EXHIBIT 4(sss)
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TXU EUROPE FUNDING I, L.P.
Dated as of March 2, 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..........................13
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..........................................28
SECTION 8.3 ANNUAL AUDIT...............................................28
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................30
SECTION 11.1 AUTHORITY..................................................30
SECTION 11.2 POWERS AND DUTIES OF THE GENERAL PARTNER...................30
SECTION 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER........32
SECTION 11.4 LIABILITY..................................................32
SECTION 11.5 OUTSIDE ACTIVITIES.........................................32
SECTION 11.6 LIMITS ON GENERAL PARTNER'S POWERS.........................33
SECTION 11.7 EXCULPATION................................................33
SECTION 11.8 FIDUCIARY DUTY.............................................34
SECTION 11.9 INDEMNIFICATION............................................35
SECTION 11.10 TAX MATTERS................................................35
SECTION 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS....................36
ARTICLE XII. TRANSFERS OF INTERESTS BY PARTNERS.............................37
SECTION 12.1 TRANSFER OF INTERESTS......................................37
SECTION 12.2 TRANSFER OF L.P. CERTIFICATES..............................38
SECTION 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED HOLDERS.......38
SECTION 12.4 BOOK-ENTRY PROVISIONS......................................38
SECTION 12.5 REGISTRAR, TRANSFER AGENT, PAYING AGENT AND
COLLECTING AGENT...........................................40
ARTICLE XIII. WITHDRAWAL, DISSOLUTION; LIQUIDATION AND DISTRIBUTION
OF ASSET....................................................................41
SECTION 13.1 WITHDRAWAL OF PARTNERS.....................................41
SECTION 13.2 DISSOLUTION OF THE PARTNERSHIP.............................41
SECTION 13.3 LIQUIDATION................................................42
SECTION 13.4 DISTRIBUTION IN LIQUIDATION................................43
SECTION 13.5 RIGHTS OF LIMITED PARTNERS.................................43
SECTION 13.6 TERMINATION................................................43
ARTICLE XIV. AMENDMENTS AND MEETINGS........................................43
SECTION 14.1 AMENDMENTS.................................................43
SECTION 14.2 AMENDMENT OF CERTIFICATE...................................44
SECTION 14.3 MEETINGS OF PARTNERS.......................................44
ARTICLE XV. MISCELLANEOUS...................................................45
SECTION 15.1 NOTICES....................................................45
SECTION 15.2 POWER OF ATTORNEY..........................................46
SECTION 15.3 ENTIRE AGREEMENT...........................................46
SECTION 15.4 GOVERNING LAW..............................................46
SECTION 15.5 EFFECT.....................................................47
SECTION 15.6 PRONOUNS AND NUMBER........................................47
SECTION 15.7 CAPTIONS...................................................47
SECTION 15.8 PARTIAL ENFORCEABILITY.....................................47
SECTION 15.9 COUNTERPARTS...............................................47
SECTION 15.10 WAIVER OF PARTITION........................................47
SECTION 15.11 REMEDIES...................................................47
SECTION 15.12 CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR
SERVICE; WAIVER OF IMMUNITIES..............................48
SCHEDULE 1..................................................................51
ANNEX A FORM OF L.P. CERTIFICATE............................................1
2
[ ] CERTIFICATE EVIDENCING PREFERRED
PARTNERSHIP SECURITIES OF TXU EUROPE FUNDING I, L.P. 9.75% PREFERRED
PARTNERSHIP SECURITIES (liquidation preference $25 per Preferred
Partnership Security)........................................................1
[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
March 2, 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.
"Additional Preferred Trust Securities" has the meaning set forth in
Section 8.01 of the Trust Agreement.
"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.
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"Clearing Agency" means DTC, another clearing agency, or any successor
registered as a clearing agency under Section 17A of the Exchange Act.
"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, or any successor entity to the Company by reason of merger,
consolidation or amalgamation, in its capacity as guarantor under the
Partnership Guarantee.
"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 and all other Affiliate Investment Instrument outstanding are
subject to optional redemption by the issuer 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
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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
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
March 2, 2000, forms of which are attached hereto as Exhibit A.
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"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.
"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.
5
"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.
"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 March 2,
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.
6
"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
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 its 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 9.75% 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 quarterly period, on the basis of the actual number
of days elapsed in such period. The Preferred Return shall be calculated on the
7
basis of quarterly periods ending on March 31, June 30, September 30 and
December 31, 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.
"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 March 2, 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.
"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 Date 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.
8
"Successor Partnership Securities" has the meaning set forth in
Section 11.11 of this Agreement.
"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, TXU Europe CP, Inc., as Control Party (the
"Control Party"), 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 March 2, 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
February 24, 2000 among the Company, the Trust, the Partnership, TXU Eastern
Funding Company, the Control Party 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
9
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
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 partner 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 1% 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 Suite, 0000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx, 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:
10
TXU Europe Limited
The Adelphi
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 and if not already a limited
partner of the Partnership, 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 any issuance of the Preferred Partnership
Securities (including if and to the extent the over-allotment option granted by
the Trust pursuant to the Underwriting Agreement is exercised), the General
Partner shall make a 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.
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(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 an amount in cash equal to the gross proceeds from the sale
on such date of the Preferred Trust Securities. If and to the extent the
over-allotment option granted by the Trust pursuant to the Underwriting
Agreement is exercised by the underwriters named therein, the Trust, as the
initial Limited Partner, shall, in exchange for an additional definitive L.P.
Certificate, contribute to the capital of the Partnership an amount of cash
equal to the gross proceeds from the sale of Additional Preferred Trust
Securities. In connection with such contributions 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
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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.
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
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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.
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.
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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
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.
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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 $25 and
having the designation, annual distribution rate, liquidation preference,
redemption terms, and other powers, preferences and special rights and
limitations set forth in this Article VI. If and to the extent the
over-allotment option granted by the Trust pursuant to the Underwriting
Agreement is exercised by the underwriters named therein, there is hereby
authorized for issuance and sale Preferred Partnership Securities having an
aggregate liquidation preference of an amount equal to the aggregate Liquidation
Amount (as defined in the Trust Agreement) of the Additional Preferred Trust
Securities and having the designation, annual distribution rate, liquidation
preference, redemption 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
with respect to Preferred Entitlements. 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 partner interests, or of securities convertible into any
Preferred Partnership Securities or other limited partner interests, whether now
or hereafter authorized and whether issued for cash or other consideration or by
way of a distribution
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Section 6.2 PREFERRED PARTNERSHIP SECURITIES.
(a) DESIGNATION. A total of 6,000,000 Preferred Partnership Securities
(plus such additional Preferred Partnership Securities, if any, authorized and
issued pursuant to the second sentence of Section 6.1(a)), stated liquidation
preference $25 per Preferred Partnership Security, are hereby designated as
"9.75% Preferred Partnership Securities".
(b) PREFERRED ENTITLEMENTS AND DISTRIBUTIONS.
(i) The Holders shall be entitled to share in the profits of
the Partnership to the extent of amounts determined at a rate per
annum of 9.75% 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 quarterly period, Preferred Entitlements will be computed on the
basis of the actual number of days elapsed in such period. Preferred
Entitlements shall, from the Closing Date, accumulate and be
cumulative. Preferred Entitlements not distributed on the scheduled
Distribution Payment Date will accumulate and compound quarterly at
the rate of 9.75% 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 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. 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.
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(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 March 2, 2005, 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)
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 distributed to holders of
the Preferred Trust Securities are held of record in book-entry only
18
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 in book-entry only form 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, 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
19
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 occurs 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, to the extent permitted by law, 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
20
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 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, in each case 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 or any other Person. In any
21
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 six consecutive quarters under this
Agreement and the Trust Agreement, Distributions in respect of
Preferred Entitlements shall be deemed to remain in arrears,
notwithstanding any Distributions in respect of Preferred
Entitlements, until full 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 General Partner, shall continue the activities
of the Partnership without dissolution. Notwithstanding the
appointment of any such Special Representative, the General
Partner shall continue as such 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.
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(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 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.
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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 6.01 of the Partnership Guarantee 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 of the 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. 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.
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(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.
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 99% 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 99% 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 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 in one of its four (4) highest generic rating categories
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 1% of the Initial
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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 1% 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
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 Instrument, 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 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 6.01 of the Preferred Trust
Securities Guarantee and Section 6.01 of the Partnership Guarantee pursuant to a
written instrument reasonably satisfactory to the trustee under the Preferred
Trust Securities Guarantee and the trustee under the Partnership Guarantee,
respectively.
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(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
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.
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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
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 Representative (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 expenses); 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
28
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.
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;
29
(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;
(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 taxation 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.
30
(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" (within the meaning of Section 7704 of the Code)
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 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
31
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
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
32
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.
(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 a Partnership Covered Persons and
a Partnership Indemnified Person, 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.
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(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
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.
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(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 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 the beneficial interests in
such Affiliate Investment Instruments, (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, replacement,
conveyance, transfer or lease 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,
replacement, conveyance, transfer or lease 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 the case may be, 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,
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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 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.
(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) such 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
36
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
immediately following the admission of the transferee of such L.P. Certificate
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.
37
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 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.
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(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
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, PAYING AGENT AND COLLECTING
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
39
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.
(e) In the event the General Partner appoints a collecting agent with
respect to the Partnership, such collecting agent shall not be a Person in the
United Kingdom.
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.
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
40
business of the Partnership is continued in accordance with the
Delaware Partnership Act;
(iii) if 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 of the Partnership 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
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
41
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.
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.
42
(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 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.
43
(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.
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 Europe Funding I, L.P.
Xxxxx 000
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to:
TXU Business Services Company
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
44
(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.
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.
45
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.
Section 15.12 CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR
SERVICE; WAIVER OF IMMUNITIES.
(a) Consent to Jurisdiction. The General Partner irrevocably consents
-----------------------
to the nonexclusive jurisdiction of any court of the State of New York or any
United States Federal court sitting, in each case, in the Borough of Manhattan,
Xxx Xxxx xx Xxx Xxxx, Xxx Xxxx, Xxxxxx Xxxxxx of America, and any appellate
court from any thereof in any suit, action or proceeding that may be brought in
connection with this Agreement, and, to the fullest extent permitted by law,
waives any immunity from the jurisdiction of such courts. The General Partner
irrevocably waives, to the fullest extent permitted by law, any objection to any
such suit, action or proceeding that may be brought in such courts whether on
the grounds of venue, residence or domicile or on the ground that any such suit,
action or proceeding has been brought in an inconvenient forum. The General
Partner agrees, to the fullest extent that it lawfully may do so, that final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the General Partner, and waives, to the fullest
extent permitted by law, any objection to the enforcement by any competent court
in the Jurisdiction of Incorporation of judgments validly obtained in any such
court in New York on the basis of such suit, action or proceeding; provided,
however, that the General Partner does not waive, and the foregoing provisions
of this sentence shall not constitute or be deemed to constitute a waiver of,
(i) any right to appeal any such judgment, to seek any stay or otherwise to seek
46
reconsideration or review of any such judgment, (ii) any stay of execution or
levy pending an appeal from, or a suit, action or proceeding for reconsideration
of, any such judgment, or (iii) any other right or remedy of the General Partner
to the extent not expressly waived in accordance with this Section.
(b) Appointment of Agent for Service. The General Partner hereby
--------------------------------
designates and appoints Xxxxxx Xxxx & Priest LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as its authorized agent upon which process may be served in any
suit or proceeding in any Federal or State court in the Borough of Manhattan,
The City of New York arising out of or relating to this Agreement, but for that
purpose only, and agrees that service of process upon said agent shall be deemed
in every respect effective service of process upon it in any such suit or
proceeding in any Federal or State court in the Borough of Manhattan, The City
of New York. Such appointment shall be irrevocable so long as any of the
Preferred Partnership Securities remain outstanding until the appointment of a
successor by the General Partner and such successor's acceptance of such
appointment. Upon such acceptance, the General Partner shall notify the
Preferred Partnership Security Owners of the name and address of such successor.
The General Partner further agree to take any and all action, including the
execution and filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of said agent in full
force and effect so long as any of the Preferred Partnership Securities shall be
outstanding.
Nothing in this Section shall affect the right of any Holder of any
Preferred Partnership Security to serve process in any manner permitted by
applicable law or limit the right of any Holder of any Preferred Partnership
Security to bring proceedings against the General Partner in the courts of any
other jurisdiction or jurisdictions.
(c) Waiver of Immunities. To the extent that the General Partner or
--------------------
any of its respective properties, assets or revenues may have or may hereafter
become entitled to, or have attributed to it, any right of immunity, on the
grounds of sovereignty or otherwise, from legal action, suit or proceeding, from
the giving of any relief in any thereof, from set-off or counterclaim, from the
jurisdiction of any court, from service of process, from attachment upon or
prior to judgment, from attachment in aid of execution of judgment, or from
execution of judgment, or other legal process or proceeding for the giving of
any relief or for the enforcement of any judgment, in any jurisdiction in which
proceedings may at any time be commenced, with respect to its obligations,
liabilities or any other matter under or arising out of or in connection with
this Agreement, to the fullest extent permitted by law, the General Partner
hereby irrevocably and unconditionally waives and agrees not to plead or claim,
any such immunity and consents to such relief and enforcement. Nothing in this
paragraph shall be deemed to waive any defense (other than such immunity)
available to the General Partner.
(d) For purposes of this Section, the term "Jurisdiction of
Incorporation" shall mean each jurisdiction in which the General Partner is
incorporated or organized.
47
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.
GENERAL PARTNER:
TXU EUROPE LIMITED.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Authorized Attorney
INITIAL LIMITED PARTNER:
TXU EUROPE CAPITAL I
.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Administrative Trustee
48
SCHEDULE 1
List of Partners
----------------
Partner Capital Account
TXU Europe Limited $26,470,600
TXU Europe Capital I $150,000,000
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.
9.75% 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") continued pursuant to the Amended and Restated
Trust Agreement of the Trust, dated as of March 2, 2000 (the "Holder"), is the
registered owner of preferred securities of the Partnership representing limited
partner interests in the Partnership designated the 9.75% 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 March 2, 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 the 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
corporation tax and income tax purposes.
A1-1
IN WITNESS WHEREOF, the Partnership has executed this certificate this
2nd day of March, 2000.
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 9.75% 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
9.75% per annum. The term "Distributions" as used herein shall have the meaning
set forth in the Partnership Agreement. Distributions in respect of Preferred
Entitlements 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 Distributions 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 in respect of the Initial Debentures and other
Affiliate Investment Instruments or from the Company in respect of the
Partnership Guarantee or the Investment Guarantees or in respect of 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 period on the basis of the actual number of days elapsed
in such period.
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
