EXHIBIT 4(kkk)
GUARANTEE AGREEMENT
Between
Texas Utilities Company doing business as TXU Corp
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
December 13 1999
TABLE OF CONTENTS
Page
----
ARTICLE I Definitions.......................................................1
SECTION 1.01 Definitions.............................................1
ARTICLE II Trust Indenture Act..............................................4
SECTION 2.01 Trust Indenture Act; Application........................4
SECTION 2.02 Lists of Holders of Preferred Trust Securities..........4
SECTION 2.03 Reports by the Guarantee Trustee........................4
SECTION 2.04 Periodic Reports to Guarantee Trustee...................4
SECTION 2.05 Evidence of Compliance with Conditions Precedent........5
SECTION 2.06 Events of Default; Waiver...............................5
SECTION 2.07 Event of Default; Notice................................5
SECTION 2.08 Conflicting Interests...................................5
ARTICLE III Powers, Duties and Rights of Guarantee Trustee..................6
SECTION 3.01 Powers and Duties of the Guarantee Trustee..............6
SECTION 3.02 Certain Rights of Guarantee Trustee.....................8
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee...9
ARTICLE IV Guarantee Trustee...............................................10
SECTION 4.01 Guarantee Trustee; Eligibility.........................10
SECTION 4.02 Compensation and Reimbursement.........................10
SECTION 4.03 Appointment, Removal and Resignation of Guarantee
Trustee................................................11
ARTICLE V Guarantee........................................................12
SECTION 5.01 Guarantee..............................................12
SECTION 5.02 Waiver of Notice and Demand............................12
SECTION 5.03 Obligations Not Affected...............................12
SECTION 5.04 Rights of Holders......................................13
SECTION 5.05 Guarantee of Payment...................................13
SECTION 5.06 Subrogation............................................14
SECTION 5.07 Independent Obligations................................14
ARTICLE VI Subordination...................................................14
SECTION 6.01 Subordination..........................................14
ARTICLE VII Termination....................................................14
SECTION 7.01 Termination............................................14
ARTICLE VIII Miscellaneous.................................................15
SECTION 8.01 Successors and Assigns.................................15
SECTION 8.02 Amendments.............................................15
SECTION 8.03 Notices................................................15
SECTION 8.04 Benefit................................................16
SECTION 8.05 Interpretation.........................................16
SECTION 8.06 Governing Law..........................................17
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CROSS-REFERENCE TABLE*
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ---------
310(a)..........................................................4.01(a)
310(b)..........................................................4.01(c), 2.08
310(c)..........................................................Inapplicable
311(a)..........................................................2.02(b)
311(b)..........................................................2.02(b)
311(c)..........................................................Inapplicable
312(a)..........................................................2.02(a)
312(b)..........................................................2.02(b)
313.............................................................2.03
314(a)..........................................................2.04
314(b)..........................................................Inapplicable
314(c)..........................................................2.05
314(d)..........................................................Inapplicable
314(e)..........................................................1.01, 2.05,
.....................................................3.02
314(f)..........................................................2.01, 3.02
315(a)..........................................................3.01(d)
315(b)..........................................................2.07
315(c)..........................................................3.01
315(d)..........................................................3.01(d)
316(a)..........................................................5.04(a), 2.06
316(b)..........................................................5.03
316(c)..........................................................2.02
317(a)..........................................................Inapplicable
317(b)..........................................................Inapplicable
318(a)..........................................................2.01(b)
318(b)..........................................................2.01
318(c)..........................................................2.01(a)
-------------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
December 13, 1999 is executed and delivered by Texas Utilities Company doing
business as TXU Corp, a Texas corporation (the "Guarantor"), and The Bank of New
York, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Trust Securities (as defined
herein) of TXU Capital II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of December 13, 1999 among the Trustees named
therein, Texas Utilities Company doing business as TXU Corp, as Depositor, and
the several Holders (as defined therein), the Issuer is issuing as of the date
hereof $150,000,000 aggregate Liquidation Amount of its 8.70% Trust Originated
Preferred Securities (the "Initial Preferred Trust Securities") representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, in the event and to the extent the over-allotment option
granted by the Issuer and Guarantor pursuant to the Underwriting Agreement dated
December 8, 1999 is exercised by the underwriters incurred therein, the Issuer
will issue up to $15,000,000 aggregate Liquidation Account of its additional
8.70% Trust Originated Preferred Securities (the "Option Preferred Trust
Securities", together with the Initial Preferred Trust Securities, the
"Preferred Trust Securities") representing undivided beneficial interests in the
assets of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Initial Preferred Trust Securities are to be issued
for sale by the Issuer and the proceeds are to be invested in $154,639,200
principal amount of Debentures (as defined in the Trust Agreement) and the
Option Preferred Trust Securities are to be issued for sale by the Issuer and
the proceeds are to be invested in up to $15,463,925 in principal amount of
Debentures; and
WHEREAS, in order to enhance the value of the Preferred Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of the
Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Trust
Securities, to the extent not paid or made by or on behalf of the Issuer: (i)
any accrued and unpaid Distributions that are required to be paid on such
Preferred Trust Securities but only if and to the extent that the Property
Trustee has available in the Payment Account funds sufficient to make such
payment, (ii) the redemption price (the "Redemption Price"), and all accrued and
unpaid Distributions to the date of redemption, with respect to the Preferred
Trust Securities called for redemption by the Issuer but only if and to the
extent that the Property Trustee has available in the Payment Account funds
sufficient to make such payment, (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Preferred
Trust Securities as provided in the Trust Agreement or upon a redemption of all
of the Preferred Trust Securities upon maturity or redemption of the Debentures
as provided in the Trust Agreement), the lesser of (a) the aggregate of the
Liquidation Amount of all Preferred Trust Securities and all accrued and unpaid
Distributions on the Preferred Trust Securities to the date of payment but only
if and to the extent that the Property Trustee has available in the Payment
Account funds sufficient to make such payment, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means a Person in whose name a Preferred Trust Security
or Preferred Trust Securities is registered in the Securities Register;
provided, however, that in determining whether the holders of the requisite
percentage of Preferred Trust Securities have given any request, notice, consent
or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate
of the Guarantor.
"Majority in Liquidation Amount of the Preferred Trust
Securities" means a vote by Holders, voting separately as a class, of more than
50% of the aggregate Liquidation Amount of all Preferred Trust Securities.
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"Officer's Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President, any Vice
President, the Treasurer, or any Assistant Treasurer of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's Certificate or Opinion of
Counsel delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer or counsel signing the Officer's
Certificate or the Opinion of Counsel has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officer's
Certificate or the Opinion of Counsel;
(c) a statement that each such officer or counsel has made such
examination or investigation as, in such officer's or counsel's
opinion, is necessary to enable such officer or counsel to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
officer or counsel, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Guarantee Trustee or the Guarantor or an Affiliate of the
Guarantor, or an employee or any thereof, who shall be acceptable to the
Guarantee Trustee.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company, unincorporated organization or
government, or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the Corporate Trust
Department of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Subordinated Indenture" means the Indenture (for Unsecured
Subordinated Debt Securities relating to Trust Securities) dated as of December
1, 1998, between the Guarantor (the "Debenture Issuer") and The Bank of New
York, as trustee, pursuant to which the Debentures are issued, together with any
indenture supplemental thereto.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required or deemed to be part of this
Guarantee Agreement and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED TRUST SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than May 1 and November
1 in each year commencing in the year 2000, a list, in such form as
the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other
times as the Guarantee Trustee may request in writing, within 30 days
after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list
is furnished; provided that, the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor. The Guarantee Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a) of the Trust Indenture Act, subject to the provisions
of Section 311(b) of the Trust Indenture Act, and Section 312(b) of
the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. Not later than
November 1 in each year, commencing November 1, 2000, the Guarantee Trustee
shall provide to the Holders such reports, if any, as are required by Section
313(a) of the Trust Indenture Act in the form and in the manner provided by
Section 313(a) of the Trust Indenture Act. Any such report shall be dated as of
the next preceding September 15. The Guarantee Trustee shall also comply with
the requirements of Sections 313(b), (c) and (d) of the Trust Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent provided for in this Guarantee Agreement as and to
the extent required by Section 314(c) of the Trust Indenture Act. Any
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certificate or opinion required to be given by an officer and any opinion of
counsel required to be given by counsel, in each case pursuant to Section 314(c)
of the Trust Indenture Act, shall be given in the form of an Officer's
Certificate, and an Opinion of Counsel, respectively.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority
in Liquidation Amount of Preferred Trust Securities may, by vote, on behalf of
all of the Holders, waive any past Event of Default and its consequences. Upon
such waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee Agreement, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders, a notice of such Event of Default
known to the Guarantee Trustee, unless such default shall have been
cured or waived before the giving of such notice, provided that the
Guarantee Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust
committee of directors or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless a Responsible Officer of the Guarantee
Trustee charged with the administration of the Trust Agreement shall
have received written notice of such Event of Default.
SECTION 2.08 CONFLICTING INTERESTS. The Trust Agreement, the
Subordinated Indenture, the Indenture (For Unsecured Debt Securities Series A)
dated as of October 1, 1997 of the Company to The Bank of New York, as trustee,
the Indenture (For Unsecured Debt Securities Series B) dated as of October 1,
1997 of the Company to The Bank of New York, as trustee, the Indenture (For
Unsecured Debt Securities Series C), dated as of January 1, 1998 of the Company
to The Bank of New York, as trustee, the Purchase Contract Agreement dated as of
July 1, 1998 of the Company to The Bank of New York, as agent, attorney-in-fact
and trustee, the Indenture (For Unsecured Debt Securities Series D and Series
E), dated as of July 1, 1998 of the Company to The Bank of New York, as trustee,
the Indenture (For Unsecured Debt Securities Series F), dated as of October 1,
1998 of the Company to The Bank of New York, as trustee, the Indenture (For
Unsecured Debt Securities Series G), dated as of October 1, 1998 of the Company
to The Bank of New York, as trustee, the Indenture (For Unsecured Debt
Securities Series H), dated as of June 1, 1999 of the Company to The Bank of New
York, as trustee, the Indenture (For Unsecured Debt Securities Series I), dated
as of September 1, 1999 of the Company to The Bank of New York, as trustee, the
Guarantee Agreement, dated as of December 30, 1998 between the Company and The
Bank of New York, as trustee, and the Amended and Restated Trust Agreement,
dated as of December 30, 1998 between the Company, The Bank of New York, The
Bank of New York (Delaware), Xxxxx Xxxxxxxx, Xxxx X. Xxxxxx, Xxxxxx Xxxxxxxx,
Xxxxx Xxxxx and Xxx Xxxxxx, as trustees, and the several Holders as defined to
5
therein, shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee
shall not transfer this Guarantee Agreement or any rights hereunder to
any Person except a Holder exercising his or her rights pursuant to
Section 5.04 or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of any Event
of Default and after the curing or waiving of all Events of Default
that may have occurred, shall undertake to perform such duties and
only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06), and is actually known to a Responsible
Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be construed
to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
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opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
Liquidation Amount of the Preferred Trust Securities relating to
the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights
or powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Guarantee Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of Sections 3.01(b) and 3.01(c).
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officer's Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee
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(unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an
Officer's Certificate which, upon receipt of such request from
the Guarantee Trustee, shall be promptly delivered by the
Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the written advice or Opinion of Counsel with respect
to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion; such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees; the
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.02(a)(v) shall
be taken to relieve the Guarantee Trustee, upon the occurrence
and continuance of an Event of Default, of its obligation under
the last sentence of Section 3.01(b) to exercise the rights and
powers vested in it by this Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(vii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder;
(viii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee Trustee
(1) may request instructions from the Holders of a Majority in
Liquidation Amount of the Preferred Trust Securities, (2) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (3) shall be
8
protected in relying on or acting in accordance with such
instructions;
(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement or any tax or securities
form) (or any rerecording, refiling or re-registration thereof);
and
(x) the Guarantee Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive
power or authority available to the Guarantee Trustee shall be
construed to be a duty to act in accordance with such power or
authority.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken
as the statements of the Guarantor, and the Guarantee Trustee does not assume
any responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act
as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for
9
the purposes of this Section 4.01(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act after giving effect to the provisions of Section
2.08 hereof, the Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Guarantee Trustee
shall from time to time agree in writing for all services rendered by
it hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee
in accordance with the provisions of this Guarantee Agreement
(including the reasonable compensation and expenses of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from and
against, any and all loss, damage, claim, liability or expense,
including taxes (other than taxes based upon the income of the
Guarantee Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance of the
trusts created by, or the administration of, this Guarantee Agreement,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the
Guarantor under this Section, the Guarantee Trustee shall have a lien prior to
the Preferred Trust Securities upon all the property and funds held or collected
by the Guarantee Trustee as such, except funds held in trust for the payment of
principal of, and premium (if any) or interest on, particular obligations of the
Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of
this Guarantee Agreement.
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SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall
have occurred and be continuing, the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60
days after delivery to the Guarantor of an instrument of resignation
or removal, the Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section
8.03 hereof. Each notice shall include the name of the successor
Guarantee Trustee and the address of its Corporate Trust Office.
(f) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
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SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, Issuer or any other
Person before proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Trust
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Trust Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Preferred Trust Securities (other than an
extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted
by the Subordinated Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Property Trustee or the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the Property
Trustee or the Holders pursuant to the terms of the Preferred Trust
Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Trust Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
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There shall be no obligation of the Guarantee Trustee, the
Property Trustee or the Holders to give notice to, or obtain consent of, the
Guarantor or any other Person with respect to the happening of any of the
foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) if an Event of
Default has occurred and is continuing, the Guarantee Trustee has the right to
enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of
a Majority in Liquidation Amount of the Preferred Trust Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) if the Guarantee Trustee fails to enforce this
Guarantee Agreement, any Holder may enforce this Guarantee Agreement, or
institute a legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee Agreement without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee, or any
other Person.
SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full
(without duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall be subrogated to
all, if any, rights of the Holders against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Trust Securities and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Guarantee Agreement notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made pari passu or subordinate
by their terms, (ii) pari passu with the most senior preferred or preference
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stock now or hereafter issued by the Guarantor and with any guarantee now or
hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to all
common stock of the Guarantor. Nothing in this Section 6.01 shall apply to
claims of, or payments to, the Guarantee Trustee under or pursuant to Section
4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. Subject to Section 4.02 hereof, this
Guarantee Agreement shall terminate and be of no further force and effect upon:
(i) full payment of the Redemption Price of all Preferred Trust Securities, and
all accrued and unpaid Distributions to the date of redemption, (ii) the
distribution of Debentures to Holders in exchange for all of the Preferred Trust
Securities, or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Trust Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Trust Securities then
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article Eleven of the Subordinated
Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 8.02 AMENDMENTS. This Guarantee Agreement may be amended
only by an instrument in writing entered into by the Guarantor and the Guarantee
Trustee. Except with respect to any changes which do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Guarantee Agreement may only be amended with the prior approval
of the Holders of not less than 66 2/3% in aggregate Liquidation Amount of all
the outstanding Preferred Trust Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of Holders shall apply to the giving of such
approval. Nothing herein contained shall be deemed to require that the Guarantee
Trustee enter into any amendment of this Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
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(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the
Guarantee Trustee and the Holders of the Preferred Trust Securities:
TXU Corp
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: 000-000-0000
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustees') address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Guarantee Trustee
and the Holders:
TXU Capital II c/o TXU Corp Energy Plaza
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 00000
Facsimile No: 000-000-0000
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice
of to the Guarantor and the Holders of the Preferred Trust Securities:
The Bank of New York
000 Xxxxxxx Xxxxxx
00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Corporate Trust Trustee Administration
(d) if given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Trust Securities.
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SECTION 8.05 INTERPRETATION. In this Guarantee Agreement, unless
the context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
Texas Utilities Company doing business
as TXU Corp
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
The Bank of New York,
as Guarantee Trustee
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
