EXHIBIT 4(B)
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TXU EUROPE FUNDING I, L.P.
Dated as of ________ __, 2000
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINED TERMS.....................................................2
SECTION 1.1 DEFINITIONS................................................2
ARTICLE II. CONTINUATION OF THE PARTNERSHIP; ADMISSION OF HOLDERS............9
SECTION 2.1 CONTINUATION OF THE PARTNERSHIP............................9
SECTION 2.2 NAME......................................................10
SECTION 2.3 PURPOSES OF THE PARTNERSHIP...............................10
SECTION 2.4 TERM......................................................10
SECTION 2.5 REGISTERED AGENT AND OFFICE...............................10
SECTION 2.6 PRINCIPAL PLACE OF ACTIVITY...............................10
SECTION 2.7 NAME AND ADDRESS OF GENERAL PARTNER.......................11
SECTION 2.8 QUALIFICATION TO CONDUCT ACTIVITIES.......................11
SECTION 2.9 ADMISSION OF HOLDERS OF PREFERRED
PARTNERSHIP SECURITIES....................................11
ARTICLE III. CAPITAL CONTRIBUTIONS; REPRESENTATION OF HOLDER'S
INTEREST; CAPITAL ACCOUNTS.....................................11
SECTION 3.1 CAPITAL CONTRIBUTIONS.....................................11
SECTION 3.2 HOLDER'S INTEREST REPRESENTED BY PREFERRED
PARTNERSHIP SECURITIES....................................12
SECTION 3.3 CAPITAL ACCOUNTS..........................................12
SECTION 3.4 INTEREST ON CAPITAL CONTRIBUTIONS.........................12
SECTION 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS............13
ARTICLE IV. ALLOCATIONS.....................................................13
SECTION 4.1 NET INCOME AND NET LOSSES.................................13
SECTION 4.2 SPECIAL ALLOCATIONS.......................................14
SECTION 4.3 WITHHOLDING...............................................15
ARTICLE V. DISTRIBUTIONS....................................................15
SECTION 5.1 DISTRIBUTIONS.............................................15
SECTION 5.2 LIMITATIONS ON DISTRIBUTIONS..............................16
ARTICLE VI. ISSUANCE OF PREFERRED PARTNERSHIP SECURITIES....................16
SECTION 6.1 GENERAL PROVISIONS REGARDING PREFERRED PARTNERSHIP
SECURITIES................................................16
SECTION 6.2 PREFERRED PARTNERSHIP SECURITIES..........................17
ARTICLE VII. PARTNERSHIP INVESTMENTS........................................25
SECTION 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS..................25
SECTION 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP......26
ARTICLE VIII. BOOKS OF ACCOUNT, RECORDS AND REPORTS.........................27
SECTION 8.1 BOOKS AND RECORDS.........................................27
SECTION 8.2 ACCOUNTING METHOD.........................................27
SECTION 8.3 ANNUAL AUDIT..............................................27
ARTICLE IX. PAYMENT OF EXPENSES.............................................28
SECTION 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES...........28
SECTION 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES.....................28
ARTICLE X. XXXXXX, RIGHTS AND DUTIES OF THE LIMITED PARTNERS................29
SECTION 10.1 LIMITATIONS...............................................29
SECTION 10.2 LIABILITY.................................................29
SECTION 10.3 PRIORITY..................................................29
ARTICLE XI. POWERS, RIGHTS AND DUTIES OF THE GENERAL PARTNER................29
SECTION 11.1 AUTHORITY.................................................29
SECTION 11.2 POWERS AND DUTIES OF THE GENERAL PARTNER..................29
SECTION 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER.......31
SECTION 11.4 LIABILITY.................................................32
SECTION 11.5 OUTSIDE ACTIVITIES........................................32
SECTION 11.6 LIMITS ON GENERAL PARTNER'S POWERS........................32
SECTION 11.7 EXCULPATION...............................................33
SECTION 11.8 FIDUCIARY DUTY............................................34
SECTION 11.9 INDEMNIFICATION...........................................34
SECTION 11.10 TAX MATTERS............................................35
SECTION 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS................35
ARTICLE XII. TRANSFERS OF INTERESTS BY PARTNERS.............................36
SECTION 12.1 TRANSFER OF INTERESTS.....................................36
SECTION 12.2 TRANSFER OF L.P. CERTIFICATES.............................37
SECTION 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED HOLDERS......38
SECTION 12.4 BOOK-ENTRY PROVISIONS.....................................38
SECTION 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT................40
ARTICLE XIII. WITHDRAWAL, DISSOLUTION; LIQUIDATION AND DISTRIBUTION
OF ASSETS.....................................................40
SECTION 13.1 WITHDRAWAL OF PARTNERS....................................40
SECTION 13.2 DISSOLUTION OF THE PARTNERSHIP............................41
SECTION 13.3 LIQUIDATION...............................................42
SECTION 13.4 DISTRIBUTION IN LIQUIDATION...............................42
SECTION 13.5 RIGHTS OF LIMITED PARTNERS................................42
SECTION 13.6 TERMINATION...............................................43
ARTICLE XIV. AMENDMENTS AND MEETINGS........................................43
SECTION 14.1 AMENDMENTS................................................43
SECTION 14.2 AMENDMENT OF CERTIFICATE..................................43
SECTION 14.3 MEETINGS OF PARTNERS......................................43
ARTICLE XV. MISCELLANEOUS...................................................45
SECTION 15.1 NOTICES...................................................45
SECTION 15.2 POWER OF ATTORNEY.........................................45
SECTION 15.3 ENTIRE AGREEMENT..........................................46
SECTION 15.4 GOVERNING LAW.............................................46
SECTION 15.5 EFFECT....................................................46
SECTION 15.6 PRONOUNS AND NUMBER.......................................46
SECTION 15.7 CAPTIONS..................................................46
SECTION 15.8 PARTIAL ENFORCEABILITY....................................46
SECTION 15.9 COUNTERPARTS..............................................46
SECTION 15.10 WAIVER OF PARTITION....................................47
SECTION 15.11 REMEDIES...............................................47
SCHEDULE 1..................................................................49
ANNEX A FORM OF L.P. CERTIFICATE............................................1
[ ] CERTIFICATE EVIDENCING PREFERRED
PARTNERSHIP SECURITIES OF TXU EUROPE FUNDING I, L.P. __% PREFERRED
PARTNERSHIP SECURITIES (liquidation preference $25 per Preferred
Partnership Security)........................................................1
2
[FORM OF REVERSE OF SECURITY]................................................3
ASSIGNMENT...................................................................5
3
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TXU EUROPE FUNDING I, L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of TXU Europe Funding
I, L.P., a Delaware limited partnership (the "Partnership"), dated as of
________ __, 2000, among TXU Europe Limited, a private limited company
incorporated under the laws of England and Wales (the "Company"), as the general
partner, and TXU Europe Capital I, a business trust formed pursuant to the laws
of the state of Delaware (the "Trust"), as the initial limited partner, and such
other Persons (as defined herein) who become Limited Partners (as defined
herein) as provided herein.
WHEREAS, the Certificate of Limited Partnership of the Partnership was
filed with the Office of the Secretary of State of the State of Delaware on
November 22, 1999;
WHEREAS, the Company and the Trust entered into an Agreement of Limited
Partnership of the Partnership dated as of November 22, 1999 (the "Original
Partnership Agreement"), and the Company and the Trust desire to continue the
Partnership under the Delaware Partnership Act (as defined herein) and to amend
and restate the Original Partnership Agreement in its entirety;
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 are hereby acknowledged, the parties hereto agree to amend
and restate the Original Partnership Agreement in its entirety as follows:
ARTICLE I.
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context otherwise requires, the terms
defined in this Article I shall, for the purposes of this Agreement, have the
meanings herein specified. Terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the Trust
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 Trustees" has the meaning set forth in Section 1.01 of the
Trust Agreement. "
"Affiliate" has the meaning set forth in Section 1.01 of the Trust
Agreement.
"Affiliate Investment Instruments" has the meaning set forth in Section 7.1
of this Agreement.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended or supplemented from time to time.
"Beneficiaries" has the meaning set forth in Section 11.3 of this
Agreement.
"Book-Entry Interest" means a beneficial interest in the L.P. Certificates,
ownership and transfers of which shall be maintained and made through
book-entries of a Clearing Agency as set forth in Section 12.4 of this
Agreement.
"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.
"Capital Account" has the meaning set forth in Section 3.3 of this
Agreement.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware on
November 22, 1999, as it may be amended or restated from time to time.
"Change in 1940 Act Law" has the meaning set forth in Section 1.01 of the
Trust Agreement.
"Clearing Agency" means DTC, another clearing agency, or any successor
registered as a clearing agency under Section 17A of the Exchange Act.
2
"Closing Date" has the meaning set forth in Section 1.01 of the Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
"Compounded Preferred Entitlements" has the meaning set forth in Section
6.2(b)(i) of this Agreement.
"Definitive L.P. Certificates" has the meaning set forth in Section 12.4(a)
of this Agreement.
"Delaware Partnership Act" means the Revised Uniform Limited Partnership
Act of the State of Delaware (6 Del. C. Section 17-101, et seq.), as it may be
amended from time to time, or any successor legislation.
"Delaware Trustee" has the meaning set forth in Section 1.01 of the Trust
Agreement.
"Dissolution Date" means any date (i) on which an Affiliate Investment
Instrument matures or (ii) on which the Partnership has not held any Affiliate
Investment Instruments for a period of 12 consecutive months.
"Distribution Payment Date" has the meaning set forth in Section 6.2(b)(i)
of this Agreement.
"Distributions" means the cumulative cash distributions payable by the
Partnership with respect to the Interests represented by the Preferred
Partnership Securities, which amounts are payable in accordance with Sections
5.1 and 6.2(b) of this Agreement.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Eligible Debt Securities" means cash or book-entry securities, negotiable
instruments, or other securities of entities not affiliated with the Company
represented by instruments in registered form which evidence any of the
following: (a) any security issued or guaranteed as to principal or interest by
the United States of America, or by a Person controlled or supervised by and
acting as an instrumentality of the Government of the United States of America
pursuant to authority granted by the Congress of the United States, or any
certificate of deposit for any of the foregoing; (b) commercial paper issued
pursuant to Section 3(a)(3) of the Securities Act and having, at the time of the
investment or contractual commitment to invest therein, a rating from each of
S&P and Moody's in the highest investment rating category granted by such rating
agency and having a maturity not in excess of nine months; (c) demand deposits,
time deposits and certificates of deposit which are fully insured by the FDIC,
in no case having a maturity greater than nine months; (d) repurchase
obligations, having a maturity of no greater than nine months with respect to
any security that is a direct obligation of, or fully guaranteed by, the
Government of the United States of America or any agency or instrumentality
3
thereof, the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company which is an Eligible Institution and the deposits
of which are insured by the FDIC; and (e) any other security which is identified
as a permitted investment of a finance subsidiary pursuant to Rule 3a-5 under
the 1940 Act at the time it is acquired by the Partnership.
"Eligible Institution" means a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank), (1)(i) which
has either (A) a long-term unsecured debt rating of AA or better by S&P and Aa
or better by Moody's or (B) a short-term unsecured debt rating or a certificate
of deposit rating of A-1+ or better by S&P and P-1 or better by Moody's and (ii)
whose deposits are insured by the FDIC or (2)(i) the parent of which has a
long-term or short-term unsecured debt rating which signifies investment grade
and (ii) whose deposits are insured by the FDIC.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"FDIC" means the United States Federal Deposit Insurance Corporation or any
successor thereto.
"Fiscal Period" means each calendar quarter.
"Fiscal Year" means the calendar year.
"General Partner" means the Company, 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 terms of this Agreement.
"General Partner Capital Contribution" means the contribution by the
General Partner to the Partnership made contemporaneously with the issuance of
the Preferred Partnership Securities, in an amount equal to 15/85ths of the
amount contributed by the Limited Partner to the Partnership pursuant to Section
3.1(c) of this Agreement.
"General Partner Interest" means the Interest of the General Partner in the
Partnership.
"Holder" means a Limited Partner in whose name an L.P. Certificate
representing Preferred Partnership Securities is registered.
"Indentures" means the Indentures between the Company and certain of its
subsidiaries, and The Bank of New York, as Indenture Trustee, dated as of
____________ 2000, forms of which are attached hereto as Exhibit A.
"Independent Financial Adviser" shall mean a nationally recognized
accounting firm, bank or investment banking firm which shall be designated by
the Company and which firm does not (and whose directors, officers, employees
and affiliates do not) have a direct or indirect material equity interest in the
Company or any of its subsidiaries.
4
"Initial Debentures" has the meaning set forth in Section 7.1(b) of this
Agreement.
"Initial Partnership Proceeds" means the aggregate proceeds received by the
Partnership from the sale of the Preferred Partnership Securities and the
General Partner Capital Contribution.
"Interest" means the entire ownership interest of a Partner in the
Partnership at any particular time, including, without limitation, its interest
in the capital, profits, and losses of, and distributions from, the Partnership.
"Investment Affiliate" means any corporation, partnership, limited
liability company or other entity (other than the Partnership or the Trust) that
(i) is controlled by the Company 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
Securities and Exchange Commission.
"Investment Event of Default" means an event of default under any Affiliate
Investment Instrument.
"Investment Guarantee" has the meaning specified in Section 1.01 of the
Trust Agreement.
"Investment Offer" has the meaning specified in Section 7.2(b) of this
Agreement.
"Limited Partner" means the Trust, in its capacity as the initial limited
partner of the Partnership, and any Person who is admitted to the Partnership as
a limited partner pursuant to the terms of this Agreement, in such Person's
capacity as a limited partner of the Partnership.
"Liquidator" has the meaning specified in Section 13.3 of this Agreement.
"L.P. Certificate" means a certificate substantially in the form attached
hereto as Annex A, evidencing the Preferred Partnership Securities held by a
Limited Partner.
"Majority in Liquidation Preference" means Holders of Preferred Partnership
Securities, voting together as a single class, whose aggregate liquidation
preferences represent more than 50% of the aggregate liquidation preference of
all Preferred Partnership Securities then outstanding.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor thereto.
"Net Income" and "Net Loss", respectively, for any Fiscal Period mean the
income and loss, respectively, of the Partnership for such Fiscal Period as
determined in accordance with the method of accounting followed by the
Partnership for United States federal income tax purposes, including any income
exempt from tax and any noncapital, nondeductible expenditures of the
Partnership which are described in the Code.
5
"100% in Liquidation Preference" means Holders of Preferred Partnership
Securities, voting together as a single class, whose aggregate liquidation
preferences represent 100% of the aggregate liquidation preference of all
Preferred Partnership Securities then outstanding.
"Original Partnership Agreement" has the meaning set forth in the recitals
to this Agreement.
"Partners" means the General Partner and the Limited Partner, collectively,
where no distinction is required by the context in which the term is used.
"Partnership Covered Person" means any Partner, any Affiliate of a Partner
or any officers, directors, shareholders, partners, members, employees,
representatives or agents of a Partner or its respective Affiliates, or any
employee or agent of the Partnership or its Affiliates or any Special
Representative.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
"Partnership Guarantee" means the Partnership Guarantee Agreement between
the Company and The Bank of New York, as trustee, dated as of ________ __, 2000
in favor of the Holders with respect to the Preferred Partnership Securities, as
amended or supplemented from time to time.
"Partnership Indemnified Person" means the General Partner, any Special
Representative, any Affiliate of the General Partner or any Special
Representative or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the General Partner or any Special
Representative, or any of their respective Affiliates, or any employee or agent
of the Partnership or its Affiliates.
"Partnership Investment Company Event" means that the General Partner shall
have requested and received 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 Partnership is or will be considered an
"investment company" which is required to be registered under the 1940 Act.
"Partnership Liquidation Distribution" has the meaning set forth in Section
6.2(g) of this Agreement.
"Partnership Special Event" means either a Partnership Tax Event or a
Partnership Investment Company Event.
"Partnership Tax Event" means that the General Partner: (A) shall have
requested, received and delivered to the Partnership 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 Partnership is, or will
be, subject to United States federal income tax or United Kingdom corporation
6
tax or income tax with respect to income accrued or received on the Affiliate
Investment Instruments or the Eligible Debt Securities, (ii) the Partnership 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 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 taxation purposes; or (B)
has certified to the Partnership 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 Partnership that the General Partner cannot avoid the requirement to pay
such Additional Amounts by using reasonable efforts.
"Paying Agent" shall have the meaning set forth in Section 12.5(b) of this
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.
"Power of Attorney" means the Power of Attorney granted pursuant to Section
15.2 of this Agreement.
"Preferred Entitlement" shall have the meaning set forth in section
6.2(b)(i) of this Agreement.
"Preferred Partnership Securities" represent the Interests of Limited
Partners and have the stated liquidation preference and designation set forth in
Section 6.2(a) of this Agreement.
"Preferred Partnership Security 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 DTC, or on the books of a Person maintaining an
account with DTC (directly as a participant or as an indirect participant, in
each case in accordance with the rules of DTC or such participant).
"Preferred Return" means an amount equal to % per annum of the stated
liquidation preference of a Preferred Partnership Security, calculated on the
basis of a 360-day year consisting of twelve 30-day months, or, for any period
shorter than a full 90-day quarter, on the basis of the actual number of days
elapsed in such quarter. The Preferred Return shall be calculated on the basis
of quarterly periods ending on , , , and , and shall accumulate and be
cumulative from the date of original issue.
"Preferred Trust Securities" has the meaning specified in Section 8.01 of
the Trust Agreement.
7
"Preferred Trust Securities Guarantee" means the Preferred Trust Securities
Guarantee Agreement between the Company and The Bank of New York, as trustee,
dated as of ________ __, 2000, for the benefit of the holders of the Preferred
Trust Securities, as amended or supplemented from time to time.
"Property Trustee" has the meaning set forth in Section 1.01 of the Trust
Agreement.
"Rating Agency" means Moody's or S&P or any other nationally recognized
statistical rating organization.
"Record Date" means (i) as long as the Preferred Trust Securities (or, in
the event that the Trust is dissolved in connection with a Trust Special Event,
and Preferred Partnership Securities are distributed to holders of the Preferred
Trust Securities, as long as the Preferred Partnership Securities) remain in
book-entry only form, one Business Day prior to the relevant Distribution
Payment Dates and (ii) in the event that the Preferred Trust Securities (or in
the event that the Trust is dissolved in connection with a Trust Special Event,
and Preferred Partnership Securities are distributed to holders of Preferred
Trust Securities, the Preferred Partnership Securities) shall not continue to
remain in book-entry only form, the 15th day of the month of the relevant
Distribution Payment Date.
"Redemption Notice" has the meaning set forth in Section 6.2(e) of this
Agreement.
"Redemption Price" has the meaning set forth in Section 6.2(c) of this
Agreement.
"Registrar" has the meaning set forth in Section 12.5(b) of this Agreement.
"Reinvestment Criteria" has the meaning specified in Section 7.2(d) of this
Agreement.
"S&P" means Standard & Poor's Ratings Services or any successor thereof.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"66-2/3% in Liquidation Preference" means Holders of Preferred Partnership
Securities, voting together as a single class whose aggregate liquidation
preferences represent 66-2/3% or more of the aggregate liquidation preference of
Preferred Partnership Securities then outstanding.
"Special Representative" has the meaning set forth in Section 6.2(h)(i) of
this Agreement.
"Successor Partnership Securities" has the meaning set forth in Section
11.11 of this Agreement.
8
"Super Majority" has the meaning set forth in Section 6.2(h)(ii)(B) of this
Agreement.
"Tax Action" has the meaning set forth in Section 1.01 of the Trust
Agreement.
"Tax Matters Partner" has the meaning set forth in Section 11.10 of this
Agreement.
"10% in Liquidation Preference" means Holders of Preferred Partnership
Securities, voting together as a single class, whose aggregate liquidation
preferences represent 10% or more of the aggregate liquidation preference of the
Preferred Partnership Securities then outstanding.
"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).
"Trust" has the meaning set forth in the first paragraph of this Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement of the
Trust among TXU Business Services Company, as Initial Depositor, the Company, as
Successor Depositor, the Property Trustee, the Delaware Trustee, the
Administrative Trustees and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust, dated as of ________ __, 2000,
as amended from time to time in accordance with its terms.
"Trust Special Event" has the meaning set forth in Section 1.01 of the
Trust Agreement.
"Underwriting Agreement" means the Underwriting Agreement dated ________
__, 2000 among the Company, the Trust, the Partnership, TXU Eastern Funding
Company, the Control Party (as defined therein) and the underwriters named in
Schedule II thereto.
ARTICLE II.
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF HOLDERS
Section 2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto agree to
continue the Partnership in accordance with the terms of this Agreement. The
General Partner, for itself and as agent for the Limited Partners, shall make
every reasonable effort to assure that all certificates and documents are
properly executed and shall accomplish all filing, recording, publishing and
other acts necessary or appropriate for compliance with all the requirements for
the continuation of the Partnership as a limited partnership under the Delaware
Partnership Act and under all other laws of the State of Delaware or such other
jurisdictions in which the General Partner determines that the Partnership may
9
conduct activities. The rights and duties of the Partners shall be as provided
herein and, subject to the terms hereof, under the Delaware Partnership Act.
Section 2.2 NAME. The name of the Partnership is "TXU Europe Funding I,
L.P.", as such name may be modified from time to time by the General Partner
following written notice to the Limited Partners.
Section 2.3 PURPOSES OF THE PARTNERSHIP. The purpose of the Partnership is
to carry on the business of making and managing investments with a view to the
realization of profit to be shared between the Limited Partners and the General
Partner as set forth herein, and to that intent, to: (a) issue limited
partnership interests in the Partnership in the form of Preferred Partnership
Securities, (b) receive the General Partner Capital Contribution, (c) use
substantially all of the Initial Partnership Proceeds to purchase, as an
investment, beneficial interests in the Initial Debentures, (d) invest, at all
times, an amount equal to at least __% of the Initial Partnership Proceeds in
Eligible Debt Securities, (e) receive interest and other payments on the
Affiliate Investment Instruments and the Eligible Debt Securities held by the
Partnership from time to time, (f) make Distributions in respect of Preferred
Entitlements on the Preferred Partnership Securities and distributions on the
General Partner Interest if, as and when declared by the General Partner in its
sole discretion, (g) subject to the restrictions and conditions contained in
this Agreement, make additional investments in Affiliate Investment Instruments
and Eligible Debt Securities and to dispose of any such investments and (h)
except as otherwise limited herein, enter into, make and perform all contracts
and other undertakings, and engage in those activities and transactions as the
General Partner may reasonably deem necessary or advisable for the carrying out
of the foregoing purposes of the Partnership. The Partnership may not engage in
any other activities or operations except as contemplated by the preceding
sentence.
Section 2.4 TERM. The term of the Partnership commenced upon the filing of
the Certificate in the Office of the Secretary of State of the State of Delaware
and shall continue until the Partnership is dissolved in accordance with the
provisions of this Agreement.
Section 2.5 REGISTERED AGENT AND OFFICE. The Partnership's registered agent
and office in Delaware shall be RL&F Service Corp., One Xxxxxx Square, 10th
Floor, Tenth and Xxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx, 00000.
At any time, the General Partner may designate another registered agent and/or
registered office.
Section 2.6 PRINCIPAL PLACE OF ACTIVITY. The principal place of activity of
the Partnership shall be c/o TXU Business Services Company, Energy Plaza, 0000
Xxxxx Xxxxxx, Xxxxxx, Xxxxx 00000. Upon ten days' written notice to the
Partners, the General Partner may change the location of the Partnership's
principal place of activity, provided that such change has no material adverse
effect upon any Partner.
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER. The name and address of
the General Partner are as follows:
TXU Europe Limited
The Adelphi
10
0-00 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx
XX0X 0XX
Attn: Treasurer
The General Partner may change its name or address from time to time, in which
event the General Partner shall promptly notify the Limited Partners of any such
change.
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General Partner shall
cause the Partnership to become qualified, formed or registered under the
applicable qualification, fictitious name or similar laws of any jurisdiction in
which the Partnership conducts activities.
Section 2.9 ADMISSION OF HOLDERS OF PREFERRED PARTNERSHIP SECURITIES.
(a) Without execution of this Agreement, upon the receipt of an L.P.
Certificate by a Person, whether by purchase, gift, devise or other valid
transfer, which receipt shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect such Person's admission as
a Limited Partner, such Person shall be admitted to the Partnership as a Limited
Partner and shall become bound by this Agreement.
(b) The name and mailing address of each Partner and the amount contributed
by such Partner to the capital of the Partnership shall be listed on the books
and records of the Partnership. The General Partner shall be required to update
the books and records from time to time as necessary to accurately reflect such
information.
ARTICLE III.
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
HOLDER'S INTEREST; CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS.
(a) The General Partner has, prior to the date hereof, contributed an
aggregate of $15.00 to the capital of the Partnership, which amount is equal to
at least 15% of the total capital contributions to the Partnership, after taking
into account the contribution of the initial Limited Partner referred to in
Section 3.1(b). Contemporaneous with the issuance of the Preferred Partnership
Securities, the General Partner shall make the General Partner Capital
Contribution.
(b) The initial Limited Partner has, prior to the date hereof, contributed
the amount of $85.00 to the capital of the Partnership.
(c) On the Closing Date, the Trust, as the initial Limited Partner, shall,
in exchange for a definitive L.P. Certificate, contribute to the capital of the
Partnership on behalf of the Trust an amount in cash equal to the gross
11
proceeds from the sale of the Preferred Trust Securities. On such date, the
Trust shall continue to be the sole Limited Partner.
(d) No Limited Partner shall at any time be required to make any additional
capital contributions to the Partnership, except as may be required by law.
Section 3.2 HOLDER'S INTEREST REPRESENTED BY PREFERRED PARTNERSHIP
SECURITIES. A Holder's Interest shall be represented by the Preferred
Partnership Securities held by or on behalf of such Partner. Each Holder's
respective ownership of Preferred Partnership Securities shall be set forth on
the books and records of the Partnership. Each Partner hereby agrees that its
Interest in the Partnership shall for all purposes be personal property. No
Partner shall have an interest in specific Partnership property.
Section 3.3 CAPITAL ACCOUNTS.
(a) ESTABLISHMENT AND MAINTENANCE OF CAPITAL ACCOUNTS. The Partnership
shall establish and maintain a separate account (the "Capital Account") for each
Partner. The initial balance of the Capital Account for each Partner shall be
the amount as set out opposite the name of each of the Partners on Schedule 1
attached hereto. The Capital Account of each Partner shall be increased by (i)
the dollar amount of any additional contributions made by such Partner and (ii)
allocations to such Partner of income and gain (including income exempt from
tax). The Capital Account of each Partner shall be decreased by (i) the dollar
amount of any distributions made to such Partner, and (ii) allocations to such
Partner of loss and deduction (including noncapital, nondeductible expenditures
not deductible in computing the Partnership's income or loss for United States
federal income tax purposes).
(b) COMPLIANCE WITH REGULATIONS. Notwithstanding any other provision of
this Agreement to the contrary, the provisions of Section 3.3(a) regarding the
maintenance of Capital Accounts shall be construed so as to comply with the
Treasury Regulations promulgated under section 704 of the Code. The General
Partner, in its sole discretion, is authorized to modify such provisions to the
minimum extent necessary to comply with such Treasury Regulations.
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS. Except as provided herein,
no Partner shall be entitled to interest on or with respect to any capital
contribution to the Partnership.
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS. Subject to
Section 3.1(b) hereof, no Partner shall be entitled to withdraw any part of such
Partner's capital contribution to the Partnership. No Partner shall be entitled
to receive any distributions from the Partnership, except as provided in this
Agreement.
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ARTICLE IV.
ALLOCATIONS
Section 4.1 NET INCOME AND NET LOSSES. After giving effect to the special
allocation provisions set forth in Section 4.2, which special allocations shall
take precedence over any allocations made pursuant to this Section 4.1,
(a) the Net Income for each Fiscal Period of the Partnership shall be
allocated as follows:
(i) First, to each Holder in an amount equal to the excess, if any, of
(A) all Net Losses, if any, allocated to each such Holder from the date of
issuance of the Preferred Partnership Security through and including the
close of such Fiscal Period pursuant to Section 4.1(b)(ii) below over (B)
the amount of Net Income, if any, allocated to each such Holder pursuant to
this Section 4.1(a)(i) in all prior Fiscal Periods.
(ii) Second, to the Holders in an amount equal to the excess of (A)
the Preferred Return accumulated on the Preferred Partnership Securities
from the date of their issuance through and including the last day of such
Fiscal Year, over (B) the amount of Net Income allocated to the Holders
pursuant to this Section 4.1(a)(ii) in all prior Fiscal Periods. Amounts
allocated to the Holders shall be allocated among such Holders in
proportion to the number of Preferred Partnership Securities held by such
Holders.
(iii) Any remaining Net Income shall be allocated to the General
Partner.
(b) The Net Loss for any Fiscal Period of the Partnership shall be
allocated as follows:
(i) First, to the General Partner until the balance of the General
Partner's Capital Account is reduced to zero, provided, however, that the
aggregate amount of Net Losses allocated to the General Partner pursuant to
this Section 4.1(b)(i) shall not exceed the sum of 14% of the total capital
contributions of all Partners plus the aggregate Net Income allocated to
the General Partner pursuant to this Section 4.1.
(ii) Second, to the Holders in proportion to their respective
aggregate Capital Account balances, until the Capital Account balances of
such Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the General
Partner.
(c) DAILY DETERMINATION. For purposes of determining the profits, losses or
any other items allocable to any period, profits, losses and any such other
items shall be determined on a daily basis, unless the General Partner
determines that another method is permissible under Section 704 of the Code and
the Treasury Regulations promulgated thereunder. Unless otherwise specified,
such profits, losses or other items shall be determined for each Fiscal Period.
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Section 4.2 SPECIAL ALLOCATIONS.
(a) All expenditures that are incurred by, or on behalf of, the Partnership
and paid, or otherwise reimbursed, by the General Partner out of its own funds
shall be allocated entirely to the General Partner.
(b) In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of the Partnership's income
(including gross income) shall be specially allocated to such Partner in a
manner sufficient to eliminate the deficit, if any, in the balance of the
Capital Account of such Partner as quickly as possible. The foregoing is
intended to be a "qualified income offset" provision as described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in
all respects in accordance with such Treasury Regulation.
(c) SECTION 704 COMPLIANCE. While this Agreement does not specifically
provide for certain provisions required by Treasury Regulation Sections
1.704-1(b) and 1.704-2 because those provisions apply to transactions that are
not expected to occur as regards the Partnership, the Partners intend that the
allocations under Section 4.1 conform to Treasury Regulations Sections
1.704-1(b) and 1.704-2 (including, without limitation, the minimum gain
chargeback, chargeback of partner nonrecourse debt minimum gain and partner
nonrecourse debt provisions of such Treasury Regulations), and, to the extent
necessary due to the occurrence of unexpected events, the General Partner shall
make such changes in the allocations under Section 4.1 as it believes are
reasonably necessary to meet the requirements of such Treasury Regulations.
(d) ADJUSTMENT OF ALLOCATIONS. If the allocations set forth in this Article
IV are adjusted by the Internal Revenue Service and the Tax Matters Partner
agrees to such adjustments, such allocations shall be amended to the minimum
extent necessary to conform with such adjustments.
(e) ADDITIONAL ALLOCATIONS. Notwithstanding the foregoing, if, upon the
dissolution of the Partnership and after taking into account all allocations of
Net Income and Net Losses (and other tax items) under this Article IV, the
distributions to be made in accordance with positive Capital Account balance
would not result in a return of the liquidation preference of the Preferred
Partnership Securities plus the accumulated and unpaid Preferred Return, then
gross items of income and gain (and other tax items) for the taxable year of the
dissolution (and, to the extent permitted under section 761(c) of the Code,
gross items of income and gain, and other tax items, for the immediately
preceding taxable year) shall be allocated to the Partners to increase or
decrease their respective Capital Account balances so that the final
distribution will be result in a an amount equal to the aggregate liquidation
preference of the Preferred Partnership Securities plus the amount of
accumulated and unpaid Preferred Return being distributed to the Limited
Partners.
Section 4.3 WITHHOLDING. The General Partner on behalf of the Partnership
shall comply with withholding requirements under Federal, state and local law
and shall remit amounts withheld to and file required forms with applicable
jurisdictions. To the extent that the Partnership is required to withhold and
pay over any amounts to any authority with respect to distributions
14
or allocations to any Partner, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Partner. In the event of
any claimed over-withholding, Partners shall be limited to an action against the
applicable jurisdiction. If the amount withheld was not withheld from actual
distributions, the General Partner on behalf of the Partnership may reduce
subsequent distributions by the amount of such withholding. Each Partner agrees
to furnish the General Partner on behalf of the Partnership with any
representations and forms as shall reasonably be requested by the Partnership to
assist it in determining the extent of, and in fulfilling, its withholding
obligations.
ARTICLE V.
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. The Limited Partners shall receive periodic
Distributions with respect to Preferred Entitlements, redemption payments and
liquidation distributions in accordance with the terms of the Preferred
Partnership Securities set forth in Article VI. The General Partner shall in its
sole discretion determine whether and when Distributions shall be payable;
provided, however, that if the General Partner shall determine a Distribution
will not be paid on a scheduled Distribution Payment Date, the General Partner
shall give notice of its determination not to pay such Distribution to Limited
Partners of record as of the Record Date for the payment of such Distribution;
provided, further, however, that the General Partner shall not declare
Distributions, and no Distributions shall be payable by the Partnership to the
General Partner in respect of its General Partner Interest unless all
Distributions in respect of accumulated and unpaid Preferred Entitlements,
including any Distributions in respect of Compounded Preferred Entitlements,
have been paid in full for all prior Fiscal Periods. Subject to the immediately
preceding sentence, to the extent that the aggregate payments of interest (or
dividends) received by the Partnership in respect of Affiliate Investment
Instruments and Eligible Debt Securities for each Fiscal Period exceed the
amount of Distributions in respect of Preferred Entitlements, including any
Distributions in respect of Compounded Preferred Entitlements, paid on the
Preferred Partnership Securities for such Fiscal Period, the General Partner, in
its sole discretion may declare and distribute such excess funds to the General
Partner in respect of its General Partner Interest.
Section 5.2 LIMITATIONS ON DISTRIBUTIONS. The Partnership shall not make a
Distribution to any Partner on account of such Partner's Interest if such
Distribution would violate Section 17-607 of the Delaware Partnership Act or
other applicable law.
ARTICLE VI.
ISSUANCE OF PREFERRED PARTNERSHIP SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING PREFERRED PARTNERSHIP SECURITIES.
(a) There is hereby authorized for issuance and sale Preferred Partnership
Securities having an aggregate liquidation preference of $___________ and having
the designation, annual distribution rate, liquidation preference, redemption
15
terms, and other powers, preferences and special rights and limitations set
forth in this Article VI.
(b) The payment of Distributions (including payments of distributions by
the Partnership in liquidation or on redemption in respect of Preferred
Partnership Securities) shall be guaranteed by the Company pursuant to and to
the extent set forth in the Partnership Guarantee. The Holders hereby authorize
The Bank of New York (or its successor), as trustee under the Partnership
Guarantee, to hold the Partnership Guarantee on behalf of the Holders. In the
event of an appointment of a Special Representative pursuant to Section 6.2
(h)(i), among other things, to enforce the Partnership Guarantee, the Special
Representative may take possession of the Partnership Guarantee for such
purpose. If no Special Representative has been appointed to enforce the
Partnership Guarantee, the General Partner and The Bank of New York, as trustee,
each has the right to enforce the Partnership Guarantee on behalf of the
Holders. The Holders, by acceptance of such Preferred Partnership Securities,
acknowledge and agree to the subordination provisions in, and other terms of,
the Partnership Guarantee.
(c) The Partnership may not issue any interests in the Partnership other
than the Preferred Partnership Securities and the General Partner Interest,
provided that the Partnership may accept additional capital contributions from
the General Partner with respect to the General Partner Interest. All Preferred
Partnership Securities shall rank senior to all other Interests in the
Partnership in respect of the right to receive Distributions. All Preferred
Partnership Securities redeemed, purchased or otherwise acquired by the
Partnership shall be canceled. The Preferred Partnership Securities will be
issued in registered form only.
(d) No Holder shall be entitled as a matter of right to subscribe for or
purchase, or have any preemptive right with respect to, any part of any new or
additional limited partnership interests, or of securities convertible into any
Preferred Partnership Securities or other limited partnership interests, whether
now or hereafter authorized and whether issued for cash or other consideration
or by way of a distribution
Section 6.2 PREFERRED PARTNERSHIP SECURITIES.
(a) DESIGNATION. A total of _________________ Preferred Partnership
Securities, stated liquidation preference $25 per Preferred Partnership
Security, are hereby designated as "___% Preferred Partnership Securities".
(b) PREFERRED ENTITLEMENTS AND DISTRIBUTIONS.
(i) The Holders shall be entitled to receive Distributions to the
extent of amounts at a rate per annum of % of the stated liquidation
preference of $25 per Preferred Partnership Security ("Preferred -----
Entitlements"), calculated on the basis of a 360-day year consisting of
twelve 30-day months, and computed by reference to quarterly periods ending
on March 31, June 30, September 30 and December 31 of each year commencing
[June 30, 2000] (each, a "Distribution Payment Date"). For any period
shorter than a full 90-day quarter, Preferred Entitlements will be computed
on the basis of the actual number of days elapsed in such 90-day quarter.
Preferred Entitlements shall, from the date of original issue, accumulate
and be cumulative. Preferred Entitlements not distributed on the scheduled
16
Distribution Payment Date will accumulate and compound quarterly at the
rate of __% per annum (such amount in excess of such preferred entitlements
is herein referred to as "Compounded Preferred Entitlements"). Preferred
Entitlements and Compounded Preferred Entitlements (if any) shall be
cumulative from the Closing Date. In the event that the Distribution
Payment Date is not a Business Day, then the relevant Distribution Payment
Date shall be the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such distribution subject
to the delay) except that, if such Business Day is in the next succeeding
calendar year, such relevant Distribution Payment Date shall be 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
(ii) Distributions in respect of Preferred Entitlements on the
Preferred Partnership Securities will be payable quarterly in arrears on
each Distribution Payment Date, commencing __________, if, as and when,
declared by the General Partner in its sole discretion, out of the assets
of the Partnership legally available therefor. Distributions in respect of
Preferred Entitlements will be payable to the Holders as they appear on the
books and records of the Partnership on the relevant Record Date. If the
Trust or the Property Trustee is the Holder of the Preferred Partnership
Securities, all Distributions in respect of Preferred Entitlements shall be
made by wire transfer of same day funds to such Holder by 10:00 a.m., New
York City time, on the applicable Distribution Payment Date. Distributions
in respect of Preferred Entitlements payable on any Preferred Partnership
Securities that are not punctually paid on the relevant Distribution
Payment Date or the Business Day specified in section 6.2(b)(i) will not to
be payable to the Person in whose name such Preferred Partnership
Securities are registered on the relevant Record Date, and such
Distribution will instead be payable to the Person in whose name such
Preferred Partnership Securities are registered on the special record date
or other specified date for payment of such Distribution.
(c) OPTIONAL REDEMPTION. Preferred Partnership Securities shall be
redeemable at the option of the General Partner, in whole, at any time, or in
part, from time to time, on or after ________ __, ____, upon not less than 30
nor more than 60 days notice, at an amount per Preferred Partnership Security
equal to $25 plus accumulated and unpaid Distributions in respect of Preferred
Entitlements thereon, including any Compounded Preferred Entitlements, to the
date fixed for redemption (the "Redemption Price"). The Partnership may not
redeem the Preferred Partnership Securities in part unless all Distributions in
respect of accumulated and unpaid Preferred Entitlements, including any
Compounded Preferred Entitlements, have been paid in full on all Preferred
Partnership Securities for all Fiscal Periods terminating on or prior to the
date of redemption. If a partial redemption of the Preferred Partnership
Securities would result in the delisting of the Preferred Trust Securities (or,
if the Trust is dissolved in connection with a Trust Special Event, or if a
partial redemption would result in the delisting of the Preferred Partnership
Securities), the Partnership may only redeem the Preferred Partnership
Securities in whole but not in part.
(d) SPECIAL EVENT REDEMPTIONS. If, at any time, a Partnership Special Event
shall occur and be continuing, the General Partner shall, within 90 days
following the occurrence of such Partnership Special Event, elect to either (i)
17
redeem the Preferred Partnership Securities in whole (but not in part), upon not
less than 30 or more than 60 days notice at the Redemption Price, provided,
however, that, if at the time there is available to the Partnership the
opportunity to eliminate, within such 90-day period, the Partnership Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other reasonable measure that in the sole judgment of
the General Partner has or will cause no material adverse effect on the
Partnership, the Trust, the Company or the Holders, the General Partner will
pursue such measure in lieu of redemption; or (ii) cause the Preferred
Partnership Securities to remain outstanding, provided that in the case of this
clause (ii), the General Partner shall pay any and all costs and expenses
(including any tax or governmental charges) incurred by or payable by the
Partnership which are attributable to the Partnership Special Event.
(e) REDEMPTION PROCEDURES.
(i) Notice of any redemption of Preferred Partnership Securities (a
"Redemption Notice") will be given by the Partnership by mail to each
Holder to be redeemed not less than 30 nor more than 60 days before the
date fixed for redemption. For purposes of the calculation of the date of
redemption and the dates on which notices are given pursuant to this
Section 6.2(e)(i), a Redemption 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 Notice shall be addressed to the Holders at the
address of each such Holder appearing in the books and records of the
Partnership. No defect in the Redemption Notice or in the mailing thereof
with respect to any Holder shall affect the validity of the redemption
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Partnership Securities are to be redeemed, the Preferred Partnership
Securities to be redeemed shall be redeemed pro rata or pursuant to the
rules of any securities exchange on which the Preferred Partnership
Securities are then listed, provided that, in the event Preferred
Partnership Securities are distributed to holders of the Preferred Trust
Securities are held of record in book-entry only form by DTC or its nominee
(or any successor Clearing Agency or its nominee), DTC will reduce, in
accordance with DTC's customary procedures, the amount of the interest of
each Clearing Agency Participant in the Preferred Partnership Securities to
be redeemed; provided, that if, as a result of such pro rata redemption,
Holders would hold fractional interests in the Preferred Partnership
Securities, the General Partner may adjust the amount of the interest of
each Holder to be redeemed to avoid such fractional interests.
(iii) If the Partnership gives a Redemption Notice (which notice will
be irrevocable), then by 12:00 noon, New York City time, on the redemption
date, the Partnership (A) if the Preferred Partnership Securities are
represented by global certificates held by DTC, will irrevocably deposit
with DTC funds sufficient to pay the applicable Redemption Price and will
give DTC irrevocable instructions and authority to pay the Redemption Price
in respect of the Preferred Partnership Securities held through DTC in
global form or (B) if the Preferred Partnership Securities are held in
certificated form, will irrevocably deposit with the Paying Agent, funds
sufficient to pay the applicable Redemption Price of the amount of any such
Preferred Partnership Securities and will give to the Paying Agent
irrevocable instructions and authority to pay such amounts to the Holders,
18
upon surrender of their certificates, by check, mailed to the address of
the relevant Holder appearing on the books and records of the Partnership
on the redemption date; provided, however, that for so long as the Trust or
the Property Trustee of the Trust shall hold the Preferred Partnership
Securities, payment of cash shall be made by wire transfer in same day
funds to the Holder by 12:00 Noon, New York City time, on the redemption
date. Upon satisfaction of the foregoing conditions, then immediately prior
to the close of business on the date of such deposit or payment, all rights
of Holders of such Preferred Partnership Securities so called for
redemption will cease, except the right of the Holders to receive the
Redemption Price, but without interest on such Redemption Price, and from
and after the date fixed for redemption, such Preferred Partnership
Securities will not accumulate Distributions in respect of Preferred
Entitlements or bear interest. In the event that any date fixed for
redemption of Preferred Partnership Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the
next succeeding Business Day (and without any interest in respect of any
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
in each case, with the same force and effect as if made on such date fixed
for redemption. In the event that payment of the Redemption Price is
improperly withheld or refused and not paid by either the Partnership or
the Company pursuant to the Partnership Guarantee, Distributions in respect
of Preferred Entitlements on the Preferred Partnership Securities called
for redemption will continue to accumulate, from the original redemption
date until the Redemption Price is actually paid.
(f) COMPANY PURCHASES. Subject to the provisions of this Section 6.2 and
applicable law (including, without limitation, United States federal securities
laws), if Preferred Partnership Securities have been distributed to the holders
of Preferred Trust Securities, the Company or any of its Affiliates may at any
time and from time to time purchase outstanding Preferred Partnership Securities
by tender, in the open market, or by private agreement.
(g) LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution of the Partnership, the Holders will be
entitled to receive out of the assets of the Partnership such amount as is
determined in accordance with Section 13.4 (the "Partnership Liquidation
Distribution") payable in cash.
(h) VOTING RIGHTS.
(i) Special Representative.
----------------------
(A) If one or more of the following events shall occur and be
continuing (each, a "Partnership Enforcement Event"): (i) the
Partnership fails to pay Distributions in respect of Preferred
Entitlements, including any Compounded Preferred Entitlements, on the
Preferred Partnership Securities for six consecutive quarterly
distribution periods, (ii) the Company is in default on any of its
obligations under the Partnership Guarantee or (iii) an Investment
Event of Default on any Affiliate Investment Instrument and a default
under the relevant Investment Guarantee, as the case may be, occurs
19
and is continuing, then the Property Trustee on behalf of the Trust,
for so long as the Preferred Partnership Securities are held by the
Trust, will have the right, or the Holders, upon the affirmative vote
of a Majority in Liquidation Preference of the Preferred Partnership
Securities, shall have the right to enforce under this Agreement the
terms of the Preferred Partnership Securities, to the exclusion of the
General Partner, including the right (a) to appoint and authorize a
special representative of the Partnership and the Limited Partners (a
"Special Representative") to enforce (1) to the maximum extent
permitted by applicable law, the Partnership's creditors' rights and
other rights, including the right to receive payments under the
Affiliate Investment Instruments and the Investment Guarantees, (2)
the rights of the Holders under the Partnership Guarantee, and (3) the
rights of the Holders to receive Distributions in respect of Preferred
Entitlements (only if, and to the extent, declared by the General
Partner, in its sole discretion, out of funds legally available
therefor) on the Preferred Partnership Securities, and (b) to enforce
the terms of the Partnership Guarantee. Under no circumstances,
however, shall the Special Representative have authority to cause the
General Partner to declare Distributions in respect of Preferred
Entitlements on the Preferred Partnership Securities nor to have any
authority concerning the selection of Partnership Investments. When
the Special Representative acts to enforce the Partnership's
creditors' rights and other rights with respect to the Affiliate
Investment Instruments and the Investment Guarantees, the Special
Representative acts as an agent of the Partnership. When the Special
Representative acts to enforce the rights of the Holders under the
Partnership Guarantee or their rights to receive Distributions in
respect of Preferred Entitlements on the Preferred Partnership
Securities, the Special Representative acts as an agent of the
Holders. In addition, the Special Representative shall not, by virtue
of acting in such capacity, be admitted as a general or limited
partner in the Partnership or otherwise be deemed to be a general or
limited partner in the Partnership and shall have no liability for the
debts, obligations or liabilities of the Partnership.
(B) In furtherance of the foregoing, and without limiting the
powers of any Special Representative so appointed and to avoid any
doubt concerning the powers of the Special Representative, any Special
Representative, in its own name, in the name of the Partnership, in
the name of the Limited Partners, or otherwise, may institute, or
cause to be instituted, a proceeding, including, without limitation,
any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce on behalf of the Partnership the
Partnership's rights directly against the Company or any other obligor
in connection with its obligations to the Partnership, and may
prosecute such proceeding to judgment or final decree, and enforce the
same against the Company or any other obligor in connection with such
obligations and collect, out of the property, wherever situated, of
the Company or any such other obligor upon such obligations, the
monies adjudged or decreed to be payable in the manner provided by
law. The General Partner agrees to execute and deliver such documents
as may be necessary, appropriate or convenient for the Special
20
Representative to enforce the foregoing rights and obligations on
behalf and in the name of the Partnership.
(C) If the Special Representative fails to enforce its rights
under any Affiliate Investment Instrument or any Investment Guarantee
after a Holder has made a written request, such Holder may, to the
fullest extent permitted by law, directly institute a legal proceeding
against the issuer of that Affiliate Investment Instrument or the
Company to enforce the rights of the Special Representative and the
Partnership under that Affiliate Investment Instrument or such
Investment Guarantee without first instituting any legal proceeding
against the Special Representative, the Partnership or any other
Person. In any event, if a Partnership 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 of the Company to make any
required payment when due on any Investment Guarantee, then a Holder
may to the fullest extent permitted by law on behalf of the
Partnership directly institute a proceeding against such Investment
Affiliate or the Company with respect to such Affiliate Investment
Instrument or Investment Guarantee, as the case may be, for
enforcement of payment. In addition, the Partnership acknowledges
that, 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 under any Affiliate Investment Instrument
or Investment Guarantee, as the case may be, after a holder of
Preferred Trust Securities has made a written request, a holder of
record of Preferred Trust Securities may to the fullest extent
permitted by law on behalf of the Partnership directly institute a
legal proceeding against the Investment Affiliate under the Affiliate
Investment Instrument or the Company under the Investment Guarantee,
without first instituting any legal proceeding against the Property
Trustee, the Trust, the Special Representative or the Partnership. In
any event, for so long as the Trust is a Holder, 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 the Company to make any required payment when due on
any Investment Guarantee, then the Partnership acknowledges that a
holder of Preferred Trust Securities may to the fullest extent
permitted by law on behalf of the Partnership directly institute a
proceeding against such Investment Affiliate with respect to such
Affiliate Investment Instrument or against the Company with respect to
any such Investment Guarantee, in each case for enforcement of
payment. Under no circumstances shall the Special Representative, any
Holder of Preferred Partnership Securities or any holder of Preferred
Trust Securities have authority to cause the General Partner to
declare Distributions in respect of Preferred Entitlements on the
Preferred Partnership Securities.
(D) For purposes of determining whether the Partnership has
deferred payment of Distributions in respect of Preferred Entitlements
for ____ consecutive quarters, Distributions in respect of Preferred
Entitlements shall be deemed to remain in arrears, notwithstanding any
Distributions in respect of Preferred Entitlements, until full
21
Distributions in respect of Preferred Entitlements, including
Compounded Preferred Entitlements, have been or contemporaneously are
paid with respect to all quarterly Distribution periods terminating on
or prior to the date of payment of such cumulative Distributions. Not
later than 30 days after such right to appoint a Special
Representative arises, the General Partner will convene a meeting for
election of a Special Representative. If the General Partner fails to
convene such meeting within such 30-day period, the Holders of not
less than 10% in Liquidation Preference of the Preferred Partnership
Securities will be entitled to convene such meeting. The provisions of
Section 14.3 relating to the convening and conduct of meetings of the
Partners will apply with respect to any such meeting. In the event
that, at any such meeting, Holders of less than a Majority in
Liquidation Preference of Preferred Partnership Securities entitled to
vote for the appointment of a Special Representative vote for such
appointment, no Special Representative shall be appointed. Any Special
Representative appointed shall cease to be a Special Representative of
the Partnership and the Limited Partners if (x) the Partnership (or
the Company pursuant to the Partnership Guarantee) shall have paid in
full all unpaid Distributions in respect of Preferred Entitlements and
Compounded Preferred Entitlements on the Preferred Partnership
Securities, (y) the relevant Investment Event of Default or the
relevant default under the related Investment Guarantee shall have
been cured, and (z) the Company is in compliance with all its
obligations under the Partnership Guarantee, and the Company, in its
capacity as the General Partner, shall continue the activities of the
Partnership without dissolution. Notwithstanding the appointment of
any such Special Representative, the Company shall continue as General
Partner and shall retain all rights under this Agreement, including
the right to determine whether to declare, in its sole discretion, the
payment of Distributions in respect of Preferred Entitlements on the
Preferred Partnership Securities.
(ii) Certain Amendments; Waiver.
--------------------------
(A) If any proposed amendment of this Agreement provides for, or
the General Partner otherwise proposes to effect, (x) any action that
would materially adversely affect the powers, preferences or special
rights of the Holders, whether by way of amendment of this Agreement
or otherwise (including, without limitation, the authorization or
issuance of any limited partnership interests in the Partnership
ranking, as to participation in profits or distributions, or in the
assets of the Partnership, senior to the Preferred Partnership
Securities); or (y) the liquidation, dissolution, winding-up or
termination of the Partnership, other than (1) in connection with the
occurrence of a Partnership Special Event or (2) as described under
Sections 11.11 and 13.2 of this Agreement, then the Holders of
outstanding Preferred Partnership Securities will be entitled to vote
on such amendment or proposal of the General Partner (but not on any
other amendment or proposal) as a class and such amendment or proposal
shall not be effective except with the approval of Holders of a
Majority in Liquidation Preference of such outstanding Preferred
Partnership Securities having a right to vote on the matter; provided,
however, that if the Property Trustee or the Trust is the Holder of
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the Preferred Partnership Securities, any such amendment or proposal
not excepted by (1) or (2) above shall not be effective without the
prior or concurrent approval of the Holders of a majority in
liquidation amount of the outstanding Preferred Trust Securities
having a right to vote on such matters; provided, further, that no
such approval shall be required if the, liquidation, dissolution,
winding-up or termination of the Partnership is proposed or initiated
upon the initiation of proceedings, or after proceedings have been
initiated, for the dissolution, winding-up, liquidation or termination
of the General Partner.
(B) The Holders of a Majority in Liquidation Preference of
Preferred Partnership Securities may, by vote, on behalf of all the
Holders, waive any past Partnership Enforcement Event with respect to
the Preferred Partnership Securities and its consequences; provided,
that if the underlying Investment Event of Default and default on the
related Investment Guarantee.
(1) is not waivable under the related Affiliate Investment
Instrument and Investment Guarantee, such Partnership Enforcement
Event shall also not be waivable; or
(2) requires the consent or vote of the Holders of greater
than a majority in principal amount of the related Affiliate
Investment Instrument (a "Super Majority") to be waived under the
related Affiliate Investment Instrument and Investment Guarantee,
the Partnership Enforcement Event may only be waived by the vote
of the Holders of the relevant Super Majority in liquidation
preference of the Preferred Partnership Securities.
Upon such waiver, any such Partnership Enforcement Event shall
cease to exist, and shall be deemed to have been cured, for every
purpose of this Agreement, but no such waiver shall extend to any
subsequent or other Partnership Enforcement Event or impair any right
consequent thereon.
(C) A waiver of an Investment Event of Default or a default under
any Investment Guarantee by the Special Representative, acting at the
direction of the Holders of the Preferred Partnership Securities,
constitutes a waiver of the corresponding Partnership Enforcement
Event.
(iii) General Voting.
--------------
(A) Neither the General Partner nor the Special Representative
shall (1) direct the time, method and place of conducting any
proceeding for any remedy available, (2) waive any Investment Event of
Default that is waivable under the Affiliate Investment Instruments or
waive any default under the Investment Guarantees, (3) exercise any
right to rescind or annul a declaration that the principal of any
Affiliate Investment Instruments shall be due and payable, (4) waive
the breach of Section ___ of the Partnership Guarantee by the Company,
23
or (5) consent to any amendment, modification or termination of any
Affiliate Investment Instrument or Investment Guarantee, where such
consent shall be required from the holder thereof, without, in each
case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Preference of the Preferred Partnership
Securities; provided, however, that if the Property Trustee or the
Trust is the Holder, such waiver, consent or amendment or other action
shall not be effective without the prior or concurrent approval of at
least a majority in liquidation amount of the outstanding Preferred
Trust Securities having a right to vote on such matters. Neither the
General Partner nor the Special Representative shall revoke any action
previously authorized or approved by a vote of the Holders without the
approval of a Majority in Liquidation Preference of the Preferred
Partnership Securities. The General Partner shall notify all Holders
of any notice of an Investment Event of Default received with respect
to any Affiliate Investment Instrument or any default under any
Investment Guarantee.
(B) Any required approval of the Holders may be given at a
separate meeting of such Holders convened for such purpose, at a
meeting of all Partners or pursuant to written consent without prior
notice. The General Partner 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 (1)
the date of such meeting, (2) a description of any matter proposed for
adoption at such meeting on which such Holders are entitled to vote
and (3) instructions for the delivery of proxies. No vote or consent
of the Holders will be required for the Partnership to redeem and
cancel Preferred Partnership Securities in accordance with this
Agreement.
(C) Notwithstanding that the Holders are entitled to vote or
consent under any of the circumstances described above, any of the
Preferred Partnership Securities at such time that are beneficially
owned by the Company or by any entity directly or indirectly
controlled by, or under direct or indirect common control with, the
Company, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not
outstanding; provided, however, that persons (other than Affiliates of
the Company) to whom the Company or any of its Affiliates have pledged
Preferred Partnership Securities may vote or consent with respect to
such pledged Preferred Partnership Securities pursuant to the terms of
such pledge.
(D) Holders shall have no rights to remove or replace the General
Partner.
(E) Holders shall have no preemptive or similar rights.
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ARTICLE VII.
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS.
(a) All Partnership funds will be invested in the subordinated debt
securities, including the Initial Debentures, of Investment Affiliates, or
beneficial interests therein (the "Affiliate Investment Instruments"), and
Eligible Debt Securities. No more than __% of the Initial Partnership Proceeds
will be used by the Partnership to purchase the Initial Debentures meeting the
criteria set forth in this Section 7.1. The remaining funds from the Initial
Partnership Proceeds will be used to purchase Eligible Debt Securities in
accordance with the terms of this Agreement.
(b) The Partnership shall apply approximately __% of the Initial
Partnership Proceeds to purchase beneficial interests in subordinated debt
securities of two or more Investment Affiliates (such debt securities
collectively referred to as the "Initial Debentures"). The Initial Debentures
may each contain a provision that allows an affiliate of the issuer of such
Debenture to assume the obligations of such issuer subject to certain
conditions. The Partnership may purchase the beneficial interests in Initial
Debentures only upon receipt of an opinion of the Independent Financial Advisor
to the effect that (i) if such Initial Debentures were to be rated, at least one
Rating Agency would rate all the Initial Debentures investment grade at the time
such Initial Debentures are purchased by the Partnership, (ii) each Investment
Affiliate would have been capable, if supported by a full and unconditional
guarantee from the Company comparable to an Investment Guarantee, of issuing and
selling debt instruments with the same terms and conditions as the applicable
Initial Debentures to unrelated third party investors, (iii) the financial terms
and conditions of the Initial Debentures are consistent with the terms and
conditions of a public offering or a private placement pursuant to Rule 144A
under the Securities Act of such Initial Debentures and are no more favorable to
the relevant Investment Affiliate than could have been obtained by such
Investment Affiliate from unrelated third party investors pursuant to such a
public offering or private placement of such Initial Debentures. On the Closing
Date, the Partnership shall invest approximately __% of the Initial Partnership
Proceeds in Eligible Debt Securities. The terms of the Initial Debentures will
be as set forth in, or pursuant to, the Indentures.
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP.
(a) The Partnership must at all times invest an amount equal to at least
__% of the Initial Partnership Proceeds in Eligible Debt Securities.
(b) The Partnership may reinvest any payments it receives in respect of its
investments in (i) Eligible Debt Securities without limitation and (ii)
additional Affiliate Investment Instruments but only upon (A) the acceptance of
a written offer setting forth the terms and conditions on which an Investment
Affiliate would be willing to issue an Affiliate Investment Instrument to the
Partnership (an "Investment Offer") and (B) the receipt of an opinion of the
25
Independent Financial Advisor that the terms of such Affiliate Investment
Instrument set forth in such Investment Offer satisfy the Reinvestment Criteria.
(c) If the Independent Financial Advisor determines that the terms of an
Affiliate Investment Instrument (as set forth in the Investment Offer) do not
satisfy the Reinvestment Criteria, the Partnership shall be prohibited from
making any investment in such Affiliate Investment Instrument.
(d) Each Affiliate Investment, except the Initial Debentures, shall satisfy
the following criteria (the "Reinvestment Criteria"): (i) the applicable
financial terms and conditions of the proposed Affiliate Investment Instrument
be taken as a whole shall have been determined by the Independent Financial
Advisor to at least as favorable as the terms and conditions which could be
obtained by the Partnership in a contemporaneous public offering or private
placement under Rule 144A of the Securities Act of a comparable security issued
by the relevant Investment Affiliate, provided, however, that if the comparable
security would be fully and unconditionally guaranteed by any entity, the
proposed Affiliate Investment Instrument would be required to be fully and
unconditionally guaranteed by that entity; (ii) the Partnership shall not have
held any Affiliate Investment Instruments of the Investment Affiliate submitting
the Investment Offer within the three-year period ending on the date of the
Investment Offer; (iii) there shall not have been a default on any debt
obligation of the Investment Affiliate submitting the Investment Offer that was
previously owned by the Partnership and there shall have been no default in the
ten-year period immediately preceding the date of the Investment Offer by the
Investment Affiliate submitting the Investment Offer; (iv) the Investment
Affiliate submitting the Investment Offer shall not be deemed to be 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 Securities and Exchange Commission; and (v)
the Investment Affiliate submitting the Investment Offer agrees to be bound by
the covenants in section ___ of the Preferred Trust Securities Guarantee and
section ___ of the Partnership Guarantee pursuant to a written instrument
reasonably satisfactory to the trustee of the Preferred Trust Securities
Guarantee and the trustee of the Partnership Guarantee.
(e) Any payments received by the Partnership in respect of its investments
that are not invested in additional Affiliate Investment Instruments, may be
reinvested only in Eligible Debt Securities (subject to restrictions of
applicable law, including the 1940 Act).
ARTICLE VIII.
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of account of the Partnership
shall be kept by the General Partner, in which shall be entered fully and
accurately all transactions and other matters relative to the Partnership's
investments. The books and records of the Partnership, together with a certified
copy of this Agreement and of the Certificate, shall at all times be maintained
at the principal office of the General Partner and shall be open to the
inspection and examination of the Partners or their duly authorized
26
representatives for any proper purpose reasonably related to its Interest during
reasonable business hours.
(b) Notwithstanding any other provision of this Agreement to the contrary,
the General Partner may, to the maximum extent permitted by applicable law, keep
confidential from the Partners any information with respect to the Partnership,
the disclosure of which the General Partner reasonably believes is not in the
best interests of the Partnership, or is adverse to the interests of the
Partnership, or which the Partnership or the General Partner is required by law
or by an agreement with any Person to keep confidential.
(c) (i) For so long as the Preferred Partnership Securities are held by the
Property Trustee on behalf of the Trust, within one month after the close of
each Fiscal Year, the General Partner shall transmit to each Partner a statement
indicating such Partner's share of each item of Partnership income, gain, loss,
deduction or credit, for United States federal income tax purposes, for such
Fiscal Year.
(ii) In the event that the Preferred Partnership Securities are no
longer held by the Property Trustee on behalf of the Trust, as soon as
reasonably possible after the close of the Fiscal Year, the General Partner
shall transmit to each Partner the statement referred to in Section
8.1(c)(i) hereof.
Section 8.2 ACCOUNTING METHOD. For both financial and tax reporting
purposes, the books and records of the Partnership shall be kept on the accrual
method of accounting applied on a consistent basis and shall reflect all
Partnership transactions.
Section 8.3 ANNUAL AUDIT. As soon as practical after the end of each Fiscal
Year, but not later than 90 days after such end, the financial statements of the
Partnership shall be audited by a firm of independent certified public
accountants selected by the General Partner in accordance with applicable law.
The cost of such audits will be an expense of the Partnership and shall be paid
by the General Partner.
ARTICLE IX.
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES. Since the
Trust is being formed solely to facilitate a direct investment in the Preferred
Partnership Securities, the General Partner, on behalf of the Partnership hereby
agrees, at any time while the Property Trustee or the Trust is the Holder of any
Preferred Partnership Securities, to pay all the expenses of the Trust,
including, but not limited to, any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed on the Trust
by the United States, or any other domestic taxing authority, so that the net
amounts received and retained by the Trust and the Property Trustee after paying
such expenses will be equal to the amounts the Trust and the Property Trustee
would have received had no such costs or expenses been incurred by or imposed on
the Trust. The General Partner shall be liable for, and shall pay all such
expenses solely out of its own funds. In addition, if the Partnership is
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
27
any other domestic taxing authority, then, in any case, the General Partner will
pay such taxes, duties, assessments or other governmental charges out of its own
funds.
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES. In connection with the
offering, sale and issuance of the Preferred Partnership Securities by the
Partnership, the General Partner shall:
(a) pay all costs and expenses of the Partnership (including, but not
limited to, costs and expenses relating to the organization of the Partnership,
the offering, sale and issuance of the Preferred Partnership Securities
(including commissions to the underwriters in connection therewith), the fees
and expenses of the Special Representatives (if any), and the costs and expenses
relating to the operation of the Partnership, including, without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expense); and
(b) be primarily and fully liable for any indemnification obligations
arising with respect to this Agreement.
ARTICLE X.
XXXXXX, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS. The Limited Partners shall not participate in the
management or control of the Partnership's investment activity, property or
other assets, nor shall the Limited Partners engage in any activities for the
Partnership, nor shall the Limited Partners have the power to act for or bind
the Partnership, such powers being vested solely and exclusively in the General
Partner (and, upon appointment, and to the extent set forth herein, the Special
Representative). The Limited Partners shall have such rights as are set forth
herein and in the Partnership Guarantee. The Limited Partners shall have no
interest in the properties or assets of the General Partner, or any equity
therein, or in any proceeds of any sales thereof (which sales shall not be
restricted in any respect), by virtue of acquiring or owning an Interest in the
Partnership.
Section 10.2 LIABILITY. Subject to the provisions of the Delaware
Partnership Act, no Limited Partner shall be liable for the repayment,
satisfaction or discharge of any debts or other obligations of the Partnership
in excess of the Capital Account balance of such Limited Partner.
Section 10.3 PRIORITY. No Limited Partner shall have priority over any
other Limited Partner as to Partnership allocations or distributions.
28
ARTICLE XI.
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 11.1 AUTHORITY. Subject to the provisions of Section 6.2(h)(i) with
respect to the Special Representative, the General Partner shall have exclusive
and complete authority and discretion to manage the operations and affairs of
the Partnership and to make all decisions regarding the investment activity of
the Partnership. Any action taken by the General Partner shall constitute the
act of and serve to bind the Partnership. In dealing with the General Partner
acting on behalf of the Partnership no Person shall be required to inquire into
the authority of the General Partner to bind the Partnership. Persons dealing
with the Partnership are entitled to rely conclusively on the power and
authority of the General Partner as set forth in this Agreement.
Section 11.2 POWERS AND DUTIES OF THE GENERAL PARTNER. (a) Subject to the
provisions of Section 6.2(h)(i) with respect to the Special Representative, the
General Partner shall have all rights and powers of a general partner under the
Delaware Partnership Act, and shall have all authority, rights and powers in the
management of the Partnership's investment activity to do any and all other acts
and things necessary, proper, convenient or advisable to effectuate the purposes
of this Agreement, including by way of illustration but not by way of
limitation, the following:
(i) to secure the necessary goods and services required in performing
the General Partner's duties for the Partnership;
(ii) to exercise all powers of the Partnership, on behalf of the
Partnership, in connection with enforcing the Partnership's rights under
the Affiliate Investment Instruments, the Investment Guarantees and the
Partnership Guarantee;
(iii) to issue Preferred Partnership Securities and to admit Limited
Partners in connection therewith in accordance with this Agreement;
(iv) to act as registrar and transfer agent for the Preferred
Partnership Securities or designate an entity to act as registrar and
transfer agent;
(v) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including with respect
to Distributions in respect of Preferred Entitlements and voting rights and
to make determinations as to the payment of Distributions in respect of
Preferred Entitlements, and make or cause to be made all other required
payments to Holders of the Preferred Partnership Securities and to the
General Partner;
(vi) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(vii) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Partnership;
29
(viii) to deposit, withdraw, invest, pay, retain and distribute the
Partnership's funds in a manner consistent with the provisions of this
Agreement;
(ix) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Partnership's valid existence,
rights, franchises and privileges as a limited partnership under the laws
of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Limited
Partners or to enable the Partnership to invest in the Affiliate Investment
Instruments and the Eligible Debt Securities;
(x) to take all action not inconsistent with applicable law, the
Certificate or this Agreement, that the General Partner or, upon
appointment pursuant to Section 6.2(h)(i), the Special Representative
determines in its sole discretion to be necessary or desirable to ensure,
as long as such action does not adversely affect the interests of the
Holders, or cause (A) the Partnership to be deemed to be an "investment
company" required to be registered under the 1940 Act, (B) any Initial
Debenture (or any subsequent Affiliate Investment Instrument) to not be
treated as indebtedness for United States federal income tax purposes or
United Kingdom corporation tax purposes, or (C) the Partnership to be
treated as an association, or as a "publicly traded partnership" (within
the meaning of Section 7704 of the Code), taxable as a corporation for
United States federal income tax purposes or to be treated as a company for
United Kingdom taxation purposes;
(xi) to cause the Partnership to enter into and perform the
Underwriting Agreement and to purchase Eligible Debt Securities and
Affiliate Investment Instruments, as the case may be, without any further
act, vote or approval of any Partner; and
(xii) to execute and deliver any and all documents or instruments,
perform all duties and powers and do all things for and on behalf of the
Partnership in all matters necessary or desirable or incidental to the
foregoing.
(b) For so long as any Preferred Partnership Securities remain outstanding,
the General Partner covenants and agrees (i) subject to Section 12.1(b) hereof,
to remain the sole general partner of the Partnership and to maintain directly
100% ownership of the General Partner's interest in the Partnership, which
interest will at all times represent at least 1% of the total capital of the
Partnership, (ii) to cause the Partnership to remain a limited partnership and
not to voluntarily dissolve, liquidate, wind-up or be terminated, except as
permitted by this Agreement and (iii) to use its commercially reasonable efforts
to ensure that the Partnership will not be (A) an "investment company" for
purposes of the 1940 Act or (B) 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 or income tax purposes.
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER. (a) The
General Partner hereby assumes and shall be liable for the debts, obligations
and liabilities of the Partnership, including, but not limited to, any
liabilities arising under the Securities Act or the Exchange Act and all costs
30
and expenses relating to the investment by the Partnership in any Affiliate
Investment Instruments (but not any losses related to any non-payment with
respect to such investments), and agrees to pay to each Person to whom the
Partnership is now or hereafter becomes indebted or liable (the
"Beneficiaries"), whether such indebtedness, obligations or liabilities arise in
contract, tort or otherwise (excluding payment obligations of the Company to
Holders of the Preferred Partnership Securities in such Holders' capacities as
Holders of such Preferred Partnership Securities, such obligations being
separately guaranteed under the Partnership Guarantee), the full payment of such
indebtedness and any and all liabilities, when and as due. This Agreement is
intended to be for the benefit of and to be enforceable by all such
Beneficiaries whether or not such Beneficiaries have received notice hereof.
(b) The General Partner agrees to pay and be responsible for:
(i) all costs and expenses of the Partnership including, but not
limited to, costs and expenses relating to the organization of the
Partnership, the offering, sale and issuance of Preferred Partnership
Securities, the costs and expenses relating to the operation of the
Partnership (including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agents, duplicating, travel and telephone
and other telecommunications expenses) and costs and expenses incurred in
connection with the acquisition, financing, and disposition of the
Partnership's assets; and
(ii) any and all taxes (other than Federal, state and local
withholding taxes) and all liabilities, costs and expenses with respect to
such taxes of the Partnership.
Section 11.4 LIABILITY. Except as expressly set forth in this Agreement,
(a) the General Partner shall not be personally liable for the return of any
portion of the capital contributions (or any return thereon) of the Limited
Partners; (b) the return of such capital contributions (or any return thereon)
shall be made solely from assets of the Partnership; and (c) the General Partner
shall not be required to pay to the Partnership or to any Limited Partner any
deficit in any Limited Partner's Capital Account upon dissolution, winding up or
otherwise. Other than as expressly provided in this Agreement or under the
Delaware Partnership Act, no Limited Partner shall have the right to demand or
receive property other than cash for its respective Interest in the Partnership.
The General Partner shall be liable to an unlimited extent for the debts and
other obligations of the Partnership.
Section 11.5 OUTSIDE ACTIVITIES. Any Partner or Affiliate thereof may
engage in or possess an interest in other ventures of any nature or description,
independently or with others, similar or dissimilar to the activities of the
Partnership, and the Partnership and the Partners shall have no rights by virtue
of this 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 activities of the Partnership, shall not be deemed wrongful or improper. No
Partner or Affiliate thereof shall be obligated to present any particular
investment opportunity to the Partnership even if such opportunity is of a
character that, if presented to the Partnership, could be taken by the
Partnership, and any Partner or Affiliate thereof shall have the right to take
31
for its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment opportunity.
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS. Anything in this Agreement
to the contrary notwithstanding, the General Partner shall not cause or permit
the Partnership to:
(a) acquire any assets other than as expressly provided herein;
(b) do any act which would make it impractical or impossible to carry on
the ordinary activity of the Partnership as set forth in Section 2.3;
(c) possess Partnership property for other than a Partnership purpose;
(d) admit a Person as a Partner, except as expressly provided in this
Agreement;
(e) make any advances of funds to the General Partner or its Affiliates,
other than such as represented by the Affiliate Investment Instruments;
(f) perform any act that would subject any Limited Partner to liability as
a general partner in any jurisdiction;
(g) engage in any activity that is not consistent with the purposes of the
Partnership, as set forth in Section 2.3;
(h) to the fullest extent permitted by law, without the written consent of
the Holders of 66-2/3% in Liquidation Preference of the Preferred Partnership
Securities, have an order for relief entered with respect to the Partnership or
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the appointment
of or taking possession by a receiver, trustee or other custodian for all or a
substantial part of the Partnership's property, or make any assignment for the
benefit of creditors of the Partnership; or
(i) borrow money or become liable for the borrowings of any third party or
to engage in any financial or other trade or business.
Section 11.7 EXCULPATION. (a) No Partnership Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Partnership or
any Partnership Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Partnership Indemnified
Person in good faith on behalf of the Partnership and in a manner such
Partnership Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Partnership Indemnified Person by this Agreement or
by law, except that a Partnership Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Partnership Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
32
(b) A Partnership Indemnified Person shall be fully protected in relying in
good faith upon the records of the Partnership and upon such information,
opinions, reports or statements presented to the Partnership by any Person as to
matters the Partnership 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 Partnership, 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 Partners might properly be paid.
Section 11.8 FIDUCIARY DUTY. (a) To the extent that, at law or in equity, a
Partnership Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or to any other Partnership
Covered Person, a Partnership Indemnified Person acting under this Agreement
shall not be liable to the Partnership or to any other Partnership Covered
Person for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict the duties and
liabilities of a Partnership Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Partnership Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever a conflict of
interest exists or arises between Partnership Covered Persons, or (ii) whether
this Agreement or any other agreement contemplated herein or therein provides
that a Partnership Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Partnership or any Partner, the
Partnership 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 Partnership Indemnified Person, the resolution, action or term so
made, taken or provided by the Partnership Indemnified Person shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or of any duty or obligation of the Partnership Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Agreement a Partnership Indemnified Person is
permitted or required to make a decision (i) in its "discretion" or under a
grant of similar authority, the Partnership Indemnified Person shall be entitled
to consider such interests and factors as it desires, including its own
interest, and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Partnership or any other Person, or (ii) in
its "good faith" or under another express standard, the Partnership Indemnified
Person shall act under such express standard and shall not be subject to any
other or different standard imposed by this Agreement or by applicable law.
Section 11.9 INDEMNIFICATION. (a) To the fullest extent permitted by
applicable law, the Partnership shall indemnify and hold harmless each
Partnership Indemnified Person from and against any loss, damage or claim
incurred by such Partnership Indemnified Person by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good faith on
behalf of the Partnership and in a manner such Partnership Indemnified Person
33
reasonably believed to be within the scope of authority conferred on such
Partnership Indemnified Person by this Agreement, except that no Partnership
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Partnership Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 11.9 shall be provided
out of and to the extent of Partnership assets only, and no Partnership Covered
Person shall have any personal liability on account thereof.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by a Partnership Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Partnership prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Partnership of an undertaking by or on behalf
of the Partnership Indemnified Person to repay such amount if it shall be
determined that the Partnership Indemnified Person is not entitled to be
indemnified as authorized in Section 11.9(a).
Section 11.10 TAX MATTERS
(a) For purposes of section 6231(a)(7) of the Code, the "Tax Matters
Partner" shall be the Company as long as it remains the general partner of the
Partnership. The Tax Matters Partner shall keep the Limited Partners fully
informed of any inquiry, examination or proceeding.
(b) Neither the Partnership, nor the Tax Matters Partner on behalf of the
Partnership, shall make an election under section 754 of the Code.
(c) The General Partner and the Preferred Partnership Security Holders
acknowledge that they intend, for United States federal and United Kingdom
taxation purposes, that the Partnership shall be treated as a partnership (other
than a publicly traded partnership taxable as a corporation) and that the
General Partner and the Holders shall be treated as partners of the Partnership.
(d) The General Partner may retain, at the expense of the Partnership and
at its sole discretion, a nationally recognized firm of certified public
accountants which shall prepare all United States federal, state, local or other
tax and information returns of the Partnership, as required by law, and the
Schedule K-1's or any successor or similar forms or schedules.
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS. The Partnership 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 permitted pursuant to this Section 11.11.
The Partnership may, as determined by the General Partner and without the
consent of the Holders, 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 limited partnership, limited
liability company or trust organized as such under the laws of any state of the
United States of America, provided that if the Partnership is not the survivor,
(i) such successor entity either (A) expressly assumes all of the obligations of
the Partnership under the Preferred Partnership Securities or (B) substitutes
for the Preferred Partnership Securities other securities having substantially
the same terms as the Preferred Partnership Securities (the "Successor
34
Partnership Securities") so long as the Successor Partnership Securities are not
junior to any other equity securities of the successor entity, with respect to
participation in the profits and distributions, and in the assets, of the
successor entity upon dissolution, redemption or otherwise, (ii) the Investment
Affiliates expressly acknowledge such successor entity as the holder of the
Affiliate Investment Instruments, or, if the holder of the Affiliate Investment
Instruments is a depositary, then such depositary expressly acknowledges such
successor entity as the holder of beneficial interests in such Affiliate
Investment Instrument, (iii) the Preferred Partnership Securities continue to be
or any Successor Partnership Securities are or will be listed, upon notification
of issuance, on any national securities exchange or other organization on which
the Preferred Partnership Securities, if so listed, are then listed, (iv) such
merger, consolidation, amalgamation or replacement does not cause the Preferred
Trust Securities (or, in the event that the Trust is dissolved in connection
with a Trust Special Event, the Preferred Partnership Securities (including any
Successor Partnership Securities)) to be downgraded by any nationally recognized
statistical securities rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the powers, preferences
and other special rights of the holders of the Preferred Trust Securities or the
Holders of the Preferred Partnership Securities (including any Successor
Partnership Securities)) in any material respect (other than, in the case of the
Preferred Partnership Securities, with respect to any dilution of the Holders'
interest in the new resulting entity), (vi) such successor entity has a purpose
substantially identical to that of the Partnership, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
General Partner has received an opinion of nationally recognized independent
counsel to the Partnership in the United States or the United Kingdom, as
applicable, experienced in such matters to the effect that (A) such successor
entity will be treated as a "partnership" for United States federal income tax
purposes and not as an association or a publicly traded partnership taxable as a
corporation, (B) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease will not cause the Trust to be classified as other
than a grantor trust for United States federal income tax purposes, (C)
following such merger, consolidation, amalgamation, replacement conveyance,
transfer or lease, the General Partner and such successor entity will be in
compliance with the 1940 Act without registering thereunder as an investment
company, (D) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease will not adversely affect the limited liability of the Holders
of the Preferred Partnership Securities (or the Successor Partnership
Securities), and (E) following the merger, consolidation, replacement,
conveyance, transfer or lease, the Trust will not be classified as other than a
transparent entity for United Kingdom income tax purposes, and (viii) the
Company or a successor permitted by the Partnership Guarantee guarantees the
obligations of such successor entity under the Successor Partnership Securities
at least to the extent provided by the Partnership Guarantee.
ARTICLE XII.
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS.
(a) Preferred Partnership Securities shall be freely transferable by a
Holder.
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(b) Except as provided in the next sentence, the General Partner may not
assign or transfer its Interest in the Partnership in whole or in part unless,
prior to such assignment or transfer, the General Partner has obtained the
consent of the Holders of not less than 66-2/3% in Liquidation Preference of the
Preferred Partnership Securities. The General Partner may assign or transfer its
Interest without such consent to an entity that is the survivor of a merger or
consolidation of the General Partner in a transaction that meets the
requirements of Section 11.11 or to a wholly-owned direct or indirect subsidiary
of the Company provided that, in each case (i) such entity expressly accepts
such assignment or transfer of the obligations as General Partner and (ii) prior
to such assignment or transfer, the Company has received an opinion of
nationally recognized independent counsel to the Partnership in the United
States experienced in such matters to the effect that (A) the Partnership will
be treated as a partnership (and not a publicly- traded partnership) for United
States federal income and United Kingdom taxation purposes, (B) the assignment
or transfer would not cause the Trust to be classified as other than a grantor
trust for United States federal income tax purposes and as other than a
transparent entity for United Kingdom taxation purposes, (C) following such
assignment or transfer, the successor entity will be in compliance with the 1940
Act without registering thereunder as an investment company, and (D) such
assignment or transfer will not adversely affect the limited liability of the
holders of the Preferred Partnership Securities. "Permitted Successor" shall
mean an entity that is an assignee or transferee of the Interest of the General
Partner as permitted by this Section 12.1(b). The admission of a Permitted
Successor as a general partner of the Partnership shall be effective upon the
filing of an amendment to the Certificate with the Secretary of State of the
State of Delaware which indicates that the Permitted Successor has been admitted
as a general partner of the Partnership. If the General Partner assigns its
entire Interest, the General Partner shall cease to be a general partner of the
Partnership immediately following the admission of the Permitted Successor as a
general partner of the Partnership. Any such Permitted Successor is hereby
authorized to and shall continue the business of the Partnership without
dissolution.
(c) Except as provided above, no Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Agreement. Any transfer or purported transfer of any Interest not made in
accordance with this Agreement shall be null and void.
Section 12.2 TRANSFER OF L.P. CERTIFICATES. The General Partner shall
provide for the registration of L.P. Certificates and of transfers of L.P.
Certificates. Upon surrender for registration of transfer of any L.P.
Certificate, the General Partner shall cause one or more new L.P. Certificates
to be issued in the name of the designated transferee or transferees. Every L.P.
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the General Partner duly
executed by the Preferred Partnership Security Holder or his or her attorney
duly authorized in writing. Each L.P. Certificate surrendered for registration
of transfer shall be cancelled by the General Partner. A transferee of an L.P.
Certificate shall be admitted to the Partnership as a Limited Partner, shall
become bound by this Agreement and shall be entitled to the rights and subject
to the obligations of a Preferred Partnership Security Holder hereunder upon the
receipt by the transferee of an L.P. Certificate, which receipt shall be deemed
to constitute a request by such transferee that the books and records of the
Partnership reflect such transferee's admission as a limited partner. The
transferor of an L.P. Certificate, in whole, shall cease to be a Limited Partner
36
at the time immediately following the admission of the transferee of such L.P.
Certificate is admitted to the Partnership as a Limited Partner in accordance
with this Section 12.2.
Section 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED HOLDERS.
(a) Unless and until the Partnership issues a global L.P. Certificate
pursuant to Section 12.4, the Partnership shall only issue definitive L.P.
Certificates to the Preferred Partnership Security Holders.
(b) The Partnership may treat the Person in whose name any L.P. Certificate
shall be registered on the books and records of the Partnership as the sole
Holder of such L.P. Certificate and of the Preferred Partnership Securities
represented by such L.P. Certificate for purposes of receiving Distributions and
for all other purposes whatsoever (including without limitation, tax returns and
information reports) and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such L.P. Certificate or in the
Preferred Partnership Securities represented by such L.P. Certificate on the
part of any other Person, whether or not the Partnership shall have actual or
other notice thereof.
Section 12.4 BOOK-ENTRY PROVISIONS.
(a) GENERAL. The provisions of this Section 12.4 shall apply only in the
event that the Preferred Partnership Securities are distributed to the holders
of Preferred Trust Securities in connection with the involuntary or voluntary
dissolution, winding up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event. Upon the occurrence of such event, a global
L.P. Certificate representing the Book-Entry Interests shall be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Partnership and any
previously issued and still outstanding definitive L.P. Certificates shall be of
no further force and effect. The global L.P. Certificate shall initially be
registered on the books and records of the Partnership in the name of Cede &
Co., the nominee of DTC, and no Holder will receive a new definitive L.P.
Certificate representing such Holder's interests in such L.P. Certificate,
except as provided in Section 12.4(c). In connection with the involuntary or
voluntary dissolution and winding up of the Trust as a result of the occurrence
of a Trust Special Event, Cede & Co., the nominee of DTC, shall automatically be
admitted to the Partnership as a Limited Partner. Receipt of the global L.P.
Certificate shall be deemed to constitute a request by Cede & Co., the nominee
of DTC, that the books and records of the Partnership reflect its admission as a
Limited Partner. Unless and until new definitive, fully registered L.P.
Certificates (the "Definitive L.P. Certificates") have been issued to the
Preferred Partnership Security Owners pursuant to Section 12.4(c):
(i) The provisions of this Section shall be in full force and effect;
(ii) The Partnership, the General Partner and any Special
Representative shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of Distributions,
Redemption Price and liquidation proceeds on the L.P. Certificates and
receiving approvals, votes or consents hereunder) as the Preferred
37
Partnership Security Holder and the sole Holder of the L.P. Certificates
and shall have no obligation to the Preferred Partnership Security Owners;
(iii) None of the Partnership, the Trust, the General Partner, any
Special Representative or any agents of any of the foregoing shall have any
liability or responsibility for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global L.P.
Certificate for such beneficial ownership interests or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests; and
(iv) Except as provided in Section 12.4(c) below, the Preferred
Partnership Security Owners will not be entitled to receive physical
delivery of the Preferred Partnership Securities in definitive form and
will not be considered Holders thereof for any purpose under this
Agreement, and no global L.P. Certificate representing Preferred
Partnership Securities shall be exchangeable, except for another global
L.P. Certificate of like denomination and tenor to be registered in the
name of DTC or Cede & Co., or to a successor Clearing Agency or its
nominee. Accordingly, each Preferred Partnership Security Owner must rely
on the procedures of DTC or if such Person is not a Clearing Agency
Participant, on the procedures of the Clearing Agency Participant through
which such Person owns its interest to exercise any rights of a Holder
under the Agreement.
(b) NOTICES TO CLEARING AGENCY. Whenever a notice or other communication to
the Preferred Partnership Security Holders is required under this Agreement,
unless and until Definitive L.P. Certificates shall have been issued to the
Preferred Partnership Security Owners pursuant to Section 12.4(c), the General
Partner and any Special Representative shall give all such notices and
communications specified herein to be given to the Preferred Partnership
Security Holders to the Clearing Agency, and shall have no obligations to the
Preferred Partnership Security Owners.
(c) DEFINITIVE L.P. CERTIFICATES. Definitive L.P. Certificates shall be
prepared by the Partnership and exchangeable for the global L.P. Certificate or
L.P. Certificates if and only if (i) the Clearing Agency notifies the General
Partner that it is unwilling or unable to continue its services as a securities
depositary and no successor depositary shall have been appointed, (ii) the
Clearing Agency, at any time, ceases to be a clearing agency registered under
the Exchange Act at such time as the Clearing Agency is required to be so
registered to act as such depositary and no successor depositary shall have been
appointed, or (iii) the General Partner, in its sole discretion, determines that
such global L.P. Certificate shall be so exchangeable. Upon surrender of the
global L.P. Certificate or L.P. Certificates representing the Book-Entry
Interests by the Clearing Agency, accompanied by registration instructions, the
General Partner shall cause Definitive L.P. Certificates to be delivered to
Preferred Partnership Security Owners in accordance with the instructions of the
Clearing Agency. Neither the General Partner nor the Partnership shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Any Person receiving a
Definitive L.P. Certificate in accordance with this Section 12.4 shall be
admitted to the Partnership as a Limited Partner upon receipt of such Definitive
L.P. Certificate and shall be registered on the books and records of the
Partnership as a Holder. The Clearing Agency or the nominee of the Clearing
38
Agency, as the case may be, shall cease to be a Limited Partner under this
Section 12.4(c) at the time that at least one additional Person is admitted to
the Partnership as a Limited Partner in accordance herewith. The Definitive L.P.
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as may be required by any national securities exchange on which
Preferred Partnership Securities may be listed and is reasonably acceptable to
the General Partner, as evidenced by its execution thereof.
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT.
(a) The General Partner will act as Registrar, Transfer Agent and Paying
Agent for the Preferred Partnership Securities for so long as the Preferred
Partnership Securities are held by the Trust or, if the Trust is dissolved in
connection with a Trust Special Event, for so long as the Preferred Partnership
Securities remain in book-entry only form.
(b) Except in such case where the General Partner shall act as Registrar or
Paying Agent pursuant to Section 12.5(a) hereof, the Partnership shall maintain
in the Borough of Manhattan, City of New York, State of New York (i) an office
or agency where Preferred Partnership Securities may be presented for
registration of transfer or for exchange ("Registrar") and (ii) an office or
agency where Preferred Partnership Securities may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Preferred
Partnership Securities and of their transfer and exchange. The Partnership may
appoint the Registrar and the Paying Agent and may appoint one or more
co-registrars and one or more additional paying agents in such other locations
as it shall determine. The term "Paying Agent" includes any additional paying
agent. The Partnership may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder. If the Partnership fails to appoint or
maintain another entity as Registrar or Paying Agent, the General Partner shall
act as such.
(c) Registration of transfers of Preferred Partnership Securities shall be
effected without charge by or on behalf of the Partnership, but upon payment
(with the giving of such indemnity as the Partnership or the General Partner may
require) in respect of any tax or other governmental charges that may be imposed
in relation to the transfer.
(d) The Partnership will not be required to register or cause to be
registered the transfer of Preferred Partnership Securities after such Preferred
Partnership Securities have been called for redemption.
ARTICLE XIII.
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS. The General Partner shall not at any
time retire or withdraw from the Partnership except as otherwise permitted
hereunder. If the General Partner retires or withdraws in contravention of this
Section 13.1, it shall indemnify, defend and hold harmless the Partnership and
the other Partners from and against any losses, expenses, judgments, fines,
settlements or damages suffered or incurred by the Partnership or such other
Partners arising out of or resulting from such retirement or withdrawal.
39
Section 13.2 DISSOLUTION OF THE PARTNERSHIP.
(a) The Partnership shall not be dissolved by the admission of Partners in
accordance with the terms of this Agreement. The death, withdrawal, bankruptcy
or dissolution of a Limited Partner, or the occurrence of any other event that
terminates the Interest of a Limited Partner in the Partnership, shall not, in
and of itself, cause the Partnership to be dissolved and its affairs wound up.
To the fullest extent permitted by applicable law, upon the occurrence of any
such event, the General Partner may, without any further act, vote on approval
of any Partner, admit any Person to the Partnership as an additional or
substitute limited partner in the Partnership, which admission shall be
effective as of the date of the occurrence of such event, and the business of
the Partnership shall be continued without dissolution.
(b) The Partnership shall be dissolved and its affairs shall be wound up
upon the earliest to occur of any of the following events:
(i) upon the bankruptcy or insolvency of the General Partner;
(ii) upon the assignment by the General Partner of its entire Interest
in the Partnership when the assignee is not admitted to the Partnership as
a general partner of the Partnership in accordance with this Agreement, or
the filing of a certificate of dissolution or its equivalent with respect
to the General Partner, or the revocation of the General Partner's charter
and the expiration of 90 days after the date of notice to the General
Partner of revocation without a reinstatement of its charter, or if any
other event occurs that causes the General Partner to cease to be a general
partner of the Partnership under the Delaware Partnership Act, unless the
business of the Partnership is continued in accordance with the Delaware
Partnership Act;
(iii) the Partnership has redeemed or otherwise purchased all of the
Preferred Partnership Securities;
(iv) upon the entry of a decree of judicial dissolution under Section
17-802 of the Delaware Partnership Act;
(v) the written consent of all Partners; or
(vi) on any Dissolution Date, the Holders (or, if the Trust is the
only Holder, the holders of the Preferred Trust Securities) vote in favor
of a dissolution by 100% in Liquidation Preference of the Preferred
Partnership Securities (or, if the Trust is the only Holder, by 100% in
aggregate liquidation amount of the Preferred Trust Securities).
(c) Upon dissolution of the Partnership, the Liquidator shall promptly
notify the Partners of such dissolution.
Section 13.3 LIQUIDATION.
(a) In the event of the dissolution of the Partnership for any reason, the
General Partner (or, if the Partnership is dissolved pursuant to Section
13.2(b)(i) or (ii), then a liquidating trustee appointed by Holders of not less
40
than 66 2/3% in Liquidation Preference of the Preferred Partnership Securities
(the General Partner or such Person so appointed is hereinafter referred to as
the "Liquidator")) shall commence to wind up the affairs of the Partnership and
to liquidate the Partnership's assets; provided, however, that a reasonable time
shall be allowed for the orderly liquidation of the assets of the Partnership
and the satisfaction of liabilities to creditors so as to enable the Partners to
minimize the normal losses attendant upon liquidation. The Partners shall
continue to share all income, losses and distributions during the period of
liquidation in accordance with Articles IV and V. Subject to the provisions of
this Article XIII, the Liquidator shall have full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
property pursuant to such liquidation, giving due regard to the activity and
condition of the relevant market and general financial and economic conditions.
(b) The Liquidator shall have all of the rights and powers with respect to
the assets and liabilities of the Partnership in connection with the liquidation
and termination of the Partnership that the General Partner would have with
respect to the assets and liabilities of the Partnership during the term of the
Partnership, and the Liquidator is hereby expressly authorized and empowered to
execute any and all documents necessary or desirable to effectuate the
liquidation and termination of the Partnership and the transfer of any assets.
(c) Notwithstanding the foregoing, a Liquidator that is not a General
Partner shall not, by virtue of acting in such capacity, be deemed a Partner in
this Partnership and shall not have any of the economic interests in the
Partnership of a Partner; and such Liquidator may be compensated for its
services to the Partnership at normal customary and competitive rates for its
services to the Partnership as reasonably determined by all the Limited
Partners.
Section 13.4 DISTRIBUTION IN LIQUIDATION. The proceeds of liquidation shall
be applied in the following order of priority (and without regard to the
non-mandatory provisions of Section 17-804 of the Delaware Partnership Act):
(i) first, to creditors of the Partnership, including Partners who are
creditors, to the extent otherwise permitted by law, in satisfaction of the
liabilities of the Partnership (whether by payment or the making of
reasonable provisions for payment thereof), other than liabilities for
distributions (including Distributions) to Partners;
(ii) second, following any allocations required under Section 4.2(e)
of the Agreement, to the Limited Partners, an amount equal to and pro rata
in proportion with the positive Capital Account balances of the Limited
Partners; and
(iii) thereafter, to the General Partner.
Section 13.5 RIGHTS OF LIMITED PARTNERS. Each Limited Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership and such Partner's capital contribution (including returns
thereof), and such Partner's share of profits or losses thereof, and shall have
no recourse therefor (upon dissolution or otherwise) against the General
Partner, except under the Partnership Guarantee. No Partner shall have any right
to demand or receive property other than cash upon dissolution and termination
of the Partnership.
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Section 13.6 TERMINATION. The Partnership shall terminate when all of the
assets of the Partnership shall have been disposed of and the assets shall have
been distributed as provided in Section 13.4 and the Liquidator has executed and
caused to be filed a certificate of cancellation of the Partnership.
ARTICLE XIV.
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS.
(a) Except as provided by Section 3.3(b) and Section 6.2(h), this Agreement
may be amended by, and only by, a written instrument executed by the General
Partner without the consent of any Limited Partner; provided, however, that no
amendment shall be made, and any such purported amendment shall be void and
ineffective, to the extent the result thereof would be to (i) cause the
Partnership to be treated for United States federal income tax purposes as an
association or a publicly traded partnership taxable as a corporation or for
United Kingdom corporation or income tax purposes as a company, (ii) require the
Partnership to register under the 1940 Act, or (iii) materially adversely affect
the rights, privileges or preferences of the Preferred Partnership Securities.
(b) Notwithstanding any provision to the contrary, in the event of (i) a
dissolution of the Trust for any reason or (ii) any other distribution which
effectively causes Preferred Partnership Securities to be distributed to holders
of Preferred Trust Securities, the General Partner may amend this Agreement
without the consent of the Limited Partners to provide for (A) orderly
dissemination, purchase, sale, exchange and replacement of such Preferred
Partnership Securities, (B) all other matters to the extent required by or
desirable under then applicable law and (C) such other matters reasonably
incidental or related thereto; provided, however, that no such amendment may
materially adversely affect the rights, privileges, or preferences of the
Preferred Partnership Securities without the consent of a Majority in
Liquidation Preference of the Preferred Partnership Securities.
Section 14.2 AMENDMENT OF CERTIFICATE. In the event this Agreement shall be
amended pursuant to Section 14.1, the General Partner shall amend the
Certificate to reflect such change if it deems such amendment of the Certificate
to be necessary or appropriate.
Section 14.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are Holders may be called at any
time by the General Partner to consider and act on any matter on which Limited
Partners are entitled to act under the terms of this Agreement or the Act. The
General Partner shall call a meeting of Holders if directed to do so by Holders
of no less than 10% in Liquidation Preference as permitted by this Agreement.
Such direction shall be given by delivering to the General Partner a request in
writing stating that the signing Limited Partners desire to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Limited Partners calling a meeting shall specify in writing the L.P.
Certificates held by the Limited Partners exercising the right to call a meeting
and only those specified Interests shall be counted for purposes of determining
42
whether the required percentage set forth in the second sentence of this
paragraph has been met. Except to the extent otherwise provided in this
Agreement, the following provisions shall apply to meetings of Partners.
(b) Notice of any such meeting shall be given to all Limited Partners
having a right to vote thereat not less than seven Business Days nor more than
60 days prior to the date of such meeting. Each such notice shall set forth the
date, time and place of the meeting, a description of any matter on which
Holders are entitled to vote and instructions for the delivery of proxies or
written consents.
(c) Any action that may be taken at a meeting of the Limited Partners may
be taken without a meeting and without prior notice if a consent in writing
setting forth the action so taken is signed by Limited Partners owning not less
than the minimum Interests that would be necessary to authorize or take such
action at a meeting in which all Limited Partners 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 Limited Partners entitled to vote who have not consented
in writing. The General Partner may provide that any written ballot submitted to
the Limited Partners for the purpose of taking any action without a meeting
shall be returned to the Partnership within a specified time.
(d) Each Partner may authorize any Person to act for it by proxy on all
matters as to which a Partner is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Partner or its attorney-in-fact. 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 Partner
executing it. Except as otherwise provided herein, or pursuant to Section
14.3(f), 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 Partnership were a
Delaware corporation and the Limited Partners were stockholders of a Delaware
corporation.
(e) Each meeting of Partners shall be conducted by the General Partner or
by such other Person that the General Partner may designate.
(f) The General Partner may establish all other reasonable procedures
relating to meetings of Limited Partners or the giving of written consents, in
addition to those expressly provided, including notice of time, place or purpose
of any meeting at which any matter is to be voted on by any Partners, 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.
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ARTICLE XV.
MISCELLANEOUS
Section 15.1 NOTICES. All notices provided for in this Agreement shall be
in writing, and shall be delivered or mailed by first class or registered or
certified mail or, with respect to the Partnership and General Partner,
telecopied, as follows:
(a) if given to the Partnership, in care of the General Partner at the
Partnership's mailing address set forth below:
TXU Business Services Company
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
(b) if given to the General Partner, at its mailing address set forth
below:
TXU Europe Limited
The Adelphi
0-00 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Attention: Treasurer
(c) if given to any other Partner at the address set forth on the books and
records of the Partnership.
Section 15.2 POWER OF ATTORNEY. Each Holder of a Preferred Partnership
Security does hereby constitute and appoint the General Partner, and if
applicable, any Special Representative appointed pursuant to Section 6.2(h)(i)
of this Agreement, as its true and lawful representative and attorney-in-fact,
in its name, place and stead to make, execute, sign, deliver and file (a) any
amendment of the Certificate required because of an amendment of this Agreement
or in order to effect any change in the Partnership, (b) this Agreement, (c) any
amendments to this Agreement and (d) all such other instruments, documents and
certificates which from time to time may be required by the laws of the United
States of America, the State of Delaware or any other jurisdiction, or any
political subdivision or agency thereof, to effectuate, implement and continue
the valid and subsisting existence of the Partnership or to dissolve the
Partnership for any other purpose consistent with this Agreement and the
transactions contemplated hereby.
The power of attorney granted hereby is coupled with an interest and shall
(a) survive and not be affected by the subsequent death, incapacity, disability,
dissolution, termination, or bankruptcy of the Holder granting the same or the
transfer of all or any portion of such Holder's Interest and (b) extend to such
Holder's successors, assigns and legal representatives.
44
Section 15.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties. It supersedes any prior agreement or understandings
among them, and it may not be modified or amended in any manner other than as
set forth herein.
Section 15.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAW 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 15.5 EFFECT. Except as herein otherwise specifically provided, this
Agreement shall be binding upon and inure to the benefit of the parties and
their legal representatives, successors and assigns.
Section 15.6 PRONOUNS AND NUMBER. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine,
feminine or neuter shall include the masculine, feminine and neuter.
Section 15.7 CAPTIONS. Captions, headings, and subheadings contained in
this Agreement are included for convenience and identification purposes only and
in no way define, limit or extend the scope or intent of this Agreement or any
provision herein.
Section 15.8 PARTIAL ENFORCEABILITY. If any provision of this Agreement, or
the application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this 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 15.9 COUNTERPARTS. This Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signature of each of the Partners 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.
Section 15.10 WAIVER OF PARTITION. Each Partner hereby irrevocably waives
any and all rights (if any) that such Partner may have to maintain any action
for partition of any of the Partnership's property.
Section 15.11 REMEDIES. The failure of any party to seek redress for
violation of, or to insist upon the strict performance of, any provision of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and the use of any
one right or remedy by any party shall not preclude or waive its right to use
any or all other remedies. Said rights and remedies are given in addition to any
other rights the parties may have by law, statute, ordinance or otherwise.
45
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above stated.
GENERAL PARTNER:
TXU EUROPE LIMITED.
By:
-------------------------------------
Name:
Title:
INITIAL LIMITED PARTNER:
TXU EUROPE CAPITAL I
.
By:
-------------------------------------
Name:
Title: Administrative Trustee
46
SCHEDULE 1
List of Partners
----------------
Partner Capital Account
TXU Europe Limited $
TXU Europe Capital I $
ANNEX A
FORM OF L.P. CERTIFICATE
[IF THE PREFERRED PARTNERSHIP SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT: This Preferred Partnership Security is a Global Certificate within the
meaning of the Partnership 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 Partnership Security is exchangeable for
Preferred Partnership Securities registered in the name of a person other than
the Depositary or its nominee only in the limited circumstances described in the
Partnership Agreement and no transfer of this Preferred Partnership Security
(other than a transfer of this Preferred Partnership 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 Partnership Security is presented by an
authorized representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx), a New York corporation, to the Partnership or its agent for
registration of transfer, exchange or payment, and any Preferred Partnership
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.]
X-0
XX-0
[ ]
CERTIFICATE EVIDENCING PREFERRED PARTNERSHIP SECURITIES
OF
TXU EUROPE FUNDING I, L.P.
__% PREFERRED PARTNERSHIP SECURITIES
(liquidation preference $25 per Preferred Partnership Security)
TXU EUROPE FUNDING I, L.P., a limited partnership formed under the
laws of the State of Delaware (the "Partnership"), hereby certifies that TXU
Europe Capital I (the "Trust") created pursuant to the Amended and Restated
Trust Agreement of the Trust, dated as of ________ __, 2000 (the "Holder"), is
the registered owner of preferred securities of the Partnership representing
limited partner interests in the Partnership designated the __% Preferred
Partnership Securities (liquidation preference $25 per Preferred Partnership
Security) (the "Preferred Partnership Securities"). The Preferred Partnership
Securities are freely transferable on the books and records of the Partnership,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights, powers,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Partnership Securities represented hereby are set forth in, issued
under and shall in all respects be subject to the provisions of the Amended and
Restated Agreement of Limited Partnership dated as of ________ __, 2000, as the
same may be amended from time to time (the "Partnership Agreement"). Capitalized
terms used herein but not defined shall have the meaning given them in the
Partnership Agreement. The Holder is entitled to the benefits of the Partnership
Guarantee to the extent provided therein. The Partnership will provide a copy of
the Partnership Agreement and the Partnership Guarantee to a Holder without
charge upon written request to the Partnership at its principal place of
business.
Upon receipt of this certificate, the Holder is admitted to the
Partnership as a Limited Partner, is bound by the Partnership Agreement and is
entitled to the benefits thereunder. Each Holder of a Preferred Partnership
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 income tax purposes [and United Kingdom
corporate] income tax purposes.
A1-1
IN WITNESS WHEREOF, the Partnership has executed this certificate this
__ day of ________, ----.
TXU EUROPE FUNDING I, L.P.
By: TXU EUROPE LIMITED
as General Partner
By:
-------------------------------------
Name:
Title:
(See reverse for additional terms)
A1-2
[FORM OF REVERSE OF SECURITY]
[Distributions in respect of Preferred Entitlements payable on each
Preferred Partnership Security will be fixed at a rate per annum of % of the
stated liquidation preference of $25 per Preferred Partnership Security.
Distributions not paid on the scheduled payment date will accumulate and
compound quarterly (to the extent permitted by applicable law) at the rate of
___% per annum. The term "Distributions" as used herein shall mean cumulative
cash distributions in respect of each Fiscal Period together with any such
Compounded Preferred Entitlements. Distributions on the Preferred Partnership
Securities will only be made to the extent that the Partnership has funds
legally available for the payment of such distributions. Amounts available to
the Partnership for Distribution in respect of Preferred Entitlements to the
holders of the Preferred Partnership Securities will be limited to payments
received by the Partnership from certain subsidiaries of the Company on the
Initial Debentures and Affiliate Investment Instruments or from the Company on
the Partnership Guarantee or the Investment Guarantees or on the Eligible Debt
Securities. Distributions in respect of Preferred Entitlements on the Preferred
Partnership Securities will be paid only if, as and when declared in the sole
discretion of the General Partner. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period on the basis of the actual number of days
elapsed in a 90-day quarter.
Except as otherwise described herein, Distributions in respect of
Preferred Entitlements on the Preferred Partnership Securities will be
cumulative, will accumulate from the date of initial issuance and will be
payable quarterly in arrears, on March 31, June 30, September 30 and December 31
of each year, commencing [June 30, 2000], if, as and when, declared by the
General Partner in its sole discretion, out of the assets of the Partnership
legally available therefor. If the Preferred Trust Securities (or, if the Trust
is dissolved, the Preferred Partnership Securities) are in book-entry-only form,
Distributions in respect of Preferred Entitlements will be payable to the
Holders as they appear on the books and records of the Partnership on the
relevant Record Date. If the Trust or the Property Trustee is the Holder of the
Preferred Partnership Securities, all Distributions in respect of Preferred
Entitlements shall be made by wire transfer of same day funds to such Holder by
10:00 a.m., New York City time, on the applicable Distribution Payment Date.
Distributions in respect of Preferred Entitlements payable on any Preferred
Partnership Securities that are not punctually paid on the relevant Distribution
Payment Date will cease to be payable to the Person in whose name such Preferred
Partnership Securities are registered on the relevant Record Date, and such
Distribution will instead be payable to the Person in whose name such Preferred
Partnership Securities are registered on the special record date or other
specified date for payment of such Distribution. In the event that any
Distribution Payment Date is not a Business Day, then the relevant Distribution
Payment Date shall be 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 falls 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.
A1-3
The Preferred Partnership Securities shall be redeemable as provided
in the Partnership Agreement.
A1-4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Partnership 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 Partnership Security Certificate on the books of the Partnership.
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
Partnership Security Certificate)
A1-5
