Exhibit 4(e)
GUARANTEE AGREEMENT
Between
Texas Utilities Electric Company
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
, 1997
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . 4
SECTION 2.01 Trust Indenture Act; Application . . . . . . . . 4
SECTION 2.02 Lists of Holders of Securities . . 4
SECTION 2.03 Reports by the Guarantee Trustee . . . . . . . . 4
SECTION 2.04 Periodic Reports to Guarantee Trustee . . . . . 4
SECTION 2.05 Evidence of Compliance with Conditions Precedent. 5
SECTION 2.06 Events of Default; Waiver . . . . . . . . . . . 5
SECTION 2.07 Event of Default; Notice . . . . . . . . . . . . 5
SECTION 2.08 Conflicting Interests . . . . . . . . . . . . . 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE . . . . 5
SECTION 3.01 Powers and Duties of the Guarantee Trustee . . . 5
SECTION 3.02 Certain Rights of Guarantee Trustee . . . . . . 7
SECTION 3.03 Certain Rights of Guarantee Trustee . . . . . . 9
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . 9
SECTION 4.01 Guarantee Trustee; Eligibility . . . . . . . . . 9
SECTION 4.02 Compensation and Reimbursement . . . . . . . . . 10
SECTION 4.03 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . . . . 11
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.01 Guarantee . . . . . . . . . . . . . . . . . . . 11
SECTION 5.02 Waiver of Notice and Demand . . . . . . . . . . 12
SECTION 5.03 Obligations Not Affected . . . . . . . . . . . . 12
SECTION 5.04 Rights of Holders . . . . . . . . . . . . . . . 13
SECTION 5.05 Guarantee of Payment . . . . . . . . . . . . . . 13
SECTION 5.06 Subrogation . . . . . . . . . . . . . . . . . . 13
SECTION 5.07 Independent Obligations . . . . . . . . . . . . 13
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01 Subordination . . . . . . . . . . . . . . . . . 14
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.01 Termination . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . 14
SECTION 8.01 Successors and Assigns . . . . . . . . . . . . . 14
SECTION 8.02 Amendments . . . . . . . . . . . . . . . . . . . 14
SECTION 8.03 Notices . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04 Benefit . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.05 Interpretation . . . . . . . . . . . . . . . . . 16
SECTION 8.06 Governing Law . . . . . . . . . . . . . . . . . 16
CROSS-REFERENCE TABLE
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Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ----------
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01(c), 2.08
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . 1.01, 2.05, 3.02
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01, 3.02
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(a), 2.06
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
_____________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
, 1997, is executed and delivered by Texas Utilities Electric
Company, a Texas corporation (the "Guarantor"), and The Bank of New York,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Securities (as
defined herein) of TU Electric Capital , a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of , 1997 between the Trustees of
the Issuer named therein, Texas Utilities Electric Company, as Depositor,
and the several Holders (as defined therein) the Issuer is issuing as of
the date hereof $ ,000,000 aggregate Liquidation Amount of its %
Cumulative Securities (the " Securities")
representing ownership interests in the Issuer and having the terms set
forth in the Trust Agreement;
WHEREAS, the Securities are to be issued for sale by
the Issuer and the proceeds are to be invested in $ ,000,000 principal
amount of Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the
Securities, the Guarantor desires to irrevocably and unconditionally agree,
to the extent set forth herein, to pay to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of
the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires,
have the following meanings. Capitalized or otherwise defined terms used
but not otherwise defined herein shall have the meanings assigned to such
terms in the Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Common Securities" means the securities representing common
ownership interests in the assets of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the
Securities, to the extent not paid or made by or on behalf of the Issuer:
(i) any accrued and unpaid Distributions that are required to be paid on
such Securities but only if and to the extent that the
Property Trustee has available in the Payment Account funds sufficient to
make such payment, (ii) the redemption price (the "Redemption Price"), and
all accrued and unpaid Distributions to the date of redemption, with
respect to the Securities called for redemption by the Issuer
but only if and to the extent that the Property Trustee has available in
the Payment Account funds sufficient to make such payment, (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Securities as provided in the Trust
Agreement or upon a redemption of all of the Securities upon
maturity or redemption of the Debentures as provided in the Trust
Agreement), the lesser of (a) the aggregate of the Liquidation Amount of
all Securities and all accrued and unpaid Distributions on the
Securities to the date of payment but only if and to the extent
that the Property Trustee has available in the Payment Account funds
sufficient to make such payment, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each
such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Securities then outstanding;
provided, however, that in determining whether the holders of the requisite
percentage of Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of December 1, 1995,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee pursuant to which the Debentures are issued, together with any
indenture supplemental thereto.
"Majority in Liquidation Amount of the Securities"
means a vote by Holders, voting separately as a class, of more than 50% of
the aggregate Liquidation Amount of all Securities.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Guarantor, and delivered to the Guarantee
Trustee. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government, or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge
of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required or deemed to be part of this
Guarantee Agreement and shall, to the extent applicable, be governed by
such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Section
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.02 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than December 31 and June 30
in each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as
of a date not more than 15 days prior to the delivery thereof, and (b) at
such other times as the Guarantee Trustee may request in writing, within 30
days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished; provided that, the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from
the most recent List of Holders given to the Guarantee Trustee by the
Guarantor. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a) of the Trust Indenture Act, subject to the provisions
of Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days
after December 31 of each year, commencing December 31, 1997, the Guarantee
Trustee shall provide to the Holders such reports, if any, as are required
by Section 313(a) of the Trust Indenture Act in the form and in the manner
provided by Section 313(a) of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Sections 313(b), (c) and
(d) of the Trust Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee such documents, reports
and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this Guarantee
Agreement as and to the extent required by Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be
given in the form of an Officers' Certificate.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders of a
Majority in Liquidation Amount of Securities may, by vote, on
behalf of all of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the
Guarantee Trustee, unless such defaults have been cured or waived before
the giving of such notice, provided that, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
Responsible Officers of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless a Responsible Officer charged with the
administration of the Trust Agreement shall have obtained written notice of
such Event of Default.
SECTION 2.08 CONFLICTING INTERESTS. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement or any rights hereunder to any Person
except a Holder exercising his or her rights pursuant to Section 5.04 or to
a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed
and delivered pursuant to the appointment of such Successor Guarantee
Trustee.
(b) The Guarantee Trustee, prior to the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform such duties and only such duties as
are specifically set forth in this Guarantee Agreement, and no implied
covenants or obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.06), and is
actually known to a Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be construed
to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a
Majority in Liquidation Amount of the Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights
or powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly provided, every provision
of this Guarantee Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of Sections 3.01(b) and 3.01(c).
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance on such
advice or opinion; such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its employees;
the Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.02(a)(v) shall
be taken to relieve the Guarantee Trustee, upon the occurrence
and continuance of an Event of Default, of its obligation under
the last sentence of Section 3.01(b) to exercise the rights and
powers vested in it by this Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(vii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it
hereunder;
(viii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee Trustee
(1) may request instructions from the Holders, (2) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (3) shall be protected
in relying on or acting in accordance with such instructions;
(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement or any tax or securities
form) (or any rerecording, refiling or re-registration thereof);
and
(x) the Guarantee Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any
such right, power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a duty.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken
as the statements of the Guarantor, and the Guarantee Trustee does not
assume any responsibility for their correctness. The Guarantee Trustee
makes no representation as to the validity or sufficiency of this Guarantee
Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision
or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Guarantee Trustee shall
from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with the provisions of this Guarantee Agreement (including the
reasonable compensation and expenses of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from and
against, any and all loss, damage, claim, liability or expense, including
taxes (other than taxes based upon the income of the Guarantee Trustee)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance of the trusts created by, or the
administration of, this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the
Guarantor under this Section, the Guarantee Trustee shall have a lien prior
to the Securities upon all the property and funds held or
collected by the Guarantee Trustee as such, except funds held in trust for
the payment of principal of, and premium (if any) or interest on,
particular obligations of the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of
this Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall
have occurred and be continuing, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60 days
after delivery to the Guarantor of an instrument of resignation or removal,
the Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
(f) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense, right of set-off or counterclaim which
the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any
liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices
and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement
shall in no way be affected or impaired by reason of the happening from
time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the
Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Property Trustee or the Holders to enforce, assert or
exercise any right, privilege, power or remedy conferred on the
Property Trustee or the Holders pursuant to the terms of the
Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Guarantee Trustee, the Property Trustee
or the Holders to give notice to, or obtain consent of, the Guarantor or
any other Person with respect to the happening of any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) if an
Event of Default has occurred and is continuing, the Guarantee Trustee has
the right to enforce this Guarantee Agreement on behalf of the Holders;
(iii) the Holders of a Majority in Liquidation Amount of the
Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement without
first instituting a legal proceeding against the Issuer or any other
Person.
SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee
Payments in full (without duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall be subrogated to
all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee
Agreement; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts of Guarantee Payments are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor
acknowledges that its obligations hereunder are independent of the
obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to
make Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made pari passu or
subordinate by their terms, (ii) pari passu with the most senior preferred
or preference stock now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor. Nothing in this Section 6.01
shall apply to claims of, or payments to, the Guarantee Trustee under or
pursuant to Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. This Guarantee Agreement shall
terminate and be of no further force and effect upon: (i) full payment of
the Redemption Price of all Securities, and all accrued and
unpaid Distributions to the date of redemption, (ii) the distribution of
Debentures to Holders in exchange for all of the Securities or
(iii) full payment of the amounts payable in accordance with the Trust
Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore
payment of any sums paid with respect to Securities or under
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Eleven of the
Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 8.02 AMENDMENTS. This Guarantee Agreement may be
amended only by an instrument in writing entered into by the Guarantor and
the Guarantee Trustee. Except with respect to any changes which do not
materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than 66 2/3% in
aggregate Liquidation Amount of all the outstanding
Securities. The provisions of Article VI of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval. Nothing
herein contained shall be deemed to require that the Guarantee Trustee
enter into any amendment of this Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or other
communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered,
telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the
Guarantee Trustee and the Holders of the Securities:
Texas Utilities Electric Company
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: 000-000-0000
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustees') address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Guarantee Trustee
and the Holders:
TU Electric Capital
c/o Texas Utilities Electric Company
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: 000-000-0000
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice
of to the Guarantor and the Holders of the Securities:
The Bank of New York
000 Xxxxxxx Xxxxxx
00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Corporate Trust Trustee Administration
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid, except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement is solely for
the benefit of the Holders and, subject to Section 3.01(a), is not
separately transferable from the Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee Agreement,
unless the context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
Texas Utilities Electric Company
By:
---------------------------------
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By:
---------------------------------
Name:
Title:
