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EXHIBIT 4(d)
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENRON PREFERRED FUNDING II, L.P.
Dated as of ___________, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2 NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3 PURPOSES OF THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5 REGISTERED AGENT AND OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.6 PRINCIPAL PLACE OF ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP
PREFERRED SECURITIES; WITHDRAWAL OF INITIAL LIMITED
PARTNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST; CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2 PARTNERSHIP PREFERRED
SECURITY HOLDER'S INTEREST
REPRESENTED BY PARTNERSHIP PREFERRED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.3 CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.2 SPECIAL ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.3 WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.2 LIMITATIONS ON DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING
PARTNERSHIP PREFERRED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.2 PARTNERSHIP PREFERRED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . 18
Section 7.3 ASSUMPTION OF OBLIGATIONS AND
RELEASE OF INVESTMENT AFFILIATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.2 ACCOUNTING METHOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.3 ANNUAL AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IX
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES. . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE X
POWERS, RIGHTS AND DUTIESOF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.2 LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.3 PRIORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE XI
POWERS, RIGHTS AND DUTIESOF THE GENERAL PARTNER
Section 11.1 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . . 22
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Section 11.4 LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 11.5 OUTSIDE ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 11.7 EXCULPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 11.8 FIDUCIARY DUTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 11.9 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 11.10 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.2 TRANSFER OF L.P. CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.3 DEFINITIVE L.P. CERTIFICATES;
PERSONS DEEMED PARTNERSHIP PREFERRED SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . 27
Section 12.4 BOOK-ENTRY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 13.2 DISSOLUTION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 13.3 LIQUIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.4 DISTRIBUTION IN LIQUIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.5 RIGHTS OF LIMITED PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.6 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 14.2 AMENDMENT OF CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 14.3 MEETINGS OF PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XV
MISCELLANEOUS
Section 15.1 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.2 POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.3 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.4 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.5 EFFECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.6 PRONOUNS AND NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.7 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.8 PARTIAL ENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.9 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 15.10 WAIVER OF PARTITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 15.11 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Schedule 1 LIST OF PARTNERS
Annex A FORM OF L.P. CERTIFICATE
Exhibit A FORM OF INDENTURE OF ENRON CORP.
Exhibit B FORM OF INDENTURE FOR SUBSIDIARIES
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AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
ENRON PREFERRED FUNDING II, L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Enron Preferred
Funding II, L.P., a Delaware limited partnership (the "Partnership"), dated as
of _________________, 1997, among Enron Corp., a Delaware corporation (the
"Company"), as the general partner, Organizational Partner, Inc., a Delaware
corporation, as the initial limited partner (the "Initial Limited Partner") and
such other Persons (as defined herein) who become Limited Partners (as defined
herein) as provided herein.
WHEREAS, the Company and the Initial Limited Partner entered into an
Agreement of Limited Partnership, dated as of December ___, 1996, (the
"Original Partnership Agreement"), and the Partners (as defined herein) desire
to continue the Partnership under the Act (as defined herein) and to amend and
restate the Original Partnership Agreement in its entirety;
WHEREAS, the Certificate of Limited Partnership of the Partnership was
filed with the Office of the Secretary of State of the State of Delaware on
December ____, 1996;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate the Original Partnership Agreement as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified. Terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Declaration.
"Act" means the Delaware Revised Uniform Limited Partnership Act, Del.
Code Xxx. tit. 6, Section 17-101 et seq., as amended from time to time.
"Affiliate" has the meaning set forth in Section 1.1 of the Declaration.
"Affiliate Investment Instruments" has the meaning set forth in Section
7.1 of this Agreement.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended or supplemented from time to time.
"Assuming Investment Affiliate" has the meaning set forth in Section 7.3
of this Agreement.
"Beneficiaries" has the meaning set forth in Section 11.3 of this
Agreement.
"Book-Entry Interest" means a beneficial interest in the L.P.
Certificates, ownership and transfers of which shall be maintained and made
through book-entries of a Clearing Agency as set forth in Section 12.4 of this
Agreement.
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"Business Day" means a day other than a day on which banking
institutions in The City of New York are authorized or required by law to
close.
"Capital Account" has the meaning set forth in Section 3.3 of this
Agreement.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware on
December _____, 1996, as it may be amended and restated from time to time.
"Change in 1940 Act Law" has the meaning set forth in Section 1.1 of the
Declaration.
"Closing Date" has the meaning set forth in Section 1.1 of the
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Company" means Enron Corp., a Delaware corporation.
"Compounded Distributions" has the meaning set forth in Section 6.2 of
this Agreement.
"Declaration" means the Amended and Restated Declaration of Trust by and
among the Company, as Sponsor, the Property Trustee, the Delaware Trustee, and
the Regular Trustees, dated as of _____, 1997.
"Definitive L.P. Certificates" has the meaning set forth in Section
12.4(a) of this Agreement.
"Delaware Trustee" has the meaning set forth in Section 6.2 of the
Declaration.
"Distribution Payment Date" has the meaning set forth in Section
6.2(b)(ii) of this Agreement.
"Distributions" means the right to receive the amount of the cumulative
cash distributions payable by the Partnership with respect to the Interests
represented by the Partnership Preferred Securities, which amounts will accrue
on the $25 liquidation preference of each Partnership Preferred Security from
the Closing Date and are payable quarterly in arrears in accordance with
Sections 5.1 and 6.2(b) of this Agreement.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
"Eligible Debt Securities" means cash or book-entry securities,
negotiable instruments, or other securities of entities not affiliated with the
Company represented by instruments in registered form which evidence any of the
following: (a) any security issued or guaranteed as to principal or interest
by the United States, or by a person controlled or supervised by and acting as
an instrumentality of the Government of the United States pursuant to authority
granted by the Congress of the United States, or any certificate of deposit for
any of the foregoing; (b) commercial paper issued pursuant to Section 3(a)(3)
of the Securities Act of 1933 (the "Securities Act") and having, at the time of
the investment or contractual commitment to invest therein, a rating from each
of S&P and Moody's in the highest rating category granted by such rating agency
and having a maturity not in excess of nine months; (c) demand deposits, time
deposits and certificates of deposit which are fully insured by the FDIC; (d)
repurchase obligations with respect to any security that is a direct obligation
of, or fully guaranteed by, the Government of the United States of America or
any agency or instrumentality thereof, the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company which is an
Eligible Institution and the deposits of which are insured by the FDIC; and (e)
any other security which is identified as a permitted investment of a finance
subsidiary pursuant to Rule 3a-5 under the 1940 Act at the time it is acquired
by the Partnership.
"Eligible Institution" means a depository institution organized under
the laws of the United States of America or any one of the states thereof or
the District of Columbia (or any domestic branch of a foreign bank),
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(1)(i) which has either (A) a long-term unsecured debt rating of AA or better
by S&P and Aa or better by Moody's or (B) a short-term unsecured debt rating or
a certificate of deposit rating of A-1+ or better by S&P and P-1 or better by
Moody's and (ii) whose deposits are insured by the FDIC or (2)(i) the parent of
which has a long-term or short-term unsecured debt rating which signifies
investment grade and (ii) whose deposits are insured by the FDIC.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"Fiscal Period" means each calendar quarter.
"Fiscal Year" means (i) the period commencing upon the formation of the
Partnership and ending on December 31, 1996, and (ii) any subsequent calendar
year.
"General Partner" means the Company in its capacity as the general
partner of the Partnership, its permitted successors, or any successor general
partner in the Partnership admitted as such pursuant to the terms of this
Agreement.
"General Partner Capital Contribution" means the contribution by the
General Partner to the Partnership made contemporaneous with the issuance of
the Partnership Preferred Securities.
"General Partner Interest" means the Interest of the General Partner in
the Partnership.
"Holder" or "Partnership Preferred Security Holder" means a Limited
Partner in whose name an L.P. Certificate representing Partnership Preferred
Securities is registered.
"Indentures" means the Indentures between the Company or certain of its
subsidiaries, as the case may be, and The Chase Manhattan Bank, as Indenture
Trustee, dated as of _______________, 1997, forms of which are attached hereto
as Exhibits A and B, respectively.
"Independent Financial Adviser" shall mean (i) Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated or (ii) such other nationally recognized investment
banking firm which shall be designated by the Company and which firm does not
(and whose directors, officers, employees and affiliates do not) have a direct
or indirect material equity interest in the Company or any of its subsidiaries
or (iii) another entity which is an investment banking, accounting or financial
services firm selected by the Company and approved by the Holders of a Majority
in Liquidation Preference of Partnership Preferred Securities.
"Initial Affiliate Debentures" has the meaning set forth in Section
7.1(b) of this Agreement.
"Initial Company Debenture" has the meaning set forth in Section 7.1(b)
of this Agreement.
"Initial Debentures" means collectively, the Initial Company Debentures
and the Initial Affiliate Debentures.
"Initial Limited Partner" means Organizational Partner, Inc., a Delaware
corporation.
"Initial Partnership Proceeds" means the aggregate proceeds received by
the Partnership from the sale of the Partnership Preferred Securities and the
General Partner Capital Contribution.
"Interest" means the entire ownership interest of a Partner in the
Partnership at any particular time, including, without limitation, its interest
in the capital, profits, and losses of, and distributions from, the
Partnership.
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"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 any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its obligations under any Affiliate Investment
Instrument that is an equity instrument.
"Investment Guarantee" has the meaning specified in Section 1.1 of the
Declaration.
"Investment Offer" has the meaning specified in Section 7.2(b) of this
Agreement.
"Limited Partner" means any Person who is admitted to the Partnership as
a limited partner pursuant to the terms of this Agreement, in such Person's
capacity as a limited partner of the Partnership.
"Liquidator" has the meaning specified in Section 13.3 of this
Agreement.
"L.P. Certificate" means a certificate substantially in the form
attached hereto as Annex A, evidencing the Partnership Preferred Securities
held by a Limited Partner.
"Majority in Liquidation Preference" means Holder(s) of Partnership
Preferred Securities who are the record owners of Partnership Preferred
Securities whose aggregate liquidation preferences represent more than 50% of
the aggregate liquidation preference of all Partnership Preferred Securities
then outstanding.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
thereto.
"Net Income" and "Net Loss", respectively, for any Fiscal Period mean
the income and loss, respectively, of the Partnership for such Fiscal Period as
determined in accordance with the method of accounting followed by the
Partnership for United States federal income tax purposes, including, for all
purposes, the net income, if any, from the Affiliate Investment Instruments,
Eligible Debt Securities and any income exempt from tax and any noncapital,
nondeductible expenditures of the Partnership which are described in the Code.
"1940 Act" has the meaning set forth in Section 1.1 of the Declaration.
"Original Partnership Agreement" has the meaning set forth in the
recitals to this Agreement.
"Partners" means the General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which the term
is used.
"Partnership Covered Person" means any Partner, any Affiliate of a
Partner or any officers, directors, shareholders, partners, members, employees,
representatives or agents of a Partner of its respective Affiliates, or any
employee or agent of the Partnership or its Affiliates or any Special
Representative.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
"Partnership Guarantee" means the Partnership Guarantee Agreement dated
as of ______, 1997 by the Company in favor of the Partnership Preferred
Security Holders with respect to the Partnership Preferred Securities, as
amended or supplemented from time to time.
"Partnership Indemnified Person" means the General Partner, any Special
Representative, any Affiliate of the General Partner or any Special
Representative or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the General Partner or any Special
Representative, or any of their respective Affiliates, or any employee or agent
of the Partnership or its Affiliates.
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"Partnership Investment Company Event" means that the General Partner
shall have requested and received an opinion of nationally recognized
independent legal counsel experienced in such matters to the effect that as a
result of the occurrence on or after the date hereof of a Change in 1940 Act
Law, the Partnership is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
"Partnership Liquidation Distribution" has the meaning set forth in
Section 6.2(g) of this Agreement.
"Partnership Preferred Securities" represent the Interests of Limited
Partners and have the preference and designation set forth in Section 6.2(a) of
this Agreement.
"Partnership Preferred Security Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest as reflected on the books of DTC, or on the books of a Person
maintaining an account with DTC (directly as a participant or as an indirect
participant, in each case in accordance with the rules of DTC or such
participant).
"Partnership Special Event" means either a Partnership Tax Event or a
Partnership Investment Company Event.
"Partnership Successor Securities" has the meaning set forth in Section
11.11 of this Agreement.
"Partnership Tax Event" means that the General Partner shall have
requested and received an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that there has been a Tax
Action that results in there being more than an insubstantial risk that (i) the
Partnership is, or will be, subject to United States federal income tax with
respect to income accrued or received on the Affiliate Investment Instruments
or the Eligible Debt Securities, (ii) the Partnership is, or will be, subject
to more than a de minimis amount of other taxes, duties or other governmental
charges or (iii) interest payable by an Investment Affiliate with respect to
any Initial Debenture issued by such Investment Affiliate to the Partnership is
not, or will not be, deductible by such Investment Affiliate for United States
federal income tax purposes.
"Paying Agent" shall have the meaning set forth in Section 12.5 of this
Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Power of Attorney" means the Power of Attorney granted pursuant to
Section 15.2 of this Agreement.
"Property Trustee" has the meaning set forth in Section 1.1 of the
Declaration.
"Purchase Agreement" means the Purchase Agreement dated ________, 1997
among the Company, the Trust, the Partnership, Xxxxxxx Xxxxx & Co. and Merrill,
Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated as representatives of the other
underwriters named in Schedule A thereto.
"Record Date" means (i) as long as the Trust Preferred Securities remain
(or, in the event that the Trust is liquidated in connection with a Trust
Special Event, as long as the Partnership Preferred Securities remain) in book-
entry only form, one Business Day prior to the relevant payment dates and (ii)
in the event that the Trust Preferred Securities (or in the event that the
Trust is liquidated in connection with a Trust Special Event, the Partnership
Preferred Securities) shall not continue to remain in book-entry only form, the
15th day of the month of the relevant payment date.
"Redemption Notice" has the meaning set forth in Section 6.2(e) of this
Agreement.
"Redemption Price" has the meaning set forth in Section 6.2(c) of this
Agreement.
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"Registrar" has the meaning set forth in Section 12.5 of this Agreement.
"Regular Trustees" has the meaning set forth in Section 1.1 of the
Declaration.
"Reinvestment Criteria" has the meaning specified in Section 7.2(d) of
this Agreement.
"Released Investment Affiliate" has the meaning set forth in Section 7.3
of this Agreement.
"S&P" means Standard & Poor's Ratings Services or any successor thereof.
"Special Representative" has the meaning set forth in Section 6.2(h)(i)
of this Agreement.
"Tax Action" has the meaning set forth in Section 1.1 of the
Declaration.
"Tax Matters Partner" means the General Partner designated as such in
Section 11.10 of this Agreement.
"10% in Liquidation Preference" means Holders of the Partnership
Preferred Securities voting together as a single class representing 10% of the
aggregate 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 the Partnership
Preferred Securities.
"Treasury Regulations" has the meaning set forth in Section 1.1 of the
Declaration.
"Trust" means Enron Capital Trust II, a Delaware business trust, formed
under the Declaration.
"Trust Common Securities" has the meaning specified in Section 8.1 of
the Declaration.
"Trust Common Securities Guarantee" means the Trust Common Securities
Guarantee Agreement dated as of ________, 1997, entered into by the Company, as
Guarantor, for the benefit of the holders of the Trust Common Securities.
"Trust Preferred Securities" has the meaning specified in Section 8.1 of
the Declaration.
"Trust Preferred Securities Guarantee" means the Trust Preferred
Securities Guarantee Agreement dated as of _______, 1997, entered into by the
Company, as Guarantor, for the benefit of the holders of the Trust Preferred
Securities.
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto agree
to continue the Partnership in accordance with the terms of this Agreement.
The General Partner, for itself and as agent for the Limited Partners, shall
make every reasonable effort to assure that all certificates and documents are
properly executed and shall accomplish all filing, recording, publishing and
other acts necessary or appropriate for compliance with all the requirements
for the continuation of the Partnership as a limited partnership under the Act
and under all other laws of the State of Delaware or such other jurisdictions
in which the General Partner determines that the Partnership may conduct
activities. The rights and duties of the Partners shall be as provided herein
and, subject to the terms hereof, under the Act.
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Section 2.2 NAME. The name of the Partnership is "Enron Preferred
Funding II, L.P.", as such name may be modified from time to time by the
General Partner following written notice to the Limited Partners.
Section 2.3 PURPOSES OF THE PARTNERSHIP. The purposes of the
Partnership are (a) to issue limited partnership interests in the Partnership
in the form of Partnership Preferred Securities, (b) to receive the General
Partner Capital Contribution, (c) to use substantially all of the Initial
Partnership Proceeds to purchase, as an investment, the Initial Debentures, (d)
to invest, at all times, an amount equal to at least 1% of the Initial
Partnership Proceeds in Eligible Debt Securities, (e) to receive interest and
other payments on the Affiliate Investment Instruments and the Eligible Debt
Securities held by the Partnership from time to time, (f) to make Distributions
on the Partnership Preferred Securities and distributions on the General
Partner Interest if, as and when declared by the General Partner in its sole
discretion, (g) subject to the restrictions and conditions contained in this
Agreement, to make additional investments in Affiliate Investment Instruments
and Eligible Debt Securities and to dispose of any such investments and (h)
except as otherwise limited herein, to enter into, make and perform all
contracts and other undertakings, and engage in those activities and
transactions as the General Partner may reasonably deem necessary or advisable
for the carrying out of the foregoing purposes of the Partnership. The
Partnership may not engage in any other activities or operations except as
contemplated by the preceding sentence.
Section 2.4 TERM. The term of the Partnership shall commence upon the
filing of the Certificate in the Office of the Secretary of State of the State
of Delaware and shall continue until the Partnership is dissolved in accordance
with the provisions of this Agreement.
Section 2.5 REGISTERED AGENT AND OFFICE. The Partnership's registered
agent and office in Delaware shall be Corporation Trust Company, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000. At any time, the
General Partner may designate another registered agent and/or registered
office.
Section 2.6 PRINCIPAL PLACE OF ACTIVITY. The principal place of
activity of the Partnership shall be c/o Enron Corp., 0000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000. Upon ten days' written notice to the Partners, the
General Partner may change the location of the Partnership's principal place of
activity, provided that such change has no material adverse effect upon any
Partner.
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER. The name and address
of the General Partner are as follows:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Treasury Department
The General Partner may change its name or address from time to time, in which
event the General Partner shall promptly notify the Limited Partners of any
such change.
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General Partner
shall cause the Partnership to become qualified, formed or registered under the
applicable qualification, fictitious name or similar laws of any jurisdiction
in which the Partnership conducts activities.
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP PREFERRED SECURITIES;
WITHDRAWAL OF INITIAL LIMITED PARTNER.
(a) Without execution of this Agreement, upon the receipt of an L.P.
Certificate by a Person, whether by purchase, gift, devise or other valid
transfer, which receipt shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect such Person's admission
as a Limited Partner, such Person shall be admitted to the Partnership as a
Limited Partner and shall become bound by this Agreement.
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(b) Following the first admission of a Partnership Preferred Security
Holder to the Partnership as a Limited Partner, the Initial Limited Partner
shall withdraw from the Partnership and shall receive the return of its capital
contribution, if any, without interest or deduction.
(c) The name and mailing address of each Partner and the amount
contributed by such Partner to the capital of the Partnership shall be listed
on the books and records of the Partnership. The General Partner shall be
required to update the books and records from time to time as necessary to
accurately reflect such information.
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS.
(a) Contemporaneous with the issuance of the Partnership Preferred
Securities, the General Partner shall make the General Partner Capital
Contribution. The General Partner shall, from time to time, make such
additional capital contributions as are necessary to maintain at all times a
positive Capital Account balance equal to at least one percent (1%) of the
aggregate positive Capital Account balances of all Partners at the end of such
period.
(b) On the Closing Date, the Trust shall, in exchange for a
definitive L.P. Certificate, contribute to the capital of the Partnership on
behalf of the Trust an amount in cash equal to the gross proceeds from the sale
of the Trust Preferred Securities and the Trust Common Securities (such amount
being a capital contribution to the Partnership). On such date, immediately
following the withdrawal of the Initial Limited Partner, the Trust shall be the
sole Limited Partner.
(c) No Limited Partner shall at any time be required to make any
additional capital contributions to the Partnership, except as may be required
by law.
Section 3.2 PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST
REPRESENTED BY PARTNERSHIP PREFERRED SECURITIES. A Partnership Preferred
Security Holder's Interest shall be represented by the Partnership Preferred
Securities held by or on behalf of such Partner. Each Partnership Preferred
Security Holder's respective ownership of Partnership Preferred Securities
shall be set forth on the books and records of the Partnership. Each Partner
hereby agrees that its Interest in the Partnership shall for all purposes be
personal property. No Partner shall have an interest in specific Partnership
property.
Section 3.3 CAPITAL ACCOUNTS.
(a) Establishment and Maintenance of Capital Accounts. The
Partnership shall establish and maintain a separate account (the "Capital
Account") for each Partner. The initial balance of the Capital Account for
each Partner shall be the amount as set out opposite the name of each of the
Partners on Schedule 1 attached hereto. The Capital Account of each Partner
shall be increased by (i) the dollar amount of any additional contributions
made by such Partner and (ii) allocations to such Partner of income and gain
(including income exempt from tax). The Capital Account of each Partner shall
be decreased by (i) the dollar amount of any distributions made to such
Partner, and (ii) allocations to such Partner of loss and deduction (including
noncapital, nondeductible expenditures not deductible in computing the
Partnership's income or loss for United States federal income tax purposes).
(b) Compliance with Regulations. Notwithstanding any other provision
of this Agreement to the contrary, the provisions of Section 3.3(a) hereof
regarding the maintenance of Capital Accounts shall be construed so as to
comply with the Treasury Regulations promulgated under section 704 of the Code.
The General Partner,
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in its sole discretion, is authorized to modify such provisions to the minimum
extent necessary to comply with such Treasury Regulations.
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS. No Partner shall be
entitled to interest on or with respect to any capital contribution to the
Partnership.
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS. Subject
to Section 2.9(b) hereof, no Partner shall be entitled to withdraw any part of
such Partner's capital contribution to the Partnership. No Partner shall be
entitled to receive any distributions from the Partnership, except as provided
in this Agreement.
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES. After giving effect to the special
allocation provisions set forth in Section 4.2, which special allocations shall
take precedence over any allocations made pursuant to this Section 4.1,
(a) The Partnership's Net Income for each Fiscal Period of the
Partnership shall be allocated as follows:
(i) First, to each Holder of a Partnership Preferred Security
in an amount equal to the excess, if any, of (x) the amount of Net
Losses, if any, allocated to each such Holder from the date of issuance
of the Partnership Preferred Security through and including the close of
such Fiscal Period pursuant to Section 4.1(b)(ii) below over (y) the
amount of Net Income, if any, allocated to each such Holder pursuant to
this Section 4.1(a)(i) in all prior Fiscal Periods.
(ii) Second, to the Holders of the Partnership Preferred
Securities, an amount of Net Income equal to the excess of (x) the
Distributions accrued on the Partnership Preferred Securities from the
date of their issuance through and including the last day of such Fiscal
Period, including any Compounded Distributions payable with respect
thereto, over (y) the amount of Net Income allocated to the Holders of
the Partnership Preferred Securities pursuant to this Section 4.1(a)(ii)
in all prior Fiscal Periods. Amounts allocated to all Partnership
Preferred Security Holders shall be allocated among such Holders in
proportion to the number of Partnership Preferred Securities held by
such Holders.
(iii) Any remaining Net Income shall be allocated to the General
Partner.
(b) The Partnership's Net Loss for any Fiscal Period shall be
allocated as follows:
(i) First, to the General Partner until the balance of the
General Partner's Capital Account is reduced to zero, provided, however,
that the aggregate amount of Net Losses allocated to the General Partner
pursuant to this Section 4.1(b)(i) shall not exceed the sum of 14% of
the total capital contributions of all Partners plus the aggregate Net
Income allocated to the General Partner pursuant to this Section 4.1.
(ii) Second, among the Holders in proportion to their
respective aggregate Capital Account balances, until the Capital Account
balances of such Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the General
Partner.
(c) Daily Determination. For purposes of determining the profits,
losses or any other items allocable to any period, profits, losses and any such
other items shall be determined on a daily basis, unless the General
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Partner determines that another method is permissible under Section 704 of the
Code and the Treasury Regulations promulgated thereunder. Unless otherwise
specified, such profits, losses or other items shall be determined for each
Fiscal Period.
Section 4.2 SPECIAL ALLOCATION.
(a) All expenditures that are (i) incurred by, or on behalf of, the
Partnership and (ii) paid, or otherwise reimbursed, by the General Partner out
of its own funds shall be allocated entirely to the General Partner.
(b) In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of the Partnership's Net Income
shall be specially allocated to such Partner in a manner sufficient to
eliminate the deficit, if any, in the balance of the Capital Account of such
Partner as quickly as possible. The foregoing is intended to be a "qualified
income offset" provision as described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in all respects in
accordance with such Treasury Regulation.
(c) Section 704 Compliance. While this Agreement does not
specifically provide for certain provisions required by Treasury Regulation
Sections 1.704-1(b) and 1.704-2 because those provisions apply to transactions
that are not expected to occur as regards the Partnership, the Partners intend
that the allocations under Section 4.1 conform to Treasury Regulations Sections
1.704-1(b) and 1.704-2 (including, without limitation, the minimum gain
chargeback, chargeback of partner nonrecourse debt minimum gain and partner
nonrecourse debt provisions of such Treasury Regulations), and, to the extent
necessary due to the occurrence of unexpected events, the General Partner shall
make such changes in the allocations under Section 4.1 as it believes are
reasonably necessary to meet the requirements of such Treasury Regulations.
(d) Adjustment of Allocations. If the allocations set forth in this
Article IV are adjusted by the Internal Revenue Service and the Tax Matters
Partner agrees to such adjustments, such allocations shall be amended to the
minimum extent necessary to conform with such adjustments.
(e) Additional Allocations. Notwithstanding the foregoing, if, upon
the final dissolution and termination of the Partnership and after taking into
account all allocations of Net Income and Net Losses (and other tax items)
under this Article IV, the distributions to be made in accordance with the
positive Capital Account balances would result in a distribution that would be
different from a distribution under Article XIII, then gross items of income
and gain (and other tax items) for the taxable year of the final dissolution
and termination (and, to the extent permitted under section 761(c) of the Code,
gross items of income and gain, and other tax items, for the immediately
preceding taxable year) shall be allocated to the Partners to increase or
decrease their respective Capital Account balances so that the final
distribution will occur in the same manner as a distribution under Section
13.4.
(f) General Partner Allocations. Notwithstanding any provision of
this Agreement to the contrary, the interest of the General Partner in each
item of Partnership income, gain, loss, deduction, or credit shall, at all
times during the existence of the Partnership, be equal to at least (A) at any
time that the aggregate capital contributions to the Partnership are equal to
or less than $50,000,000, one percent (1%) of each such item and (B) at any
time that the aggregate capital contributions to the Partnership are greater
than $50,000,000, at least a percentage equal to the product of (i) one percent
(1%) and (ii) a fraction (not exceeding 1 and not less than 0.2), the numerator
of which is $50,000,000 and the denominator of which is the lesser of (x) the
aggregate Capital Account balances of the Capital Accounts of all Partners at
such time and (y) the aggregate capital contributions to the Partnership of all
Partners at such time.
Section 4.3 WITHHOLDING. The Partnership shall comply with
withholding requirements under federal, state and local law and shall remit
amounts withheld to and file required forms with applicable jurisdictions. To
the extent that the Partnership is required to withhold and pay over any
amounts to any authority with respect to distributions or allocations to any
Partner, the amount withheld shall be deemed to be a distribution
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in the amount of the withholding to the Partner. In the event of any claimed
over-withholding, Partners shall be limited to an action against the applicable
jurisdiction. If the amount withheld was not withheld from actual
distributions, the Partnership may reduce subsequent distributions by the
amount of such withholding. Each Partner agrees to furnish the Partnership
with any representations and forms as shall reasonably be requested by the
Partnership to assist it in determining the extent of, and in fulfilling, its
withholding obligations.
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. Limited Partners shall receive periodic
Distributions and Compounded Distributions, if any, redemption payments and
liquidation distributions in accordance with the terms of the Partnership
Preferred Securities set forth in Article VI. The General Partner shall in its
sole discretion determine whether and when Distributions shall be payable;
provided, however, that if the General Partner shall determine a Distribution
will not be paid on a scheduled Distribution Payment Date, the General Partner
shall give notice of its determination not to pay such Distribution to Limited
Partners of record as of the Record Date for the payment of such Distribution;
provided, further, however, that the General Partner shall not declare
distributions, and no distributions shall be payable by the Partnership to the
General Partner in respect of its General Partner Interest unless all
accumulated and unpaid Distributions, including any Compounded Distributions,
have been paid in full for all prior Fiscal Periods. Subject to the
immediately preceding sentence, to the extent that the aggregate payments of
interest (or dividends) received by the Partnership in respect of Affiliate
Investment Instruments and Eligible Debt Securities for each Fiscal Period
exceed the amount of Distributions, including any Compounded Distributions,
paid on the Partnership Preferred Securities for such Fiscal Period, the
General Partner, in its sole discretion may declare and distribute such excess
funds to the General Partner in respect of its General Partner Interest.
Section 5.2 LIMITATIONS ON DISTRIBUTIONS. The Partnership shall not
make a Distribution to any Partner on account of such Partner's Interest if
such Distribution would violate Section 17-607 of the Act or other applicable
law.
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP PREFERRED
SECURITIES.
(a) There is hereby authorized for issuance and sale Partnership
Preferred Securities having an aggregate liquidation preference not greater
than $_____________ and having the designation, annual distribution rate,
liquidation preference, redemption terms, and other powers, preferences and
special rights and limitations set forth in this Article VI.
(b) The payment of Distributions (including payments of distributions
by the Partnership in liquidation or in redemption in respect of Partnership
Preferred Securities) shall be guaranteed by the Company pursuant to and to the
extent set forth in the Partnership Guarantee. The Partnership Preferred
Security Holders hereby authorize the General Partner to hold the Guarantee on
behalf of the Partnership Preferred Security Holders. In the event of an
appointment of a Special Representative pursuant to Section 6.2(i), among other
things, to enforce the Partnership Guarantee, the Special Representative may
take possession of the Partnership Guarantee for such purpose. If no Special
Representative has been appointed to enforce the Partnership Guarantee, the
General Partner has the right to enforce the Partnership Guarantee on behalf of
the Partnership Preferred Security Holders. The Partnership Preferred Security
Holders, by acceptance of such Partnership Preferred Securities, acknowledge
and agree to the subordination provisions in, and other terms of, the
Partnership Guarantee.
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(c) The Partnership may not issue any interests in the Partnership
other than the Partnership Preferred Securities and the General Partner
Interest, provided that the Partnership may accept consideration for additional
capital contributions from the General Partner with respect to the General
Partner Interest. All Partnership Preferred Securities shall rank senior to
all other Interests in the Partnership in respect of the right to receive
Distributions. All Partnership Preferred Securities redeemed, purchased or
otherwise acquired by the Partnership shall be canceled. The Partnership
Preferred Securities will be issued in registered form only.
(d) No Holder shall be entitled as a matter of right to subscribe for
or purchase, or have any preemptive right with respect to, any part of any new
or additional limited partnership interests, or of securities convertible into
any Partnership Preferred Securities or other limited partnership interests,
whether now or hereafter authorized and whether issued for cash or other
consideration or by way of a distribution.
(e) Any of the Partnership Preferred Securities that are owned by the
Company or by any entity more than 50% of which is owned by the Company, either
directly or indirectly, shall not be entitled to vote or consent with respect
to any Partnership Preferred Security owned by it, and shall, for purposes of
such vote or consent, be treated as if they were not outstanding; provided,
however, that persons otherwise eligible to vote to whom the Company or any of
its subsidiaries have pledged Partnership Preferred Securities may vote or
consent with respect to such pledged Partnership Preferred Securities under any
of the circumstances described in Section 6.2.
Section 6.2 PARTNERSHIP PREFERRED SECURITIES.
(a) Designation. A total of ______________ Partnership Preferred
Securities, liquidation preference $25 per Partnership Preferred Security, are
hereby designated as "___% Partnership Preferred Securities".
(b) Distributions.
(i) Partnership Preferred Security Holders shall be entitled
to receive cumulative Distributions and Compounded Distributions (as
defined below) (if any), if, as and when declared by the General
Partner, in its sole discretion, out of the assets of the Partnership
legally available therefor, at a rate per annum of ___% of the stated
liquidation preference of $25 per Partnership Preferred Security,
calculated on the basis of a 360-day year consisting of twelve 30-day
months. For any period shorter than a full 90-day quarter,
Distributions will be computed on the basis of the actual number of days
elapsed in such 90-day quarter. Such Distributions shall, from the date
of original issue, accrue and be cumulative and shall be payable
quarterly, when, if, and as declared by the General Partner on the dates
specified in Section 6.2(b)(ii) below. Distributions and Compounded
Distributions (as defined below) (if any) on the Partnership Preferred
Securities shall be cumulative from the Closing Date. Distributions not
paid on the scheduled Distribution Payment Date will accumulate and
compound quarterly at the rate of ___% per annum ("Compounded
Distributions"). In the event that any date on which Distributions are
payable on the Partnership Preferred Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on
the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day (without any
reduction in interest or other amounts in respect of such early
payment).
(ii) Distributions on the Partnership Preferred Securities will
be payable quarterly in arrears if, as and when, declared by the General
Partner on March 31, June 30, September 30 and December 31 of each year,
commencing on _________, 1997 (each a "Distribution Payment Date").
Distributions will be payable to the Holders as they appear on
the books and records of the Partnership on the relevant Record Date.
If the Trust or the Property Trustee is the Holder of the Partnership
Preferred Securities, all distributions of cash shall be made by wire
transfer of same day funds to such Holder by 10:00 a.m., New York City
time, on the applicable Distribution Payment Date. Distributions
payable on any Partnership Preferred Securities that are not punctually
paid on any Distribution
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Payment Date will cease to be payable to the Person in whose name such
Partnership Preferred Securities are registered on the relevant record
date, and such Distribution will instead be payable to the Person in
whose name such Partnership Preferred Securities are registered on the
record date for payment of such defaulted or accrued Distribution.
(c) Optional Redemption. Partnership Preferred Securities shall be
redeemable at the option of the General Partner, in whole or in part, from time
to time, on or after ________, 2002, upon not less than 30 nor more than 60
days' notice, at an amount per Partnership Preferred Securities equal to $25
plus accrued and unpaid Distributions thereon, including any Compounded
Distributions (the "Redemption Price"). The Partnership may not redeem the
Partnership Preferred Securities in part unless all accumulated and unpaid
Distributions, including any Compounded Distributions, have been paid in full
on all Partnership Preferred Securities for all Fiscal Periods terminating on
or prior to the date of redemption. If a partial redemption of the Partnership
Preferred Securities would result in the delisting of the Trust Preferred
Securities (or, if the Trust is liquidated in connection with a Trust Special
Event, the delisting of the Partnership Preferred Securities), the Partnership
may only redeem the Partnership Preferred Securities in whole but not in part.
(d) Special Event Redemptions. (i) If, at any time, a Partnership
Special Event shall occur and be continuing, the General Partner shall, within
90 days following the occurrence of such Partnership Special Event, elect to
either (i) redeem the Partnership Preferred Securities in whole (but not in
part), upon not less than 30 or more than 60 days' notice at the Redemption
Price, provided that if at the time there is available to the Partnership the
opportunity to eliminate, within such 90-day period, the Partnership Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that in the sole
judgment of the General Partner has or will cause no adverse effect on the
Partnership, the Trust, or the Company, the General Partner will pursue such
measure in lieu of redemption; or (ii) cause the Partnership Preferred
Securities to remain outstanding, provided that in the case of this clause
(ii), the General Partner shall pay any and all costs and expenses incurred by
or payable by the Partnership which are attributable to the Partnership Special
Event.
(e) Redemption Procedures.
(i) Notice of any redemption of Partnership Preferred
Securities (a "Redemption Notice") will be given by the General Partner
on behalf of the Partnership by mail to each Holder of Partnership
Preferred Securities to be redeemed not fewer than 30 nor more than 60
days before the date fixed for redemption. For purposes of the
calculation of the date of redemption and the dates on which notices are
given pursuant to this Section 6.2(e)(i), a Redemption Notice shall be
deemed to be given on the day such notice is first mailed, by
first-class mail, postage prepaid, to Holders of Partnership Preferred
Securities. Each Redemption Notice shall be addressed to the Holders of
Partnership Preferred Securities at the address of each such Holder
appearing in the books and records of the Partnership. No defect in the
Redemption Notice or in the mailing thereof with respect to any Holder
shall affect the validity of the redemption proceedings with respect to
any other Holder.
(ii) In the event that fewer than all the outstanding
Partnership Preferred Securities are to be redeemed, the Partnership
Preferred Securities to be redeemed shall be redeemed pro rata provided,
that, in the event Partnership Preferred Securities are held in
book-entry only form by DTC or its nominee (or any successor Clearing
Agency or its nominee), DTC will reduce, in accordance with DTC's
customary procedures, the amount of the interest of each Clearing Agency
Participant in the Partnership Preferred Securities to be redeemed.
(iii) If the Partnership gives a Redemption Notice (which notice
will be irrevocable), then by 12:00 noon, New York City time, on the
redemption date, the General Partner on behalf of the Partnership (A) if
the Partnership Preferred Securities are in book-entry only form with
DTC, will deposit irrevocably with DTC funds sufficient to pay the
applicable Redemption Price and will give DTC irrevocable instructions
and authority to pay the Redemption Price in respect of the Partnership
Preferred Securities held
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through DTC in global form or (B) if the Partnership Preferred
Securities are held in certificated form, will deposit with the Paying
Agent, funds sufficient to pay the applicable Redemption Price of the
amount of any such Partnership Preferred Securities and will give to the
Paying Agent irrevocable instructions and authority to pay such amounts
to the Holders of Partnership Preferred Securities, upon surrender of
their certificates, by check, mailed to the address of the relevant
Holder appearing on the books and records of the Partnership on the
redemption date; provided, however, that for so long as the Trust or the
Property Trustee of the Trust shall hold the Partnership Preferred
Securities, payment of cash shall be made by wire in same day funds to
the Holder by 12:00 Noon, New York City time, on the redemption date.
For these purposes, the applicable Redemption Price shall not include
Distributions which are being paid to Holders who were Holders on a
relevant record date. Upon satisfaction of the foregoing conditions,
then immediately prior to the close of business on the date of such
deposit or payment, all rights of Holders of such Partnership Preferred
Securities so called for redemption will cease, except the right of the
Holders to receive the Redemption Price, but without interest on such
Redemption Price, and from and after the date fixed for redemption, such
Partnership Preferred Securities will not accrue distributions or bear
interest.
In the event that any date fixed for redemption of Partnership
Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding Business Day (and without any interest in respect of any such
delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business
Day (without any reduction in interest on other amounts in respect of
any such early payment). In the event that payment of the Redemption
Price is improperly withheld or refused and not paid by either the
Partnership or the Company pursuant to the Partnership Guarantee,
Distributions on the Partnership Preferred Securities called for
Redemption will continue to accrue, to the extent that payment of such
interest is legally available, from the original redemption date until
the Redemption Price is actually paid.
The Partnership shall not be required to register or cause to be
registered the transfer of any Partnership Preferred Securities which
have been called for redemption.
(f) Company Purchases. Subject to the provisions of this Section 6.2
and applicable law (including, without limitation, Federal securities laws), if
Partnership Preferred Securities have been distributed to the Holders (as
defined in the Declaration) of Trust Preferred Securities, the Company or any
of its subsidiaries may at any time and from time to time purchase outstanding
Partnership Preferred Securities by tender, in the open market, or by private
agreement.
(g) Liquidation Distribution Upon Dissolution. In the event of any
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Partnership, the Holders of Partnership Preferred Securities at the time
outstanding will be entitled to receive out of the assets of the Partnership
such amount as is determined in accordance with Section 13.4 (the "Partnership
Liquidation Distribution") payable in cash.
(h) Voting Rights.
(i) Special Representative.
(1) If one or more of the following events shall occur and be
continuing (each a "Partnership Enforcement Event"): (i) arrearages on
distributions on the Partnership Preferred Securities shall exist for
six consecutive quarterly distribution periods, (ii) the Company is in
default on any of its obligations under the Partnership Guarantee or
(iii) an Investment Event of Default on any Affiliate Investment
Instrument or a default under any Investment Guarantee, as the case may
be, the Holders of the Partnership Preferred Securities, upon the
affirmative vote of at least a Majority in Liquidation Preference of the
Partnership Preferred Securities, shall have the right, to the exclusion
of the General Partner, (a) to appoint and authorize a special
representative of the Partnership and the Limited Partners (a "Special
Representative") to enforce (1) to the maximum extent permitted by
applicable law, the Partnership's creditors' rights and other rights
with respect to the Affiliate Investment Instruments and the Investment
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Guarantees, (2) the rights of the Holders of the Partnership Preferred
Securities under the Partnership Guarantee, and (3) the rights of the
Holders of the Partnership Preferred Securities to receive Distributions
(only if, and to the extent, declared by the General Partner, in its
sole discretion, out of funds legally available therefor) on the
Partnership Preferred Securities, and (b) under the Partnership
Guarantee to enforce the terms of the Partnership Guarantee, including
the right to enforce the covenant restricting certain payments. Under
no circumstances, however, shall the Special Representative have
authority to cause the General Partner to declare Distributions on the
Partnership Preferred Securities or have any authority concerning the
selection of Partnership Investments. When the Special Representative
acts to enforce the Partnership's creditors' rights and other rights
with respect to the Affiliate Investment Instruments and the Investment
Guarantees, the Special Representative acts as an agent of the
Partnership. When the Special Representative acts to enforce the rights
of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee or their rights to receive Distributions on the
Partnership Preferred Securities, the Special Representative acts as an
agent of the Holders of the Partnership Preferred Securities. In
addition, the Special Representative shall not, by virtue of acting in
such capacity, be admitted as a general or limited partner in the
Partnership or otherwise be deemed to be a general or limited partner in
the Partnership and shall have no liability for the debts, obligations,
or liabilities of the Partnership.
(2) In furtherance of the foregoing, and without limiting the
powers of any Special Representative so appointed and to avoid any doubt
concerning the powers of the Special Representative, any Special
Representative, in its own name, in the name of the Partnership, in the
name of the Limited Partners, or otherwise, may institute, or cause to
be instituted, a proceeding, including, without limitation, any suit in
equity, an action at law or other judicial or administrative proceeding,
to enforce on behalf of the Partnership the Partnership's rights
directly against the Company or any other obligor in connection with its
obligations to the Partnership, and may prosecute such proceeding to
judgment or final decree, and enforce the same against the Company or
any other obligor in connection with such obligations and collect, out
of the property, wherever situated, of the Company or any such other
obligor upon such obligations, the monies adjudged or decreed to be
payable in the manner provided by law. The General Partner agrees to
execute and deliver such documents as may be necessary, appropriate or
convenient for the Special Representative to enforce the foregoing
rights and obligations on behalf and in the name of the Partnership.
(3) If the Special Representative fails to enforce its rights
under any Affiliate Investment Instrument after a holder of Partnership
Preferred Securities has made a written request, such holder of record
of Partnership Preferred Securities may to the fullest extent permitted
by law directly institute a legal proceeding against the applicable
Investment Affiliate to enforce the rights of the Special Representative
and the Partnership under the Affiliate Investment Instrument without
first instituting any legal proceeding against the Special
Representative, the Partnership or any other person or entity. In any
event, if a Partnership Enforcement Event has occurred and is continuing
and such event is attributable to the failure of an Investment Affiliate
to make any required payment when due on any Affiliate Investment
Instrument, then a holder of Partnership Preferred Securities may to the
fullest extent permitted by law on behalf of the Partnership directly
institute a proceeding against such Investment Affiliate with respect to
such Affiliate Investment Instrument for enforcement of payment. In
addition, the Partnership acknowledges that, for so long as the Trust
holds any Partnership Preferred Securities, if the Special
Representative fails to enforce its rights on behalf of the Partnership
under the Affiliate Investment Instruments after a holder of Trust
Securities has made a written request, a holder of record of Trust
Securities may to the fullest extent permitted by law on behalf of the
Partnership directly institute a legal proceeding against the Investment
Affiliates under the Affiliate Investment Instruments, without first
instituting any legal proceeding against the Property Trustee, the
Trust, the Special Representative or the Partnership. In any event, for
so long as the Trust is the holder of any Partnership Preferred
Securities, if a Trust Enforcement Event has occurred and is continuing
and such event is attributable to the failure of an Investment Affiliate
to make any required payment when due on any Affiliate Investment
Instrument or the failure of the Company to make any required payment
when due on any Investment Guarantee, then
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the Partnership acknowledges that a holder of Trust Securities may to
the fullest extent permitted by law on behalf of the Partnership
directly institute a proceeding against such Investment Affiliate with
respect to such Affiliate Investment Instrument or against the Company
with respect to any such Investment Guarantee, in each case for
enforcement of payment. Under no circumstances shall the Special
Representative, any holder of Partnership Preferred Securities or any
holder of Trust Preferred Securities have authority to cause the General
Partner to declare distributions on the Partnership Preferred
Securities.
(4) For purposes of determining whether the Partnership has
deferred payment of Distributions for six (6) consecutive quarters,
Distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative Distributions,
including Compounded Distributions, have been or contemporaneously are
paid with respect to all quarterly Distribution periods terminating on
or prior to the date of payment of such full cumulative Distributions.
Not later than 30 days after such right to appoint a Special
Representative arises, the General Partner will convene a meeting for
election of a Special Representative. If the General Partner fails to
convene such meeting within such 30-day period, the Holders of not less
than 10% in Liquidation Preference of the Outstanding Partnership
Preferred Securities will be entitled to convene such meeting. The
provisions of Section 14.3 relating to the convening and conduct of
meetings of the Partners will apply with respect to any such meeting.
In the event that, at any such meeting, Holders of less than a Majority
in Liquidation Preference of Partnership Preferred Securities entitled
to vote for the appointment of a Special Representative vote for such
appointment, no Special Representative shall be appointed. Any Special
Representative appointed shall cease to be a Special Representative of
the Partnership and/or the Limited Partners if (x) the Partnership (or
the Company pursuant to the Partnership Guarantee) shall have paid in
full all accrued and unpaid Distributions on the Partnership Preferred
Securities, (y) the relevant Investment Event of Default shall have been
cured, and (z) the Company is in compliance with all its obligations
under the Partnership Guarantee, and the Company, in its capacity as the
General Partner, shall continue the activities of the Partnership
without dissolution. Notwithstanding the appointment of any such
Special Representative, the Company shall continue as General Partner
and shall retain all rights under this Agreement, including the right to
determine whether to declare, in its sole discretion, the payment of
Distributions on the Partnership Preferred Securities.
(ii) Certain Amendments; Waiver. (1) If any proposed
amendment of this Agreement provides for, or the General Partner
otherwise proposes to effect, (x) any action that would adversely affect
the powers, preferences or special rights of the Holders of the
Partnership Preferred Securities, whether by way of amendment of this
Agreement or otherwise (including, without limitation, the authorization
or issuance of any limited partnership interests in the Partnership
ranking, as to participation in profits or distributions, or in the
assets of the Partnership, senior to the Partnership Preferred
Securities); or (y) the dissolution, winding-up or termination of the
Partnership, other than (1) in connection with the occurrence of a
Partnership Special Event or (2) as described under Sections 11.11 and
13.2 of this Agreement, then the Holders of outstanding Partnership
Preferred Securities will be entitled to vote on such amendment or
proposal of the General Partner (but not on any other amendment or
proposal) as a class and such amendment or proposal shall not be
effective except with the approval of Holders of a Majority in
Liquidation Preference of such outstanding Partnership Preferred
Securities having a right to vote on the matter; provided, however, that
if the Property Trustee on behalf of the Trust is the Holder of the
Partnership Preferred Securities, any such amendment or proposal not
excepted by (1) or (2) above shall not be effective without the prior or
concurrent approval of the Holders of a majority in liquidation amount
of the outstanding Trust Preferred Securities having a right to vote on
such matters; provided, further that no such approval shall be required
if the dissolution, winding-up or termination of the Partnership is
proposed or initiated upon the initiation of proceedings, or after
proceedings have been initiated, for the dissolution, winding-up,
liquidation or termination of the Company.
(2) The Holders of a Majority in Liquidation Preference
of Partnership Preferred Securities may, by vote, on behalf of
the Holders of all of the Partnership Preferred Securities,
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waive any past Partnership Enforcement Event with respect to the
Partnership Preferred Securities and its consequences; provided
that, if the underlying Investment Event of Default:
(A) is not waivable under the related Affiliate Investment
Instrument, such Partnership Enforcement Event shall also
not be waivable; or
(B) requires the consent or vote of the Holders of greater
than a majority in principal amount or liquidation
preference of the Affiliate Investment Instruments (a
"Super Majority") to be waived under the related Affiliate
Investment Instrument, the Partnership Enforcement Event
may only be waived by the vote of the Holders of the
relevant Super Majority in liquidation amount of the
Partnership Preferred Securities.
Upon such waiver, any such Partnership Enforcement Event shall
cease to exist, and shall be deemed to have been cured, for every
purpose of this Agreement, but no such waiver shall extend to any
subsequent or other Partnership Enforcement Event or impair any
right consequent thereon.
(3) A waiver of an Investment Event of Default by the
Special Representative, acting at the direction of the Holders of
the Partnership Preferred Securities, constitutes a waiver of the
corresponding Partnership Enforcement Event.
(iii) General Voting. (1) Neither the General Partner nor the
Special Representative shall (i) direct the time, method and place of
conducting any proceeding for any remedy available, (ii) waive any
Investment Event of Default that is waivable under the Affiliate
Investment Instruments, (iii) exercise any right to rescind or annul a
declaration that the principal of any Affiliate Investment Instruments
that are debt instruments shall be due and payable, (iv) waive the
breach of the covenant by the Company in the Partnership Guarantee to
restrict certain payments, or (v) consent to any amendment, modification
or termination of any Affiliate Investment Instrument, where such
consent shall be required from the holder thereof, without, in each
case, obtaining the prior approval of the Holders of at least a Majority
in Liquidation Preference of the Partnership Preferred Securities;
provided, however, that if the Property Trustee on behalf of the Trust
is the Holder of the Partnership Preferred Securities, such waiver,
consent or amendment or other action shall not be effective without the
prior or concurrent approval of at least a majority in liquidation
amount of the outstanding Trust Preferred Securities having a right to
vote on such matters. The General Partner shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Partnership Preferred Securities. The General Partner shall notify all
Holders of the Partnership Preferred Securities of any notice of an
Investment Event of Default received with respect to any Affiliate
Investment Instrument.
(2) Any required approval of Holders of Partnership Preferred
Securities may be given at a separate meeting of such Holders convened
for such purpose or pursuant to written consent. The General Partner
will cause a notice of any meeting at which Holders of Partnership
Preferred Securities are entitled to vote, or of any matter upon which
the action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Partnership Preferred Securities.
Each such notice will include a statement setting forth (x) the date of
such meeting or the date by which such action is to be taken, (y) a
description of any matter proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matters upon which written
consent is sought and (z) instructions for the delivery of proxies or
consents. No vote or consent of the Holders of Partnership Preferred
Securities will be required for the Partnership to redeem and cancel
Partnership Preferred Securities in accordance with this Agreement.
(3) Notwithstanding that Holders of Partnership Preferred
Securities are entitled to vote or consent under any of the
circumstances described above, any of the Partnership Preferred
Securities at such time that are owned by the Company or by any entity
more than 50% of which is owned by the
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Company, either directly or indirectly, shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as
if they were not outstanding; provided, however, that persons otherwise
eligible to vote to whom the Company or any of its subsidiaries have
pledged Partnership Preferred Securities may vote or consent with
respect to such pledged Partnership Preferred Securities under any of
the circumstances described herein.
(4) Holders of the Partnership Preferred Securities shall have
no rights to remove or replace the General Partner.
(5) Holders of Partnership Preferred Securities shall have no
preemptive rights.
ARTICLE VII
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS.
(a) All Partnership funds will be invested in the securities of
Investment Affiliates (the "Affiliate Investment Instruments") and Eligible
Debt Securities. No more than 99% of the Initial Partnership Proceeds will be
used by the Partnership to purchase the Initial Debentures meeting the criteria
set forth in this Section 7.1. The remaining funds from the Initial
Partnership Proceeds will be used to purchase Eligible Debt Securities in
accordance with the terms of this Agreement.
(b) The Partnership shall apply approximately 99% of the Initial
Partnership Proceeds to purchase (1) a debt instrument of the Company (the
"Initial Company Debenture") in the aggregate principal amount of approximately
$______________ and (2) debt instruments of two wholly owned United States
subsidiaries of the Company totalling approximately $___________ (such debt
instruments collectively referred to as the "Initial Affiliate Debentures").
The Initial Company Debenture and the Initial Affiliate Debentures are
collectively referred to as the "Initial Debentures." The Partnership may
purchase the Initial Debentures only upon receipt of an opinion of the
Independent Financial Advisor to the effect that (i) if such Initial Debentures
were to be rated, at least one Rating Agency would rate all the Initial
Debentures investment grade at the time such Initial Debentures are purchased
by the Partnership, (ii) the Company and each Investment Affiliate which is a
subsidiary of the Company would have been capable of issuing and selling debt
instruments with the same terms and conditions as the applicable Initial
Debentures to unrelated third party investors, (iii) the terms and conditions
of the Initial Debentures taken as a whole are no more favorable to the
relevant Investment Affiliate than could have been obtained by such Investment
Affiliate from unrelated third party investors pursuant to a public offering or
a private placement pursuant to Rule 144A under the Securities Act of 1933 of
such Initial Debentures. On the Closing Date, the Partnership shall invest at
least 1% of such Initial Partnership Proceeds in Eligible Debt Securities. The
terms of the Initial Debentures will be as set forth in the Indentures attached
hereto as Exhibits A and B.
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP.
(a) The Partnership must at all times invest an amount equal to at
least 1% of the Initial Partnership Proceeds in Eligible Debt Securities.
(b) The Partnership may reinvest any payments it receives in respect
of its investments in (i) Eligible Debt Securities without limitation or (ii)
additional Affiliate Investment Instruments but only upon (A) the acceptance of
a written offer setting forth the terms and conditions on which an Investment
Affiliate would be willing to issue an Affiliate Investment Instrument to the
Partnership (an "Investment Offer") and (B) the receipt of an opinion of the
Independent Financial Advisor that the terms of such Affiliate Investment
Instrument set forth in such Investment Offer satisfy the Reinvestment Criteria
(as defined below).
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(c) If the Independent Financial Advisor determines that the terms of
an Affiliate Investment Instrument (as set forth in the Investment Offer) do
not satisfy the Reinvestment Criteria, the Partnership shall be prohibited from
making any investment in such Affiliate Investment Instrument.
(d) Each Affiliate Investment Instrument shall satisfy the following
criteria (the "Reinvestment Criteria"): (i) the economic terms of each
Affiliate Investment Instrument shall be no less favorable to the Partnership
than terms that would otherwise be obtainable through a public offering or
private placement under Rule 144A of the Securities Act of 1933 of securities
by the requesting Investment Affiliate and the other terms and conditions of
each Affiliate Reinvestment Instrument are substantially similar to the terms
and conditions of similar securities that are offered to the public in a public
offering or private placement under Rule 144A of the Securities Act of 1933 of
such securities; (ii) the Partnership shall not have held any Affiliate
Investment Instruments of the Investment Affiliate submitting the Investment
Offer within the three-year period ending on the date of the Investment Offer;
(iii) there shall not have been a default on any debt obligation of the
Investment Affiliate submitting the Investment Offer that was owned by the
Partnership; (iv) no dividend arrearages shall have existed on any equity
security of the Investment Affiliate submitting the Investment Offer that was
owned by the Partnership; and (v) the Investment Affiliate submitting the
Investment Offer shall not be deemed to be an investment company by reason of
Section 3(a) or 3(b) of the 1940 Act.
(e) Any payments received by the Partnership in respect of its
investments that are not invested in additional Affiliate Investment
Instruments, may be reinvested only in Eligible Debt Securities (subject to
restrictions of applicable law, including the 1940 Act).
Section 7.3 ASSUMPTION OF OBLIGATIONS AND RELEASE OF INVESTMENT
AFFILIATE.
The General Partner, on behalf of the Partnership, may without the
approval of the Holders of Partnership Preferred Securities, release any
Investment Affiliate other than the Company (a "Released Investment Affiliate")
from its obligations under an Affiliate Investment Instrument but only upon (A)
the receipt of a written instrument of assumption evidencing the assumption by
another Investment Affiliate (an "Assuming Investment Affiliate") of all
obligations of the Released Investment Affiliate under such Affiliate
Investment Instrument, (B) the receipt of a written instrument of the Company
evidencing its agreement that its Investment Guarantee will continue to be
applicable to such Affiliate Investment Instrument following the assumption and
release and (C) the receipt of an opinion of the Independent Financial Advisor
that the terms of such Affiliate Investment Instrument would satisfy the
Reinvestment Criteria if such Affiliate Investment Instrument were entered into
de novo by the Assuming Investment Affiliate on the date of such assumption.
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of account of the
Partnership shall be kept by the General Partner, in which shall be entered
fully and accurately all transactions and other matters relative to the
Partnership's investments. The books and records of the Partnership, together
with a certified copy of this Agreement and of the Certificate, shall at all
times be maintained at the principal office of the General Partner and shall be
open to the inspection and examination of the Partners or their duly authorized
representatives for any proper purpose reasonably related to its Interest
during reasonable business hours.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the General Partner may, to the maximum extent permitted by
applicable law, keep confidential from the Partners any information with
respect to the Partnership, the disclosure of which the General Partner
reasonably believes is not in the best interests
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of the Partnership, or is adverse to the interests of the Partnership, or which
the Partnership or the General Partner is required by law or by an agreement
with any Person to keep confidential.
(c) (i) For so long as the Partnership Preferred Securities are held
by the Property Trustee on behalf of the Trust, within one month after the
close of each Fiscal Year, the General Partner shall transmit to each Partner a
statement indicating such Partner's share of each item of Partnership income,
gain, loss, deduction or credit, for United States federal income tax purposes,
for such Fiscal Year.
(ii) In the event that the Partnership Preferred Securities are
no longer held by the Property Trustee on behalf of the Trust, as soon
as reasonably possible after the close of the Fiscal Year, the General
Partner shall transmit to each Partner the statement referred to in
Section 8.1(c)(i) hereof.
Section 8.2 ACCOUNTING METHOD. For both financial and tax reporting
purposes, the books and records of the Partnership shall be kept on the accrual
method of accounting applied on a consistent basis and shall reflect all
Partnership transactions.
Section 8.3 ANNUAL AUDIT. As soon as practical after the end of each
Fiscal Year, but not later than 90 days after such end, the financial
statements of the Partnership shall be audited by a firm of independent
certified public accountants selected by the General Partner in accordance with
applicable law. The cost of such audits will be an expense of the Partnership
and shall be paid by the General Partner.
ARTICLE IX
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES. Since
the Trust is being formed solely to facilitate a direct investment in the
Partnership Preferred Securities, the General Partner on behalf of the
Partnership hereby agrees, at any time while the Property Trustee is the Holder
of any Partnership Preferred Securities, to pay all the expenses of the Trust,
including, but not limited to, any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed on the Trust
by the United States, or any other taxing authority, so that the net amounts
received and retained by the Trust and the Property Trustee after paying such
expenses will be equal to the amounts the Trust and the Property Trustee would
have received had no such costs or expenses been incurred by or imposed on the
Trust. The General Partner shall be liable for, and shall pay all such
expenses on behalf of the Partnership solely out of its own funds. In
addition, if the Partnership is required to pay any taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in any case,
the General Partner will pay such taxes, duties, assessments or other
governmental charges on behalf of the Partnership out of its own funds.
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES. In connection with
the offering, sale and issuance of the Partnership Preferred Securities by the
Partnership, the General Partner shall:
(a) pay all costs and expenses of the Partnership (including, but not
limited to, costs and expenses relating to the organization of the Partnership,
the offering, sale and issuance of the Partnership Preferred Securities
(including commissions to the underwriters in connection therewith) the fees
and expenses of the Special Representatives (if any), and the costs and
expenses relating to the operation of the Partnership, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses; and
(b) be primarily and fully liable for any indemnification obligations
arising with respect to this Agreement.
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ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS. The Limited Partners shall not participate
in the management or control of the Partnership's investment activity, property
or other assets, nor shall the Limited Partners engage in any activities for
the Partnership, nor shall the Limited Partners have the power to act for or
bind the Partnership, such powers being vested solely and exclusively in the
General Partner (and, upon appointment, and to the extent set forth herein, the
Special Representative). The Limited Partners shall have such rights as are
set forth herein and in the Partnership Guarantee. The Limited Partners shall
have no interest in the properties or assets of the General Partner, or any
equity therein, or in any proceeds of any sales thereof (which sales shall not
be restricted in any respect), by virtue of acquiring or owning an Interest in
the Partnership.
Section 10.2 LIABILITY. Subject to the provisions of the Act, no
Limited Partner shall be liable for the repayment, satisfaction or discharge of
any debts or other obligations of the Partnership in excess of the Capital
Account balance of such Limited Partner.
Section 10.3 PRIORITY. No Limited Partner shall have priority over any
other Limited Partner as to Partnership allocations or distributions.
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 11.1 AUTHORITY. Subject to the provisions of Section 6.2(h)(i)
with respect to the Special Representative, the General Partner shall have
exclusive and complete authority and discretion to manage the operations and
affairs of the Partnership and to make all decisions regarding the investment
activity of the Partnership. Any action taken by the General Partner shall
constitute the act of and serve to bind the Partnership. In dealing with the
General Partner acting on behalf of the Partnership no Person shall be required
to inquire into the authority of the General Partner to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively on the
power and authority of the General Partner as set forth in this Agreement.
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER. Subject to the
provisions of Section 6.2(h)(i) with respect to the Special Representative, the
General Partner shall have all rights and powers of a general partner under the
Act, and shall have all authority, rights and powers in the management of the
Partnership's investment activity to do any and all other acts and things
necessary, proper, convenient or advisable to effectuate the purposes of this
Agreement, including by way of illustration but not by way of limitation, the
following:
(a) to secure the necessary goods and services required in performing
the General Partner's duties for the Partnership;
(b) to exercise all powers of the Partnership, on behalf of the
Partnership, in connection with enforcing the Partnership's rights under the
Affiliate Investment Instruments and the Partnership Guarantee;
(c) to issue Partnership Preferred Securities and to admit Limited
Partners in connection therewith in accordance with this Agreement;
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(d) to act as registrar and transfer agent for the Partnership
Preferred Securities or designate an entity to act as registrar and transfer
agent;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including with
respect to Distributions and voting rights and to make determinations as to the
payment of Distributions, and make or cause to be made all other required
payments to Holders of the Partnership Preferred Securities and to the General
Partner;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Partnership;
(h) to deposit, withdraw, invest, pay, retain and distribute the
Partnership's funds in a manner consistent with the provisions of this
Agreement;
(i) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Partnership's valid existence, rights,
franchises and privileges as a limited partnership under the laws of the State
of Delaware and of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Limited Partners or to enable the
Partnership to invest in the Affiliate Investment Instruments and Eligible Debt
Securities;
(j) to take all action not inconsistent with applicable law, the
Certificate or this Agreement, that the General Partner or, upon appointment
pursuant to Section 6.2(h)(i), the Special Representative, determines in its
sole discretion to be necessary or desirable to ensure, as long as such action
does not adversely affect the interests of the Partnership Preferred Security
Holders, or cause (i) the Partnership to be deemed to be an "investment
company" required to be registered under the 1940 Act, (ii) any Initial
Debenture (or any subsequent Affiliate Investment Instrument that is intended
to be classified as debt) to not be treated as indebtedness for United States
federal income tax purposes, or (iii) the Partnership to be treated as an
association or as a publicly traded partnership taxable as a corporation;
(k) to cause the Partnership to enter into and perform the Purchase
Agreement and to purchase Eligible Debt Securities and Affiliate Investment
Instruments, as the case may be, without any further act, vote or approval of
any Partner; and
(l) to execute and deliver any and all documents or instruments,
perform all duties and powers and do all things for and on behalf of the
Partnership in all matters necessary or desirable or incidental to the
foregoing.
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER.
(a) The General Partner hereby assumes and shall be liable for the
debts, obligations and liabilities of the Partnership, including, but not
limited to, any liabilities arising under the Securities Act or the Exchange
Act and all costs and expenses relating to the investment by the Partnership in
any Affiliate Investment Instruments (but not any losses related to any
non-payment with respect to such investments), and agrees to pay on behalf of
the Partnership and solely out of its own funds to each Person to whom the
Partnership is now or hereafter becomes indebted or liable (the
"Beneficiaries"), whether such indebtedness, obligations or liabilities arise
in contract, tort or otherwise (excluding payment obligations of the Company to
Holders of the Partnership Preferred Securities in such Holders' capacities as
Holders of such Partnership Preferred Securities, such obligations being
separately guaranteed under the Partnership Guarantee), the full payment of
such indebtedness and any and all liabilities, when and as due. This Agreement
is intended to be for the benefit of and to be enforceable by all such
Beneficiaries whether or not such Beneficiaries have received notice hereof.
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(b) The General Partner agrees to pay on behalf of the Partnership
and solely out of its own funds and be responsible for:
(i) all costs and expenses of the Partnership including, but
not limited to, costs and expenses relating to the organization of the
Partnership, the offering, sale and issuance of Partnership Preferred
Securities, the costs and expenses relating to the operation of the
Partnership (including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agents, duplicating, travel and
telephone and other telecommunications expenses) and costs and expenses
incurred in connection with the acquisition, financing, and disposition
of the Partnership's assets; and
(ii) any and all taxes (other than federal, state and local
withholding taxes) and all liabilities, costs and expenses with respect
to such taxes of the Partnership.
Section 11.4 LIABILITY. Except as expressly set forth in this
Agreement or in the Guarantee Agreements, (a) the General Partner shall not be
personally liable for the return of any portion of the capital contributions
(or any return thereon) of the Limited Partners; (b) the return of such capital
contributions (or any return thereon) shall be made solely from assets of the
Partnership; and (c) the General Partner shall not be required to pay to the
Partnership or to any Limited Partner any deficit in any Limited Partner's
Capital Account upon dissolution, winding-up or otherwise. Other than as
expressly provided in this Agreement or under the Act, no Limited Partner shall
have the right to demand or receive property other than cash for its respective
Interest in the Partnership. The General Partner shall be liable to an
unlimited extent for the debts and other obligations of the Partnership.
Section 11.5 OUTSIDE ACTIVITIES. Any Partner or Affiliate thereof may
engage in or possess an interest in other ventures of any nature or
description, independently or with others, similar or dissimilar to the
activities of the Partnership, and the Partnership and the Partners shall have
no rights by virtue of this Agreement in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the activities of the Partnership, shall not be deemed
wrongful or improper. No Partner or Affiliate thereof shall be obligated to
present any particular investment opportunity to the Partnership even if such
opportunity is of a character that, if presented to the Partnership, could be
taken by the Partnership, and any Partner or Affiliate thereof shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment opportunity.
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS. Anything in this
Agreement to the contrary notwithstanding, the General Partner shall not cause
or permit the Partnership to:
(i) acquire any assets other than as expressly provided
herein;
(ii) do any act which would make it impractical or impossible
to carry on the ordinary activity of the Partnership as set forth in
Section 2.3;
(iii) possess Partnership property for other than a Partnership
purpose;
(iv) admit a Person as a Partner, except as expressly provided
in this Agreement;
(v) make any advances of funds to the General Partner or its
Affiliates, other than such as represented by the Affiliate Investment
Instruments;
(vi) perform any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction;
(vii) engage in any activity that is not consistent with the
purposes of the Partnership, as set forth in Section 2.3;
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(viii) without the written consent of the Holders of 66-2/3% in
Liquidation Preference of the Partnership Preferred Securities, have an
order for relief entered with respect to the Partnership or commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of the Partnership's
property, or make any assignment for the benefit of creditors of the
Partnership; or
(ix) borrow money or become liable for the borrowings of any
third party or to engage in any financial or other trade or business.
Section 11.7 EXCULPATION.
(a) No Partnership Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Partnership or any Partnership
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Partnership Indemnified Person in good
faith on behalf of the Partnership and in a manner such Partnership Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Partnership Indemnified Person by this Agreement or by law, except that a
Partnership Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Partnership Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) A Partnership Indemnified Person shall be fully protected in
relying in good faith upon the records of the Partnership and upon such
information, opinions, reports or statements presented to the Partnership by
any Person as to matters the Partnership Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Partnership,
including information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which distributions to
Partners might properly be paid.
Section 11.8 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, a Partnership
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Partnership or to any other Partnership Covered Person,
a Partnership Indemnified Person acting under this Agreement shall not be
liable to the Partnership or to any other Partnership Covered Person for its
good faith reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they restrict the duties and liabilities of
a Partnership Indemnified Person otherwise existing at law or in equity, are
agreed by the parties hereto to replace such other duties and liabilities of
such Partnership Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever a
conflict of interest exists or arises between Partnership Covered Persons, or
(ii) whether this Agreement or any other agreement contemplated herein or
therein provides that a Partnership Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Partnership or
any Partner, the Partnership Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Partnership Indemnified Person, the resolution,
action or term so made, taken or provided by the Partnership Indemnified Person
shall not constitute a breach of this Agreement or any other agreement
contemplated herein or of any duty or obligation of the Partnership Indemnified
Person at law or in equity or otherwise.
(c) Whenever in this Agreement a Partnership Indemnified Person is
permitted or required to make a decision (i) in its "discretion" or under a
grant of similar authority, the Partnership Indemnified Person shall be
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entitled to consider such interests and factors as it desires, including its
own interest, and shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Partnership or any other Person, or
(ii) in its "good faith" or under another express standard, the Partnership
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Agreement or by
applicable law.
Section 11.9 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Partnership shall indemnify and hold harmless each Partnership Indemnified
Person from and against any loss, damage or claim incurred by such Partnership
Indemnified Person by reason of any act or omission performed or omitted by
such Partnership Indemnified Person in good faith on behalf of the Partnership
and in a manner such Partnership Indemnified Person reasonably believed to be
within the scope of authority conferred on such Partnership Indemnified Person
by this Agreement, except that no Partnership Indemnified Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Partnership Indemnified Person by reason of gross negligence or willful
misconduct with respect to such acts or omissions; provided, however, that any
indemnity under this Section 11.9 shall be provided out of and to the extent of
Partnership assets only, and no Partnership Covered Person shall have any
personal liability on account thereof.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Partnership Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Partnership prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Partnership Indemnified Person to repay such
amount if it shall be determined that the Partnership Indemnified Person is not
entitled to be indemnified as authorized in Section 11.9(a).
Section 11.10 TAX MATTERS
(a) For purposes of section 6231(a)(7) of the Code, the "Tax
Matters Partner" shall be the Company as long as it remains the general partner
of the Partnership. The Tax Matters Partner shall keep the Limited Partners
fully informed of any inquiry, examination or proceeding.
(b) Neither the Partnership, nor the Tax Matters Partner on behalf
of the Partnership, shall make an election under section 754 of the Code.
(c) The General Partner and the Partnership Preferred Security
Holders acknowledge that they intend, for United States federal income tax
purposes, that the Partnership shall be treated as a "partnership" (other than
a publicly traded partnership taxable as a corporation) and that the General
Partner and the Partnership Preferred Security Holders shall be treated as
"partners" of the Partnership.
(d) The General Partner shall retain, at the expense of the
Partnership and at its sole discretion, a nationally recognized firm of
certified public accountants which shall prepare all United States federal,
state, local or other tax and information returns of the Partnership, as
required by law, and the Schedule K-1's or any successor or similar forms or
schedules.
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS. The
Partnership may not consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to, any corporation or other body, except as permitted pursuant to
this Section 11.11. The Partnership may, without the consent of the Holders of
the Partnership Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by a limited partnership, limited liability company or
trust organized as such under the laws of any state of the United States of
America, provided that (i) such successor entity either (x) expressly assumes
all of the obligations of the Partnership under the Partnership Preferred
Securities or (y) substitutes for the Partnership Preferred Securities other
securities having substantially the same terms
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as the Partnership Preferred Securities (the "Partnership Successor
Securities") so long as the Partnership Successor Securities are not junior to
any other equity securities of the successor entity, with respect to
participation in the profits and distributions, and in the assets, of the
successor entity, (ii) the Investment Affiliates expressly acknowledge such
successor entity as the holder of the Affiliate Investment Instruments, (iii)
the Partnership Preferred Securities continue to be or any Partnership
Successor Securities are or will be listed, upon notification of issuance, on
any national securities exchange or other organization on which the Partnership
Preferred Securities, if so listed, are then listed, (iv) such merger,
consolidation, amalgamation or replacement does not cause the Trust Preferred
Securities (or, in the event that the Trust is liquidated in connection with a
Trust Special Event, the Partnership Preferred Securities (including any
Partnership Successor Securities)) to be downgraded by any nationally
recognized statistical securities rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the
powers, preferences and other special rights of the holders of the Trust
Preferred Securities or the Holders of the Partnership Preferred Securities
(including any Partnership Successor Securities)) in any material respect
(other than, in the case of the Partnership Preferred Securities, with respect
to any dilution of the Holders' interest in the new resulting entity), (vi)
such successor entity has a purpose substantially identical to that of the
Partnership, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of nationally recognized
independent counsel to the Partnership experienced in such matters to the
effect that (A) such successor entity will be treated as a "partnership" for
United States federal income tax purposes and not as an association or a
publicly traded partnership taxable as a corporation, (B) such merger,
consolidation, amalgamation or replacement will not cause the Trust to be
classified as an association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes, (C) following such
merger, consolidation, amalgamation or replacement, the Company and such
successor entity will be in compliance with the 1940 Act without registering
thereunder as an investment company, and (D) such merger, consolidation,
amalgamation or replacement will not adversely affect the limited liability of
the Holders of the Partnership Preferred Securities and (viii) the Company
guarantees the obligations of such successor entity under the Partnership
Successor Securities at least to the extent provided by the Partnership
Guarantee.
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS.
(a) Partnership Preferred Securities shall be freely transferable
by a Holder.
(b) Except as provided in the next sentence, the General Partner
may not assign or transfer its Interest in the Partnership in whole or in part
unless, prior to such assignment or transfer, the General Partner has obtained
the consent of the Holders of not less than 66-2/3% in Liquidation Preference
of the Partnership Preferred Securities. The General Partner may assign or
transfer its Interest in the Partnership without such consent only to an entity
that is the survivor of a merger or consolidation of the General Partner in a
transaction that meets the requirements of Section 11.11 and only if prior to
such assignment or transfer the Company has received an opinion of nationally
recognized independent tax counsel to the Partnership experienced in such
matters to the effect that after such assignment or transfer the Partnership
will continue to be treated as a partnership for United States federal income
tax purposes and will not be treated as an association or a publicly traded
partnership taxable as a corporation. "Permitted Successor" shall mean an
entity that is an assignee or transferee of the Interest of the General Partner
as permitted by this Section 12.1(b). The admission of a Permitted Successor
as a general partner of the Partnership shall be effective upon the filing of
an amendment to the Certificate with the Secretary of State of the State of
Delaware which indicates that the Permitted Successor has been admitted as a
general partner of the Partnership. If the General Partner assigns its entire
Interest, the General Partner shall cease to be a general partner of the
Partnership simultaneously with the admission of the Permitted Successor as a
general partner of the Partnership. Any such Permitted Successor is hereby
authorized to and shall continue the business of the Partnership without
dissolution.
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(c) Except as provided above, no Interest shall be transferred, in
whole or in part, except in accordance with the terms and conditions set forth
in this Agreement. Any transfer or purported transfer of any Interest not made
in accordance with this Agreement shall be null and void.
Section 12.2 TRANSFER OF L.P. CERTIFICATES. The General Partner
shall provide for the registration of L.P. Certificates and of transfers of
L.P. Certificates. Upon surrender for registration of transfer of any L.P.
Certificate, the General Partner shall cause one or more new L.P. Certificates
to be issued in the name of the designated transferee or transferees. Every
L.P. Certificate surrendered for registration of transfer shall be accompanied
by a written instrument of transfer in form satisfactory to the General Partner
duly executed by the Partnership Preferred Security Holder or his or her
attorney duly authorized in writing. Each L.P. Certificate surrendered for
registration of transfer shall be canceled by the General Partner. A
transferee of an L.P. Certificate shall be admitted to the Partnership as a
Limited Partner, shall become bound by this Agreement and shall be entitled to
the rights and subject to the obligations of a Partnership Preferred Security
Holder hereunder upon the receipt by the transferee of an L.P. Certificate,
which receipt shall be deemed to constitute a request by such transferee that
the books and records of the Partnership reflect such transferee's admission as
a limited partner. The transferor of an L.P. Certificate, in whole, shall
cease to be a Limited Partner at the time that the transferee of such L.P.
Certificate is admitted to the Partnership as a Limited Partner in accordance
with this Section 12.2.
Section 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED
PARTNERSHIP PREFERRED SECURITY HOLDERS.
(a) Unless and until the Partnership issues a global L.P.
Certificate pursuant to Section 12.4(a), the Partnership shall only issue
definitive L.P. Certificates to the Partnership Preferred Security Holders.
(b) The Partnership may treat the Person in whose name any L.P.
Certificate shall be registered on the books and records of the Partnership as
the sole holder of such L.P. Certificate and of the Partnership Preferred
Securities represented by such L.P. Certificate for purposes of receiving
Distributions and for all other purposes whatsoever (including without
limitation, tax returns and information reports) and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such L.P.
Certificate or in the Partnership Preferred Securities represented by such L.P.
Certificate on the part of any other Person, whether or not the Partnership
shall have actual or other notice thereof.
Section 12.4 BOOK-ENTRY PROVISIONS.
(a) General. The provisions of this Section 12.4 shall apply only
in the event that the Partnership Preferred Securities are distributed to the
Holders of Trust Securities in connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event. Upon the occurrence of such event, a
global L.P. Certificate representing the Book-Entry Interests shall be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Partnership and any previously issued and still outstanding definitive L.P.
Certificates shall be of no further force and effect. The global L.P.
Certificate shall initially be registered on the books and records of the
Partnership in the name of Cede & Co., the nominee of DTC, and no Holder of a
Partnership Preferred Security will receive a new definitive L.P. Certificate
representing such Holder's interests in such L.P. Certificate, except as
provided in Section 12.4(c). In connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event, Cede & Co., the nominee of DTC, shall
automatically be admitted to the Partnership as a Limited Partner. Receipt of
the global L.P. Certificate shall be deemed to constitute a request by Cede &
Co., the nominee of DTC, that the books and records of the Partnership reflect
its admission as a Limited Partner. Unless and until new definitive, fully
registered L.P. Certificates (the "Definitive L.P. Certificates") have been
issued to the Partnership Preferred Security Owners pursuant to Section
12.4(c):
(i) The provisions of this Section shall be in full force
and effect;
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(ii) The Partnership, the General Partner and any Special
Representative shall be entitled to deal with the Clearing Agency for
all purposes of this Agreement (including the payment of
Distributions, Redemption Price and liquidation proceeds on the L.P.
Certificates and receiving approvals, votes or consents hereunder) as
the Partnership Preferred Security Holder and the sole holder of the
L.P. Certificates and shall have no obligation to the Partnership
Preferred Security Owners;
(iii) None of the Partnership, the Trust, the General
Partner, any Special Representative or any agents of any of the
foregoing shall have any liability or responsibility for any aspect of
the records relating to or payments made on account of beneficial
ownership interests in a global L.P. Certificate for such beneficial
ownership interests or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests; and
(iv) Except as provided in Section 12.4(c) below, the
Partnership Preferred Security Owners will not be entitled to receive
physical delivery of the Partnership Preferred Securities in
definitive form and will not be considered Holders thereof for any
purpose under this Agreement, and no global L.P. Certificate
representing Partnership Preferred Securities shall be exchangeable,
except for another global L.P. Certificate of like denomination and
tenor to be registered in the name of DTC or Cede & Co., or to a
successor Depositary or its nominee. Accordingly, each Partnership
Preferred Security Owner must rely on the procedures of DTC or if such
person is not a Participant, on the procedures of the Participant
through which such person owns its interest to exercise any rights of
a Holder under the Agreement.
(b) NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Partnership Preferred Security Holders is required under
this Agreement, unless and until Definitive L.P. Certificates shall have been
issued to the Partnership Preferred Security Owners pursuant to Section
12.4(c), the General Partner and any Special Representative shall give all such
notices and communications specified herein to be given to the Partnership
Preferred Security Holders to the Clearing Agency, and shall have no
obligations to the Partnership Preferred Security Owners.
(c) DEFINITIVE L.P. CERTIFICATES. Definitive L.P. Certificates
shall be prepared by the Partnership and exchangeable for the global L.P.
Certificate or L.P. Certificates if and only if (i) the Depositary notifies the
Company that it is unwilling or unable to continue its services as a securities
depositary and no successor depositary shall have been appointed, (ii) the
Depositary, at any time, ceases to be a clearing agency registered under the
Exchange Act at such time as the Depositary is required to be so registered to
act as such depositary and no successor depositary shall have been appointed,
or (iii) the Company, in its sole discretion, determines that such global L.P.
Certificate shall be so exchangeable. Upon surrender of the global L.P.
Certificate or L.P. Certificates representing the Book- Entry Interests by the
Clearing Agency, accompanied by registration instructions, the General Partner
shall cause Definitive L.P. Certificates to be delivered to Partnership
Preferred Security Owners in accordance with the instructions of the Clearing
Agency. Neither the General Partner nor the Partnership shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Any Person receiving a
Definitive L.P. Certificate in accordance with this Section 12.4 shall be
admitted to the Partnership as a Limited Partner upon receipt of such
Definitive L.P. Certificate and shall be registered on the books and records of
the Partnership as a Partnership Preferred Security Holder. The Clearing
Agency or the nominee of the Clearing Agency, as the case may be, shall cease
to be a Limited Partner under this Section 12.4(c) at the time that at least
one additional Person is admitted to the Partnership as a Limited Partner in
accordance herewith. The Definitive L.P. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as may be
required by any national securities exchange on which Partnership Preferred
Securities may be listed and is reasonably acceptable to the General Partner,
as evidenced by its execution thereof.
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Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT.
(a) The General Partner will act as Registrar, Transfer Agent and
Paying Agent for the Partnership Preferred Securities for so long as the
Partnership Preferred Securities are held by the Trust or, if the Trust is
liquidated in connection with a Trust Special Event, for so long as the
Partnership Preferred Securities remain in book-entry only form.
(b) Except in such case where the General Partner shall act as
Registrar or Paying Agent pursuant to Section 12.5(a) hereof, the Partnership
shall maintain in the Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Partnership Preferred Securities may be presented
for registration of transfer or for exchange ("Registrar") and (ii) an office
or agency where Partnership Preferred Securities may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Partnership
Preferred Securities and of their transfer and exchange. The Partnership may
appoint the Registrar and the Paying Agent and may appoint one or more
co-registrars and one or more additional paying agents in such other locations
as it shall determine. The term "Paying Agent" includes any additional paying
agent. The Partnership may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder. If the Partnership fails to appoint or
maintain another entity as Registrar or Paying Agent, the General Partner shall
act as such.
(c) Registration of transfers of Partnership Preferred Securities
shall be effected without charge by or on behalf of the Partnership, but upon
payment (with the giving of such indemnity as the Partnership or the General
Partner may require) in respect of any tax or other governmental charges that
may be imposed.
(d) The Partnership will not be required to register or cause to
be registered the transfer of Partnership Preferred Securities after such
Partnership Preferred Securities have been called for redemption.
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS. The General Partner shall
not at any time retire or withdraw from the Partnership except as otherwise
permitted hereunder. If the General Partner retires or withdraws in
contravention of this Section 13.1, it shall indemnify, defend and hold
harmless the Partnership and the other Partners from and against any losses,
expenses, judgments, fines, settlements or damages suffered or incurred by the
Partnership or such other Partners arising out of or resulting from such
retirement or withdrawal.
Section 13.2 DISSOLUTION OF THE PARTNERSHIP.
(a) The Partnership shall not be dissolved by the admission of
Partners in accordance with the terms of this Agreement. The death,
withdrawal, bankruptcy or dissolution of a Limited Partner, or the occurrence
of any other event which terminates the Interest of a Limited Partner in the
Partnership, shall not, in and of itself, cause the Partnership to be dissolved
and its affairs wound up. To the fullest extent permitted by applicable law,
upon the occurrence of any such event, the General Partner may, without any
further act, vote on approval of any Partner, admit any Person to the
Partnership as an additional or substitute limited partner in the Partnership,
which admission shall be effective as of the date of the occurrence of such
event, and the business of the Partnership shall be continued without
dissolution.
(b) The Partnership shall be dissolved and its affairs shall be
wound up upon the earliest to occur of any of the following events:
(i) upon the bankruptcy, insolvency or dissolution of the
General Partner;
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(ii) upon the assignment by the General Partner of its
entire interest in the Partnership when the assignee is not admitted
to the Partnership as a general partner of the Partnership in
accordance with this Agreement, or the filing of a certificate of
dissolution or its equivalent with respect to the General Partner, or
the revocation of the General Partner's charter and the expiration of
90 days after the date of notice to the General Partner of revocation
without a reinstatement of its charter, or if any other event occurs
that causes the General Partner to cease to be a general partner of
the Partnership under the Partnership Act, unless the business of the
Partnership is continued in accordance with the Partnership Act;
(iii) the Partnership has redeemed or otherwise purchased
all of the Partnership Preferred Securities;
(iv) the entry of a decree of judicial dissolution under
Section 17-802 of the Act; or
(v) the written consent of all Partners.
(c) Upon dissolution of the Partnership, the Liquidator shall
promptly notify the Partners of such dissolution.
Section 13.3 LIQUIDATION.
(a) In the event of the dissolution of the Partnership for any
reason, the General Partner (or, if the Partnership is dissolved pursuant to
Section 13.2(b)(i) or (ii), then a liquidating agent appointed by Holders of
not less than 66 2/3% in Liquidation Preference of the Partnership Preferred
Securities (the General Partner or such Person so appointed is hereinafter
referred to as the "Liquidator")) shall commence to wind up the affairs of the
Partnership and to liquidate the Partnership's assets; provided, however, that
a reasonable time shall be allowed for the orderly liquidation of the assets of
the Partnership and the satisfaction of liabilities to creditors so as to
enable the Partners to minimize the normal losses attendant upon liquidation.
The Partners shall continue to share all income, losses and distributions
during the period of liquidation in accordance with Articles IV and V. Subject
to the provisions of this Article XIII, the Liquidator shall have full right
and unlimited discretion to determine the time, manner and terms of any sale or
sales of Partnership property pursuant to such liquidation, giving due regard
to the activity and condition of the relevant market and general financial and
economic conditions.
(b) The Liquidator shall have all of the rights and powers with
respect to the assets and liabilities of the Partnership in connection with the
liquidation and termination of the Partnership that the General Partner would
have with respect to the assets and liabilities of the Partnership during the
term of the Partnership, and the Liquidator is hereby expressly authorized and
empowered to execute any and all documents necessary or desirable to effectuate
the liquidation and termination of the Partnership and the transfer of any
assets.
(c) Notwithstanding the foregoing, a Liquidator that is not a
General Partner shall not, by virtue of acting in such capacity, be deemed a
Partner in this Partnership and shall not have any of the economic interests in
the Partnership of a Partner; and such Liquidator may be compensated for its
services to the Partnership at normal customary and competitive rates for its
services to the Partnership as reasonably determined by all the Limited
Partners.
Section 13.4 DISTRIBUTION IN LIQUIDATION. The proceeds of
liquidation shall be applied in the following order of priority (and without
regard to the non-mandatory provisions of Section 17-804 of the Act):
(i) first, to creditors of the Partnership, including
Partners who are creditors, to the extent otherwise permitted by law,
in satisfaction of the liabilities of the Partnership (whether by
payment or the making of reasonable provisions for payment thereof),
other than liabilities for distributions (including Distributions) to
Partners;
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(ii) second, following any allocations required under
Section 4.2(e) of the Agreement, to the Limited Partners, an amount
equal to the aggregate liquidation preference of their Partnership
Preferred Securities, plus the amount of Distributions (including any
Compounded Distributions) that are accrued and unpaid as of the date
of such liquidating distribution; and
(iii) thereafter, to the General Partner.
Section 13.5 RIGHTS OF LIMITED PARTNERS. Each Limited Partner
shall look solely to the assets of the Partnership for all distributions with
respect to the Partnership and such Partner's capital contribution (including
returns thereof), and such Partner's share of profits or losses thereof, and
shall have no recourse therefor (upon dissolution or otherwise) against the
General Partner, except under the Partnership Guarantee. No Partner shall have
any right to demand or receive property other than cash upon dissolution and
termination of the Partnership.
Section 13.6 TERMINATION. The Partnership shall terminate when
all of the assets of the Partnership shall have been disposed of and the assets
shall have been distributed as provided in Section 13.4 and the Liquidator has
executed and caused to be filed a certificate of cancellation of the
Partnership.
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS. Except as provided by Section 3.3(b) and
Section 6.2(i), this Agreement may be amended by, and only by, a written
instrument executed by the General Partner without the consent of any Limited
Partner; provided, however, that no amendment shall be made, and any such
purported amendment shall be void and ineffective, to the extent the result
thereof would be to (A) cause the Partnership to be treated for United States
federal income tax purposes as an association or a publicly traded partnership
taxable as a corporation, (B) require the Partnership to register under the
1940 Act or (C) materially adversely affect the rights, privileges or
preferences of the Partnership Preferred Securities. Notwithstanding any
provision to the contrary, in the event of (i) a liquidation of the Trust for
any reason or (ii) any other distribution which effectively causes Partnership
Preferred Securities to be distributed to Holders of Trust Preferred
Securities, the General Partner may amend this Agreement without the consent of
the Limited Partners to provide for (A) orderly dissemination, purchase, sale,
exchange and replacement of such Partnership Preferred Securities, (B) all
other matters to the extent required by or desirable under then applicable law
and (C) such other matters reasonably incidental or related thereto; provided,
however, that no such amendment may materially adversely affect the rights,
privileges, or preferences of the Partnership Preferred Securities without the
consent of a majority in interest of the Partners so affected.
Section 14.2 AMENDMENT OF CERTIFICATE. In the event this
Agreement shall be amended pursuant to Section 14.1, the General Partner shall
amend the Certificate to reflect such change if it deems such amendment of the
Certificate to be necessary or appropriate.
Section 14.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are Holders may be called
at any time by the General Partner to consider and act on any matter on which
Limited Partners are entitled to act under the terms of this Agreement or the
Act. The General Partner shall call a meeting of Holders if directed to do so
by Holders of no less than 10% in Liquidation Preference as permitted by this
Agreement. Such direction shall be given by delivering to the General Partner
a request in writing stating that the signing Limited Partners desire to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Limited Partners calling a meeting shall specify in writing
the L.P. Certificates held by the Limited Partners exercising the right to call
a meeting and only those specified Interests shall be counted for purposes of
determining whether the required per-
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centage set forth in the second sentence of this paragraph has been met.
Except to the extent otherwise provided in this Agreement, the following
provisions shall apply to meetings of Partners.
(b) Notice of any such meeting shall be given to all Limited
Partners having a right to vote thereat not less than seven Business Days nor
more than 60 days prior to the date of such meeting. Each such notice shall
set forth the date, time and place of the meeting, a description of any matter
on which Holders are entitled to vote and instructions for the delivery of
proxies or written consents.
(c) Any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by Limited Partners owning not less than the
minimum Interests that would be necessary to authorize or take such action at a
meeting in which all Limited Partners having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners entitled to vote who have not consented
in writing. The General Partner may provide that any written ballot submitted
to the Limited Partners for the purpose of taking any action without a meeting
shall be returned to the Partnership within a specified time.
(d) Each Partner may authorize any Person to act for it by proxy
on all matters as to which a Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be
valid after the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Partner executing it. Except as otherwise provided herein, or pursuant to
Section 14.3(f), all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder, as if
the Partnership were a Delaware corporation and the Limited Partners were
stockholders of a Delaware corporation.
(e) Each meeting of Partners shall be conducted by the General
Partner or by such other Person that the General Partner may designate.
(f) The General Partner may establish all other reasonable
procedures relating to meetings of Limited Partners or the giving of written
consents, in addition to those expressly provided, including notice of time,
place or purpose of any meeting at which any matter is to be voted on by any
Partners, waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XV
MISCELLANEOUS
Section 15.1 NOTICES. All notices provided for in this Agreement
shall be in writing, and shall be delivered or mailed by first class or
registered or certified mail or, with respect to the Partnership and General
Partner, telecopied, as follows:
(a) if given to the Partnership, in care of the General Partner at
the Partnership's mailing address set forth below:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasury Department
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(b) if given to the General Partner, at its mailing address set
forth below:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasury Department
(c) if given to any other Partner at the address set forth on the
books and records of the Partnership.
Section 15.2 POWER OF ATTORNEY. Each Holder of a Partnership
Preferred Security does hereby constitute and appoint the General Partner, and
if applicable, any Special Representative appointed pursuant to Section
6.2(h)(i) of this Agreement, as its true and lawful representative and
attorney-in-fact, in its name, place and stead to make, execute, sign, deliver
and file (a) any amendment of the Certificate required because of an amendment
of this Agreement or in order to effect any change in the Partnership, (b) this
Agreement, (c) any amendments to this Agreement and (d) all such other
instruments, documents and certificates which from time to time may be required
by the laws of the United States of America, the State of Delaware or any other
jurisdiction, or any political subdivision or agency thereof, to effectuate,
implement and continue the valid and subsisting existence of the Partnership or
to dissolve the Partnership for any other purpose consistent with this
Agreement and the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an interest and
shall (a) survive and not be affected by the subsequent death, incapacity,
disability, dissolution, termination, or bankruptcy of the Holder granting the
same or the transfer of all or any portion of such Holder's Interest and (b)
extend to such Holder's successors, assigns and legal representatives.
Section 15.3 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement among the parties. It supersedes any prior agreement or
understandings among them, and it may not be modified or amended in any manner
other than as set forth herein.
Section 15.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAW OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY
SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
Section 15.5 EFFECT. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, successors and assigns.
Section 15.6 PRONOUNS AND NUMBER. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural
shall include the singular and the plural, and pronouns stated in either the
masculine, feminine or neuter shall include the masculine, feminine and neuter.
Section 15.7 CAPTIONS. Captions, headings, and subheadings
contained in this Agreement are included for convenience and identification
purposes only and in no way define, limit or extend the scope or intent of this
Agreement or any provision herein.
Section 15.8 PARTIAL ENFORCEABILITY. If any provision of this
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 15.9 COUNTERPARTS. This Agreement may contain more than
one counterpart of the signature page and this Agreement may be executed by the
affixing of the signature of each of the Partners to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
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Section 15.10 WAIVER OF PARTITION. Each Partner hereby irrevocably
waives any and all rights (if any) that such Partner may have to maintain any
action for partition of any of the Partnership's property.
Section 15.11 REMEDIES. The failure of any party to seek redress
for violation of, or to insist upon the strict performance of, any provision of
this Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and the use of
any one right or remedy by any party shall not preclude or waive its right to
use any or all other remedies. Said rights and remedies are given in addition
to any other rights the parties may have by law, statute, ordinance or
otherwise.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.
GENERAL PARTNER:
ENRON CORP.
a Delaware corporation
By:
---------------------------------
Name:
Title:
INITIAL LIMITED PARTNER:
Organizational Limited Partner, Inc.
By:
---------------------------------
Name:
Title:
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ANNEX A
FORM OF L.P. CERTIFICATE
[IF THE PARTNERSHIP PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT: This Partnership Preferred Security is a Global Certificate within the
meaning of the Partnership Agreement hereinafter referred to and is registered
in the name of The Depository Trust Company (the "Depositary") or a nominee of
the Depositary. This Partnership Preferred Security is exchangeable for
Partnership Preferred Securities registered in the name of a person other than
the Depositary or its nominee only in the limited circumstances described in
the Partnership Agreement and no transfer of this Partnership Preferred
Security (other than a transfer of this Partnership Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Partnership Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx), a New York corporation, to the Partnership or its agent for
registration of transfer, exchange or payment, and any Partnership Preferred
Security issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of the Depositary and any payment
hereon is made to Cede & Co. or such other entity as is requested by an
authorized representative of the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
X-0
00
XX-0 [ ]
Certificate Evidencing Partnership Preferred Securities
of
ENRON PREFERRED FUNDING II, L.P.
% Partnership Preferred Securities
(liquidation amount $25 per Partnership Preferred Security)
ENRON PREFERRED FUNDING II, L.P., a limited partnership formed under
the laws of the State of Delaware (the "Partnership"), hereby certifies that
The Chase Manhattan Bank, a property trustee pursuant to the Amended and
Restated Declaration of Trust of Enron Capital Trust II, dated _______, 1997
(the "Holder") is the registered owner of _____________ preferred securities
of the Partnership representing limited partner interests in the Partnership
designated the % Partnership Preferred Securities (liquidation amount $25
per Partnership Preferred Security) (the "Partnership Preferred Securities").
The Partnership Preferred Securities are freely transferable on the books and
records of the Partnership, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, powers, privileges, restrictions, preferences and
other terms and provisions of the Partnership Preferred Securities represented
hereby are set forth in, issued under and shall in all respects be subject to
the provisions of the Amended and Restated Agreement of Limited Partnership
dated as of _____________, 1997, as the same may be amended from time to time
(the "Partnership Agreement"). Capitalized terms used herein but not defined
shall have the meaning given them in the Partnership Agreement. The Holder is
entitled to the benefits of the Partnership Guarantee to the extent provided
therein. The Partnership will provide a copy of the Partnership Agreement and
the Partnership Guarantee to a Holder without charge upon written request to
the Partnership at its principal place of business.
Upon receipt of this certificate, the Holder is admitted to the
Partnership as a Limited Partner, is bound by the Partnership Agreement and is
entitled to the benefits thereunder. Each Holder of a Partnership Preferred
Security, by acceptance of this Certificate and each Certificate owner, by
acquisition of a beneficial interest in a Certificate, agrees to treat the
Debentures, and any other Affiliate Investment Instruments that are treated as
debt instruments by the relevant Investment Affiliate and by the Partnership,
as indebtedness for United States federal income tax purposes.
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43
IN WITNESS WHEREOF, the Partnership has executed this certificate this
____ day of _______, ______.
ENRON PREFERRED FUNDING II, L.P.
By: ENRON CORP.,
as General Partner
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
(See reverse for additional terms)
A-3
44
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Partnership Preferred Security will be
fixed at a rate per annum of ___% of the stated liquidation amount of $25 per
Partnership Preferred Security. Distributions not paid on the scheduled
payment date will accumulate and compound quarterly (to the extent permitted by
applicable law) at the rate of ___% per annum. The term "Distributions" as
used herein shall mean ordinary cumulative distributions in respect of each
Fiscal Period together with any such Compounded Distributions. Distributions
on the Partnership Preferred Securities will only be made to the extent that
the Partnership has funds legally available for the payment of such
distributions. Amounts available to the Partnership for distribution to the
holders of the Partnership Preferred Securities will be limited to payments
received by the Partnership from the Company and certain wholly owned
subsidiaries on the Affiliate Investment Instruments or from the Company on the
Partnership Guarantee or on the Eligible Debt Securities. Distributions on the
Partnership Preferred Securities will be paid only if, as and when declared in
the sole discretion of the Company, as the General Partner of the Partnership.
The amount of Distributions payable for any period will be computed for any
full quarterly Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full quarterly Distribution
period on the basis of the actual number of days elapsed in a 90-day quarter.
Except as otherwise described herein, distributions on the Partnership
Preferred Securities will be cumulative, will accrue from the date of initial
issuance and will be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ______, 1997, if, as
and when declared by the General Partner in its sole discretion. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership Preferred
Securities) are in book-entry only form, Distributions will be payable to the
Holders of record of Partnership Preferred Securities as they appear on the
books and records of the Partnership on the relevant record dates, which will
be one Business Day prior to the relevant payment dates. If the Trust or the
Property Trustee is the Holder of the Partnership Preferred Securities, all
distributions of cash shall be made by wire transfer of same day funds to such
Holder by 10:00 a.m., New York City time, on the applicable Distribution
Payment Date. Distributions payable on any Partnership Preferred Securities
that are not punctually paid on any Distribution Payment Date will cease to be
payable to the Person in whose name such Partnership Preferred Securities are
registered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Partnership Preferred Securities are
registered on the record date for payment of such defaulted or accrued
Distribution. If the Trust Preferred Securities (or, if the Trust is
liquidated, the Partnership Preferred Securities) are not in book-entry only
form, the relevant record dates shall be the 15th day of the month of the
relevant payment dates. In the event that any date on which distributions are
payable is not a Business Day, payment of such Distribution shall be made on
the next succeeding day which is a Business Day (without any interest or other
payment in respect of any such delay) except that, if such Business Day falls
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day (without any reduction in interest or other
amounts in respect of any such early payment).
The Partnership Preferred Securities shall be redeemable as provided
in the Partnership Agreement.
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45
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Partnership
Preferred Security Certificate to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
agent to transfer this Partnership Preferred Security Certificate on the books
of the Partnership. The agent may substitute another to act for him or her.
Date:
----------------------------
Signature:
-----------------------
(Sign exactly as your name appears on the other side of this
Partnership Preferred Security Certificate)
A-5
