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EXHIBIT 4(e)
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
ENRON CAPITAL TRUST I
DATED AS OF NOVEMBER [ ], 1996
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . 4
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . 4
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee . . . . . . 4
SECTION 2.4 Periodic Reports to Trust Preferred Guarantee Trustee . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . 5
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . 5
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Guarantee Trustee . 5
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee . . . . . 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility . . . . . . . 9
SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred
Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . . 10
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . 10
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . . 12
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . . 12
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . 14
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.3 Merger of the Guarantor . . . . . . . . . . . . . . . . . . . 14
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 15
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Trust
Preferred Securities Guarantee"), dated as of November __, 1996, is executed
and delivered by Enron Corp., a Delaware corporation (the "Guarantor" or the
"Company"), and The Chase Manhattan Bank, a New York banking corporation, as
trustee (the "Trust Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Trust Preferred Securities
(as defined herein) of Enron Capital Trust I, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of November __, 1996, among the trustees of the Issuer
named therein, Enron Corp., as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 8,000,000 Trust Originated Preferred Securities,
having an aggregate liquidation amount of $200,000,000, designated the _______%
Trust Originated Preferred Securities (the "Trust Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Preferred Securities Guarantee, to pay to
the Holders of the Trust Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein and;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Trust Common Securities Guarantee") in substantially identical
terms to this Trust Preferred Securities Guarantee for the benefit of the
holders of the Trust Common Securities (as defined herein), except that if the
Company is in default on any of its obligations under the Trust Preferred
Securities Guarantee, the Partnership Guarantee, or any Investment Guarantee,
or any default has occurred and is continuing with respect to an Affiliate
Investment Instrument (as defined herein), the rights of holders of the Trust
Common Securities to receive Guarantee Payments under the Trust Common
Securities Guarantee are subordinated to the rights of Holders of Trust
Preferred Securities to receive Guarantee Payments under this Trust Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Trust
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Trust Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Preferred Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Trust Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) capitalized terms used in this Trust Preferred Securities
Guarantee but not otherwise defined herein shall have the
meanings assigned to them in the Declaration or the Partnership
Agreement, as the case may be;
(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
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(d) all references to "the Trust Preferred Securities Guarantee" or
"this Trust Preferred Securities Guarantee" are to this Trust
Preferred Securities Guarantee as modified, supplemented or
amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Trust
Preferred Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Preferred Securities Guarantee, unless
otherwise defined in this Trust Preferred Securities Guarantee or
unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with, such specified person.
"Affiliate Investment Instruments" has the meaning set forth in the
Partnership Agreement.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by
any applicable law to close.
"Comparable Equity Interest" shall mean the 8% Cumulative Guaranteed
Monthly Income Preferred Shares of Enron Capital LLC, the 9% Cumulative
Guaranteed Preferred Securities, Series A of Enron Capital Resources, L.P. and
any preferred security hereafter issued by any finance subsidiary of which the
Company is the parent company and the principal purpose of which is to lend the
proceeds of the sale thereof to the Company or to eligible affiliates of the
Company.
"Corporate Trust Office" means the principal trust office of the Trust
Preferred Guarantee Trustee at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof is
located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Global Trust Services.
"Covered Person" means any Holder or beneficial owner of Trust Preferred
Securities.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Trust Preferred Securities to the extent the Issuer shall have funds
available therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Trust Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Partnership Preferred Securities to the
Holders as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Trust
Preferred Securities to the date of payment and (b) the amount of assets of the
Issuer, after satisfaction of all liabilities, remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Issuer of any Trust Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Trust Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
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"Indemnified Person" means the Trust Preferred Guarantee Trustee, any
Affiliate of the Trust Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Trust Preferred Guarantee Trustee.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
investment company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under an
Affiliate Investment Instrument.
"Majority in liquidation amount of the Trust Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Trust Preferred Securities, voting separately as a class, of more than 50% of
the liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Trust
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Trust Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition 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.
"Partnership" means Enron Preferred Funding, L.P.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of November ____, 1996, among
Enron Corp., a Delaware corporation, as general partner, Organizational
Partner, Inc., a Delaware corporation, as initial limited partner and such
other persons who become limited partners as provided therein.
"Partnership Preferred Securities" means those securities representing
limited partnership interests in the Partnership.
"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.
"Responsible Officer" means, with respect to the Trust Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the Trust
Preferred Guarantee Trustee, including any vice president, any assistant vice
president, any secretary, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Trust Preferred 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.
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"Successor Trust Preferred Guarantee Trustee" means a successor Trust
Preferred Guarantee Trustee possessing the qualifications to act as Trust
Preferred Guarantee Trustee under Section 4.1.
"Trust Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Preferred Guarantee Trustee" means The Chase Manhattan Bank, a
national banking association, until a Successor Trust Preferred Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Trust Preferred Securities Guarantee and thereafter means each
such Successor Trust Preferred Guarantee Trustee.
"Trust Securities" means the Trust Common Securities together with the
Trust Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be
part of this Trust Preferred Securities Guarantee and shall, to
the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Trust Preferred
Securities Guarantee 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 2.2 Lists of Holders of Securities
(a) The Trust Guarantee Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it
of the names and addresses of Holders of Trust Preferred
Securities. If the Trust Guarantee Trustee is not the Registrar,
the Guarantor shall furnish to the Trust Guarantee Trustee semi-
annually on or before the last day of June and December in each
year, and at such other times as the Trust Guarantee Trustee may
request in writing, a list, in such form and as of such date as
the Trust Guarantee Trustee may reasonably require, containing
all the information in the possession or control of the
Registrar, the Guarantor or any of its Paying Agents other than
the Trust Guarantee Trustee as to the names and addresses of
Holders of Trust Preferred Securities. If there are unregistered
securities outstanding, even if the Trust Guarantee Trustee is
the Registrar, the Company shall furnish to the Trust Guarantee
Trustee such a list containing such information with respect to
Holders of such unregistered securities only.
(b) The Trust Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Trust Preferred Guarantee
Trustee shall provide to the Holders of the Trust Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Trust Preferred Guarantee Trustee shall also comply with the requirements
of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Trust Preferred Guarantee Trustee
The Guarantor shall provide to the Trust Preferred 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 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trust Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Trust Preferred Securities 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 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, 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 Trust Preferred Securities Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Trust Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Trust Preferred
Securities, notices of all Events of Default actually known to a
Responsible Officer of the Trust Preferred Guarantee Trustee,
unless such defaults have been cured before the giving of such
notice, provided, that, the Trust Preferred Guarantee Trustee
shall be protected in withholding such notice if and so long as a
Responsible Officer of the Trust Preferred Guarantee Trustee in
good faith determines that the withholding of such notice is in
the interests of the Holders of the Trust Preferred Securities
Trust Preferred Securities.
(b) The Trust Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Trust Preferred
Guarantee Trustee shall have received written notice, or of which
a Responsible Officer of the Trust Preferred Guarantee Trustee
charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Trust Preferred Securities Guarantee 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
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Guarantee Trustee
(a) This Trust Preferred Securities Guarantee shall be held by the
Trust Preferred Guarantee Trustee for the benefit of the Holders
of the Trust Preferred Securities, and the Trust Preferred
Guarantee Trustee shall not transfer this Trust Preferred
Securities Guarantee to any Person except a Holder of Trust
Preferred Securities exercising his or her rights pursuant to
Section 5.4(b) or to a
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Successor Trust Preferred Guarantee Trustee on acceptance by such
Successor Trust Preferred Guarantee Trustee of its appointment to
act as Successor Trust Preferred Guarantee Trustee. The right,
title and interest of the Trust Preferred Guarantee Trustee shall
automatically vest in any Successor Trust Preferred 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 Trust Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Trust Preferred Guarantee Trustee has occurred and is
continuing, the Trust Preferred Guarantee Trustee shall enforce
this Trust Preferred Securities Guarantee for the benefit of the
Holders of the Trust Preferred Securities.
(c) The Trust Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing or waiver of all Events
of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Trust
Preferred Securities Guarantee, and no implied covenants shall be
read into this Trust Preferred Securities Guarantee against the
Trust Preferred Guarantee Trustee. In case an 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 Trust Preferred Guarantee Trustee, the Trust Preferred
Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Trust Preferred Securities 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 Trust Preferred Securities Guarantee shall
be construed to relieve the Trust Preferred 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 Trust Preferred
Guarantee Trustee shall be determined solely by the
express provisions of this Trust Preferred
Securities Guarantee, and the Trust Preferred
Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as
are specifically set forth in this Trust Preferred
Securities Guarantee, and no implied covenants or
obligations shall be read into this Trust Preferred
Securities Guarantee against the Trust Preferred
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Trust Preferred Guarantee Trustee, the Trust
Preferred 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 Trust
Preferred Guarantee Trustee and conforming to the
requirements of this Trust Preferred Securities
Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are
specifically required to be furnished to the Trust
Preferred Guarantee Trustee, the Trust Preferred
Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform
to the requirements of this Trust Preferred
Securities Guarantee;
(ii) The Trust Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Trust Preferred Guarantee
Trustee, unless it shall be proved that the Trust
Preferred Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;
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(iii) The Trust Preferred 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 Trust Preferred Securities relating to the
time, method and place of conducting any proceeding for
any remedy available to the Trust Preferred Guarantee
Trustee, or exercising any trust or power conferred upon
the Trust Preferred Guarantee Trustee under this Trust
Preferred Securities Guarantee; and
(iv) No provision of this Trust Preferred Securities Guarantee
shall require the Trust Preferred 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 Trust Preferred 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 Trust Preferred Securities
Guarantee or indemnity, reasonably satisfactory to the
Trust Preferred Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust Preferred 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
Trust Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust Preferred
Securities Guarantee, the Trust Preferred Guarantee
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any
action hereunder, the Trust Preferred 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 Trust Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or registration
thereof).
(v) The Trust Preferred Guarantee Trustee may, at the expense
of the Sponsor, consult with counsel of its selection, 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 Trust Preferred Guarantee
Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust
Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Trust Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested
in it by this Trust Preferred Securities Guarantee at the
request or direction of any Holder, unless such Holder
shall have provided to the Trust Preferred Guarantee
Trustee such security and indemnity, reasonably
satisfactory to the
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Trust Preferred Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's 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 Trust Preferred Guarantee Trustee;
provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Trust Preferred
Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and
powers vested in it by this Trust Preferred Securities
Guarantee.
(vii) The Trust Preferred 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 Trust
Preferred Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Trust Preferred 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 Trust Preferred
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 Trust Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the
Trust Preferred Securities, and the signature of the Trust
Preferred 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 Trust Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and
provisions of this Trust Preferred Securities Guarantee,
both of which shall be conclusively evidenced by the Trust
Preferred Guarantee Trustee or its agent taking such
action.
(x) Whenever in the administration of this Trust Preferred
Securities Guarantee the Trust Preferred Guarantee Trustee
shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any
other action hereunder, the Trust Preferred Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Trust Preferred
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The Trust Preferred 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 Trust Preferred Securities
Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee shall
be deemed to impose any duty or obligation on the Trust Preferred
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
Trust Preferred 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
Trust Preferred Guarantee Trustee shall be construed to be a
duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee
The recitals contained in this Trust Preferred Securities Guarantee
shall be taken as the statements of the Guarantor, and the Trust Preferred
Guarantee Trustee does not assume any responsibility for their correctness.
The Trust Preferred Guarantee Trustee makes no representation as to the
validity or sufficiency of this Trust Preferred Securities Guarantee.
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Preferred 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
4.1(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 Trust Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Trust
Preferred Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Trust Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Trust Preferred Guarantee Trustee
and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Trust Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Trust Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Trust Preferred
Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor
Trust Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Trust Preferred Guarantee Trustee
shall have been appointed or until its removal or resignation.
The Trust Preferred Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an
instrument in writing executed by the Trust Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Trust Preferred Guarantee
Trustee has been appointed and has accepted such appointment by
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instrument in writing executed by such Successor Trust Preferred
Guarantee Trustee and delivered to the Guarantor and the
resigning Trust Preferred Guarantee Trustee.
(d) If no Successor Trust Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Trust Preferred Guarantee Trustee resigning or
being removed may petition any court of competent jurisdiction
for appointment of a Successor Trust Preferred Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any,
as it may deem proper, appoint a Successor Trust Preferred
Guarantee Trustee.
(e) No Trust Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Trust Preferred Guarantee
Trustee.
(f) Upon termination of this Trust Preferred Securities Guarantee or
removal or resignation of the Trust Preferred Guarantee Trustee
pursuant to this Section 4.2, and before the appointment of any
Successor Trust Preferred Guarantee Trustee the Guarantor shall
pay to the Trust Preferred Guarantee Trustee all amounts to which
it is entitled to the date of such termination, removal or
resignation.
ARTICLE V
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 Issuer), if, as and when due, regardless of any defense, right of
setoff or counterclaim that 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 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust Preferred
Securities 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 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 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Trust Preferred Securities Guarantee 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 Trust
Preferred 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
Trust Preferred Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Trust Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other
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sum payable that results from the extension of any interest
payment period on the Partnership Preferred Securities or any
extension of the maturity date of the Partnership Preferred
Securities permitted by the Partnership Agreement);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of
the Trust Preferred 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 Trust
Preferred 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 Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Trust
Preferred Securities have the right to direct the time, method
and place of conducting of any proceeding for any remedy
available to the Trust Preferred Guarantee Trustee in respect of
this Trust Preferred Securities Guarantee or exercising any trust
or power conferred upon the Trust Preferred Guarantee Trustee
under this Trust Preferred Securities Guarantee.
(b) If the Trust Preferred Guarantee Trustee fails to enforce its
rights under the Trust Preferred Securities Guarantee after a
Holder of Trust Preferred Securities has made a written request,
such Holder of Trust Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Trust
Preferred Guarantee Trustee's rights under this Trust Preferred
Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Trust Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the
foregoing, if the Guarantor has failed to make a guarantee
payment, a Holder of Trust Preferred Securities may directly
institute a proceeding in such Holder's own name against the
Guarantor for enforcement of the Trust Preferred Securities
Guarantee for such payment. The Guarantor waives any right or
remedy to require that any action be brought first against the
Issuer or any other person or entity before proceeding directly
against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Trust Preferred Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Trust Preferred Securities
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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 Trust Preferred Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Trust Preferred Securities 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 Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Trust
Preferred Securities, and that the Guarantor shall be liable as principal and
as debtor hereunder to make Guarantee Payments pursuant to the terms of this
Trust Preferred Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Preferred Securities remain outstanding, if for any
distribution period, (a) full distributions on a cumulative basis on any Trust
Preferred Securities have not been paid or declared and set apart for payment,
(b) an Investment Event of Default by any Investment Affiliate in respect of
any Affiliate Investment Instrument has occurred and is continuing, or (c) the
Company is in default of its obligations under the Trust Preferred Securities
Guarantee, the Trust Common Securities Guarantee, the Partnership Guarantee or
any Investment Guarantee, then, during such period (i) the Company shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to any of its
capital stock (except for dividends or distributions in shares of its common
stock and exchanges of common stock of one class for common stock of another
class), (ii) the Company shall not make any payment or cause any payment to be
made that would result in and shall take such action as shall be necessary to
prevent, the payment of dividends on, any distribution with respect to, any
redemption, purchase or other acquisition of, or any liquidation payment with
respect to, any Comparable Equity Interest, and (iii) the Company shall not
make any guarantee payments with respect to the foregoing.
SECTION 6.2 Ranking
This Trust Preferred Securities Guarantee 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, without
limitation, the fees, charges, expenses and indemnities due to the Property
Trustee or the Delaware Trustee in respect of the Declaration of Trust, the
Trust Preferred Securities Guarantee and the Affiliate Debenture Guarantee
Agreement, (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 security of
any Affiliate of the Guarantor, and (iii) senior to the Guarantor's common
stock. Any similar guarantee given hereafter by the Company with respect to
Trust Preferred Securities that is silent as to seniority will rank pari passu
with this Trust Preferred Securities Agreement.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Trust Preferred Securities, (ii) upon
the distribution of the Partnership Preferred Securities to the Holders of all
of the Trust Preferred Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Trust Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Trust Preferred Securities must restore payment of any sums
paid under the Trust Preferred Securities or under this Trust Preferred
Securities Guarantee.
ARTICLE VIII
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 or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good
faith in accordance with this Trust Preferred Securities
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 Trust Preferred Securities
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 gross 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 and who has been selected with reasonable
care by or on behalf of the Guarantor, 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 Trust Preferred Securities might
properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without gross 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. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of
this Trust Preferred Securities Guarantee or the earlier resignation or removal
of the Trust Preferred Guarantee Trustee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Trust Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Trust Preferred Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all the outstanding Trust Preferred Securities.
The provisions of Section 13.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Merger of the Guarantor
The Guarantor covenants that it will not merge or consolidate with any
other corporation or other entity or sell or convey all or substantially all of
its assets to any person (other than such a sale or conveyance to a Subsidiary
or any successor thereto (such a sale or conveyance being called an "Asset
Drop-Down")), unless (i) either the Guarantor shall be the continuing
corporation or the successor corporation or other entity or the person which
acquires by sale or conveyance substantially all the assets of the Guarantor
shall expressly assume the obligations of the Guarantor hereunder, according to
their tenor, and the due and punctual performance and observance of all of the
covenants hereof to be performed or observed by the Guarantor, by instrument in
form satisfactory to the Trust Preferred Securities Guarantee Trustee, executed
and delivered to the Trust Preferred Securities Guarantee Trustee by such
corporation or other entity, and (ii) the Guarantor or such successor
corporation or other entity, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition. In the event of any Asset
Drop-Down after the date hereof, any subsequent sale or conveyance of assets by
a Subsidiary to which assets were transferred in such Asset Drop-Down will be
deemed to be a sale or conveyance of assets by the Company for purposes of this
provision.
SECTION 9.4 Notices
All notices provided for in this Trust Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Trust Preferred Guarantee Trustee, at the Trust
Preferred Guarantee Trustee's mailing address set forth below:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Trust Services
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give
notice of to the Holders of the Trust Preferred Securities):
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Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasury Department
Telecopy: [ ]
(c) If given to any Holder of Trust Preferred Securities, at the
address set forth on the books and records of the Issuer.
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 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 9.5 Benefit
This Trust Preferred Securities Guarantee is solely for the benefit of
the Holders of the Trust Preferred Securities and, subject to Section 3.1(a),
is not separately transferable from the Trust Preferred Securities.
SECTION 9.6 Governing Law
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
ENRON CORP.,
as Guarantor
By:
---------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trust Preferred Guarantee Trustee
By:
---------------------------------------
Name:
Title:
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