom as may be required by ordinary usage, custom, or practice.
SECTION 5.02 Transfer of the Control Certificate.
Upon a transfer of the Control Certificate in accordance with this Section
5.02:
(a) The Control Party surrendering the Control Certificate (the
"Surrendering Party") (or its duly authorized attorney) shall surrender the
Control Certificate at the office or agency of the Trust along with a written
instrument of surrender, in a form satisfactory to at least one Administrative
Trustee, duly executed by the Surrendering Party. Thereupon, the Surrendering
Party shall cease to be the Control Party. The surrendered Control Certificate
shall be canceled and subsequently disposed of by the Administrative Trustee in
accordance with its customary practice; and
(b) Immediately upon such surrender, (i) an Administrative Trustee, on
behalf of the Trust, shall execute and deliver in the name of the successor
Control Party a new Control Certificate dated the date of the delivery and (ii)
the successor Control Party shall evidence its acceptance by executing the new
Control Certificate and taking possession thereof. Thereupon, such Person shall
be deemed to be the Control Party.
No service charge shall be made for any registration of transfer or
surrender of the Control Certificate.
SECTION 5.03 No Economic Interest in the Trust.
(a) The Control Party, by virtue of its possession of the Control
Certificate, has no beneficial interest in the Trust; moreover, the Control
Party, solely by virtue of its possession of the Control Certificate, shall not
be a trustee of the Trust nor shall it have an undivided beneficial interest in
the property of the Trust nor shall it be entitled to any financial or monetary
interest in the Trust, including but not limited to any distribution from the
Trust, any amounts paid on liquidation, dissolution or termination of the Trust,
or any entitlement to the Preferred Partnership Securities or payments thereon.
(b) Possession of the Control Certificate does not:
(i) Entitle the Control Party to income or assets of the Trust;
(ii) Impose upon the Control Party any obligation as trustee with
respect to the Trust; or
(iii) Impose upon the Control Party any obligation to act as a
fiduciary (to the fullest extent of the law) with respect to the Trust or the
Preferred Trust Securities.
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SECTION 5.04 Certain Duties and Responsibilities.
The rights, duties, and responsibilities of the Control Party shall be only
as provided by the Control Certificate and this Trust Agreement. Notwithstanding
the foregoing, no provision of the Control Certificate or this Trust Agreement
shall require the Control Party to incur any of its own funds in performance of
its duties as Control Party. Whether or not therein expressly so provided, every
provision of the Control Certificate and this Trust Agreement relating to the
conduct of the Control Party shall be subject to the provisions of this Section
5.04.
SECTION 5.05 Rights and Responsibilities of the Control Party.
(a) Except as provided under this Section 5.05, the Trust Indenture
Act or other applicable law, the Control Party will have no voting rights.
(b) The Control Party is entitled, in accordance with and subject to
Article VI of this Trust Agreement, to appoint, remove or replace any Trustee or
to increase or decrease the number of Trustees.
(c) No consent of the Control Party shall be required for the Trust to
distribute Preferred Partnership Securities in accordance with this Trust
Agreement.
(d) In connection with the issuance and sale of the Preferred Trust
Securities, the Control Party shall have the exclusive right and responsibility
to engage in the following activities:
(i) to determine the States of the United States in which to take
appropriate action to qualify or register for sale all or part of the Preferred
Trust Securities and to do any and all such acts, other than actions which must
be taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust, as
the Control Party deems necessary or advisable in order to comply with the
applicable laws of any such States; and
(ii) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale of the Preferred Trust
Securities and to negotiate the terms of the Underwriting Agreement.
ARTICLE VI.
Trustees
SECTION 6.01 Number of Trustees.
The number of Trustees initially shall be ___________ (___), and:
(a) at any time before the issuance of any Preferred Trust Securities,
the Initial Depositor may, by written instrument, increase or decrease the
number of Trustees; and
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(b) after the issuance of any Preferred Trust Securities, the number
of Trustees may be increased or decreased by the Control Party; provided,
however, that the number of Trustees shall in no event be less than three (3);
provided, further, that (1) if required by the Business Trust Act, one Trustee
shall be the Delaware Trustee; (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with, TXU Europe (each, an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Trust Agreement is required to qualify as an indenture under the
Trust Indenture Act, and such Property Trustee may also serve as Delaware
Trustee if it meets the applicable requirements.
SECTION 6.02 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided, that if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee may also be the Delaware Trustee (in which case
Section 3.11 shall have no application).
SECTION 6.03 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Successor Depositor; and
(ii) be a Person 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 Person permitted by the 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 Person 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 6.03(a)(ii), the combined capital and
surplus of such Person 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 Property Trustee shall cease to be eligible to
so act under Section 6.03(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.07(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Control Party (as if it were the obligor referred to in
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Section 310(b) of the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Preferred Trust Securities Guarantee and the Indenture (For
Unsecured Debt Securities) dated as of May 1, 1999 of TXU Europe and TXU Eastern
Funding Company to The Bank of New York, as trustee, shall be deemed to be
specifically described in this Trust Agreement for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 6.04 Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age and who is a citizen of the United States or a legal
entity, organized under the laws of any State of the United States, that shall
act through one or more Authorized Officers.
SECTION 6.05 Administrative Trustees.
The initial Administrative Trustees shall be:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
-----------------------------
Except as expressly set forth in this Trust Agreement and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
SECTION 6.06 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 6.07 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.07(b), Trustees may be appointed or removed
without cause at any time:
29
(i) until the issuance of any Preferred Trust Securities, by
written instrument executed by the Initial Depositor; and
(ii) after the issuance of any Preferred Trust Securities, by the
Control Party; provided, however, that if a Trust Enforcement Event has occurred
and is continuing, the Property Trustee or Delaware Trustee may only be
appointed or removed without cause at any time by the Holders of a Majority in
Liquidation Amount of the Preferred Trust Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 6.07(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.03 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Administrative Trustees and the Successor Depositor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 6.07(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 6.02 and 6.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Administrative Trustees and the Successor Depositor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Successor Depositor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(1) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Successor Depositor and the
resigning Property Trustee; or
(2) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Successor Depositor and the
resigning Delaware Trustee.
(d) The Control Party shall use its best efforts to promptly appoint a
Successor Delaware Trustee or Successor Property Trustee, as the case may be, if
the Property Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 6.07; provided, however, that if a
Trust Enforcement Event has occurred and is continuing, a Successor Property
Trustee or Successor Delaware Trustee may only by appointed by the Holders of a
Majority in Liquidation Amount of the Preferred Trust Securities if such
instrument of resignation is delivered.
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(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
6.07 within 60 days after delivery to the Successor Depositor and the Trust of
an instrument of resignation, the resigning Property Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 6.08 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.01, or if the number of Trustees
is increased pursuant to Section 6.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 6.07.
SECTION 6.09 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 6.07,
the Administrative Trustees in office, regardless of their number, shall have
all the powers granted to the Administrative Trustees and shall discharge all
the duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 6.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
31
provided otherwise in this Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter; provided, that a Quorum is present, or without a meeting
and without a prior notice by the unanimous consent of the Administrative
Trustees. Notwithstanding the foregoing, any and all actions of the
Administrative Trustees may be taken by the unanimous written consent of all
Administrative Trustees.
SECTION 6.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.06, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder; provided, that such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
ARTICLE VII.
SECTION 7.01 Distributions.
(a) Holders shall be entitled to receive cash distributions on a Pro
Rata basis of all amounts distributed to the Trust, including amounts received
from (i) the Partnership on the Preferred Partnership Securities (which provide
for entitlements to share in net income of the Partnership at the rate per annum
of _____% of the stated liquidation preference of $25 per Preferred Partnership
Security plus any Compounded Preferred Entitlements), and (ii) TXU Europe under
the Partnership Guarantee or the Preferred Trust Securities Guarantee.
Distributions on the Preferred Trust Securities shall be payable to the extent
that the Partnership makes a distribution on the Preferred Partnership
Securities held by the Property Trustee on behalf of the Trust, TXU Europe makes
32
a payment under the Partnership Guarantee, or the Trust receives income from any
other source, including under the Preferred Trust Securities Guarantee (the
amount of any such partnership distribution, guarantee payment, or other income
being a "Payment Amount"). The Trust shall, and the Property Trustee is directed
to, to the extent funds are available for that purpose, make a Pro Rata
distribution of the Payment Amount to Holders.
(b) Distributions on the Preferred Trust Securities will be payable
when, as and if legally available for payment, by the Property Trustee, solely
from funds accumulated in the Property Account.
(c) If the Property Trustee, as the holder on behalf of the Trust of
the Preferred Partnership Securities for the benefit of the Holders, receives
written notice of any determination by the Partnership not to pay distributions
on such Preferred Partnership Securities, the Property Trustee shall give notice
of such determination to the Holders.
(d) Distributions on the Preferred Trust Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant record dates, as long as the Preferred
Trust Securities remain in book-entry only form, will be one Business Day prior
to the relevant payment dates which payment dates are expected to correspond to
the scheduled distributions on the Preferred Partnership Securities. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the Preferred Partnership Securities in the Property
Account for the benefit of the Holders. In the event that the Preferred Trust
Securities do not remain in book-entry only form, the relevant record dates
shall be the 15th day of the month of the relevant payment dates. In the event
that any date on which distributions are payable on the Preferred Trust
Securities is not a Business Day, payment of the distribution payable on such
date will be made on the next succeeding day which is a Business Day (without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day (without any reduction in interest or
other payments in respect of such early payment), in each case with the same
force and effect as if made on such date.
ARTICLE VIII.
Issuance Of Preferred Trust Securities
SECTION 8.01 Designation and General Provisions Regarding the Preferred
Trust Securities.
(a) The Administrative Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial ownership
interests in the assets of the Trust with an aggregate Liquidation Amount with
respect to the assets of the Trust of Five Hundred Million Dollars
($500,000,000) and a Liquidation Amount with respect to the assets of the Trust
of $25 per preferred security, which preferred securities are hereby designated
for the purpose of identification only as _______% Trust Originated Preferred
Securities (the "Initial Preferred Trust Securities"). In the event and to the
extent the over-allotment option granted by the Trust pursuant to the
Underwriting Agreement is exercised by the underwriters named therein, on one or
33
more occasions as set forth therein the Administrative Trustees shall, on behalf
of the Trust, issue additional Preferred Trust Securities representing undivided
beneficial ownership interests in the assets of the Trust with an aggregate
Liquidation Amount with respect to the assets of the Trust of up to $75,000,000
(to the extent so issued, the "Additional Preferred Trust Securities" and,
together with the Initial Preferred Trust Securities, the "Preferred Trust
Securities"). The Preferred Trust Security Certificates evidencing the Preferred
Trust Securities shall be substantially in the form of Exhibit A-1 to this Trust
Agreement, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice or to conform to the rules of
any stock exchange on which the Preferred Trust Securities are listed.
(b) The Trust shall issue no securities or other interests in the
assets of the Trust other than the Preferred Trust Securities.
(c) Any Administrative Trustee shall sign the Preferred Trust Security
Certificates for the Trust by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Preferred
Trust Security Certificates shall cease to be an Administrative Trustee before
the Preferred Trust Security Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Administrative Trustee; and
any such Preferred Trust Security Certificate may be signed on behalf of the
Trust by such persons who, at the actual date of execution of such Preferred
Trust Security Certificate, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of this Trust Agreement any
such person was not such an Administrative Trustee. Preferred Trust Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification and such legends or endorsements as the
Administrative Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation of any stock exchange on which
Preferred Trust Securities may be listed, or to conform to usage.
(d) A Preferred Trust Security shall not be valid until authenticated
by the manual or facsimile signature of an Authorized Officer of the Property
Trustee or an Authorized Officer of an authenticating agent appointed pursuant
to Section 8.01(f). Such signature shall be conclusive evidence that the
Preferred Trust Security has been authenticated under this Trust Agreement.
(e) Upon a written order of the Trust signed by one Administrative
Trustee directing the Property Trustee to authenticate and deliver the Preferred
Trust Securities, the Property Trustee shall authenticate and deliver the
Preferred Trust Securities for original issue. The aggregate number of Preferred
Trust Securities outstanding at any time shall not exceed the number set forth
in Section 8.1(a).
(f) The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Trust Securities. An
authenticating agent may authenticate Preferred Trust Securities whenever the
Property Trustee may do so. Each reference in this Trust Agreement to
authentication by the Property Trustee includes authentication by such agent. An
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authenticating agent has the same rights as the Property Trustee to deal with
the Control Party or an Affiliate of the Control Party.
(g) The consideration received by the Trust for the issuance of the
Preferred Trust Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(h) Upon issuance of the Preferred Trust Securities as provided in
this Trust Agreement, the Preferred Trust Securities so issued shall be deemed
to be validly issued, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust. The issuance of the Preferred Trust
Securities is not subject to preemptive or similar rights.
(i) Every Person, by virtue of having become a Holder or a Preferred
Trust Security Beneficial Owner in accordance with the terms of this Trust
Agreement, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Trust Agreement.
SECTION 8.02 Redemption of Preferred Trust Securities.
(a) Upon a purchase of the Preferred Partnership Securities by the
Partnership upon redemption or otherwise, the proceeds from such purchase shall
be simultaneously applied Pro Rata to redeem Preferred Trust Securities having
an aggregate Liquidation Amount equal to the Preferred Partnership Securities so
purchased or redeemed at an amount equal to $25 per Preferred Partnership
Security plus any unpaid Preferred Entitlements and any Compounded Preferred
Entitlements thereon through the date of the redemption or such lesser amount as
shall be received by the Trust in respect of the Preferred Partnership
Securities so purchased or redeemed (the "Redemption Price"). Holders will be
given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Preferred Trust Securities are
to be so redeemed, the Preferred Trust Securities to be redeemed will be
redeemed as described in Section 8.03 below; provided, that fewer than all of
the outstanding Preferred Trust Securities may not be redeemed unless all
accumulated and unpaid distributions have been paid on all Preferred Trust
Securities for all quarterly distribution periods in respect of the Preferred
Partnership Securities terminating on or prior to the date of redemption.
(c) If, at any time, a Trust Special Event shall occur and be
continuing, the Administrative Trustees shall, unless the Preferred Partnership
Securities are redeemed in the limited circumstances described in the next
sentence, within 90 days following the occurrence of such Trust Special Event
elect to either (i) dissolve the Trust upon not less than 30 nor more than 60
days notice with the result that, after satisfaction of creditors of the Trust,
if any, Preferred Partnership Securities would be distributed on a Pro Rata
basis to the Holders in liquidation of such Holders' interests in the Trust;
provided, however, that if at the time there is available to the Trust the
opportunity to eliminate, within such 90-day period, the Trust Special Event by
taking some Ministerial Action, such as filing a form or making an election, or
pursuing some other reasonable measure which in the sole judgment of the Control
Party has or will cause no material adverse effect on the Trust, the
Partnership, the Control Party, the Successor Depositor, or the Holders and will
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involve no material cost, the Trust will pursue such measure in lieu of
dissolution or; (ii) cause the Preferred Trust Securities to remain outstanding;
provided, that in the case of this clause (ii), the Successor Depositor shall
pay any and all expenses (including any tax or governmental charges) incurred by
or payable by the Trust attributable to the Trust Special Event. Notwithstanding
the foregoing, upon the occurrence of a Trust Tax Event, if (i) the
Administrative Trustees have received a Trust Redemption Tax Opinion, or (ii)
TXU Europe certifies to the Administrative Trustees that, as a result of a Tax
Action, Additional Amounts are, or will be, payable with respect to any payments
made on any Affiliate Investment Instruments, or under the Investment
Guarantees, the Preferred Trust Securities Guarantee or the Partnership
Guarantee, and further certifies that it or any Investment Affiliate, as the
case may be, cannot avoid the requirement to pay such Additional Amounts by
using its reasonable efforts even if the Preferred Partnership Securities were
distributed to the Holders in liquidation of such holders' interests in the
Trust, then the General Partner shall have the right, within 90 days following
the occurrence of such Trust Tax Event, to elect to cause the Partnership to
either (1) redeem the Preferred Partnership Securities in whole (but not in
part) for cash upon not less than 30 nor more than 60 days notice and promptly
following such redemption, the Preferred Trust Securities will be redeemed by
the Trust at the Redemption Price; provided, however, that, if at the time there
is available to the Trust or the Partnership the opportunity to eliminate within
that 90-day period, the Trust Tax Event by taking some Ministerial Action, such
as filing a form or making an election, or pursuing such other reasonable
measure that in the sole judgment of the Control Party has or will cause no
material adverse effect on the Partnership, the Trust, TXU Europe, the Control
Party or the Holders, and will involve no material cost, the Trust or the
Partnership will pursue that measure instead of dissolution of the Trust or (2)
cause the Preferred Partnership Securities to remain outstanding, provided that,
in the case of this clause (2), the Successor Depositor will pay any and all
expenses (including any tax or governmental charges) incurred by or payable by
the Trust attributable to the Trust Tax Event.
(d) If the Preferred Partnership Securities are distributed to the
Holders, the Successor Depositor will use its best efforts to cause the
Preferred Partnership Securities to be listed on The New York Stock Exchange,
Inc. or on such other national securities exchange or similar organization on
which the Preferred Trust Securities are then listed or quoted.
(e) On the date fixed for any distribution of Preferred Partnership
Securities, upon dissolution of the Trust, (i) the Preferred Trust Securities
will no longer be deemed to be outstanding and (ii) certificates representing
Preferred Trust Securities will be deemed to represent the Preferred Partnership
Securities having a liquidation preference equal to the stated Liquidation
Amount of such Preferred Trust Securities until such certificates are presented
to the Successor Depositor or its agent for transfer or reissuance.
SECTION 8.03 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of
Preferred Partnership Securities in exchange for, the Preferred Trust Securities
(a "Redemption/Distribution Notice") will be given by the Trust by mail to each
Holder to be redeemed or exchanged not fewer than 30 nor more than 60 days
before the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Preferred Partnership
Securities. For purposes of the calculation of the date of redemption or
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exchange and the dates on which notices are given pursuant to this Section 8.03,
a Redemption/ Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders. Each
Redemption/Distribution Notice shall be addressed to the Holders at the address
of each such Holder appearing in the books and records of the Trust. No defect
in the Redemption/ Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(b) In the event that fewer than all the outstanding Preferred Trust
Securities are to be redeemed, the Preferred Trust Securities to be redeemed
shall be redeemed Pro Rata from each Holder, provided, that in respect of
Preferred Trust Securities registered in the name of and held of record by DTC
or its nominee (or any successor Clearing Agency or its nominee), the
distribution of the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or nominee.
In the event that the Preferred Trust Securities do not remain in book-entry
only form and fewer than all of the outstanding Preferred Trust Securities are
to be redeemed, the Preferred Trust Securities shall be redeemed Pro Rata or
pursuant to the rules of any securities exchange on which the Preferred Trust
Securities are listed. The Property Trustee shall promptly notify the
Administrative Trustees in writing of the Preferred Trust Securities selected
for redemption and, in the case of any Preferred Trust Securities selected for
partial redemption, the aggregate Liquidation Amount to be redeemed.
(c) If Preferred Trust Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, which notice may only be issued if the
Preferred Partnership Securities are redeemed as set out in this Section 8.03
(which notice will be irrevocable), then (A) while the Preferred Trust
Securities are in book-entry only form, by 12:00 noon, New York City time, on
the redemption date, the Property Trustee on behalf of the Trust will deposit
irrevocably with DTC or its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the applicable Redemption Price with respect to
the Preferred Trust Securities and will give DTC irrevocable instructions and
authority to pay the Redemption Price to the Holders, and (B) with respect to
Preferred Trust Securities issued in definitive form, the Property Trustee on
behalf of the Trust will pay the relevant Redemption Price to the Holders by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date, upon surrender by such Holder of
such Preferred Trust Securities in definitive form. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if applicable,
then immediately prior to the close of business on the date of such deposit, or
on the redemption date, as applicable, distributions will cease to accumulate on
the Preferred Trust Securities so called for redemption and all rights of
Holders will cease, except the right of the Holders to receive the Redemption
Price, but without interest on such Redemption Price, and such Preferred Trust
Securities will cease to be outstanding. If any date fixed for redemption of
Preferred Trust Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of the amount
payable subject to such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day (without any reduction in interest or other payments in respect of
such early payment), in each case with the same force and effect as if made on
such date fixed for redemption. If payment of the Redemption Price in respect of
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any Preferred Trust Securities is improperly withheld or refused and not paid
either by the Trust or by TXU Europe pursuant to the Preferred Trust Securities
Guarantee, distributions on such Preferred Trust Securities will continue to
accumulate at the then applicable rate from the original redemption date to the
actual date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the Redemption Price.
For these purposes, the applicable Redemption Price shall not include
distributions which are being paid to Holders who were Holders on a relevant
record date. Neither the Administrative Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Preferred Trust
Securities that have been called for redemption.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), TXU Europe or its Affiliates
may at any time and from time to time purchase outstanding Preferred Trust
Securities, including by tender, in the open market or by private agreement.
SECTION 8.04 Voting Rights of Preferred Trust Securities.
(a) Except as provided in this Trust Agreement, including without
limitation under Section 2.6 and under this Article VIII, and as except
otherwise required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders will have no voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 8.04(d) below, 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 Property Trustee on behalf of the Trust, or direct the
exercise of any trust or power conferred upon the Property Trustee under this
Trust Agreement, including the right to direct the Property Trustee on behalf of
the Trust, as holder of the Preferred Partnership Securities, to (i) exercise
the remedies available to the Trust under the Limited Partnership Agreement as a
holder of the Preferred Partnership Securities, including the right to direct
the Special Representative of the Partnership as elected by the holders of the
Preferred Partnership Securities in accordance with the Limited Partnership
Agreement to enforce (A) the Partnership's creditors' rights and other rights,
including the right to receive payments under the Affiliate Investment
Instruments and the Investment Guarantees, (B) the rights of the holders of the
Preferred Partnership Securities under the Partnership Guarantee, and (C) the
rights of the holders of the Preferred Partnership Securities to receive
distributions (if and to the extent such distributions have been declared out of
funds legally available therefor by the General Partner in its sole discretion)
on the Preferred Partnership Securities and (ii) consent to any amendment,
modification or termination of the Limited Partnership Agreement or the
Preferred Partnership Securities where such consent shall be required; provided,
however, that where a consent or action under the Limited Partnership Agreement
would require the consent or act of the holders of more than a majority of the
aggregate liquidation preference of Preferred Partnership Securities affected
thereby, only the Holders of the percentage of the aggregate stated Liquidation
Amount of the Preferred Trust Securities which is at least equal to the
percentage of aggregate liquidation preference required under the Limited
Partnership Agreement may direct the Property Trustee to give such consent or
take such action on behalf of the Trust.
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(c) If the Property Trustee fails to enforce the Trust's rights under
the Preferred Partnership Securities after a Holder has made a written request,
such Holder may to the fullest extent permitted by law, institute a legal
proceeding directly against the Partnership or the Special Representative, to
enforce the Trust's rights under the Partnership Preferred Securities without
first instituting any legal proceeding against the Successor Depositor, the
Property Trustee, the Trust or any other Person. In addition, for so long as the
Trust holds any Preferred Partnership Securities, if the Special Representative
fails to enforce its rights on behalf of the Partnership in the Affiliate
Investment Instruments or the Investment Guarantees after a Holder has made a
written request, a Holder of the Preferred Trust Securities may on behalf of the
Partnership directly institute a legal proceeding against TXU Europe or any
Investment Affiliate that has issued Affiliate Investment Instruments, without
first instituting any legal proceedings against the Property Trustee, the Trust,
the Special Representative, the Partnership or any other Person. Notwithstanding
the foregoing, for so long as the Trust is the holder of the Preferred
Partnership Securities, if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of an Investment
Affiliate to make any required payment when due on any Affiliate Investment
Instrument or the failure of TXU Europe to make any required payment when due on
any Investment Guarantee, then a Holder may on behalf of the Partnership
directly institute a proceeding against such Investment Affiliate or TXU Europe
for enforcement of payment with respect to such Affiliate Investment Instrument
or Investment Guarantee.
(d) The Property Trustee shall notify all Holders of any notice of any
Partnership Enforcement Event received from the General Partner with respect to
the Preferred Partnership Securities, the Affiliate Investment Instruments and
the Investment Guarantees. Such notice shall state that such Partnership
Enforcement Event also constitutes a Trust Enforcement Event. Except with
respect to directing the time, method, and place of conducting a proceeding for
a remedy, the Property Trustee shall be under no obligation to take any of the
actions described in Section 8.04(b)(i) and (ii) above unless it has obtained an
opinion of independent tax counsel in the United States or the United Kingdom,
as the case may be, to the effect that as a result of such action, the Trust
will not fail to be classified as a grantor trust for United States federal
income tax purposes or as a transparent entity for United Kingdom corporation
tax or income tax purposes and that after such action each Holder will continue
to be treated as owning an undivided beneficial ownership interest in the
Preferred Partnership Securities.
(e) In the event the consent of the Property Trustee on behalf of the
Trust, as the holder of the Preferred Partnership Securities, is required under
the Limited Partnership Agreement with respect to any amendment, modification or
termination of the Limited Partnership Agreement, the Property Trustee shall
request the direction of the Holders with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in Liquidation Amount of
the Preferred Trust Securities voting together as a single class; provided,
however, that where a consent under the Limited Partnership Agreement would
require the consent of the holders of more than a majority of the aggregate
liquidation preference of the Preferred Partnership Securities, the Property
Trustee on behalf of the Trust may only give such consent at the direction of
the Holders of at least the same proportion in aggregate stated Liquidation
Amount of the Preferred Trust Securities. The Property Trustee shall not take
any such action in accordance with the directions of the Holders unless the
Property Trustee has obtained an opinion of independent tax counsel in the
United States or the United Kingdom, as the case may be, to the effect that, as
39
a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes or as other than a
transparent entity for United Kingdom corporation tax or income tax purposes.
(f) A waiver of a Partnership Enforcement Event with respect to the
Preferred Partnership Securities held by the Property Trustee will constitute a
waiver of the corresponding Trust Enforcement Event.
(g) Any required approval or direction of Holders may be given at a
separate meeting of Holders convened for such purpose, at a meeting of all of
the Holders or pursuant to written consent. The Administrative Trustees will
cause a notice of any meeting at which Holders are entitled to vote, to be
mailed to each Holder of record. Each such notice will include a statement
setting forth the following information: (i) the date of such meeting; (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote; and (iii) instructions for the delivery of
proxies.
(h) No vote or consent of the Holders will be required for the Trust
to redeem and cancel Preferred Trust Securities or distribute Preferred
Partnership Securities in accordance with this Trust Agreement.
(i) Notwithstanding that Holders are entitled to vote or consent under
any of the circumstances described above, any of the Preferred Trust Securities
that are beneficially owned at such time by TXU Europe or any Affiliate of TXU
Europe shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if such Preferred Trust Securities were not
outstanding; provided, however, that Persons (other than Affiliates of TXU
Europe) to whom TXU Europe or any of its Affiliates have pledged Preferred Trust
Securities may vote or consent with respect to such pledged Preferred Trust
Securities pursuant to the terms of such pledge.
(j) Holders will have no rights to appoint or remove the
Administrative Trustees, who may be appointed, removed or replaced solely by the
Control Party.
SECTION 8.05 Paying Agent.
The Trust shall maintain in the Borough of Manhattan, City of New York,
State of New York, an office or agency where the Preferred Trust Securities may
be presented for payment ("Paying Agent"). The Administrative Trustees may
appoint on behalf of the Trust the Paying Agent and may appoint one or more
additional paying agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent. The Administrative Trustees
may change any Paying Agent without prior notice to any Holder and any Paying
Agent may resign as Paying Agent upon 30 days prior written notice to the
Administrative Trustees. The Administrative Trustees shall notify the Property
Trustee of the name and address of any Paying Agent not a party to this Trust
Agreement. If the Administrative Trustees fail to appoint or maintain another
entity as Paying Agent, the Property Trustee shall act as such. The Trust or any
of its Affiliates may act as Paying Agent. The Bank of New York shall initially
act as Paying Agent for the Preferred Trust Securities.
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SECTION 8.06 Listing.
The Successor Depositor shall use its best efforts to cause the Preferred
Trust Securities and the Preferred Trust Securities Guarantee to be listed on
The New York Stock Exchange, Inc.
SECTION 8.07 Acceptance of Guarantee and Agreements, Limited Partnership
Agreement.
Each Holder, by the acceptance of the Preferred Trust Securities, agrees to
the provisions of the Preferred Trust Securities Guarantee, the Partnership
Guarantee, the Affiliate Investment Instruments and the Investment Guarantees,
respectively, including the subordination provisions therein.
ARTICLE IX.
Dissolution And Liquidation Of The Trust
SECTION 9.01 Dissolution of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Successor Depositor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Successor Depositor, upon the consent of at least
a Majority in Liquidation Amount of the Preferred Trust Securities, voting
together as a single class, to dissolve the Trust, or the revocation of the
Successor Depositor 's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Successor Depositor or the Trust;
(iv) when all of the Preferred Trust Securities shall have been
called for redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with this Trust Agreement;
(v) upon the election of the Administrative Trustees, following
the occurrence and continuation of a Trust Special Event, to dissolve the Trust
and distribute the Preferred Trust Securities to the Holders in exchange for all
of the Preferred Trust Securities; or
(vi) before the issuance of any Preferred Trust Securities, with
the consent of all of the Administrative Trustees and the Initial Depositor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 9.01(a) and after the completion of the winding up of the
Trust, the Trustees shall file a certificate of cancellation with the Secretary
of State of the State of Delaware.
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(c) The provisions of Section 3.09 and Article XI shall survive the
termination of the Trust.
SECTION 9.02 Liquidation Distribution Upon Termination and Dissolution of
the Trust.
In the event of any voluntary or involuntary dissolution of the Trust (a
"Trust Liquidation"), each Holder on the date of the Trust Liquidation will be
entitled to receive, out of the assets of the Trust available for distribution
to Holders after satisfaction of the Trust's liabilities and creditors, if any,
a Pro Rata portion of the assets of the Trust.
ARTICLE X.
Transfer Of Interests
SECTION 10.01 Transfer of Preferred Trust Securities.
Subject to this Article X, Preferred Trust Securities shall be freely
transferable.
SECTION 10.02 Transfer of Certificates.
The Administrative Trustees hereby appoint TXU Business Services Company as
the initial Registrar and Transfer Agent with respect to the Certificates. The
Registrar and Transfer Agent shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Registrar and Transfer Agent may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Registrar and Transfer Agent shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees, executed by an Administrative Trustee and authenticated by the
Property Trustee. Every Certificate surrendered for registration of transfer
shall be accompanied by a written instrument of transfer in form satisfactory to
the Registrar and Transfer Agent duly executed by the Holder or such Holder's
attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled by the Registrar and Transfer Agent.
A transferee of a Certificate shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Certificate. By acceptance of a Certificate, each transferee shall be deemed to
have agreed to be bound by this Trust Agreement.
SECTION 10.03 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole Holder of such
Certificate and of the Preferred Trust Securities represented by such
Certificate for purposes of receiving distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Preferred Trust
Securities represented by such Certificate on the part of any Person, whether or
not the Trust shall have actual or other notice thereof.
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SECTION 10.04 Book-Entry Interests.
Unless otherwise specified in this Trust Agreement, the Preferred Trust
Security Certificates, on original issuance, will be issued in the form of one
or more fully registered, global Preferred Trust Security Certificates (each, a
"Global Certificate"), to be delivered to DTC, the initial Clearing Agency (or
held by a custodian thereof), by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of DTC, and no Preferred Trust Security
Beneficial Owner will receive a definitive Preferred Trust Security Certificate
representing such Preferred Trust Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 10.07. Unless and until
definitive, fully registered Preferred Trust Security Certificates (the
"Definitive Preferred Trust Security Certificates") have been issued to the
Preferred Trust Security Beneficial Owners pursuant to Section 10.07:
(a) the provisions of this Section 10.04 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Trust Agreement (including the payment
of distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder and the sole Holder of the Global Certificates
and shall have no obligation to the Preferred Trust Security Beneficial Owners;
(c) to the extent that the provisions of this Section 10.04 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 10.04 shall control; and
(d) the rights of the Preferred Trust Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Trust Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and the Clearing Agency shall receive and transmit payments of
distributions on the Global Certificates to such Clearing Agency Participants.
The Clearing Agency will make book-entry transfers among the Clearing Agency
Participants; provided, that solely for the purposes of determining whether the
Holders of the requisite amount of Preferred Trust Securities have voted on any
matter provided for in this Trust Agreement, so long as Definitive Preferred
Trust Security Certificates have not been issued, the Trustees may conclusively
rely on, and shall be fully protected in relying on, any written instrument
(including a proxy) delivered to the Trustees by the Clearing Agency setting
forth the Preferred Trust Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part.
SECTION 10.05 Notices to Clearing Agency.
Whenever a notice or other communication to the Holders is required under
this Trust Agreement, unless and until Definitive Preferred Trust Security
Certificates shall have been issued to the Preferred Trust Security Beneficial
Owners pursuant to Section 10.07, the Administrative Trustees shall give all
such notices and communications specified herein to be given to the Holders to
the Clearing Agency, and shall have no notice obligations to the Preferred Trust
Security Beneficial Owners.
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SECTION 10.06 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Trust Securities, the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Trust Securities.
SECTION 10.07 Definitive Preferred Trust Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Trust Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 10.06 or
(b) the Administrative Trustees elect after consultation with the
Control Party to terminate the book-entry system through the Clearing Agency
with respect to the Preferred Trust Securities, or
(c) there is a Trust Enforcement Event, then:
(i) Definitive Preferred Trust Security Certificates shall be
prepared by the Administrative Trustees on behalf of the Trust with respect to
such Preferred Trust Securities; and
(ii) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Administrative Trustees
shall cause Definitive Preferred Trust Security Certificates to be delivered to
Preferred Trust Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may conclusively
rely on and shall be fully protected in relying on, said instructions of the
Clearing Agency. The Definitive Preferred Trust Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Administrative Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Preferred Trust Securities
may be listed, or to conform to usage.
SECTION 10.08 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Administrative Trustees, or if the Administrative Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate; and
(b) there shall be delivered to the Administrative Trustees such
security or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Administrative Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
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destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 10.08,
the Administrative Trustees may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Preferred Trust Securities, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
ARTICLE XI.
Limitation Of Liability Of
Holders, Trustees Or Others
SECTION 11.01 Liability.
(a) Except as expressly set forth in this Trust Agreement, the
Preferred Trust Securities Guarantee and the terms of the Preferred Trust
Securities, the Initial Depositor, the Successor Depositor, the Control Party
and the Trustees shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders which shall be made
solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder any deficit
upon dissolution of the Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
shall be entitled to the same limitation of personal liability extended to
shareholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 11.02 Exculpation.
(a) No TXU Europe Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such TXU Europe Indemnified Person in good faith on behalf of the
Trust and in a manner such TXU Europe Indemnified Person reasonably believed to
be within the scope of the authority conferred on such TXU Europe Indemnified
Person by this Trust Agreement or by law, except that a TXU Europe Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such TXU Europe Indemnified Person's gross negligence or willful misconduct with
respect to such acts or omissions. An Indemnified Person shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to Holders might properly be paid.
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SECTION 11.03 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder, the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Trust Agreement or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Trust Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the Trust or
any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Trust Agreement or by
applicable law.
SECTION 11.04 Indemnification.
(a) (i)To the fullest extent permitted by applicable law, the
Successor Depositor shall indemnify and hold harmless any TXU Europe Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a TXU Europe
Indemnified Person against expenses (including attorneys' fees), judgments,
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fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the TXU Europe Indemnified Person did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Successor Depositor shall indemnify, to the fullest
extent permitted by law, any TXU Europe Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a TXU Europe Indemnified Person
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such TXU Europe Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a TXU Europe Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 11.04(a), or in defense of any claim, issue or matter therein,
he shall be indemnified, to the fullest extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 11.04(a) (unless ordered by a court) shall be made by the Successor
Depositor only as authorized in the specific case upon a determination that
indemnification of the TXU Europe Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made by the Administrative
Trustees by a majority vote of a quorum consisting of such Administrative
Trustees who were not parties to such action, suit or proceeding, if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a written
opinion, or by the Control Party.
(v) Expenses (including attorneys' fees) incurred by a TXU Europe
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 11.04(a) shall be paid by the Successor Depositor in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such TXU Europe Indemnified Person to repay such
47
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Successor Depositor as authorized in this Section 11.04(a).
Notwithstanding the foregoing, no advance shall be made by the Successor
Depositor if a determination is reasonably and promptly made by the
Administrative Trustees by a majority vote of a quorum of disinterested
Administrative Trustees, if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion or the Control Party, that, based
upon the facts known to the Administrative Trustees, counsel or the Control
Party at the time such determination is made, such TXU Europe Indemnified Person
acted in bad faith or in a manner that such Person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect to any criminal
proceeding, that such TXU Europe Indemnified Person believed or had reasonable
cause to believe his conduct was unlawful. In no event shall any advance be made
in instances where the Administrative Trustees, independent legal counsel or the
Control Party reasonably determine that such Person deliberately breached his
duty to the Trust [or the Control Party].
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 11.04(a) shall not
be deemed exclusive of any other rights to which those seeking indemnification
and advancement of expenses may be entitled under any agreement, vote of
shareholders or disinterested directors of the Successor Depositor or Holders or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. All rights to indemnification under
this Section 11.04(a) shall be deemed to be provided by a contract between the
Successor Depositor and each TXU Europe Indemnified Person who serves in such
capacity at any time while this Section 11.04(a) is in effect. Any repeal or
modification of this Section 11.04(a) shall not affect any rights or obligations
then existing.
(vii) The Successor Depositor or the Trust may purchase and
maintain insurance on behalf of any Person who is or was a TXU Europe
Indemnified Person against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the Successor Depositor would have the power to indemnify him against such
liability under the provisions of this Section 11.04(a).
(viii) For purposes of this Section 11.04(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 11.04(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 11.04(a) shall, unless otherwise provided
when authorized or ratified, continue as to a Person who has ceased to be a TXU
Europe Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a Person.
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(b) The Successor Depositor agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee
and the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents of
the Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on the part of
the Trustee arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 11.04(b) shall survive the satisfaction
and discharge of this Trust Agreement.
SECTION 11.05 Outside Businesses.
Any Covered Person, the Initial Depositor, the Successor Depositor, the
Delaware Trustee and the Property Trustee may engage in or possess an interest
in other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders shall have no rights by virtue of this Trust Agreement in and to
such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. None of the Covered Person, the
Initial Depositor, the Successor Depositor, the Delaware Trustee, or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Initial Depositor, the Successor Depositor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Initial Depositor or any Affiliate of the Initial
Depositor, or may act as depositary for, trustee or agent for, or act on any
committee or body of Holders of, securities or other obligations of the Initial
Depositor or its Affiliates.
ARTICLE XII.
Accounting
SECTION 12.01 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year.
SECTION 12.02 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Administrative
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
49
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the
Administrative Trustees.
(b) Within 60 days after of each year commencing, the Property Trustee
shall provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
(c) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Preferred Trust Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 12.03 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Preferred Partnership Securities held by the Property Trustee on
behalf of the Trust shall be made directly to the Property Account and no other
funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Account.
SECTION 12.04 Withholding.
The Trust and the Administrative Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Control Party
on behalf of the Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Control Party on behalf of the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
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distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual distributions made, the Control Party on behalf of theTrust may
reduce subsequent distributions by the amount of such withholding.
Notwithstanding anything herein to the contrary, the Control Party on behalf of
the Trust and the Administrative Trustees shall, absent receipt of an opinion of
nationally recognized tax counsel to the contrary, withhold thirty percent (30%)
(or such other rate as may be imposed as a result of an amendment to the Code or
such lower rate as may be imposed under an applicable income tax treaty) on the
gross amount of any distributions on Preferred Trust Securities held by a Holder
that is not a "United States person" within the meaning of Section 7701(a)(30)
of the Code.
ARTICLE XIII.
Amendments And Meetings
SECTION 13.01 Amendments.
(a) Except as otherwise provided in this Trust Agreement, this Trust
Agreement may only be amended by a written instrument approved and executed by:
(i) the Administrative Trustees (or, if there are more than two
Administrative Trustees, a majority of the Administrative Trustees);
(ii) the Control Party;
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee; and
(iv) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Control Party that such amendment is permitted by, and conforms
to, the terms of this Trust Agreement;
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received an opinion of counsel (who may be
counsel to the Control Party or the Trust) that such amendment is permitted by,
and conforms to, the terms of this Trust Agreement; and
(iii) to the extent the result of such amendment would be to:
(1) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust or a
transparent entity for United Kingdom corporation tax and income tax purposes;
51
(2) cause the Partnership to be classified for purposes of
United States federal income tax as an association or publicly traded
partnership taxable as a corporation or a company for United Kingdom corporation
tax and income tax purposes;
(3) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(4) cause the Trust, the Partnership or the Control Party to
be deemed to be an Investment Company required to be registered under the 1940
Act.
(c) In the event the consent of the Property Trustee, as the holder of
the Preferred Partnership Securities is required under the Limited Partnership
Agreement with respect to any amendment, modification or termination of the
Limited Partnership Agreement or the Preferred Partnership Securities, the
Property Trustee shall request the direction of the Holders with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in Liquidation
Amount of the Preferred Trust Securities, voting together as a single class;
provided, however, that where a consent under the Limited Partnership Agreement
would require the consent of a Super Majority of the Holders of Preferred
Partnership Securities the Property Trustee may only give such consent at the
direction of the Holders of at least the proportion in Liquidation Amount of the
Preferred Trust Securities which the relevant Super Majority represents of the
aggregate liquidation preference of the Preferred Partnership Securities
outstanding; provided, further, that the Property Trustee shall not be obligated
to take any action in accordance with the directions of the Holders under this
Section 13.01(c) unless the Property Trustee has obtained an opinion of
independent tax counsel in the United States or the United Kingdom, as the case
may be, to the effect that for United States federal income tax purposes, the
Trust will continue to be classified as a grantor trust and that for United
Kingdom corporation tax and income tax purposes, the Trust will continue to be
classified as a transparent entity, in each case, after consummation of such
action and each Holder will be treated as owning an undivided beneficial
ownership interest in the Preferred Partnership Securities.
(d) At such time after the Trust has issued any Preferred Trust
Securities that remain outstanding, any amendment that would (i) materially
adversely affect the powers, preferences or special rights of the Preferred
Trust Securities, whether by way of amendment to this Trust Agreement or
otherwise, or (ii) provide for the dissolution, winding-up or termination of the
Trust other than pursuant to the terms of this Trust Agreement, may be effected
only with the approval of the Holders of at least a Majority in Liquidation
Amount of the Preferred Trust Securities affected thereby.
(e) This Section 13.01 shall not be amended without the consent of all
of the Holders;
(f) Article V shall not be amended without the consent of the Control
Party and;
(g) The rights of the Control Party under Article VI to increase or
decrease the number of, and appoint and remove, Trustees shall not be amended
without the consent of the Control Party; and
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(h) Notwithstanding Section 13.01(c), this Trust Agreement may be
amended without the consent of the Holders by the Control Party and the
Administrative Trustees:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this Trust
Agreement that may be defective or inconsistent with any other provision of this
Trust Agreement;
(iii) to add to the covenants, restrictions or obligations of the
Successor Depositor;
(iv) to conform to any change in the 1940 Act or written change
in interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority;
(v) to conform to any change in the Trust Indenture Act or
written change in interpretation or application of the rules and regulations
promulgated thereunder by any legislative body, court, government agency or
regulatory authority;
(vi) to change the name of the Trust; and
(vii) to modify, eliminate and add to any provision of this Trust
Agreement to such extent as may be necessary; provided, that such amendments do
not have a material adverse effect on the rights, preferences or privileges of
the Holders.
SECTION 13.02 Meetings of the Holders; Action by Written Consent.
(a) Meetings of the Holders may be called at any time by the
Administrative Trustees to consider and act on any matter on which Holders are
entitled to act under the terms of this Trust Agreement, the Limited Partnership
Agreement, the rules of any stock exchange on which the Preferred Trust
Securities are listed or admitted for trading, the Business Trust Act or other
applicable law. The Administrative Trustees shall call a meeting of the Holders
if directed to do so by the Holders of at least 10% in Liquidation Amount of
Preferred Trust Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more notices in a writing stating that the
signing Holders wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders calling a meeting
shall specify in writing the Certificates held by the Holders exercising the
right to call a meeting and only those Preferred Trust Securities specified
shall be counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.
(b) The following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to all the Holders
having a right to vote thereat at least 7 days and not more than 60 days before
the date of such meeting. Any action that may be taken at a meeting of the
Holders may be taken without a meeting and without prior notice if a consent in
writing setting forth the action so taken is signed by the Holders owning not
less than the minimum amount of Preferred Trust Securities in Liquidation Amount
that would be necessary to authorize or take such action at a meeting at which
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all Holders having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the Holders
entitled to vote who have not consented in writing. The Administrative Trustees
may specify that any written ballot submitted to the Holder for the purpose of
taking any action without a meeting shall be returned to the Trust within the
time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by proxy
on all matters in which a Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders were shareholders of a Delaware corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative Trustees
may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the
Trust Indenture Act or the listing rules of any stock exchange on which the
Preferred Trust Securities are then listed for trading, otherwise provides, the
Administrative Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any Holders,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIV.
Representations Of Property Trustee
And Delaware Trustee
SECTION 14.01 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Control Party at the date of this Trust Agreement, and
each Successor Property Trustee represents and warrants to the Trust and the
Control Party at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a New York banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
New York, with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, the Trust Agreement;
(b) The execution, delivery and performance by the Property Trustee of
the Trust Agreement have been duly authorized by all necessary corporate action
on the part of the Property Trustee. The Trust Agreement has been duly executed
and delivered by the Property Trustee and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
54
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) The execution, delivery and performance of the Trust Agreement by
the Property Trustee do not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Property Trustee;
(d) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee of this Trust Agreement; and
(e) The Property Trustee, pursuant to this Trust Agreement, shall hold
the Preferred Partnership Securities on behalf of the Trust and agrees that,
except as expressly provided or contemplated by this Agreement, it will not
create, incur or assume, or suffer to exist any mortgage, pledge, hypothecation,
encumbrance, lien or other charge or security interest upon the Preferred
Partnership Securities.
SECTION 14.02 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Control Party at the date of this Trust Agreement, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Control Party at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Trust Agreement;
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Trust Agreement. The Trust
Agreement, under Delaware law, constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the Trust Agreement; and
(d) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
55
ARTICLE XV.
Miscellaneous
SECTION 15.01 Notices.
All notices provided for in this Trust Agreement shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders):
TXU Europe Capital I
c/o TXU Business Services Company
Energy Plaza
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Administrative Trustees
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
other Trustees):
The Bank of New York (Delaware)
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
(c) if given to the Property Trustee, at its Corporate Trust Office to
the attention of the Corporate Trust Department (or such other address as the
Property Trustee may give notice of to the Holders and the other Trustee).
(d) if given to the Control Party, at its mailing address as set forth
below (or such other address as the Control Party may give notice of to the
Trust):
c/o TXU Europe Limited
The Adelphi
▇-▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust. All such notices 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
56
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 15.02 Governing Law.
This Trust Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the internal laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 15.03 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Trust Agreement shall be interpreted to further this intention of the
parties.
SECTION 15.04 Headings.
Headings contained in this Trust Agreement are inserted for convenience of
reference only and do not affect the interpretation of this Trust Agreement or
any provision hereof.
SECTION 15.05 Successors and Assigns
Whenever in this Trust Agreement any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Trust Agreement by the
Successor Depositor, the Control Party, and the Trustees shall bind and inure to
the benefit of their respective successors and assigns, whether so expressed.
SECTION 15.06 Partial Enforceability.
If any provision of this Trust Agreement, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Trust Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 15.07 Counterparts.
This Trust Agreement may contain more than one counterpart of the signature
page and this Trust Agreement may be executed by the affixing of the signature
of each of the Trustees and a duly authorized director or officer of each of the
Initial Depositor, the Successor Depositor, and the Control Party to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
57
IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust
Agreement to be duly executed, all as of the day and year first above written.
TXU BUSINESS SERVICES COMPANY,
as Initial Depositor
By:
------------------------------------
Title:
TXU EUROPE LIMITED,
as Successor Depositor
By:
------------------------------------
Title:
-------------------------------,
as Control Party
By:
------------------------------------
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
------------------------------------
Title:
------------------------------------
Administrative Trustee
------------------------------------
Administrative Trustee
58
------------------------------------
Administrative Trustee
------------------------------------
Administrative Trustee
------------------------------------
Administrative Trustee
59
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Trust Security is a Global Certificate within the meaning of
the Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Preferred Trust Security is exchangeable for Preferred Trust Securities
registered in the name of a Person other than the Depositary or its nominee only
in the limited circumstances described in the Trust Agreement and no transfer of
this Preferred Trust Security (other than a transfer of this Preferred Trust
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Preferred Trust Security is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇), a New York corporation, to the Trust or its agent for registration of
transfer, exchange or payment, and any Preferred Trust Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co. or such other entity as is requested by an authorized representative
of the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Trust Securities
P- CUSIP NO.
Certificate Evidencing Preferred Trust Securities
of
TXU EUROPE CAPITAL I
__% Trust Originated Preferred Securities
(Liquidation Amount $25 per Preferred Trust Security)
TXU EUROPE CAPITAL I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of ___________ preferred securities of the
Trust representing undivided beneficial ownership interests in the assets of the
Trust designated the _____% Trust Originated Preferred Securities (Liquidation
Amount $25 per Preferred Trust Security) (the "Preferred Trust Securities"). The
Preferred Trust Securities are freely transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
A-1
certificate duly endorsed and in proper form for transfer. The designation,
rights, powers, privileges, restrictions, preferences and other terms and
provisions of the Preferred Trust Securities represented hereby are set forth
in, issued under and shall in all respects be subject to the provisions of the
Amended and Restated Trust Agreement of the Trust dated as of _______________,
2000, as the same may be amended from time to time (the "Trust Agreement").
Capitalized terms used herein but not defined shall have the meaning given them
in the Trust Agreement. The Holder is entitled to the benefits of the Preferred
Trust Securities Guarantee to the extent provided therein. Each Holder of a
Preferred Trust Security, by acceptance of this Certificate and each Certificate
owner, by acquisition of a beneficial interest in a Certificate, agrees to treat
the Initial Debentures, and any other Affiliate Investment Instruments, as
indebtedness for United States federal and United Kingdom corporation tax and
income tax purposes. The Trust will provide a copy of the Trust Agreement, the
Preferred Trust Securities Guarantee and the Limited Partnership Agreement to a
Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this __day of
___________, _______.
TXU EUROPE CAPITAL I
By:
-----------------------------------
Name: ___________________, solely in his
(her) capacity as Administrative Trustee
A-2
(See reverse for additional terms)
CERTIFICATE OF AUTHENTICATION. This is one of the Preferred Trust Securities
described in the within-mentioned Trust Agreement.
THE BANK OF NEW YORK, as Property Trustee
By:
--------------------------------------------
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
Holders shall be entitled to receive cash distributions on a Pro Rata basis
of all amounts distributed to the Trust including amounts received from (i) the
Partnership on the Preferred Partnership Securities (which provide for
entitlements to share in net income of the Partnership at the rate per annum of
_____% of the stated liquidation preference of $25 per Preferred Partnership
Security plus any Compounded Preferred Entitlements), and (ii) TXU Europe under
the Partnership Guarantee or the Preferred Trust Securities Guarantee.
Distributions on the Preferred Trust Securities shall be payable to the extent
that the Partnership makes a distribution on the Preferred Partnership
Securities held by the Property Trustee, TXU Europe makes a payment under the
Partnership Guarantee, or the Trust receives income from any other source,
including under the Preferred Trust Securities Guarantee (the amount of any such
partnership distribution, guarantee payment, or other income being a "Payment
Amount"). The Trust shall, and the Property Trustee is directed to, to the
extent funds are available for that purpose, make a Pro Rata distribution of the
Payment Amount to Holders.
Distributions on the Preferred Trust Securities are payable to the Holders
when, as and if legally available for payment by the Property Trustee, solely
from funds accumulated in the Property Account.
Distributions on the Preferred Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant record dates, as long as the Preferred
Trust Securities remain in book-entry only form, will be one Business Day prior
to the relevant payment dates which payment dates are expected to correspond to
the scheduled distributions on the Preferred Partnership Securities. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the Preferred Partnership Securities in the Property
Account for the benefit of the Holders. In the event that the Preferred Trust
Securities do not remain in book-entry only form, the relevant record dates
shall be the 15th day of the month of the relevant payment dates. In the event
that any date on which distributions are payable on the Preferred Trust
Securities is not a Business Day, payment of the distribution payable on such
date will be made on the next succeeding day which is a Business Day (without
any interest or other payment in respect of any such delay) except that, if such
A-3
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day (without any reduction in interest or
other payments in respect of such earlier payment), in each case with the same
force and effect as if made on such date.
The Preferred Trust Securities shall be redeemable as provided in the Trust
Agreement.
ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Trust Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints agent to transfer this Preferred Trust Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: ________________
Signature: _____________
(Sign exactly as your name appears on the other side of this Preferred Trust
Security Certificate)
A-4
EXHIBIT A-2
FORM OF CONTROL CERTIFICATE
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
PROVIDED IN THE TRUST AGREEMENT REFERRED TO HEREIN
Control Certificate
of
TXU EUROPE CAPITAL I
With respect to TXU EUROPE CAPITAL I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), by the execution of that
certain Amended and Restated Trust Agreement of the Trust, dated as of
_______________, 2000, as the same may be amended and restated from time to time
(the "Trust Agreement") among (i) TXU Business Services Company, incorporated
under the laws of the State of Texas, (ii) TXU Europe Limited, a private limited
company incorporated under the laws of England and Wales, (iii) The Bank of New
York, a banking corporation duly organized and existing under the laws of the
State of New York, as trustee, (iv) The Bank of New York (Delaware), a banking
corporation duly organized and existing under the laws of the State of Delaware,
as Delaware trustee, (v) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, __________________,
____________________ and ____________________, each an individual, and each of
whose address is c/o TXU Business Services Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, (vi) __________________, a corporation incorporated under the laws
of the State of Delaware, and (vii) the several Holders, the Trust hereby issues
this Control Certificate to _______________________. The designations, rights,
privileges, restrictions, and preferences of the holder of this certificate are
set forth in, and shall in all respects be subject to the terms and provisions
of, the Trust Agreement. The Trust shall furnish a copy of the Trust Agreement
to the holder hereof without charge upon written request to the Trust at its
principal place of business.
Upon receipt of the Control Certificate, the holder hereof is bound by the
Trust Agreement and is entitled to the benefits thereunder. Receipt of the
Control Certificate will not bestow or impose on the holder hereof any economic
or financial interest in or obligation with respect to the Trust.
IN WITNESS WHEREOF, the Trust has executed this certificate this __day of
________, _______.
A2-1
TXU EUROPE CAPITAL I
By:
-----------------------------------------
____________________, solely in
his (her) capacity as Administrative
Trustee
AGREED AND ACCEPTED:
------------------------------------------,
as holder of the Control Certificate
By:
----------------------------------------
Title:
-------------------------------------
A2-2