EXHIBIT 4-6
FORM OF CAPITAL SECURITIES GUARANTEE AGREEMENT
DATED AS OF ________________
BY AND BETWEEN
ENERGY EAST CORPORATION,
AS GUARANTOR
AND
THE CHASE MANHATTAN BANK,
AS TRUSTEE
TABLE OF CONTENTS
PAGE
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1. Interpretation and Definitions.........................................2
ARTICLE 2
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.......................................5
Section 2.2. Lists of Holders of Securities.........................................5
Section 2.3. Reports by Guarantee Trustee...........................................6
Section 2.4. Periodic Reports to Guarantee Trustee..................................6
Section 2.5. Evidence of Compliance with Conditions Precedent.......................6
Section 2.6. Guarantee Event of Default; Waiver.....................................6
Section 2.7. Guarantee Event of Default; Notice.....................................6
Section 2.8. Conflicting Interests..................................................7
Section 2.9. Disclosure of Information..............................................7
Section 2.10. Guarantee Trustee may File Proofs of Claim.............................7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of Guarantee Trustee.................................7
Section 3.2. Certain Rights of Guarantee Trustee....................................9
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee.................10
ARTICLE 4
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility........................................11
Section 4.2. Appointment, Removal and Resignation of Guarantee Trustee.............11
ARTICLE 5
GUARANTEE
Section 5.1. Guarantee.............................................................12
Section 5.2. Waiver of Notice and Demand...........................................12
Section 5.3. Obligations not Affected..............................................12
Section 5.4. Rights of Holders.....................................................13
Section 5.5. Guarantee of Payment..................................................14
Section 5.6. Subrogation...........................................................14
Section 5.7. Independent Obligations...............................................14
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transactions............................................15
Section 6.2. Ranking...............................................................15
Section 6.3. Subordination of Common Securities....................................15
ARTICLE 7
TERMINATION
Section 7.1. Termination...........................................................15
ARTICLE 8
INDEMNIFICATION
Section 8.1. Exculpation...........................................................16
Section 8.2. Compensation, Expenses and Indemnification............................16
ARTICLE 9
MISCELLANEOUS
Section 9.1. Successors and Assigns................................................17
Section 9.2. Amendments............................................................17
Section 9.3. Notices...............................................................17
Section 9.4. Benefit...............................................................18
Section 9.5. Governing Law.........................................................18
ii
CAPITAL SECURITIES GUARANTEE AGREEMENT
This CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Guarantee"), dated
as of ________________, is executed and delivered by ENERGY EAST CORPORATION, a
New York corporation (the "Guarantor"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, 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 ENERGY EAST CAPITAL TRUST [ ], a Delaware statutory business trust
(the "Trust").
RECITALS
WHEREAS, pursuant to the Trust Agreement (as defined herein), the
Trust is initially issuing on the date hereof (i) $_____________ aggregate
liquidation amount of Capital Securities, having a liquidation amount of
$__________ per security and designated the "__________ ___% Capital Securities"
of the Trust and may, from time to time, issue additional Tranches (as defined
herein) of such securities in the future (the "Capital Securities") and (ii)
$_____________ aggregate liquidation amount of common securities, having a
liquidation amount equal to approximately __% of the total capital of the Trust
and designated the "___% Common Securities" of the Trust and may, from time to
time, issue additional Tranches (as defined herein) of such securities in the
future (the "Common Securities" and, together with the Capital Securities, the
"Securities");
WHEREAS, the Securities will be issued by the Trust and the proceeds
thereof will be used to purchase the Junior Subordinated Notes (as defined
herein) of the Guarantor, which will be held by the Trust as trust assets;
WHEREAS, as incentive for the Holders to purchase the Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders of the Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein; and
WHEREAS, if a Trust Enforcement Event (as defined herein) has
occurred and is continuing, the rights of holders of the Common Securities to
receive Guarantee Payments (as defined herein) under this Guarantee are
subordinated to the rights of Holders of Capital Securities to receive Guarantee
Payments under this Guarantee;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1. INTERPRETATION AND DEFINITIONS. In this Guarantee,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
(c) all references to "the Guarantee" or "this Guarantee" are to
this Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles, Sections and
Recitals are to Articles, Sections and Recitals of this Guarantee, unless
otherwise specified;
(e) unless otherwise defined in this Guarantee, a term defined in
the Trust Indenture Act or the Trust Agreement has the same meaning when
used in this Guarantee;
(f) a reference to the singular includes the plural and vice versa
and a reference to any masculine form of a term shall include the feminine
form of a term, as applicable; and
(g) the following terms have the following meanings:
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" has the meaning specified in the Trust Agreement.
"Capital Securities" has the meaning specified in the Recitals
hereto.
"Common Securities" has the meaning specified in the Recitals
hereto.
"Corporate Trust Office" means the office of the Guarantee Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution of this
Guarantee is located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Institutional Trust Services.
"Covered Person" means a Holder or beneficial owner of Securities.
"Global Security" means a fully registered, global Capital Security
representing the Capital Securities.
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"Guarantee Event of Default" means a default by the Guarantor on any
of its payment obligations under this Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not
paid by or on behalf of the Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) that are required to be
paid on such Securities to the extent the Trust has funds legally and
immediately available therefor at the time, (ii) the Redemption Price,
including all accumulated and unpaid Distributions to the date of
redemption, with respect to any Securities called for redemption by the
Trust, to the extent the Trust shall have funds legally and immediately
available therefor at the time or (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Junior Subordinated Notes to the
Holders in exchange for Securities as provided in the Trust Agreement),
the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Securities to the date of
payment, to the extent the Trust has funds legally and immediately
available therefor and (b) the amount of assets of the Trust remaining
available for distribution to Holders in liquidation of the Trust (in
either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Chase Manhattan Bank, until a
successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee and thereafter means
each such Successor Guarantee Trustee.
"Holder" means any holder of Securities, as registered on the books
and records of the Trust; provided, however, that, in determining whether
the Holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor or any other
obligor on the Capital Securities; and provided further that in
determining whether the Holders of the requisite liquidation amount of
Capital Securities have voted on any matter provided for in this
Guarantee, then for the purpose of such determination only (and not for
any other purpose hereunder), if the Capital Securities remain in the form
of one or more Global Certificates (as defined in the Trust Agreement) and
if the Depositary which is the holder of such Global Securities has sent
an omnibus proxy to the Trust assigning voting rights to Depositary
Participants (as defined in the Trust Agreement) to whose accounts the
Capital Securities are credited on the record date, the term "Holders"
shall mean such Depositary Participants acting at the direction of the
Beneficial Owners (as defined in the Trust Agreement).
"Indemnified Person" means the Guarantee Trustee, any Affiliate of
the Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of
the Guarantee Trustee.
"Junior Subordinated Notes" means the series of Junior Subordinated
Notes to be issued, from time to time, by Energy East Corporation
designated the "_____________" held by the Property Trustee as defined in
the Trust Agreement.
"List of Holders" has the meaning assigned to it in Section 2.2
hereof.
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"Majority in Liquidation Amount" means, except as provided in the
terms of the Capital Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities, voting together as a single class, or, as the
context may require, Holders of outstanding Capital Securities or Holders
of outstanding Common Securities, voting separately as a class, who are
the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accumulated and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities
of the relevant class. In determining whether the Holders of the requisite
amount of Capital Securities have voted, Capital Securities which are
owned by the Guarantor or any Affiliate of the Guarantor or any other
obligor on the Capital Securities shall be disregarded for the purpose of
any such determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Trust Agreement) of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided
for in this Guarantee (other than pursuant to Section 314(a)(4) of the
Trust Indenture Act) 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 on behalf of
such Person 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 on behalf of such Person 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 acting on behalf of such Person, such condition or covenant
has been complied with.
"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.
"Redemption Price" has the meaning specified in the Trust Agreement.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer with direct responsibility for the administration of this
Guarantee 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.
"Securities" has the meaning specified in the Recitals hereto.
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"Subordinated Indenture" means the Indenture, dated as of
__________, 2001, by and between Energy East Corporation and The Chase
Manhattan Bank as Trustee, as supplemented, pursuant to which the Junior
Subordinated Notes are to be issued to the Property Trustee as defined in
the Trust Agreement.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Tranche" has the meaning specified in the Trust Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement of
the Trust, dated as of _____________, as amended, modified or supplemented
from time to time, among the trustees of the Trust named therein, the
Guarantor, as sponsor, and the Holders, from time to time, of undivided
beneficial ownership interests in the assets of the Trust.
"Trust Enforcement Event" in respect of the Securities means an
Event of Default (as defined in the Subordinated Indenture) has occurred
and is continuing in respect of the Junior Subordinated Notes.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Guarantee Trustee (i) except
while the Capital Securities are represented by one or more Global Securities at
least one Business Day prior to the date for payment of Distributions, a list,
in such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") as of the record
date relating to the payment of such Distributions, and (ii) at any other time,
within 30 days of receipt by the Guarantor of a written request from the
Guarantee Trustee for a List of Holders, as of a date no more than 15 days
before such List of Holders is given to the Guarantee Trustee, excluding from
any such list names and addresses received by the
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Guarantee Trustee in its capacity as Security Registrar; 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 shall preserve, in
as current a form as is reasonably practicable, all information contained in
Lists of Holders given to it, provided that 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
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY GUARANTEE TRUSTEE. Within 60 days after the
first May 15 which occurs not less than 60 days following the initial Closing
Date and within 60 days days after May 15 in every year thereafter, so long as
any Capital Securities are outstanding under the Trust Agreement, the Guarantee
Trustee shall provide to the Holders of the Securities such reports as are
required by Section 313(a) of the Trust Indenture Act (if any) in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the other requirements of Section 313 of the
Trust Indenture Act. The Guarantor shall promptly notify the Guarantee Trustee
when the Securities are listed on any stock exchange.
SECTION 2.4. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information
as required by Section 314(a) of the Trust Indenture Act (if any) and the
compliance certificate required by Section 314(a)(4) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314(a) of the
Trust Indenture Act, provided that such compliance certificate shall be
delivered on or before 120 days after the end of each calendar year of the
Guarantor.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. GUARANTEE EVENT OF DEFAULT; WAIVER. The Holders of a
Majority in Liquidation Amount of the Capital Securities may, by vote or written
consent, on behalf of the Holders of all of the Capital Securities, waive any
past Guarantee Event of Default and its consequences. Upon such waiver, any such
Guarantee Event of Default shall cease to exist, and any Guarantee Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee, but no such waiver shall extend to any subsequent or other
default or Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7. GUARANTEE EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of a Guarantee Event of Default actually known to a Responsible Officer of the
Guarantee Trustee, transmit by mail, first class postage prepaid, to the Holders
of the Securities, notices of all such Guarantee Events of Default, unless such
defaults have been cured before the giving of such
6
notice; provided, that the Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Guarantee Event of Default unless the Guarantee Trustee shall have received
written notice thereof from the Guarantor or a Holder or a Responsible Officer
of the Guarantee Trustee charged with the administration of this Guarantee shall
have obtained actual knowledge thereof.
SECTION 2.8. CONFLICTING INTERESTS. The Trust Agreement shall be
deemed to be specifically described in this Trust Agreement for purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 2.9. DISCLOSURE OF INFORMATION. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall not be deemed to be a violation
of any existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the Guarantee Trustee
be held accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
SECTION 2.10. GUARANTEE TRUSTEE MAY FILE PROOFS OF CLAIM. Upon the
occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have its claims and those of the
Holders of the Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF GUARANTEE TRUSTEE.
(a) This Guarantee shall be held by the Guarantee Trustee on behalf
of the Trust for the benefit of the Holders of the Securities, and the Guarantee
Trustee shall not transfer this Guarantee to any Person except a Holder of
Securities exercising his or her rights pursuant to Section 5.4(b) 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 in and to this Guarantee shall automatically
vest in any Successor Guarantee Trustee, and such vesting and succession of
title shall be effective whether or not conveyance documents have been executed
and delivered pursuant to the appointment of such Successor Guarantee Trustee.
7
(b) If a Guarantee Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall be entitled to enforce this Guarantee for the benefit of the
Holders of the Securities.
(c) The Guarantee Trustee, before the occurrence of any Guarantee
Event of Default and after the curing of all Guarantee Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants shall be read
into this Guarantee against the Guarantee Trustee. In case a Guarantee Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
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, 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.
(d) No provision of this Guarantee 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 Guarantee Event of Default and
after the curing or waiving of all such Guarantee 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,
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, and no implied covenants or obligations
shall be read into this Guarantee 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; 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;
(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 not less than a Majority in Liquidation
Amount of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
8
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if 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 or if the Guarantee Trustee shall have reasonable grounds for
believing that an indemnity, reasonably satisfactory to the Guarantee
Trustee, against such risk or liability is not reasonably assured to it
under the terms of this Guarantee.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by an Officers' Certificate;
(iii) Whenever, in the administration of this Guarantee, 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
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor;
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration or any instrument (or any rerecording,
refiling or re-registration thereof);
(v) The Guarantee Trustee may consult with counsel, and the 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 accordance with
such advice or opinion. Such counsel may be counsel to the Guarantor or
any of its Affiliates and may include any of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Guarantee from any court of competent
jurisdiction;
(vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee at the request
or direction of any Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Guarantee Trustee's
9
agents, nominees or custodians) 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 3.2(a)(vi) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of a Guarantee Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Guarantee in the manner provided by Section 3.1(c);
(vii) 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;
(viii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians 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;
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action. No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's taking
such action; and
(x) Whenever in the administration of this Guarantee, 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 (A) may request written instructions from the Holders of
a Majority in Liquidation Amount of the Securities, (B) may refrain from
enforcing such remedy or right or taking such other action until such
written instructions are received and (C) shall be protected in
conclusively relying on or acting in accordance with such written
instructions.
(b) No provision of this Guarantee 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 to act 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 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee 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 representations as to the
validity or sufficiency of this Guarantee.
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ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall be at all times 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 other 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 4.1(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 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(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, subject to the penultimate
paragraph thereof.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), unless a Guarantee Event of Default
shall have occurred and be continuing, the Guarantee Trustee may be appointed or
removed with or without cause at any time by the Guarantor. If a Guarantee Event
of Default has occurred and is continuing, the Guarantee Trustee may be
appointed or removed by the Holders of a Majority in Liquidation Amount of the
Capital Securities.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) 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 such 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,
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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 4.2 within 60 days after
delivery to the Guarantor of an instrument of removal or resignation, the
removed or resigning Guarantee Trustee 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) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to
the Guarantee Trustee all amounts owing for fees and reimbursement of expenses
which have accrued to the date of such termination, removal or resignation.
ARTICLE 5
GUARANTEE
SECTION 5.1. 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 Trust), as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust 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 Trust to pay such amounts to the Holders.
Notwithstanding anything to the contrary herein, the Guarantor retains all of
its rights under the Subordinated Indenture to extend the interest payment
period on the Junior Subordinated Notes pursuant to Section 2.10 thereof and the
Guarantor shall not be obligated hereunder to make any Guarantee Payments during
any Extension Period (as defined in the certificate evidencing the Junior
Subordinated Notes) with respect to the Distributions (as defined in the Trust
Agreement) on the Securities.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Trust 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 5.3. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee shall be absolute
and unconditional and shall remain in full force and effect until the entire
liquidation amount of all outstanding Securities shall have been paid and such
obligation shall in no way be affected or impaired by reason of the happening
from time to time of any event, including without limitation, the following,
whether or not with notice to, or the consent of, the Guarantor:
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(a) The release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Securities to be
performed or observed by the Trust;
(b) The extension of time for the payment by the Trust 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 Junior Subordinated Notes
permitted by the Subordinated Indenture);
(c) Any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Property Trustee or the
Holders pursuant to the terms of the Securities, or any action on the part
of the Trust 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 Trust
or any of the assets of the Trust;
(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 5.3 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 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.
No setoff, counterclaim, reduction or diminution of any obligation,
or any defense of any kind or nature that the Guarantor has or may have against
any Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Guarantee.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) The Holders of at least a Majority in Liquidation Amount of the
Capital 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 or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under this Guarantee,
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provided, that, subject to Section 3.1, the Guarantee Trustee shall have the
right to decline to follow any such direction if the Guarantee Trustee shall
determine that the action so directed would be unjustly prejudicial to the
Holders not taking part in such direction or if the Guarantee Trustee being
advised by counsel determines that the action or proceeding so directed may not
lawfully be taken or if the Guarantee Trustee in good faith by its board of
directors or trustees, executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Guarantee Trustee shall determine
that the action or proceedings so directed would involve the Guarantee Trustee
in personal liability.
(b) If the Guarantee Trustee fails to enforce this Guarantee, then
any Holder of Securities may, subject to the subordination provisions of Section
6.2, institute a legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person or
entity. In addition, if the Guarantor has failed to make a Guarantee Payment, a
Holder of Securities may, subject to the subordination provisions of Section
6.2, directly institute a proceeding against the Guarantor for enforcement of
the Guarantee for such payment to the Holder of the Securities of the principal
of or interest on the Junior Subordinated Notes on or after the respective due
dates specified or provided for in the Junior Subordinated Notes, and the amount
of the payment will be based on the Holder's pro rata share of the amount due
and owing on all of the Securities. The Guarantor hereby waives any right or
remedy to require that any action on this Guarantee be brought first against the
Trust or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5. GUARANTEE OF PAYMENT. This Guarantee creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payment in full (without
duplication) or upon the distribution of Junior Subordinated Notes to the
Holders in exchange for all of the Capital Securities.
SECTION 5.6. SUBROGATION. The Guarantor shall be subrogated to all
(if any) rights of the Holders of Capital Securities against the Trust in
respect of any amounts paid to such Holders by the Guarantor under this
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that 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, if
at the time of any such payment, any amounts are due and unpaid under this
Guarantee. 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 Guarantee Trustee for the benefit of
the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Trust
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 notwithstanding the occurrence of any event referred to
in subsections 5.3(a) through 5.3(g), inclusive, hereof.
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ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS. So long as any Securities
remain outstanding, if (i) there shall have occurred an event of default under
the Subordinated Indenture with respect to the Junior Subordinated Notes, (ii)
there shall be a Guarantee Event of Default or (iii) the Guarantor shall have
given notice of its election of an Extension Period as provided in the
certificate evidencing the Junior Subordinated Notes and shall not have
rescinded such notice, or such Extension Period or any extension thereof shall
be continuing, then the Guarantor shall not, and shall not permit any subsidiary
of the Guarantor, to (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Guarantor's capital stock (which included common and preferred stock) or (y)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Guarantor that rank on a parity
with or junior in interest to the Junior Subordinated Notes or make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks on a
parity with or junior in interest to the Junior Subordinated Notes (other than
(a) dividends or distributions in common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under this Guarantee, and (d) purchases of common stock related to the
issuance of common stock or rights under the Guarantor's dividend reinvestment
plan, or under any of the Guarantor's benefit plans).
SECTION 6.2. RANKING. This Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Company (as defined in the
Subordinated Indenture) of the Guarantor in the same manner and to the same
extent as set forth in Article XIV of the Subordinated Indenture.
SECTION 6.3. SUBORDINATION OF COMMON SECURITIES. If a Trust
Enforcement Event has occurred and is continuing under the Trust Agreement, the
rights of the holders of the Common Securities to receive Guarantee Payments
hereunder shall be subordinated to the rights of the Holders of the Capital
Securities to receive Guarantee Payments under this Guarantee.
ARTICLE 7
TERMINATION
SECTION 7.1. TERMINATION. This Guarantee shall terminate upon (i)
full payment of the Redemption Price of all Securities, (ii) distribution of the
Junior Subordinated Notes to the Holders of all the Securities or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Securities must restore payment of any sums paid under the
Securities or under this Guarantee.
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ARTICLE 8
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be paid.
SECTION 8.2. COMPENSATION, EXPENSES AND INDEMNIFICATION.
(a) The Guarantor agrees to pay to the Guarantee Trustee from time
to time reasonable compensation 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) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee.
(b) The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder.
(c) The obligations of the Guarantor under this Section 8.2 shall
survive the termination of this Guarantee.
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ARTICLE 9
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee 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, sale or conveyance involving the Guarantor that is
permitted by Article XI of the Subordinated Indenture and pursuant to which the
successor or assignee agrees in writing to perform the Guarantor's obligations
hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 9.2. AMENDMENTS. Except with respect to any changes that do
not materially adversely affect the rights of the Holders (in which case no
consent of the Holders will be required), this Guarantee may not be amended
without the prior approval of the Holders of at least a Majority in Liquidation
Amount of the Capital Securities. The provisions of Section 11.2 of the Trust
Agreement with respect to meetings of, and action by written consent of, the
Holders of the Securities apply to the giving of such approval.
SECTION 9.3. NOTICES. All notices provided for in this Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered by hand, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing 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 Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Fax: (000) 000-0000/60
(b) If given to the Guarantor, at the Guarantor's mailing addresses
set forth below (or such other address as the Guarantor may give notice of
to the Guarantee Trustee and the Holders of the Securities):
Energy East Corporation
X.X. Xxx 00000
Xxxxxx, Xxx Xxxx 00000-0000
Attention: Treasurer
Fax: _______________
(c) If given to any Holder of Securities, at the address set forth
on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a
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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 9.4. BENEFIT. This Guarantee is solely for the benefit of
the Holders of the Securities and, subject to Section 3.1(a), is not separately
transferable from the Securities.
SECTION 9.5. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
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IN WITNESS WHEREOF, this Guarantee is executed as of the day and
year first above written.
ENERGY EAST CORPORATION
as Guarantor
By:
--------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By:
--------------------------------
Name:
Title:
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