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EXHIBIT 10.3
DRAFT
August 6, 1998
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT (this "AGREEMENT") is entered into on, and
effective as of, __________, 1998 by and between ENRON CORP., an Oregon
corporation ("ENRON"), and ENRON INTERNATIONAL CPO, L.P., a Delaware limited
partnership ("EICPO").
RECITALS:
WHEREAS Enron and EICPO desire by their execution of this Agreement to
evidence their understanding concerning the provision of certain credit and
equity support and other services to be provided by Enron to EICPO and to
evidence other agreements, as more fully set forth in this Agreement;
In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 REFERENCE TO COMMON AGREEMENT. Capitalized terms used herein but
not defined shall have the meanings given to them in Appendix A to the Common
Agreement dated as of the date hereof among EICPO, Enron International CPO,
Inc., Chase Texas, as Trustee, ________ as Liquidity Facility Agent, ________,
as Backup Facility Agent and Chase Texas, as Collateral Agent (as amended,
modified or supplemented from time to time, the "COMMON AGREEMENT"). In
addition, the "Rules of Interpretation" set forth in the aforesaid Appendix A
shall apply to this Agreement.
1.2 OTHER DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
"ASSUMPTION AGREEMENT" means an assumption agreement in the
form set forth as Exhibit A attached hereto.
"AVAILABLE CLASS C OPTION" has the meaning given to it in
Section 2.1.
"CLASS C NOTE PURCHASE COMMITMENT" has the meaning given to it
in Section 2.1.
"CLASS C OPTION" has the meaning given to it in Section 2.1.
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"COMPETING ISSUER" means an entity other than EICPO and JEDI
that has as its primary purpose or activity the making of Project Loans
with respect to Eligible Projects that (i) satisfy clause (4) of the
definition of Project Loan Criteria and (ii) are located in the EI
Regions.
"CONTROLLED ENRON AFFILIATE" means any Enron Affiliate (other
than Enron Oil & Gas Company, EOTT Energy Partners, L.P. and Enron
Energy Services L.L.C.) of which 50% or more of the equity securities
or other voting equity interests are owned, directly or indirectly, by
Enron or of which Enron or a wholly owned direct or indirect subsidiary
of Enron is the sole or managing general partner, managing member or
similar position having the right to exercise actual control of the
management and policies os such Enron Affiliate.
"DESIGNATED ENRON OWNERSHIP INTEREST" means, with respect to
each Project Borrower, a percentage of ownership in such Project
Borrower designated by Enron on the Financial Closing Date of the
applicable Project Loan that (i) is less than or equal to the Enron
Ownership Percentage and (ii) satisfies the Enron Ownership Requirement
after taking into account the Designated Enron Ownership Interests of
all Project Borrowers on the date of determination. The Designated
Enron Ownership Interest shall be subject to adjustment thereafter by
the Program Manager at the direction of Enron upon each subsequent
Financial Closing Date of a Project Loan; provided that, the Enron
Ownership Requirement is satisfied after giving effect to such
adjustment, and that no such adjustment shall increase the Designated
Enron Ownership Interest in respect of a Project Borrower with a
Defaulted Project Loan.
"EICPO" means Enron International CPO, L.P. and its successors
and permitted assignees.
"EI REGIONS" means the geographic areas that are within the
boundaries (as of the date hereof) of Afghanistan, Algeria, American
Samoa, Angola, Anguilla, Antigua, Argentina, Aruba, Australia, The
Bahamas, Bahrain, Bangladesh, Barbados, Barbuda, Belize, Benin,
Bermuda, Bhutan, Bolivia, Bonaire, Botswana, Brazil, the British Virgin
Islands, Brunei, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde,
the Cayman Islands, Central African Republic, Chad, Chile, China,
Colombia, Comoros, Democratic Republic of the Congo, The Congo, Costa
Rica, Cote d'Ivoire, Cuba, Curacao, Djibouti, Dominica, Dominican
Republic, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea,
Ethiopia, the Falkland Islands, Figi, French Guiana, French West
Indies, Gabon, Gambia, Ghana, Grenada, The Grenadines, Guadeloupe,
Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong,
India, Indonesia, Iran, Iraq, Israel, Jamaica, Japan, Jordan, Kenya,
Kuwait, Laos Lebanon, Lesotho, Liberia, Libya, Macau, Madagascar,
Malaysia, Malawi, Maldives, Mali, Maldives, Martinique, Mauritius,
Mongolia, Montserrat, Morocco, Mozambique, Myanmar, Namibia, Nauru,
Nepal, Netherlands Antilles, Nevis, New Caledonia, New Zealand,
Nicaragua, Niger, Nigeria, North Korea, Oman, Pakistan, Panama, Papua
New Guinea, Paraguay, Paracel Islands, Peru, Philippines, Pitcairn,
Principe, Puerto Rico, Qatar, Reunion, Rwanda, Saba, Saint Kitts, Saint
Lucia, Saint Xxxxxxx, Sao Tome, Saudi Arabia, Senegal,
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Seychelles, Sierra Leone, Singapore, Solomon Islands, Somalia, South
Africa, South Korea, Xxxxxxxx Islands, Sri Lanka, St. Barthelemy, St.
Eustatius, St. Xxxxxx, Sudan, Suriname, Swaziland, Syria, Taiwan,
Tanzania, Thailand, Togo, Trinidad & Tobago, Tunisia, Turks & Caicos
Islands, Tuvalu, Uganda, The United Arab Emirates, Uruguay, the U.S.
Virgin Islands, Vanuatu, Xxxxxxxxx, Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx,
Xxxxxx and Zimbabwe.
"ELECTION NOTICE" has the meaning given to it in Section 2.3.
"ENRON" means Enron Corp. and its successors and permitted
assignees.
"ENRON AFFILIATE" means any Affiliate of Enron.
"ENRON CLASS II PURCHASE COMMITMENT" has the meaning given to
it in Section 3.1.
"ENRON CREDIT COUNTERPARTY" has the meaning given to it in
Appendix A to the Common Agreement; provided that, with respect to an
Enron Credit Counterparty that has obligations under this Agreement
that are guaranteed by Enron, Enron shall be obligated to issue a
guaranty of such obligations in the form of Exhibit C attached hereto.
"ENRON DISTRIBUTIONS" means, with respect to each Project
Borrower to which EICPO has made a Project Loan, any dividends,
distributions or payments on subordinated loans (in each case net of
any withholding taxes) paid to or for the benefit of the holder of the
Enron Initial Equity in respect of the Enron Initial Equity of such
Project Borrower; provided that, in the event such dividends,
distributions or payments on subordinated debt are made in a currency
other than Dollars, such dividends, distributions or payments on
subordinated debt shall be deemed to be paid in Dollars based on the
prevailing rate of exchange on the first date following payment thereof
on which such amounts are capable of being converted, directly or
indirectly, into Dollars and remitted abroad; and provided further
that,
(a) in the event of an assignment in accordance with
Article 14.8 of this Agreement, Enron Distributions shall
include any and all dividends or distributions, in each case
net of any withholding taxes, attributable to the Designated
Enron Ownership Interest in the Project Borrower that has been
transferred or assigned directly or indirectly to the
permitted assignee or an Affiliate of the permitted assignee
under Section 14.8;
(b) Enron Distributions shall not, except as provided
in clause (c) below, include payments received from a Project
Borrower following the repayment or prepayment in full of the
Project Loan made to such Project Borrower; and
(c) If (i) an event occurs that causes the Enron
Ownership Percentage to fall below the Designated Enron
Ownership Interest with respect to a Project Loan (an "EQUITY
DISPOSITION") or (ii) a Project Loan is prepaid or refinanced
in its entirety (a "REFINANCING"), then the Enron
Distributions from such Project Borrower for the
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Due Period in which such Equity Disposition or Refinancing has
occurred and for each Due Period thereafter shall be
calculated using the lesser of (x) the Enron Distributions
that would have been received from such Project Borrower
during such Due Period as determined by the Base Case
Financial Projections for such Project Borrower revised as of,
or immediately prior to, the date of such Equity Disposition
or Refinancing and (y) the portion of the amount in (x) above
that would enable the Rating Condition to be satisfied (which
portion may be zero) assuming a prepayment of the Project Loan
in an amount equal to the Disposition Amount and a redemption
of Notes under Article 10 of the Common Agreement in an amount
equal to the Note Redemption Amount on the next Quarterly
Payment Date.
"ENRON INITIAL EQUITY" means the Initial Equity of a Project
Borrower held by Enron or an Enron Affiliate and their respective
successors and assigns pursuant to Section 14.8.
"EQUITY DISPOSITION" has the meaning given to it in the
definition of "ENRON DISTRIBUTIONS."
"FINAL CREDIT SUPPORT NOTICE" has the meaning given to it in
Section 4.4.
"FUNDING AVAILABILITY COMMITMENT" means a commitment made by
Enron under Section 5.2 pursuant to an Election Notice to allow EICPO
to pass the Funding Availability Test.
"FUNDING AVAILABILITY NOTE" has the meaning given to it in
Section 5.4.
"GUARANTEED CREDITOR" has the meaning given to it in Section
9.1.
"GUARANTEED OBLIGATIONS" has the meaning given to it in
Section 9.1.
"JEDI" has the meaning given to it in Section 7.1.
"LIQUIDITY NOTE" has the meaning given to it in Section 4.3.
"MAXIMUM CLASS C NOTE PURCHASE COMMITMENT" has the meaning
given to it in Section 2.1.
"PRELIMINARY CREDIT SUPPORT NOTICE" has the meaning given to
it in Section 4.4.
"PROJECT DISTRIBUTIONS RESERVED" means, with respect to a
Quarterly Payment Date, after giving effect to all payments made on
such Quarterly Payment Date, the amount calculated as the excess of the
Required Reserve Amount over the unutilized portion of the Enron Class
II Purchase Commitment and the unutilized portion of the Class C Note
Purchase Commitment; provided that, Project Distributions Reserved
shall not exceed the Project Distributions Reserved as of the previous
Quarterly Payment Date, if any, plus the Quarterly Project
Distributions for the current Quarterly Payment Date less the amount of
any
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such Quarterly Project Distributions used to satisfy any Quarterly
Payment Shortfall under Section 4.1(c) on such Quarterly Payment Date.
"QUARTERLY PROJECT DISTRIBUTIONS" means, with respect to any
Quarterly Payment Date, an amount equal to 25% of the Enron
Distributions attributable to the Designated Enron Ownership Interest
for all Project Borrowers during each of the four Due Periods
immediately preceding such Quarterly Payment Date (or, in the case of
the first three Quarterly Payment Dates following the Closing Date,
such lesser number of Due Periods as have ended following the Closing
Date).
"REFINANCING" has the meaning given to it in the definition of
"ENRON DISTRIBUTIONS."
"SUPPORT" means the obligations of Enron under Sections 2.1,
3.1, Article IV, Article V, Article VII, Article VIII and Article IX.
"SUPPORT NOTES" means the notes payable by EICPO in the form
of Exhibit C attached hereto issuable pursuant to Article VI.
"SUPPORT PERIOD" means the period commencing on the Closing
Date and ending on the date that (i) subject to the proviso to Article
X hereof, all Notes have been paid in full, including any accrued
interest and Premium, if any, and (ii) the Class I Interests have been
terminated, retired or liquidated pursuant to the Partnership
Agreement.
ARTICLE II.
OPTION TO PURCHASE CLASS C NOTES
2.1 OPTION. Upon notification by EICPO to Enron that the Program
Manager has determined, in connection with the evaluation of an Eligible
Project, that the Rating Condition or a Credit Support Test would not be
satisfied if the related prospective Project Loan were included in the
Collateral, Enron shall have the right to either (a) purchase or cause to be
purchased Class C Notes pursuant to and in accordance with the terms and
conditions set forth on Exhibit D attached hereto or (b) commit to purchase
Class C Notes pursuant to Section 2.3 (the commitment to purchase Class C Notes
under (b) is referred to herein as the "CLASS C NOTE PURCHASE COMMITMENT" and
together, the rights under clauses (a) and (b) are the "CLASS C OPTION"), in
each case in a principal amount sufficient to allow EICPO to satisfy the Rating
Condition and the Credit Support Tests assuming such Project Loan is included in
the Collateral. The aggregate principal amount of Class C Notes that may be
purchased or that Enron may commit to purchase under the Class C Option shall
not at any time exceed U.S. $___________ (the "MAXIMUM CLASS C NOTE PURCHASE
COMMITMENT"). The "AVAILABLE CLASS C OPTION" shall be calculated as the excess
of the Maximum Class C Note Purchase Commitment over the aggregate principal
amount of Class C Notes that have been purchased or that Enron and/or any
permitted assignees under Section 2.5 have previously committed to purchase
pursuant to then outstanding Election Notices (as hereinafter defined) by
exercise of the Class C Option. For the avoidance of doubt, if the Class C Note
Purchase Commitment is reduced
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pursuant to Section 2.4 or any of the Class C Notes are redeemed pursuant to
their terms, the Available Class C Option shall be increased by the amount of
such reduction or redemption.
2.2 TERM OF OPTION. The Class C Option shall be exercisable on or after
the date hereof. The Available Class C Option (excluding any outstanding
commitments thereunder to purchase Class C Notes) shall expire on the Investment
Termination Date.
2.3 NOTICE OF EXERCISE. If Enron elects to exercise the Class C Option
with respect to a proposed initial funding of a Project Loan, Enron shall
deliver to EICPO, the Collateral Agent and the Rating Agencies a notice of such
election in the form of Exhibit E attached hereto (an "ELECTION NOTICE") no
later than five (5) Business Days prior to the consummation of the proposed
initial funding of such Project Loan. Such Election Notice shall state (i) the
principal amount of Class C Notes for which the Class C Option will be
exercised, (ii) whether the Class C Option will be exercised by purchasing Class
C Notes, committing to purchase Class C Notes or a combination thereof; provided
that, in the case of any combination thereof, Enron shall specify the amount of
Class C Notes that will be purchased and the amount of Class C Notes that Enron
will commit to purchase, (iii) the date on which Enron intends to make or cause
to be made such purchase, commitment or combination thereof which date shall be
on or before the date of the proposed initial funding of such Project Loan, (iv)
if Enron commits to purchase Class C Notes, a commitment by Enron in the form
set forth in the Election Notice, and (v) if an entity other than Enron will
purchase Class C Notes, the name of such entity. Any Election Notice may be
revoked prior to the initial funding of the Project Loan to which it relates if,
after giving effect to such revocation, EICPO is able to satisfy the Rating
Condition and the Credit Support Tests.
2.4 RIGHT TO REDUCE CLASS C NOTE PURCHASE COMMITMENT. At any time prior
to the date that is 12 months after the Investment Termination Date, Enron shall
have the right to reduce the Class C Note Purchase Commitment or redeem Class C
Notes if, after giving effect to such reduction or redemption, EICPO is able to
satisfy the Rating Condition, the Reserve Test and the Credit Support Tests;
provided that, prior to any reduction of the Class C Note Purchase Commitment,
the Program Manager shall provide written notice to the Collateral Agent that
the Rating Condition has been satisfied (assuming the proposed reduction in the
Class C Note Purchase Commitment) and that the Reserve Test and the Credit
Support Tests would be satisfied after giving effect to the proposed reduction
in the Class C Note Purchase Commitment. Such written notice shall include a
copy of any statement from the Rating Agencies that confirms that the Rating
Condition would be satisfied after the proposed reduction of the Class C Note
Purchase Commitment.
2.5 ASSIGNMENT AND TRANSFER. Enron may assign or transfer its rights
and obligations under the Class C Option, including related rights and
obligations under Sections 2.2 and 2.3, but excluding the rights and obligations
under Section 2.4, to an Enron Credit Counterparty or an Acceptable Credit
Provider pursuant to an Assumption Agreement if, and only if, (a) the assignee
or transferee shall have delivered to EICPO certification in the form of Exhibit
F with relevant tax forms duly completed and attached, that (i) either (A) such
assignee or transferee is a United States person as defined by the Code or (B)
all income to be received by such assignee or transferee with respect to the
Class C Note (whether it is treated as a partnership interest in or debt of
EICPO) will be entitled to a complete exemption from the withholding of United
States federal income tax and
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(ii) either (A) such assignee or transferee is not for United States federal
income tax purposes a partnership, grantor trust, S corporation or other
pass-through entity or (B) such assignee or transferee was not formed for the
purpose of acquiring Class C Notes, Support Notes or Interests and not more than
50% of the value of a beneficial owner's interest in such assignee or transferee
will be attributable to Class C Notes, Support Notes or Interests held by the
transferee or assignee, (b) the assignee or transferee represents that it will
take no action that would cause EICPO to become a publicly traded partnership
taxable as a corporation for United States federal income tax purposes and (c)
the Program Manager shall have determined (treating any unfunded obligations as
having been funded for purposes of this determination) that, after giving effect
to the transfer or assignment, there would be no more than forty-six (46)
holders of the aggregate of the Support Notes, the Class II Interests and the
Class C Notes for purposes of Code Section 7704 of the United States Internal
Revenue Code.
ARTICLE III.
CLASS II INTERESTS
3.1 COMMITMENT TO PURCHASE CLASS II INTERESTS. Enron hereby agrees that
Enron will, or will cause an Enron Affiliate to, purchase Class II Interests to
the extent required from time to time under Section 4.1 of this Agreement for an
aggregate purchase price not to exceed U.S. $___________ which purchase price
shall equal the value of the Class II Interests purchased (the "ENRON CLASS II
PURCHASE COMMITMENT"). Enron, EICPO and any Enron Affiliate shall follow the
terms and provisions of Exhibit G attached hereto in connection with any Class
II Interests that Enron may be obligated to purchase from time to time under
Section 4.1. Enron shall obtain an irrevocable standby letter of credit from an
Acceptable Credit Provider for the benefit of the Collateral Agent, on behalf of
the Senior Lenders and the Class B Noteholders in an amount equal to the Enron
Class II Purchase Commitment on or prior to the Closing Date. The Collateral
Agent, on behalf of the Senior Lenders and the Class B Noteholders, shall have
the right to receive payments from such standby letter of credit, if and only if
Enron has breached its obligations under Section 4.1(b) or Section 4.2 and only
for the amount payable by Enron under Section 4.1(b) or Section 4.2. Enron
shall have the right to reduce the stated amount of the irrevocable standby
letter of credit by the amount of Class II Interests purchased under Section
4.1(b) or Section 4.2.
3.2 ASSIGNMENT AND TRANSFER. Enron shall have the following rights to
assign or transfer the Enron Class II Purchase Commitment and the funded Class
II Interests:
(a) in the event that either (i) solely as a result of a
change since the Closing Date in generally accepted accounting
principles in the United States, the indebtedness of EICPO would be
required to be consolidated on Enron's balance sheet (as advised by
Enron's Independent auditors) or (ii) solely as a result of a change
since the Closing Date in the methodology utilized by the Rating
Agencies, the percentage of EICPO's indebtedness that
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would be required to be consolidated for purposes of the rating of
Enron is materially increased from the percentage of such indebtedness
so consolidated as of the Closing Date, Enron shall have the right to
assign or transfer up to fifty percent (50%) of the Enron Class II
Purchase Commitment and the obligations under Section 3.1 in respect
thereof to an Acceptable Credit Provider if, and only to the extent
that, (A) in the case of clause (i) above, such assignment or transfer
would cause EICPO's indebtedness not to be required to be consolidated
on Enron's balance sheet, (B) in the case of clause (ii) above, such
assignment or transfer would materially decrease the amount of EICPO's
indebtedness that is required to be consolidated for purposes of the
rating of Enron, (C) Enron has in good faith considered and concluded
in good faith not to pursue all reasonably practicable alternatives to
avoid the consequences described in clauses (i) and/or (ii) above
(including the sale of funded Class II Interests under clause (c) of
this Section 3.2 below), (d) no Default shall have occurred and be
continuing (immediately prior to and after giving effect to such
assignment or transfer) and (e) the Rating Condition shall be satisfied
after giving effect to such assignment or transfer;
(b) Enron shall have the right to transfer any or all of the
Enron Class II Purchase Commitment to an Enron Credit Counterparty that
is a Majority Affiliate of Enron pursuant to an Assumption Agreement;
and
(c) Enron shall have the right to transfer (i) up to fifty
percent (50%) of the funded Class II Interests to any Person or Persons
and (ii) any or all of the funded Class II Interests to a Majority
Affiliate of Enron;
provided that, Persons that are not Majority Affiliates of Enron shall not in
aggregate hold in excess of fifty percent (50%) of the Class II Interests; and
provided further that, (a) the assignee or transferee shall have delivered to
EICPO certification in the form of Exhibit F, with relevant tax forms duly
completed and attached, that (i) either (A) such assignee or transferee is a
United States person as defined by the Code or (B) all income to be received by
such assignee or transferee with respect to the Class II Interest will be
entitled to a complete exemption from the withholding of United States federal
income tax and (ii) either (A) such assignee or transferee is not for United
States federal income tax purposes a partnership, grantor trust, S corporation
or other pass-through entity or (B) such assignee or transferee was not formed
for the purpose of acquiring Class C Notes, Support Notes or Interests and not
more than 50% of the value of a beneficial owner's interest in such assignee or
transferee will be attributable to Class C Notes, Support Notes or Interests
held by the transferee or assignee, (b) the assignee or transferee represents
that it will take no action that would cause EICPO to become a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes and (c) the Program Manager shall have determined (treating any
unfunded obligations as having been funded for purposes of this determination)
that, after giving effect to the transfer or assignment of the funded Class II
Interests or the Enron Class II Purchase Commitment (and in the case of any
Enron Class II Purchase Commitment transferred or assigned, assuming the Enron
Class II Purchase Commitment has been exercised), there would be no more than
forty-six (46) holders of the aggregate of the Support Notes, the Class II
Interests and the Class C Notes for purposes of Code Section 7704 of the United
States Internal Revenue Code.
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ARTICLE IV.
SUPPORT FOR PAYMENT OBLIGATIONS
4.1 INSUFFICIENT COLLATERAL PROCEEDS ON A QUARTERLY PAYMENT DATE. On
the Business Day immediately preceding any Quarterly Payment Date, if a
Quarterly Payment Shortfall exists, the following payments shall be made by
Enron or its permitted designees in an aggregate amount not to exceed the
Quarterly Payment Shortfall on such Quarterly Payment Date and in the order set
forth below:
(a) first, Enron shall purchase or cause to be purchased from
EICPO Class C Notes in principal amount and for a purchase price up to
the unfunded Class C Note Purchase Commitment;
(b) second, Enron shall purchase from EICPO Class II Interests
for a purchase price up to the unfunded Enron Class II Purchase
Commitment;
(c) third, Enron shall pay or cause to be paid to EICPO an
amount not exceeding the Quarterly Project Distributions for such
Quarterly Payment Date;
(d) fourth, Enron shall pay or cause to be paid to EICPO an
amount not exceeding the Project Distributions Reserved as of the
previous Quarterly Payment Date;
(e) fifth, to the extent that a Quarterly Payment Shortfall
exists after application of the amounts on deposit in the Reserve
Account as of such Quarterly Payment Date and the Excess Spread Account
as of such Quarterly Payment Date pursuant to Section 4.1(b) of the
Security Agreement, Enron shall pay or cause to be paid to EICPO an
amount not exceeding the total outstanding Credit Support Test
Commitments provided under Section 5.2. (less amounts funded to date
under such commitments).
Notwithstanding anything to the contrary herein, Enron shall not be
obligated to make payments under (c) and (d) to cover Quarterly Payment
Shortfalls to the extent such shortfalls result from a Tax Event.
If more than one party is required to make payments under a particular
clause of this Section 4.1, such parties shall make the payment under such
clause ratably based on the respective commitments of such parties.
EICPO shall use any payments received under this Section 4.1 solely to
pay Quarterly Payment Shortfalls in accordance with terms and conditions of the
Financing Documents.
4.2 INSUFFICIENT COLLATERAL PROCEEDS UPON AN ACCELERATION. Upon and
after the occurrence of an Acceleration in which funds in the Collateral
Accounts are insufficient to make the payments set forth in clauses (i) through
(ix) of Section 4.3(a) of the Security Agreement, such shortfall shall be
treated hereunder in the same manner as a Quarterly Payment Shortfall and the
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provisions of Section 4.1 shall apply mutatis mutandis to a shortfall under
Section 4.3(b) of the Security Agreement; provided that, calculations of amounts
as of a Quarterly Payment Date shall be calculated as of the date of the
Acceleration and on each Quarterly Payment Date thereafter and obligations
taking effect on a Quarterly Payment Date shall take effect on the date of
Acceleration and on each Quarterly Payment Date thereafter.
4.3 LIQUIDITY SHORTFALLS. (a) Upon the occurrence of a Shortfall as
defined in Section 4.2(a) of the Security Agreement pursuant to which the amount
available to be drawn under the Liquidity Facility is less than the Liquidity
Shortfall Amounts, Enron shall pay or cause to be paid to EICPO an amount not
exceeding the lesser of (i) the remaining Liquidity Shortfall Amounts not
covered by drawdowns of the Liquidity Facility and (ii) the Liquidity Test
Commitments provided under Section 5.2 less amounts previously funded under such
commitments.
(b) On each date on which a payment is made to EICPO under this Section
4.3, EICPO shall issue to Enron or its designee a note payable to Enron or its
designee in substantially the form of Exhibit H attached hereto (a "LIQUIDITY
NOTE") in principal amount equal to the amount paid by Enron under this Section
4.3; provided that, EICPO shall not be obligated to issue Liquidity Notes in
aggregate principal amount exceeding _____________ Dollars ($_____________).
EICPO shall issue Support Notes to Enron pursuant to Section 6.1 for amounts
funded under this Section 4.3 in excess of _____________ Dollars
($_____________).
4.4 NOTICE OF CREDIT SUPPORT OBLIGATION. EICPO shall notify Enron and
any relevant Enron Credit Counterparties and Acceptable Credit Providers in
writing (a "PRELIMINARY CREDIT SUPPORT NOTICE") no later than three (3) Business
Days prior to the Quarterly Payment Date regarding any obligation of Enron, such
Enron Credit Counterparty or Acceptable Credit Provider to provide Support that,
in the reasonable judgment of EICPO, will occur on such Quarterly Payment Date.
The Preliminary Credit Support Notice shall provide (i) a description of the
Support to be provided and (ii) the estimated amounts and forms of Support,
including calculations and supporting information. EICPO shall also notify Enron
in writing of the exact amounts and forms of Support to be provided no later
than two (2) Business Days prior to such Quarterly Payment Date (the "FINAL
CREDIT SUPPORT NOTICE"), which Final Credit Support Notice shall be conclusive
absent manifest error. Upon a determination by Enron that the amount of Support
actually provided on a Quarterly Payment Date was in excess of the amount
required to be provided under the terms of this Agreement, Enron shall be
entitled to a reduction of amounts due and payable hereunder on subsequent
Quarterly Payment Dates to the extent of such overstatement. Failure to provide
any notice under this Section 4.4 within the time specified shall not constitute
a waiver by EICPO of Enron's obligations (or the obligations of an Enron Credit
Counterparty or Acceptable Credit Provider) under Section 4.1.
4.5 RECORD KEEPING AND AUDIT RIGHT. During the term of this Agreement,
Enron shall maintain an ongoing record on a quarterly basis of the Quarterly
Project Distributions. On the first Business Day following each Determination
Date, Enron shall provide a summary in writing of such amounts to EICPO. EICPO
shall have the right to reasonable access to Enron's records of the Quarterly
Project Distributions for the sole purpose of reviewing and auditing such
records.
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ARTICLE V.
SUPPORT UPON THE OCCURRENCE OF CERTAIN EVENTS
5.1 SUPPORT UPON THE OCCURRENCE OF A TAX EVENT. In the event of an
occurrence of a Tax Event, Enron shall have the option (but not the obligation)
to indemnify EICPO for the amount (if any) necessary for the satisfaction of the
Rating Condition after giving effect to the Tax Event.
5.2 SUPPORT UPON A FAILURE BY EICPO TO SATISFY CERTAIN TESTS UNDER THE
COMMON AGREEMENT. In the event that EICPO fails to satisfy any of the Funding
Availability Test, the Liquidity Test or either of the Credit Support Tests,
Enron shall have the option (but not the obligation) to pay or commit to pay to
EICPO pursuant to an Election Notice, an amount sufficient to allow EICPO to
satisfy any or all such tests. Enron shall have the right to reduce any
outstanding commitments under this Section 5.2 if, after giving effect to such
reduction, EICPO is able to satisfy the Funding Availability Test, the Liquidity
Test or the Credit Support Tests, as the case may be; provided that, (i) prior
to any reduction of such commitment, the Program Manager shall provide written
notice to the Collateral Agent that the test to which the commitment applies
would be satisfied after giving effect to the proposed reduction in such
commitment, and (ii) in the case of a reduction of a commitment made in
connection with the satisfaction of a Credit Support Test, the Rating Condition
shall have been satisfied after giving effect to such reduction and, provided
further that, any Credit Support Commitments outstanding on the first
anniversary of the Investment Termination Date shall not be reduced and shall
remain outstanding for the term of this Agreement. Funding Availability
Commitments shall terminate no earlier than the termination of the revolving
period of the Backup Facility as provided for in the terms and conditions of
the Backup Facility set forth on Appendix B to the Common Agreement.
Liquidity Test Commitments shall terminate no earlier than the maturity date of
the Liquidity Facility.
5.3 SUPPORT FOR REDEMPTIONS. Enron shall have the option (but not the
obligation) to pay to EICPO an amount which shall be used by EICPO to redeem
Notes or to effect a Class B Refinancing, in each case pursuant to Article 10 of
the Common Agreement.
5.4 SUPPORT FOR SHORTFALLS IN FUNDING OF PROJECT LOANS. (a) In the
event that (i) Enron has made a Funding Availability Commitment under Section
5.2 and (ii) EICPO will be unable to fund any draw on a Project Loan due solely
to the lack of available funds for such purposes, EICPO shall notify Enron in
writing of the amount of any unused Funding Availability Commitments necessary
to fund such Project Loan. No later than three (3) Business Days after receipt
of such notice, Enron shall pay or cause to be paid to EICPO such amount;
provided that, the aggregate amount paid pursuant to all such notifications
shall not exceed the sum of the Funding Availability Commitments provided under
Section 5.2 to satisfy the Funding Availability Test less any reductions of such
commitments under Section 5.2.
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(b) On each date on which a payment is made to EICPO under this Section
5.4, EICPO shall issue to Enron or its designee a note payable to Enron or its
designee in substantially the form of Exhibit I attached hereto (a "FUNDING
AVAILABILITY NOTE") in principal amount equal to the amount paid by Enron under
this Section 5.4.
5.5 ADDITIONAL SECURITY FOR QUARTERLY PROJECT DISTRIBUTIONS AND
PROJECT DISTRIBUTIONS RESERVED.
(a) Enron shall have the option (but not the obligation) to
obtain an irrevocable standby letter of credit from an Acceptable
Credit Provider for the benefit of the Collateral Agent, on behalf of
the Senior Lenders and the Class B Noteholders, to secure all or any
portion of the payment obligations of Enron set forth in Sections
4.1(c), (d) and 4.2, as may be incurred from time to time. Enron shall
have the right to reduce or cancel all or any portion of any standby
letter of credit outstanding under this Section 5.5(a) if, after giving
effect to such reduction, the Rating Condition has been satisfied.
(b) In the event that Xxxxx'x downgrades the rating of the
senior unsecured long-term debt of Enron below Baa2, no later than
thirty (30) days following the date that the rating of Enron has been
so downgraded, Enron shall obtain an irrevocable standby letter of
credit from an Acceptable Credit Provider for the benefit of the
Collateral Agent, on behalf of the Senior Lenders and the Class B
Noteholders in an amount equal to ____ million Dollars ($__________) to
secure all or any portion of the payment obligations of Enron set forth
in Sections 4.l(c), (d) and 4.2, as may be incurred from time to time;
provided, however, that Enron shall not be obligated to obtain or
maintain such standby letter of credit if (i) the then current rating
by Xxxxx'x with respect to the Class A Senior Notes is lower than or
equal to the then current rating by Xxxxx'x with respect to the senior
unsecured long term debt of Enron or (ii) Xxxxx'x upgrades the rating
of the senior unsecured long-term debt of Enron to A2 or higher.
(c) In the event that Enron is required to obtain a standby
letter of credit pursuant to Section 5.5(b) above and no such letter
of credit is obtained by Enron, Enron shall, no later than thirty (30)
days following the date the rating has been downgraded, deposit cash
in an account designated by EICPO in the amount set forth in Section
5.5(b) and enter into security arrangements acceptable to the
Collateral Agent with respect to such account. Funds deposited in such
account shall be invested by the Program Manager in Eligible
Investments and any income on or accretions to such Eligible
Investment shall be paid periodically to Enron.
(d) If any standby letter of credit has been issued under
Section 5.5(a) or (b) is outstanding, or Enron has deposited cash in
accordance with Section 5.5(c), the Collateral Agent, on behalf of the
Senior Lenders and the Class B Noteholders, shall have the right to
receive payments from such standby letter of credit or the principal
amount of such account, as the case may be, if and only if Enron has
breached its obligations under Section 4.1(c), 4.1(d) or 4.2 and only
for the amount payable by Enron under Sections 4.1(c), 4.1(d) or 4.2.
The stated amount of any standby letter of credit hereunder shall be
reduced by any amount paid by Enron to the Collateral Agent under
Section 4.1(c), 4.1(d) and 4.2.
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5.6 ASSIGNMENTS AND TRANSFERS. Enron may assign or transfer its rights
and obligations under this Section 5 to any Person pursuant to an Assumption
Agreement; provided that, Enron's obligations under Section 5.1 and any Funding
Availability Commitments, Liquidity Test Commitments and Credit Support
Commitments made under Section 5.2 shall only be assigned to an Enron Credit
Counterparty or an Acceptable Credit Provider; and provided further that, with
respect to transfers or assignments of rights and obligations under Sections
5.1, 5.2 in connection with any Credit Support Commitments, 5.3 and 5.5(d), (a)
such Person shall have delivered to EICPO certification in the form of Exhibit F
with relevant tax forms duly completed and attached, that (i) either (A) such
Person is a United States person as defined by the Code or (B) all income to be
received by such assignee or transferee with respect to Support Notes to be
issued in respect of payments made under Section 5.1 or 5.3 (whether such Notes
are treated as a partnership interest in or debt of EICPO) will be entitled to a
complete exemption from the withholding of United States federal income tax and
(ii) either (A) such Person is not for United States federal income tax purposes
a partnership, greater trust, S corporation or other pass-through entity or (B)
such Person was not formed for the purpose of acquiring Class C Notes, Support
Notes or Interests and not more than 50% of the value of a beneficial owner's
interest in such Person will be attributable to Class C Notes, Support Notes or
Interests held by the Person, (b) the assignee or transferee represents that it
will take no action that would cause EICPO to become a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes and (c) the Program Manager shall have determined (treating any
unfunded obligations as having been funded for purposes of this determination),
that, after giving effect to the transfer or assignment, there would be no more
than forty-six (46) holders of the aggregate of the Support Notes, the Class II
Interests and the Class C Notes for purposes of Code Section 7704 of the United
States Internal Revenue Code.
ARTICLE VI.
SUPPORT NOTES
6.1 ISSUANCE OF SUPPORT NOTES. On each date on which a payment is made
under Section 4.1, (c), (d) or (e), Section 5.1, 5.2 in connection with any
Credit Support Commitments, 5.3 or 5.5(d) or as may be required for certain
payments made under Section 4.3, EICPO shall issue notes ("SUPPORT NOTES")
payable to Enron (or to its designee) in substantially the form of Exhibit C
attached hereto in an aggregate principal amount equal to the amount paid under
the relevant Section or clause thereof.
6.2 RESTRICTIONS ON DESIGNEES. Enron may designate any Person to
provide Support under Sections 4.1 (c), (d) or (e), Section 5.1, 5.2 in
connection with any Credit Support Commitments, and 5.3, and as may be required
for certain payments made under Section 4.3, including Enron's right to receive
Support Notes under Section 6.1, if, and only if, (a) such Person shall have
delivered to EICPO certification in the form of Exhibit F with relevant tax
forms duly completed and attached, that (i) either (A) such Person is a United
States person as defined by the Code or (B) all income to be received by such
designee with respect to the Support Note (whether it is treated as a
partnership interest in or debt of EICPO) will be entitled to a complete
exemption from the withholding of United States federal income tax and (ii)
either (A) such Person is not for
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United States federal income tax purposes a partnership, grantor trust, S
corporation or other pass-through entity or (B) such Person was not formed for
the purpose of acquiring Class C Notes, Support Notes or Interests and not more
than 50% of the value of a beneficial owner's interest in such Person will be
attributable to Class C Notes, Support Notes or Interests held by such Person,
(b) the designee represents that it will take no action that would cause EICPO
to become a publicly traded partnership taxable as a corporation for United
States federal income tax purposes and (c) the Program Manager shall have
determined (on the basis of EICPO's registers of the holders of the Support
Notes, Class C Notes and Class II Interests and treating any unfunded
obligations as having been funded for purposes of this determination) that,
after giving effect to the aforesaid designation, there would be no more than
forty-six (46) holders of the aggregate of the Support Notes, the Class II
Interests and the Class C Notes for the purposes of Code Section 7704 of the
United States Internal Revenue Code.
ARTICLE VII.
NOTIFICATION OF INVESTMENT OPPORTUNITIES; LIMITATION ON COMPETITION;
MAINTENANCE OF ENRON CREDIT COUNTERPARTIES
7.1 NOTIFICATION OF INVESTMENT OPPORTUNITIES. Enron shall use
commercially reasonable efforts to notify EICPO in writing (the "INVESTMENT
NOTICE") of all opportunities to make loans to projects developed or acquired by
Enron or controlled Enron Affiliates and located within the EI Regions to the
extent any of such projects would be an Eligible Project as determined by Enron
on a commercially reasonable basis and in good faith and excluding any loan that
constitutes a "Qualified Investment" as such term is defined in, or which is
offered as such by Enron or an Enron Affiliate to Joint Energy Development
Investments II Limited Partnership ("JEDI") under, the terms of the Limited
Partnership Agreement of JEDI dated as of December 30, 1997 (the "JEDI
PARTNERSHIP AGREEMENT"). Enron shall provide the Investment Notice in a manner
sufficient to allow EICPO to prepare a timely bid to make a Project Loan in
light of the project's financing requirements. Upon request by EICPO, Enron
shall provide or cause to be provided to EICPO a description of the location and
physical components of the relevant project and a description of the ownership
interests therein held by the parties together with any available project
documents for such project; one or more sets of the current financial
projections for such project and the Project Loan in United States dollars
(together with the assumptions upon which such financial projections are based)
and such additional materials and information regarding the proposed project as
are commonly provided to lenders in such transactions. Enron's obligations under
this Section 7.1 shall terminate on the Investment Termination Date, including a
termination of the Investment Period as a result of the removal of the Program
Manager pursuant to Section ___ of the Partnership Agreement.
7.2 LIMITATION ON COMPETITION. Enron agrees that from and after the
Closing Date until the earliest of (a) the termination of the Support Period,
(b) the date on which EICPO has an aggregate principal amount of Project Loans
outstanding plus unfunded Commitments equal to or greater than $_____________
and (c) the Investment Termination Date, neither Enron nor any Controlled Enron
Affiliate shall compete with EICPO, directly or indirectly, in the commencement,
acquisition, development, sponsorship, organization or marketing of any
Competing Issuer.
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15
7.3 LIMITATION ON AMENDMENT OF JEDI PARTNERSHIP AGREEMENT. Enron shall
not amend, modify, waive, or cause to be amended, modified or waived, any
provision of the JEDI Partnership Agreement in any manner that would expand the
projects excluded from Enron's obligations to show opportunities to EICPO under
Section 7.1 hereof.
7.4 MAINTENANCE OF ENRON CREDIT COUNTERPARTIES. With respect to any
Enron Credit Counterparty that has outstanding obligations hereunder that are
guaranteed by Enron, Enron shall provide to EICPO a guaranty from Enron of such
Enron Credit Counterparty's obligations in the form attached hereto as Exhibit
A. Upon the failure of an entity that has then outstanding obligations under any
Financing Document as an Enron Credit Counterparty to qualify as an Enron Credit
Counterparty, Enron shall promptly cause such entity to requalify as an Enron
Credit Counterparty or cause an Enron Credit Counterparty to assume such
entity's outstanding obligations.
ARTICLE VIII.
EQUITY DISPOSITION
Enron shall notify EICPO in writing of any proposed Equity Disposition.
Upon such notification by Enron to EICPO, EICPO shall as soon as practicable,
but no later than ten days after EICPO has received the revised Base Case
Financial Projections for such Eligible Project, seek to confirm that the Rating
Condition would be satisfied based on the Assumptions.
If EICPO obtains a confirmation of the Rating Condition based on the
Assumptions, EICPO shall notify Enron of such confirmation and the amount of
Enron Distributions calculated pursuant to clause (c) of the definition of Enron
Distributions. Upon consummation of the Equity Disposition, Enron shall pay or
cause to be paid to EICPO the Disposition Amount, EICPO shall cause the
Collateral Agent to release the Lien on the relevant Project Loan under Section
2.6 of the Security Agreement contemporaneously with the payment of the
Disposition Amount and EICPO shall assign and transfer the Project Loan to Enron
or its designee; provided that, no such Disposition Amount shall be payable to
EICPO if the Required Lenders vote to maintain such Project Loan in the
Collateral despite such Equity Disposition.
If EICPO fails to obtain confirmation that the Rating Condition has
been satisfied based upon the Assumptions, (i) EICPO shall notify Enron that the
Rating Condition has not been so confirmed, (ii) upon such Equity Disposition,
no Disposition Amount shall be payable, (iii) EICPO shall retain the Project
Loan as Collateral and (iv) Enron Distributions shall be calculated pursuant to
clause (c) of the definition of Enron Distributions without adjustment pursuant
to subclause (y) thereof.
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16
ARTICLE IX.
GUARANTY OF CERTAIN OBLIGATIONS OF PROGRAM MANAGER
UNDER MANAGEMENT AGREEMENT
9.1 GUARANTY. Subject to Article X hereof, Enron hereby unconditionally
and irrevocably guarantees to EICPO and its assigns (the "GUARANTEED CREDITORS")
the full payment of any and all amounts due and payable by the Program Manager
to EICPO under Section 2.07 of the Management Agreement up to a maximum
aggregate amount of $___________ (the "GUARANTEED OBLIGATIONS"). Such guaranty,
subject to Article X hereof, is an absolute, unconditional, present and
continuing guaranty of payment and not of collection, is not conditioned or
contingent upon any attempt to collect from the Program Manager or upon any
other event, contingency or circumstance whatsoever (it being understood and
agreed, however that any determination of any and all such amounts due and
payable by the Program Manager to EICPO under Section 2.07 of the Management
Agreement shall be made in an arbitration conducted under and in accordance with
the terms of Section 11.11 of the Management Agreement) and that no party shall
have any right to have such a determination made by any court or other
non-arbitral body). All payments by Enron under this guaranty shall be made
within five (5) Business Days following demand therefor given in writing to
Enron (which demand will set forth the basis and calculation of the amount for
which demand is made and shall include a copy of the determination of the
arbitrator); provided that any failure to give such demand, to the extent
prohibited by law, shall not waive any rights hereunder. All such payments by
Enron of the Guaranteed Obligations shall be made to the Guaranteed Creditor in
Dollars in New York City.
9.2 OBLIGATION ABSOLUTE AND UNCONDITIONAL, CONTINUING, ETC. Enron
agrees that the obligation of Enron to pay the Guaranteed Obligations shall be a
direct obligation of Enron and such obligation, subject to the terms hereof (i)
shall be absolute, unconditional and irrevocable, (ii) to the extent permitted
by applicable government rules, shall not be subject to any counterclaims,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment or
reduction (other than full and strict compliance by Enron with its obligations
hereunder) based upon any claim Enron, the Program Manager, or any other Person
may have against the Guaranteed Creditor or upon any claim Enron may have
against the Program Manager or any other Person and (iii) shall remain in full
force and effect during the Support Period without regard to, and shall not be
released, discharged or in any way affected or impaired by any circumstance or
condition whatsoever (whether or not Enron shall have any knowledge or notice
thereof) except in accordance with Article X or as expressly consented to by the
Guaranteed Creditor, including, without limitation, (a) any amendment or
modification of or supplement to or other change in any Financing Document or
any assignment, mortgaging or transfer thereof or of any interest therein;
provided, however, that any amendment or modification of the amount of the
Guaranteed Obligations shall be consented to by Enron in writing; (b) any
failure, omission or delay on the part of any other Person to conform or comply
with any term of any Financing Document; (c) any waiver, consent, extension,
indulgence, compromise, release or other action or inaction under or in respect
of any Financing Document or any exercise or nonexercise of any right, remedy,
power or privilege under or in respect of any Financing Document; (d) any
bankruptcy, insolvency, reorganization, arrangement, readjustment, liquidation
or similar
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17
proceeding with respect to the Program Manager or any other Person or any of
their respective properties, or any action taken by any trustee or receiver or
by any court in any such proceeding; (e) any illegality, invalidity or
unenforceability, in whole or in part, of this Agreement, any Financing Document
or any term or provision thereof or hereof; (f) any merger or consolidation of
the Program Manager or Enron into or with any other Person or any sale, lease or
transfer of all or any of the assets of the Program Manager or Enron to any
other Person, except, in each case, pursuant to an assignment in accordance with
the terms and provisions of Section 14.8 hereof; (g) any change in the ownership
of any shares of capital stock of Enron or the Program Manager, except, in each
case, pursuant to an assignment in accordance with the terms and provisions of
Section 14.8 hereof; (h) to the extent as may be waived by applicable law, the
benefit of all principles or provisions of law, statutory or otherwise, which
may be in conflict with the terms hereof, including, without limitation, any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligation; and (i) to the extent permitted under applicable law,
any other occurrence or circumstance whatsoever, whether similar or dissimilar
to the foregoing which might otherwise constitute a legal or equitable defense
or discharge of the liabilities of a guarantor or surety or which might
otherwise limit recourse against Enron. The obligation of Enron set forth herein
constitutes the full recourse obligation of Enron enforceable against it to the
full extent of all its assets and properties. Without limiting the generality of
the foregoing, Enron agrees that in the event that any Guaranteed Obligations
are paid by the Program Manager or Enron hereunder, and thereafter all or any
part of such payment is recovered as a preferential or fraudulent transfer under
any bankruptcy code, any applicable insolvency law, or any other similar law now
or hereafter in effect, the liability of Enron hereunder with respect to such
Guaranteed Obligations so paid and recovered shall continue and remain in full
force and effect as if, to the extent of such recovery, such payment had not
been made. Nothing in this Section 9.2 shall in any manner affect the maximum
amount of Guaranteed Obligations as set forth in Section 9.1.
9.3 WAIVER OF DEMANDS, NOTICES, ETC. Enron hereby unconditionally and
irrevocably waives, to the extent permitted by applicable law, (a) notice of any
of the matters referred to in Section 9.2; (b) all notices which may be required
by statute, rule or law or otherwise, now or hereafter in effect, to preserve
any rights against Enron hereunder, including, without limitation, any demand,
proof or notice of non-payment of the Guaranteed Obligations; (c) acceptance of
this Agreement, demand, protest, presentment, notice of default or dishonor and
any requirement of diligence; (d) any requirement to exhaust any remedies under
any Financing Document, subject to the provisions of Section 9.1; and (e) any
other circumstance whatsoever which might otherwise constitute a discharge,
release or defense of a guarantor or surety, or which might otherwise limit
recourse against Enron or exonerate Enron from its obligations under this
Article IX (including although not limited to any such defense related to any
requirement for the prior exhaustion of the Program Manager's property, the
extension of the date for payment of any Guaranteed Obligations under the
Management Agreement or any other obligations under any Financing Document by
the Guaranteed Creditor, the novation of any of the Guaranteed Obligations under
the Management Agreement or any other obligations under any Financing Document,
the release of the Program Manager from its Guaranteed Obligations under the
Management Agreement or any other obligations under any Financing Document and
the amendment or waiver of the terms of the Management Agreement or any
Financing Document) except, in each case, pursuant to an assignment in
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accordance with the terms and provisions of Section 14.8 hereof and subject to
the maximum amount of Guaranteed Obligations as set forth in Section 9.1.
ARTICLE X.
TERMINATION OF SUPPORT AGREEMENT AND OBLIGATIONS HEREUNDER
This Agreement shall terminate and all obligations of Enron (or any
Enron Credit Counterparty or Acceptable Credit Provider) to provide Support
hereunder shall terminate at the end of the Support Period provided, however,
that this Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time payment made pursuant to this Agreement is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
Enron, any Enron Credit Counterparty or any Acceptable Credit Provider, either
of the Issuers or otherwise, all as though such payment had not been made.
ARTICLE XI.
REPRESENTATIONS AND WARRANTIES OF EICPO
EICPO hereby represents and warrants to Enron as follows as of the date
hereof:
11.1 STATUS. EICPO is a limited partnership duly formed, validly
existing and in good standing under the laws of its jurisdiction of
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals, necessary to own
its assets and carry on its business as now being or as proposed to be conducted
and is qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would have a Material Adverse Effect with respect to EICPO.
11.2 POWERS. EICPO has all necessary power and authority to execute and
deliver this Agreement and any other documentation relating to this Agreement to
which it is a party and to perform its obligations under this Agreement and has
taken all necessary partnership action to authorize such execution, delivery and
performance. This Agreement has been duly executed and delivered by EICPO. This
Agreement constitutes the legal, valid and binding obligation of EICPO,
enforceable against EICPO in accordance with its terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether enforcement is sought
in a proceeding in equity or at law).
11.3 NO VIOLATION OR CONFLICT. None of the execution and delivery of
this Agreement, the consummation of the transactions contemplated herein and in
the other Financing Documents and
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19
compliance with the terms and provisions hereof and thereof will contravene or
result in a breach of, the Partnership Agreement or the Certificate of Limited
Partnership of EICPO, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency, or any
agreement or instrument to which EICPO is a party or by which EICPO is bound or
to which EICPO is subject, or constitute a default under any such agreement or
instrument the violation or breach of or default under which would have a
Material Adverse Effect with respect to EICPO, or result in the creation or
imposition of any lien (other than Permitted Liens) upon any property of EICPO.
(b) EICPO is not in violation of any of its constitutional documents.
EICPO is not in breach or violation of or in default under (i) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement or other
evidence of indebtedness or other agreement, obligation, condition, covenant or
instrument to which EICPO is a party or is bound, (ii) any statute applicable to
EICPO or (iii) any law, decree, order, rule or regulation applicable to EICPO of
any court or regulatory, administrative or governmental agency, body or
authority, or arbitrator having or asserting jurisdiction over EICPO, or its
properties; except in any case referred to in clauses (i) through (iii) above
where the default, breach or violation would not have a Material Adverse Effect
on EICPO.
11.4 CONSENTS. All governmental and other consents that are required to
have been obtained by EICPO with respect to its execution, delivery and
performance of this Agreement have been obtained and are in full force and
effect and all conditions of any such consents have been complied with.
11.5 ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against EICPO, or against any entity controlled, directly or
indirectly, by EICPO, any entity that controls, directly or indirectly, EICPO or
any entity directly or indirectly under common control with EICPO, any action,
suit or proceeding at law or in equity or before any court, governmental body,
agency or official or any arbitrator in which there is a reasonable possibility
of an adverse decision that, if adversely determined, could have a Material
Adverse Effect with respect to EICPO.
11.6 NO REQUIRED REGISTRATION. EICPO has not engaged in any transaction
that would result in the violation of, or require registration of EICPO as an
investment company under, the Investment Company Act of 1940, as amended.
ARTICLE XII.
REPRESENTATIONS AND WARRANTIES OF ENRON
Enron hereby represents and warrants to EICPO as follows as of the date
hereof:
12.1 STATUS. Enron is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
all requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals, necessary to carry on its material
business as now being conducted.
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12.2 POWERS. Enron has all necessary corporate power and authority to
execute and deliver this Agreement and any other documentation relating to this
Agreement to which it is a party and to perform its obligations under this
Agreement and has taken all necessary corporate action to authorize such
execution, delivery and performance. This Agreement has been duly executed and
delivered by Enron. This Agreement constitutes the legal, valid and binding
obligation of Enron, enforceable against Enron in accordance with its terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or law)).
12.3 NO VIOLATION OR CONFLICT. None of the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein and
compliance with the terms and provisions hereof will contravene or result in a
breach of, the amended and restated articles of incorporation, as amended, or
by-laws, as amended, of Enron, or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental authority or
agency, or any material ("material" for the purposes of this representation
meaning creating a liability of $50,000,000 or more) agreement or instrument to
which Enron is a party or by which Enron is bound or to which Enron is subject,
or result in the creation or imposition of any Lien upon any property of Enron.
12.4 CONSENTS. All governmental and other consents that are required to
have been obtained by Enron with respect to its execution, delivery and
performance of this Agreement have been obtained and are in full force and
effect and all conditions of any such consents have been complied with.
12.5 ABSENCE OF LITIGATION. Except as disclosed in Enron's Form 10-K
for the year ended December 31, 1997 or Enron's Form 10-Q for the quarter ended
June 30, 1998, there is not pending or, to its knowledge, threatened against
Enron or its consolidated subsidiaries, any action, suit or proceeding at law or
in equity or before any court, governmental body, agency or official or any
arbitrator in which there is a reasonable possibility of an adverse decision
that, if adversely determined, could have a material adverse effect on the
ability of Enron to perform its obligations hereunder.
12.6 NO REQUIRED REGISTRATION. Enron has not engaged in any transaction
in connection with this Agreement that would result in the violation of, or
require registration of EICPO as an investment company under, the Investment
Company Act of 1940, as amended.
ARTICLE XIII.
INDEMNIFICATION
13.1 INDEMNIFICATION OF EICPO. From and after the date hereof, and
subject to the remaining provisions of this Article XIII, Enron shall indemnify,
defend and hold harmless EICPO, its officers and authorized representatives (the
"EICPO INDEMNIFIED PARTIES") from and against any
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loss, cost, claim, liability, damage or expense (collectively, "LOSSES")
incurred by EICPO as a result of a breach by Enron of its obligations under this
Agreement.
13.2 INDEMNIFICATION OF ENRON. From and after the date hereof and
subject to the remaining provisions of this Article XIII, EICPO shall indemnify,
defend and hold harmless Enron, its officers and authorized representatives (the
"ENRON INDEMNIFIED PARTIES") from and against any Losses incurred by Enron as a
result of a breach by EICPO of its obligations under this Agreement.
13.3 LIMITATION ON RECOVERY OF CERTAIN TYPES OF DAMAGES. In connection
with any claim made by a party against another party hereunder, the claiming
party shall be entitled to recover only actual damages or direct damages,
together with the costs and expenses incurred by the claiming party in
investigating, preparing and prosecuting the claim for damages, and, without
limiting the generality of the foregoing, no such party shall be entitled to
recover any other damages, whether expressed as punitive, consequential,
special, incidental, indirect, exemplary or treble damages, as damages for loss
of profits, opportunity or income or as penalties, whether based on statute or
in tort, contract or otherwise, regardless of whether such damages may be
available under applicable law or otherwise, and whether or not arising from a
party's sole, joint or concurrent negligence, strict liability, or other fault,
the parties hereto waiving their right, if any, to recover any damages in
connection with claims hereunder other than actual damages or direct damages, as
so defined. The provisions of this Section 13.3 shall in no manner limit the
meaning of "Losses" as used in Section 13.1 with respect to claims of third
parties (including, without limitation, holders of Notes) against a party for
which such party is entitled to be indemnified under Section 13.1 or Section
13.2, as the case may be (it being understood that actual and direct damages
suffered by a party may include amounts paid by such party in respect of a third
party claim, regardless of the nature of the damages claimed by the third
party).
13.4 INDEMNIFICATION PROCEDURES. Promptly after receipt by a party
indemnified (the "INDEMNIFIED PARTY") under this Article XIII of notice of the
commencement of any action or the written assertion of any claim or demand that
may give rise to a Loss, the Indemnified Party shall, if a claim in respect
thereof is to be made against an indemnifying party (the "INDEMNIFYING PARTY")
under this Article XIII, notify the Indemnifying Party in writing of the
commencement or the written assertion thereof; but the omission so to notify the
Indemnifying Party shall not relieve it from any liability which it may
otherwise have to the Indemnified Party. In case any such action, claim or
demand shall be brought or asserted against any Indemnified Party and it shall
notify the Indemnifying Party of the commencement or assertion thereof, the
Indemnifying Party shall be entitled to participate therein or, upon request by
the Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. Upon assumption by the Indemnifying Party
of the defense of such action, claim or demand, the Indemnified Party shall have
the right to participate in such action, claim or demand and to retain its own
counsel, but the Indemnifying Party shall not be liable to the Indemnified Party
under this Article XIII for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by the Indemnified Party, in
connection with the defense thereof other than reasonable costs of investigation
and preparation, unless the Indemnifying Party and the Indemnified Party are
named parties to any such action, claim or demand (including any impleaded
parties) and representation of both parties
- 21 -
22
by the same counsel would be inappropriate due to actual or potential differing
interests between them.
ARTICLE XIV.
MISCELLANEOUS
14.1 UNCONDITIONAL OBLIGATION; WAIVER OF DEFENSES. Enron hereby agrees
that its obligations hereunder shall be irrevocable and unconditional,
irrespective of the validity or enforceability of the Secured Obligations or the
absence of any action to enforce the same. Enron hereby irrevocably waives
promptness, diligence, notice of acceptance and any other notice with respect
to any of its obligations under this Agreement and any requirement that EICPO or
any other Person protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action or pursue any other
remedy in the power of EICPO.
14.2 NO PETITION. Enron hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all outstanding
Notes, it will not institute against, or join with any other Person in
instituting against, the Issuer or Co-Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other similar proceeding
under the laws of any jurisdiction.
14.3 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW.
14.4 NOTICES. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing the same in the United States mail, addressed to the Person
to be notified, postpaid, and registered or certified with return receipt
requested or by delivering such notice in person or by facsimile to such party.
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telecopier shall be effective upon actual receipt if
received during the recipient's normal business hours, or at the beginning of
the recipient's next business day after receipt if not received during the
recipient's normal business hours. All notices to be sent to a party pursuant to
this Agreement shall be sent to or made at the address set forth below such
party's signature to this Agreement, or at such other address as such party may
stipulate to the other parties in the manner provided in this Section 14.4.
14.5 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement constitutes the
entire agreement of the parties relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or written, relating
to the matters contained herein.
14.6 EFFECT OF WAIVER OR CONSENT. No waiver or consent, express or
implied, by any party to or of any breach or default by any Person in the
performance by such Person of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder.
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23
Failure on the part of a party to complain of any act of any Person or to
declare any Person in default, irrespective of how long such failure continues,
shall not constitute a waiver by such party of its rights hereunder until the
applicable statute of limitations period has run.
14.7 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by a written instrument signed by both parties
hereto. Each such instrument shall be reduced to writing and shall be designated
on its face an "AMENDMENT" or an "ADDENDUM" to this Agreement.
14.8 ASSIGNMENT. Except as otherwise provided in this Agreement, no
party shall have the right to assign its rights or obligations under this
Agreement except as otherwise set forth below:
(i) either of the parties hereto shall be entitled to assign
all of its rights and delegate all of its duties and obligations under
this Agreement to any successor of such party by merger or
consolidation; provided, however, that any such successor to Enron has
obtained a rating from S&P or Xxxxx'x and in the event that any such
successor to Enron has a rating from either S&P or Xxxxx'x that is
below Investment Grade at the time of the assignment, the financial
obligations of such successor under this Agreement shall be guaranteed
by an Acceptable Credit Provider;
(ii) in the case of a sale by Enron, an offering to third
parties or a distribution to the shareholders of Enron (as a dividend
or otherwise) of 10% or more of the securities of a Person owning a
majority interest in Enron International, including (a) all of the
interests attributable to the Designated Enron Ownership Interests held
by Enron or any Enron Affiliates in all of the Project Borrowers and
(b) control and authority over substantially all of the financing
activities, development activities and operations of Enron
International, Enron shall be entitled to assign all of its rights and
delegate all of its duties and obligations under this Agreement to such
Person; provided that, (A) if the Program Manager assigns all of its
duties and obligations under the Management Agreement to such Person or
an Affiliate of such Person, in the reasonable opinion of Enron such
Person or its Affiliate, as the case may be, has the capability or has
committed to provide the capability to perform the services of the
Program Manager under the Management Agreement in accordance with the
Standard of Care, as such term is defined in the Management Agreement,
(B) the Rating Condition shall have been satisfied after giving effect
to such assignment, (C) such Person succeeding Enron under this
Agreement shall be rated by S&P and Xxxxx'x and shall not have a credit
rating that is less than Investment Grade by either of S&P or Xxxxx'x
at the time of assignment, (D) no Default has occurred and is
continuing prior to and immediately after giving effect to such
offering, distribution or sale, (E) the Holders of the Class A Notes
and Class B Notes have been notified of such offering, distribution or
sale and related assignment, and (F) Enron shall have obtained an
Opinion of Counsel from external counsel of the entity that has
acquired the interest in Enron International that the Support Agreement
is the valid and binding obligation of such acquiring entity
enforceable against such entity in accordance with its terms, subject
to customary exceptions;
(iii) in the case of a transfer or sale by Enron to a Person
of a majority interest of Enron International, including (a) all of the
interests attributable to Designated Enron
- 23 -
24
Ownership Interests held by Enron and any Enron Affiliates in all of
the Project Borrowers and (b) control and authority over substantially
all of the financing activities, development activities and operations
of Enron International, Enron shall be entitled to assign all of its
rights and delegate all of its duties and obligations under this
Agreement to the purchaser thereof; provided that, (A) if the Program
Manager assigns all of its duties and obligations under the Management
Agreement to such Person or an Affiliate of such Person, in the
reasonable opinion of Enron such Person or its Affiliate, as the case
may be, has the capability or has committed to provide the capability
to perform the services of the Program Manager under the Management
Agreement in accordance with the Standard of Care, as such term is
defined in the Management Agreement, (B) the Rating Condition shall
have been satisfied after giving effect to such assignment, (C) such
person shall be rated by Xxxxx'x or S&P and shall not have a credit
rating that is less than Investment Grade by either Xxxxx'x or S&P; (D)
no Default has occurred and is continuing prior to and immediately
after giving effect to such transfer or sale, (E) the Holders of the
Class A Notes and Class B Notes have been notified of such transfer or
sale and related assignment, and (F) Enron shall have obtained an
Opinion of Counsel from external counsel of the entity that has
acquired the interest in Enron International that the Support Agreement
is the valid and binding obligation of such acquiring entity
enforceable against such entity in accordance with its terms, subject
to customary exceptions;
(iv) EICPO shall be entitled to assign all of its rights under
this Agreement to the Collateral Agent if and to the extent that such
assignment is required under the Security Agreement; and
(v) Enron shall be entitled to assign all of its obligations
hereunder upon a termination of the Program Manager pursuant to Section
____ of the Partnership Agreement.
14.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.
14.10 SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
14.11 FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
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25
14.12 U.S. CURRENCY. All sums and amounts payable or to be payable
pursuant to the provisions of this Agreement shall be payable in coin or
currency of the United States of America that, at the time of payment, is legal
tender for the payment of public and private debts in the United States of
America.
14.13 LAWS AND REGULATIONS. Notwithstanding any provision of this
Agreement to the contrary, no party hereto shall be required to take any act, or
fail to take any act, under this Agreement if the effect thereof would be to
cause such party to be in violation of any applicable law, statute, rule or
regulation.
14.14 NEGATION OF RIGHTS OF LIMITED PARTNERS, ASSIGNEES, AND THIRD
PARTIES. The provisions of this Agreement are enforceable solely by the parties
to this Agreement and the Collateral Agent under the Security Agreement. No
limited partner of EICPO, any assignee or other Person shall have the right,
separate and apart from the parties hereto, to enforce any provision of this
Agreement or to compel any party to this Agreement to comply with the terms of
this Agreement except the Collateral Agent in accordance with the Security
Agreement.
14.15 BINDING EFFECT. This Agreement is binding on and inures to the
benefit of the parties hereto and their respective successors and assigns.
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26
IN WITNESS WHEREOF, the parties have executed this Agreement on, and
effective as of, the date first set forth above.
ENRON CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notice:
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention:
------------------------------
Facsimile:
------------------------------
ENRON INTERNATIONAL CPO, L.P.
By: ENRON CPO HOLDINGS, INC.,
General Partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address for Notice:
----------------------------------------
----------------------------------------
----------------------------------------
Attention:
------------------------------
Facsimile No.:
--------------------------
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27
EXHIBIT A
FORM OF ASSUMPTION AGREEMENT OF
ENRON CREDIT COUNTERPARTY OR ACCEPTABLE CREDIT PROVIDER
This Assignment and Assumption Agreement is entered into as of
_____________ between _____________, (the ["Acceptable Credit Provider"] ["Enron
Credit Counterparty"] ), Enron Corp. ("Enron") and its permitted successors and
assigns and Enron International CPO, L.P. ("EICPO") and its permitted successors
and assigns.
RECITALS:
Enron and EICPO have entered into that certain Support Agreement (the
"Support Agreement") dated ______________, 1998;
Enron desires to assign all of Enron's rights, duties and obligations
in connection with certain support to be provided under the Support Agreement as
more fully described below and the [Acceptable Credit Provider][Enron Credit
Counterparty] desires to assume all of Enron's rights, duties and obligations
with respect to such support.
AGREEMENTS
1. REFERENCE TO SUPPORT AGREEMENT. All capitalized terms used herein
but not defined shall have the meanings given to them in the Support Agreement.
2. SUPPORT OBLIGATION. The Support Obligation [insert description of
Support Obligation] (the "Support Obligation").
3. ASSIGNMENT. Enron hereby assigns, transfers and conveys to the
[Acceptable Credit Provider][Enron Credit Counterparty] the Support Obligation
together with all of Enron's rights and privileges under the Support Obligation.
4. ASSUMPTION. The [Acceptable Credit Provider][Enron Credit
Counterparty] hereby accepts the Support Obligation and assumes all of Enron's
duties and obligations under the Support Obligation, subject to the terms of the
Support Agreement.
5. RELEASE. EICPO hereby releases and forever discharges Enron from the
Support Obligation and any and all claims, demands, actions or liability under
the Support Obligation. Notwithstanding the foregoing, this Agreement shall not
be construed to limit Enron's other obligations under the Support Agreement or
any guarantee by Enron of the Support Obligation.
6. REPRESENTATIONS AND WARRANTIES. The [Acceptable Credit
Provider][Enron Credit Counterparty] hereby represents and warrants to EICPO as
follows as of the date hereof:
28
(a) STATUS. The [Acceptable Credit Provider][Enron Credit Counterparty]
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation, has all requisite power and authority, and has all
material governmental licenses, authorizations, consents and approvals,
necessary to carry on its material business as now being conducted.
(b) POWERS. The [Acceptable Credit Provider][Enron Credit Counterparty]
has all necessary power and authority to execute and deliver this Agreement and
any other documentation relating to this Agreement to which it is a party and to
perform its obligations under this Agreement and has taken all necessary
corporate action to authorize such execution, delivery and performance. This
Agreement has been duly executed and delivered by the [Acceptable Credit
Provider][Enron Credit Counterparty]. This Agreement constitutes the legal,
valid and binding obligation of the [Acceptable Credit Provider][Enron Credit
Counterparty], enforceable against the [Acceptable Credit Provider][Enron Credit
Counterparty] in accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a proceeding
in equity or law)).
(c) NO VIOLATION OR CONFLICT. None of the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein and
compliance with the terms and provisions hereof will contravene or result in a
breach of, charter or formation documents, or by-laws, as amended, of the
[Acceptable Credit Provider][Enron Credit Counterparty], or any applicable law
or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any material agreement or instrument to
which the [Acceptable Credit Provider][Enron Credit Counterparty] is a party or
by which the [Acceptable Credit Provider][Enron Credit Counterparty] is bound or
to which the [Acceptable Credit Provider][Enron Credit Counterparty] is subject,
or result in the creation or imposition of any lien upon any property of the
[Acceptable Credit Provider][Enron Credit Counterparty].
(d) CONSENTS. All governmental and other consents that are required to
have been obtained by the [Acceptable Credit Provider][Enron Credit
Counterparty] with respect to its execution, delivery and performance of this
Agreement have been obtained and are in full force and effect and all conditions
of any such consents have been complied with.
(e) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against the [Acceptable Credit Provider][Enron Credit Counterparty]
or its consolidated subsidiaries, any action, suit or proceeding at law or in
equity or before any court, governmental body, agency or official or any
arbitrator in which there is a reasonable possibility of an adverse decision
that, if adversely determined, would have a Material Adverse Effect with respect
to the [Acceptable Credit Provider][Enron Credit Counterparty]'s obligations
hereunder.
(f) NO REQUIRED REGISTRATION. The [Acceptable Credit Provider] [Enron
Credit Counterparty] has not engaged in any transaction in connection with this
Agreement that would result in the violation of, or require registration of
EICPO as an investment company under, the Investment Company Act of 1940, as
amended.
X-0
00
0. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW.
8. IRREVOCABLE OBLIGATION; WAIVER. The [Acceptable Credit
Provider][Enron Credit Counterparty] hereby agrees that its obligations
hereunder shall be irrevocable and unconditional, irrespective of the validity
or enforceability of the Secured Obligations under the Financing Documents or
the absence of any action to enforce the same. The [Acceptable Credit
Provider][Enron Credit Counterparty] hereby irrevocably waives promptness,
diligence, notice of acceptance and any other notice with respect to any of its
obligations under this Agreement and any requirement that EICPO or any other
Person protect, secure, perfect or insure any lien or any property subject
thereto or exhaust any right or take any action or pursue any other remedy in
the power of EICPO.
9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon Enron,
EICPO, the [Acceptable Credit Provider][Enron Credit Counterparty], and their
respective successors and assigns, and shall inure to the benefit of such
persons and their successors and assigns.
10. MULTIPLE COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same instrument.
11. ASSIGNMENT. The [Acceptable Credit Provider][Enron Credit
Counterparty] shall not have the right to assign its rights or obligations under
this Agreement except to another Enron Credit Counterparty or Acceptable Credit
Provider pursuant to the applicable provisions of the Support Agreement;
provided that, such assignee has provided EICPO with the documentation
requirements set forth under Section 2.5(a), 3.2 or 6.2 of the Support
Agreement, as the case may be.
EXECUTED as of the date first set forth above.
ENRON CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
X-0
00
XXXXX XXXXXXXXXXXXX XXX, X.X.
By: ENRON CPO HOLDINGS, INC.,
its general partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
----------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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31
EXHIBIT B
FORM OF GUARANTY OF ENRON CORP.
OF OBLIGATIONS OF ENRON CREDIT COUNTERPARTY
GUARANTY, dated as of ___________ , 1998 (the "Agreement" or the
"Guaranty"), by ENRON CORP., a corporation organized under the laws of Oregon
("Enron" or the "Guarantor"), in favor of and for the benefit of ENRON
INTERNATIONAL CPO, L.P., a Delaware limited partnership ("EICPO").
WHEREAS, EICPO has entered into that certain Support Agreement dated
___________, 1998 with Enron Corp. (the "Support Agreement");
WHEREAS, the Guarantor desires by its execution of this Guaranty to
evidence its understanding concerning the guaranty to be provided by the
Guarantor to EICPO, as more fully set forth below;
NOW, THEREFORE, in consideration of the premises and the covenants,
conditions, and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
All capitalized terms used herein but not defined shall have the
meanings given to them in Appendix "A" of the Common Agreement dated
___________, 1998 among EICPO, Enron International CPO I Inc., Chase Texas, as
Trustee, ___________, as Liquidity Facility Agent and _______, as Backup
Facility Agent and Chase Texas, as Collateral Agent (as amended, modified or
supplemented from time to time, the "Common Agreement").
SECTION 2. GUARANTY OF THE OBLIGATIONS. Subject to Section 3 hereof,
the Guarantor hereby unconditionally and irrevocably guarantees to EICPO the
full payment by ________________ (the "Enron Credit Counterparty") under the
Support Agreement of any and all amounts due and payable by the Enron Credit
Counterparty to EICPO under that certain Assumption Agreement dated as of the
date hereof for the [describe obligation and amount] (the "Guaranteed
Obligations"). Such guaranty, subject to Section 3 hereof, is an absolute,
unconditional, present and continuing guaranty of payment and not of collection,
is not conditioned or contingent upon any attempt to collect from the Enron
Credit Counterparty or upon any other event, contingency or circumstance
whatsoever. Notwithstanding the foregoing, all payments by Enron under this
guaranty shall be made within five (5) Business Days following demand therefor
given in writing to Enron (which demand will set forth the basis and calculation
of the amount for which demand is made); provided that, any failure to give such
demand, to the extent prohibited by law, shall not waive any rights hereunder.
SECTION 3. TERMINATION OF THE GUARANTOR'S OBLIGATION. The obligation of
the Guarantor to pay the Guaranteed Obligations as set forth in this Agreement
shall terminate upon the payment in full of all obligations of the Guarantor
under this Guaranty or the termination of the obligations
B-1
32
of the Enron Credit Counterparty with respect to the Guaranteed Obligations in
accordance with their terms; provided, however, that this Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of the Guaranteed Obligations is rescinded or must otherwise be
returned upon the insolvency, bankruptcy or reorganization of the Guarantor, the
Enron Credit Counterparty, either of the Issuers or otherwise, all as though
such payment had not been made.
SECTION 4. OBLIGATION ABSOLUTE AND UNCONDITIONAL, CONTINUING, ETC. The
Guarantor agrees that the obligation of the Guarantor to pay the Guaranteed
Obligations as set forth in this Agreement shall be a direct obligation of the
Guarantor and such obligation, subject to the terms hereof (i) shall be
absolute, unconditional and irrevocable, (ii) to the extent permitted by
applicable law, shall not be subject to any counterclaims, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment or reduction (other
than full and strict compliance by the Guarantor with its obligations hereunder)
based upon any claim the Guarantor, the Enron Credit Counterparty or any other
Person may have against EICPO or upon any claim the Guarantor may have against
the Enron Credit Counterparty or any other Person and (iii) shall remain in full
force and effect without regard to, and shall not be released, discharged or in
any way affected or impaired by any circumstance or condition whatsoever
(whether or not the Guarantor shall have any knowledge or notice thereof) except
as expressly consented to by EICPO, including, without limitation, (a) any
amendment or modification of or supplement to or other change in the Support
Agreement or any assignment, mortgaging or transfer thereof or of any interest
therein; provided, however, that any amendment or modification of the amount of
the Guaranteed Obligations shall be consented to by the Guarantor in writing;
(b) any failure, omission or delay on the part of any other Person to conform or
comply with any term of the Support Agreement; (c) any waiver, consent,
extension, indulgence, compromise, release or other action or inaction under or
in respect of the Support Agreement or any exercise or non-exercise of any
right, remedy, power or privilege under or in respect of the Support Agreement;
(d) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
liquidation or similar proceeding with respect to the Enron Credit Counterparty,
the Guarantor or any other Person or any of their respective properties, or any
action taken by any trustee or receiver or by any court in any such proceeding;
(e) any illegality, invalidity or unenforceability, in whole or in part of this
Agreement, the Support Agreement or any term or provision thereof or hereof, (f)
any merger or consolidation of the Enron Credit Counterparty or the Guarantor
into or with any other Person or any sale, lease or transfer of all or any of
the assets of the Enron Credit Counterparty or the Guarantor to any other
Person, except in each case, pursuant to the terms and provisions of Section
15(g) hereof; (g) any change in the ownership of any shares of capital stock of
the Guarantor or the Enron Credit Counterparty, except in each case, pursuant to
the terms and provisions of Section 15(g) hereof; (h) to the extent as may be
waived by applicable law, the benefit of all principles or provisions of law,
statutory or otherwise, which may be in conflict with the terms hereof,
including, without limitation, any law which provides that the obligation of a
surety or guarantor must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's or guarantor's
obligation in proportion to the principal obligation; and (i) to the extent
permitted under applicable law, any other occurrence or circumstance whatsoever,
whether similar or dissimilar to the foregoing which might otherwise constitute
a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which might otherwise limit recourse against the Guarantor. The
obligation of the Guarantor set forth herein constitutes the
B-2
33
full recourse obligation of the Guarantor enforceable against it to the full
extent of all its assets and properties. Without limiting the generality of the
foregoing, the Guarantor agrees that in the event that any Guaranteed
Obligations are paid by the Enron Credit Counterparty or the Guarantor
hereunder, and thereafter all or any part of such payment is recovered as a
preferential or fraudulent transfer under any bankruptcy code, any applicable
insolvency law, or any other similar law now or hereafter in effect, the
liability of the Guarantor hereunder with respect to such Guaranteed Obligations
so paid and recovered shall continue and remain in full force and effect as if,
to the extent of such recovery, such payment had not been made.
SECTION 5. WAIVER OF DEMANDS, NOTICES, ETC. The Guarantor hereby
unconditionally and irrevocably waives, to the extent permitted by applicable
law, (a) notice of any of the matters referred to in Section 4; (b) all notices
which may be required by statute, rule or law or otherwise, now or hereafter in
effect, to preserve any rights against the Guarantor hereunder, including,
without limitation, any demand, proof or notice of non-payment of the Guaranteed
Obligations; (c) acceptance of this Agreement, demand, protest, presentment,
notice of default or dishonor and any requirement of diligence; (d) any
requirement to exhaust any remedies under the Support Agreement and (e) any
other circumstance whatsoever which might otherwise constitute a discharge,
release or defense of a guarantor or surety, or which might otherwise limit
recourse against the Guarantor or exonerate the Guarantor from its obligations
under this Agreement (including although not limited to any such defense related
to any requirement for the prior exhaustion of the Enron Credit Counterparty's
property or the extension of the date for payment of any Guaranteed Obligations
under the Assumption Agreement).
SECTION 6. SEPARATE ACTION. EICPO may bring and prosecute a separate
action or actions against the Guarantor whether or not any other guarantor or
any other Person is joined in any such action or a separate action or actions
are brought against any other guarantor, any other Person, or any collateral for
all or any part of the Guaranteed Obligations. The Guaranteed Obligations of the
Guarantor under, and the effectiveness of, this Agreement are not conditioned
upon the existence or continuation of any other guarantee of all or any part of
the Guaranteed Obligations.
SECTION 7. COSTS, EXPENSES. The Guarantor agrees to pay all costs and
expenses, including attorneys' fees, that may be incurred by EICPO to enforce
any of the obligations of the Guarantor under this Agreement.
SECTION 8. PRIORITY OF THE GUARANTY. The obligations of the Guarantor
under this Agreement shall rank pari passu with all other unsecured indebtedness
of Guarantor now or hereafter existing, subject to bankruptcy and other similar
laws applicable to creditors right generally.
SECTION 9. PAYMENTS UNDER THE GUARANTY. The Guarantor agrees to pay all
Guaranteed Obligations hereunder in immediately available Dollars in New York
pursuant to the instruction received from time to time by EICPO.
SECTION 10. STATUTES OF LIMITATIONS. Nothing in this Agreement shall be
construed as a waiver of any applicable statute of limitations period within
which legal proceedings must be initiated.
B-3
34
SECTION 11. SUBROGATION. Until all Guaranteed Obligations due and
payable in accordance with the Assumption Agreement have been paid in full in
Dollars or cash equivalents, the Guarantor hereby waives, to the fullest extent
permitted by applicable law, all rights of subrogation or contribution, whether
arising by contract or operation of law (including, without limitation, any such
right arising under any bankruptcy code, any applicable bankruptcy or insolvency
law or any other similar law) or otherwise by reason of any payment by it
hereunder and further agrees with the Enron Credit Counterparty for the benefit
of EICPO that any such payment by it shall be paid to EICPO to be credited and
applied against the Guaranteed Obligations.
SECTION 12. SEVERABILITY. The Guarantor hereby further agrees that
EICPO may pursue its rights and remedies under this Agreement and shall be
entitled to payment hereunder notwithstanding any other guarantee of or
security, if any, in favor of EICPO or any lack of validity or enforceability
thereof, or any failure to perfect or to exercise any right, remedy, power or
privilege with respect to such security, if any, or any payment received
thereunder.
SECTION 13. RIGHTS OF THIRD PARTIES. This Guaranty is made for the
benefit of, and shall be enforceable by, EICPO. Each and every right and remedy
of EICPO, shall, to the extent permitted by law, be cumulative and shall be in
addition to any right or remedy of EICPO contained in the Support Agreement or
now or hereafter existing at law or in equity or by statute. This Guaranty shall
not be construed to create any right in any Person other than EICPO or to be a
contract in whole or in part for the benefit of any Person other than EICPO.
SECTION 14. REPRESENTATIONS AND WARRANTIES OF ENRON. Enron hereby
represents and warrants to EICPO as follows as of the date hereof:
(a) STATUS. Enron is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, has all
requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals, necessary to carry on its material
business as now being conducted.
(b) POWERS. Enron has all necessary corporate power and authority to
execute and deliver this Agreement and any other documentation relating to this
Agreement to which it is a party and to perform its obligations under this
Agreement and has taken all necessary corporate action to authorize such
execution, delivery and performance. This Agreement has been duly executed and
delivered by Enron. This Agreement constitutes the legal, valid and binding
obligation of Enron, enforceable against Enron in accordance with its terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or law)).
(c) NO VIOLATION OR CONFLICT. None of the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein and
compliance with the terms and provisions hereof will contravene or result in a
breach of the amended and restated articles of incorporation, as amended, or
by-laws, as amended, of Enron, or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental authority or
agency, or any
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material ("material" for the purposes of this representation meaning creating a
liability of $50,000,000 or more) agreement or instrument to which Enron is a
party or by which Enron is bound or to which Enron is subject, or result in the
creation or imposition of any lien upon any property of Enron.
(d) CONSENTS. All governmental and other consents that are required to
have been obtained by Enron with respect to its execution, delivery and
performance of this Agreement have been obtained and are in full force and
effect and all conditions of any such consents have been complied with.
(e) ABSENCE OF LITIGATION. Except as disclosed in Enron's Form 10-K for
the year ended December 31, 1997 or Enron's Form 10-Q for the quarter ended June
30, 1998, there is not pending or, to its knowledge, threatened against Enron or
its consolidated subsidiaries, any action, suit or proceeding at law or in
equity or before any court, governmental body, agency or official or any
arbitrator in which there is a reasonable possibility of an adverse decision
that, if adversely determined, could have a material adverse effect on the
ability of Enron to perform obligations hereunder.
(f) NO REQUIRED REGISTRATION. Enron has not engaged in any transaction
in connection with this Agreement that would result in the violation of, or
require registration of EICPO as an investment company under, the Investment
Company Act of 1940, as amended.
SECTION 15. MISCELLANEOUS.
(a) SECTION HEADINGS, ETC. The headings of the various
sections of this Agreement are for convenience of reference only and
shall not modify, define, expand or limit any of the terms or
provisions hereof.
(b) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF
THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
(c) NOTICES. All notices or requests or consents provided for
or permitted to be given to Enron pursuant to this Agreement must be in
writing and must be given by depositing the same in the United States
mail, addressed to Enron to be notified, postpaid, and registered or
certified with return receipt requested or by delivering such notice in
person or by facsimile to Enron. Notice given by personal delivery or
mail shall be effective upon actual receipt. Notice given by telecopier
shall be effective upon actual receipt if received during the
recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All notices to be sent to Enron
pursuant to this Agreement shall be sent to or made at the address set
forth below Enron's signature to this Agreement, or at such other
address as Enron may stipulate to EICPO in the manner provided in this
Section 15(c).
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(d) ENTIRE AGREEMENT; SUPERSEDURE. This Agreement, constitutes
the entire agreement of the parties relating to the matters contained
herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.
(e) EFFECT OF WAIVER OR CONSENT. No waiver or consent, express
or implied, by any party to or of any breach or default by any Person
in the performance by such Person of its obligations hereunder shall be
deemed or construed to be a consent or waiver to or of any other breach
or default in the performance by such Person of the same or any other
obligations of such Person hereunder. Failure on the part of a party to
complain of any act of any Person or to declare any Person in default,
irrespective of how long such failure continues, shall not constitute a
waiver by such party of its rights hereunder until the applicable
statute of limitations period has run.
(f) AMENDMENT OR MODIFICATION. This Agreement may be amended
or modified from time to time only by a written instrument signed by
both parties hereto. Each such instrument shall be reduced to writing
and shall be designated on its face an "Amendment" or an "Addendum" to
this Agreement.
(g) ASSIGNMENT. Except as otherwise provided in this
Agreement, no party shall have the right to assign its rights or
obligations under this Agreement except as otherwise set forth below:
(i) either of the parties hereto shall be entitled to
assign all of its rights and delegate all of its duties and
obligations under this Agreement to any successor of such
party by merger or consolidation; provided, however, that any
such successor to Enron hereunder has obtained a rating from
S&P or Xxxxx'x and in the event that any such successor to
Enron hereunder has a rating from either S&P or Xxxxx'x that
is below Investment Grade at the time of the assignment, the
financial obligations of such successor under this Agreement
shall be guaranteed by an Acceptable Credit Provider;
(ii) in the case of a sale by Enron, an offering to
third parties or a distribution to the shareholders of Enron
(as a dividend or otherwise) of 10% or more of the securities
of a Person owning a majority interest in Enron International,
including (a) all of the interests attributable to the
Designated Enron Ownership Interests held by Enron or any
Enron Affiliates in all of the Project Borrowers and (b)
control and authority over substantially all of the financing
activities, development activities and operations of Enron
International, Enron shall be entitled to assign all of its
rights and delegate all of its duties and obligations under
this Agreement to such Person; provided that, (A) if the
Program Manager assigned all of its duties and obligations
under the Management Agreement to such Person or an Affiliate
of such Person, in the reasonable opinion of Enron such Person
or its Affiliate, as the case may be, has the capability or
has committed to provide the capability to perform the
services of the Program Manager under the Management Agreement
in accordance with the Standard of Care, as such term is
defined in the Management Agreement,
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(B) the Rating Condition shall have been satisfied after
giving effect to such assignment, (C) such Person succeeding
Enron under this Agreement shall be rated by S&P and Xxxxx'x
and shall not have a credit rating that is less than
Investment Grade by either of S&P or Xxxxx'x at the time of
assignment, (D) no Default has occurred and is continuing
prior to and immediately after giving effect to such offering,
distribution or sale, (E) the Holders of the Class A Notes and
Class B Notes have been notified of such offering,
distribution or sale and related assignment, and (F) Enron
shall have obtained an Opinion of Counsel from external
counsel of the entity that has acquired the interest in Enron
International that the Support Agreement is the valid and
binding obligation of such acquiring entity enforceable
against such entity in accordance with its terms, subject to
customary exceptions;
(iii) in the case of a transfer or sale by Enron to a
Person of a majority interest of Enron International,
including (a) all of the interests attributable to Designated
Enron Ownership Interests held by Enron and any Enron
Affiliates in all of the Project Borrowers and (b) control and
authority over substantially all of the financing activities,
development activities and operations of Enron International,
Enron shall be entitled to assign all of its rights and
delegate all of its duties and obligations under this
Agreement to the purchaser thereof; provided that, (A) if the
Program Manager assigns all of its duties and obligations
under the Management Agreement to such Person or an Affiliate
of such Person, in the reasonable opinion of Enron such Person
or its Affiliate, as the case may be, has the capability or
has committed to provide the capability to perform the
services of the Program Manager under the Management Agreement
in accordance with the Standard of Care, as such term is
defined in the Management Agreement, (B) the Rating Condition
shall have been satisfied after giving effect to such
assignment, (C) such Person shall be rated by Xxxxx'x or S&P
and shall not have a credit rating that is less than
Investment Grade by either Xxxxx'x or S&P; (D) no Default has
occurred and is continuing prior to and immediately after
giving effect to such transfer or sale, (E) the Holders of the
Class A Notes and Class B Notes have been notified of such
transfer or sale and related assignment, and (F) Enron shall
have obtained an Opinion of Counsel from external counsel of
the entity that has acquired the interest in Enron
International that this Agreement is the valid and binding
obligation of such acquiring entity enforceable against such
entity in accordance with its terms, subject to customary
exceptions; and
(iv) EICPO shall be entitled to assign all of its
rights under this Agreement to the Collateral Agent if and to
the extent that such assignment is required under the Security
Agreement.
(h) SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid
or unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall
not be affected thereby and shall be enforced to the greatest extent
permitted by law.
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(i) FURTHER ASSURANCES. In connection with this Agreement and
all transactions contemplated by this Agreement, each signatory party
hereto agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms,
provisions and conditions of this Agreement and all such transactions.
(j) U.S. CURRENCY. All sums and amounts payable or to be
payable pursuant to the provisions of this Agreement shall be payable
in coin or currency of the United States of America that, at the time
of payment, is legal tender for the payment of public and private debts
in the United States of America.
(k) LAWS AND REGULATIONS. Notwithstanding any provision of
this Agreement to the contrary, no party hereto shall be required to
take any act, or fail to take any act, under this Agreement if the
effect thereof would be to cause such party to be in violation of any
applicable law, statute, rule or regulation.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed by its officer thereunto duly authorized as of the date set
forth above.
ENRON CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notice:
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention:
--------------------
Facsimile No.:
----------------
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EXHIBIT C
FORM OF SUPPORT NOTE
ENRON INTERNATIONAL CPO, L.P.
ENRON INTERNATIONAL CPO, INC.
12% SUBORDINATED SUPPORT NOTES
DUE 2018
THIS ISSUANCE OF THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR QUALIFICATION UNDER
SAID ACT OR ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION THEREFROM.
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE
PRIOR PAYMENT IN FULL OF THE SENIOR INDEBTEDNESS (AS DEFINED HEREIN) PURSUANT
TO, AND TO THE EXTENT PROVIDED IN, THIS NOTE, THE INDENTURE DESCRIBED HEREIN AND
THE PARTNERSHIP AGREEMENT DESCRIBED HEREIN.
$__________________________, 199__
Enron International CPO, L.P., a Delaware limited partnership (the
"Issuer"), and Enron International CPO, Inc., a Delaware corporation (the
"Co-Issuer" and, together with the Issuer, the "Issuers"), for value received,
promise to pay to ______________ or its registered assigns ("Payee"), at
___________________, or at such other address as to which Payee (or any
subsequent holder of this Note) shall notify Issuer in writing, in lawful money
of the United States of America, the principal sum of ____________ DOLLARS
($_________), on _____________, payable together with interest on the unpaid
balance thereof except as provided below and in the Financing Documents.
Capitalized terms used herein but not defined shall have the meanings given to
them in the Common Agreement dated as of the date hereof among the Issuer, the
Co-Issuer, Chase Texas, as Trustee, ________ as Liquidity Facility Agent,
________, as Backup Facility Agent and ________ , as Collateral Agent (as
amended, modified or supplemented from time to time, the "Common Agreement").
1. Interest Payments. Interest shall accrue from and after the date
hereof on the principal balance hereof from time to time remaining unpaid at an
annual rate of 12%, calculated on the basis of a year of 360 days consisting of
twelve 30-day months. Interest shall be payable on this Note (a) in accordance
with the terms of Article 4 of the Security Agreement and the Partnership
Agreement and (b) commencing on the date on which the Class I Interests have
been terminated, retired or liquidated pursuant to the Partnership Agreement.
Notwithstanding the foregoing, during the period that interest accrues on this
Note and prior to the date on which interest shall be payable, accrued interest
shall be added to the outstanding principal of this Note on the last day of each
calendar quarter after the date of this Note and shall bear interest in
accordance with the terms of this Note.
2. Principal Payments. Principal on this Note shall be payable (a) in
accordance with the terms of Article 4 of the Security Agreement and the
Partnership Agreement and (b) commencing
40
on the date on which the Class I Interests have been terminated, retired or
liquidated pursuant to the Partnership Agreement.
3. Waivers. Issuers, and all persons liable or who become liable for
all or any part of this Note, expressly waive demand and presentment for
payment, notice of nonpayment, protest, demand, notice of protest, notice of
dishonor, dishonor, bringing of suit, notice of extension and diligence in
taking any action to collect amounts called for hereunder and in the handling of
securities at any time existing in connection herewith; and are liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder or in connection with any right, lien, interest or
property at any and all times had or existing as security for any amount called
for hereunder.
4. No Release. The granting to Issuers of an extension or extensions or
time for the payment of any sum or sums due under this Note or any other
agreement by Issuers with the Payee or any subsequent holder of this Note in
respect of such Note, or the exercising or failure to exercise any right or
power under this Note, or any agreement by Issuers with the Payee or any
subsequent holder of this Note, shall not in any way release or affect the
liability of Issuers hereunder.
5. Subordination. (a) Issuers agree, and each holder or by its
acceptance of this Note agrees, that payments of principal and interest on this
Note, together with any and all fees and expenses and all other amounts payable
hereunder, including, without limitation, postpetition interest (the "Debt") are
subordinated, to the extent and in the manner provided in this Section 5, to the
prior payment of all Senior Indebtedness, whether outstanding on the date of
execution of this Note or thereafter created, incurred or assumed, and that the
subordination is for the benefit of the holders of Senior Indebtedness. In
addition to the subordination provisions set forth in this Section 5, payments
of principal and interest on this Note are subordinated to the payment of
certain other amounts in accordance with the Priority of Payments and the
Priority of Acceleration Payments under Section 4 of the Security Agreement,
Section 3.1 of the Intercreditor Agreement and the Partnership Agreement. This
Note shall rank senior to all existing and future Indebtedness of Issuers that
is not Senior Indebtedness, and only Indebtedness of Issuers that is Senior
Indebtedness shall rank senior to this Note in accordance with the provisions
set forth herein.
(b) Certain Definitions.
"Indebtedness" means, with respect to any Person, and without
duplication, (i) indebtedness of such Person for money borrowed, incurred or
assumed, and any fees, charges, collection expenses (including, without
limitation, attorney's fees), and additional or contingent interest obligations,
(ii) express written guaranties by such Person of indebtedness for money
borrowed by any direct or indirect subsidiary of such Person, (iii) indebtedness
evidenced by notes, debentures, bonds or other instruments of indebtedness for
the payment of which such Person is responsible or liable, by guaranties or
otherwise, (iv) obligations of such Person for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit transaction, (v)
obligations of such Person under any agreement to lease or any lease of, any
real or personal property that, in accordance with generally accepted accounting
principles, is classified upon such Person's consolidated balance sheet
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as a liability and (vi) obligations of such Person under interest rate swaps,
caps, collars, options and similar arrangements and foreign currency xxxxxx
entered into in respect of any such indebtedness or obligation.
"Senior Indebtedness," when used with respect to Issuers, means the
principal of, and prepayment or redemption premium, if any, and accrued and
unpaid interest (including interest that accrues subsequent to the commencement
of any bankruptcy, insolvency or similar proceedings with respect to Issuers,
whether or not a claim for post-filing interest is allowed in such proceeding),
and any other amounts in respect of all Indebtedness of Issuers under the
Liquidity Facility, the Backup Facility, the Liquidity Notes, if any, and the
Funding Availability Notes, if any, each issued under the Support Agreement and
the Class A Notes, the Class B Notes and the Class C Notes issued under that
certain Indenture dated as of ________, 1998 among Issuers and Chase Texas, as
Trustee, whether outstanding on the date of execution of this Note or thereafter
created, incurred or assumed.
(c) Liquidation, Dissolution, Bankruptcy. The Payee will not be
permitted to commence or join with any other creditor or creditors of the Issuer
or Co-Issuer in commencing any bankruptcy, reorganization or insolvency
proceedings against the Issuer or Co-Issuer. At any general meeting of creditors
of the Issuer or Co-Issuer or in the event of any proceeding, voluntary or
involuntary, for the distribution, division or application of all or part of the
assets of the Issuer or Co-Issuer or the proceeds thereof, whether such
proceeding be for the liquidation, dissolution or winding up of the Issuer or
Co-Issuer or its business, receivership, insolvency or bankruptcy proceeding, an
assignment for the benefit of creditors or proceeding by or against the Issuer
or Co-Issuer for extension or otherwise, if the Senior Indebtedness has not been
paid in full at the time, the holders of the Senior Indebtedness (acting through
the Collateral Agent) will be irrevocably authorized at any such meeting or in
any such proceeding:
(i) To enforce claims comprising the Debt in the name
of the Payee by proof of debt, proof of claim, suit or
otherwise;
(ii) To collect any assets of the Issuer or Co-Issuer
distributed, divided or applied by way of dividend or payment,
or such securities issued, on account of the Debt and apply
the same, or the proceeds of any realization upon the same
that the holders of the Senior Indebtedness in their
discretion elect to effect, to the Senior Indebtedness until
the Senior Indebtedness shall have been paid in full (the
holders of the Senior Indebtedness will agree to render any
surplus to the Payee);
(iii) To vote claims comprising the Debt to accept or
reject any plan or partial or complete liquidation,
reorganization, arrangement, composition or extension; and
(iv) To take generally any action in connection with
any such meeting or proceeding which the Payee might otherwise
take.
Until the Senior Indebtedness is paid in full, any distribution to
which the holder of this Note would be entitled but for this Section 5 shall be
made to the Collateral Agent on behalf of holders
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of Senior Indebtedness as their interests may appear, except that the holder of
this Note may, (A) at any time other than upon a voluntary or involuntary
bankruptcy, insolvency or receivership proceeding relating to Issuers or their
properties or upon an assignment for the benefit of creditors receive securities
issued under a note or similar instrument with terms and other provisions that
are substantially identical to those contained in this Note and (B) at any other
time receive securities that are subordinated to Senior Indebtedness to at least
the same extent as this Note.
(d) Default on Senior Indebtedness. Issuers may not pay principal of or
interest on this Note and may not repurchase, redeem or otherwise acquire this
Note (other than as aforesaid) if at such time there exists (i) a default with
respect to payment of any principal, interest or other amount due with respect
to any Senior Indebtedness or (ii) any other default on Senior Indebtedness,
unless, in either case, the default has been cured or waived or such Senior
Indebtedness has been paid in full.
(e) When Distribution Must be Paid Over. If a payment or other
distribution is made to the holder of this Note in violation of the provisions
of this Section 5 should not have been made to it, the holder of this Note who
received the payment or other distribution shall hold it in trust for holders of
Senior Indebtedness and shall be required to pay it over to the Collateral Agent
on behalf of them as their interests may appear.
(f) Subrogation. After all Senior Indebtedness is paid in full and
until this Note is paid in full, the holder of this Note shall be subrogated to
the rights of holders of Senior Indebtedness. A distribution made under this
Section 5 to holders of Senior Indebtedness that otherwise would have been made
to the holder of this Note is not, as between Issuers and the holder of this
Note, a payment by Issuers on Senior Indebtedness.
(g) Relative Rights. This Section 5 defines the relative rights of the
holder of this Note and holders of Senior Indebtedness. Nothing in this Note
shall:
(i) impair, as between Issuers and the holder of this Note,
the obligation of Issuers, which is absolute and unconditional, to pay
principal of and interest on this Note in accordance with its terms; or
(ii) prevent the Payee or any subsequent holder of this Note
from exercising its available remedies upon an Event of Default,
subject to the rights of holders of Senior Indebtedness to receive
payments or other distributions otherwise payable to holder of this
Note.
(h) Subordination May Not be Impaired. Any holder of Senior
Indebtedness will be authorized to demand specific performance of the provisions
of this Section 5, whether or not the Issuer or Co-Issuer shall have complied
with the provisions of this Note applicable to it, at any time when the Payee
shall have failed to comply with any provision of this Section 5. The holders of
Senior Indebtedness may, at any time and from time to time, without impairing or
releasing the subordination provided in this Section 5 or the obligations of the
holders of this Note hereunder to the holders of the Senior Indebtedness, do any
one or more of the following:
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(i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness or otherwise
amend or supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding;
(ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness
or fail to perfect or delay in the perfection of any security interests
in such property;
(iii) release, amend, waive or consent to departure from any
guarantee for all or any Senior Indebtedness; and
(iv) exercise or refrain from exercising any rights against
Issuers and any other Person.
(i) Each holder of this Note by purchasing or accepting this Note:
(i) waives any and all notice of the creation, modification,
renewal, extension, amendment, restatement or accrual of any Senior
Indebtedness, notice of or proof of reliance by any holder or owner of
Senior Indebtedness upon this Section 5;
(ii) irrevocably waives any defense based on the adequacy of a
remedy at law which might be asserted as a bar to the remedy of
specific performance in any action brought therefor by the holders of
the Senior Indebtedness to enforce the provisions of this Section 5;
(iii) waives presentment, notice and protest in connection
with all negotiable instruments evidencing the Senior Indebtedness,
notice of acceptance of the instrument creating the Indebtedness
incurred, extension granted or other action taken in reliance on the
provisions of this Section 5, and all demands and notices of every kind
in connection with the Senior Indebtedness or time of payment of the
Senior Indebtedness;
(iv) assents to any renewal, extension or postponement of the
time of payment of the Senior Indebtedness or any other indulgence with
respect thereto, to any increase in the amount of the Senior
Indebtedness, to any substitution, exchange or release of collateral
therefor and to the addition or release of any Person primarily or
secondarily liable thereon; and
(v) assents to the provisions of any instrument, security or
other writing evidencing the Senior Indebtedness.
The Senior Indebtedness shall conclusively be deemed to have been
created, contracted or incurred in reliance on this Section 5, and all dealings
between Issuers and the holders and owners of the Senior Indebtedness shall be
deemed to have been consummated in reliance upon this Section 5. The provisions
of this Section 5 are intended to be for the benefit of, and shall be
enforceable directly by, the holders of the Senior Indebtedness.
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(j) Subordination Not Impaired In The Event of Default. If an Event of
Default shall have occurred and be continuing:
(i) The Issuer or Co-Issuer is not permitted to, directly or
indirectly, make any payment on account of, or transfer any collateral
for any part of, the Debt except as set forth in the Security
Agreement;
(ii) The Payee shall not be permitted to demand, xxx for, or
accept from the Issuer or Co-Issuer or any other Person any such
payment or collateral, to take any other action to enforce or collect
upon any such payment or to enforce its rights in respect of or
accelerate the Debt, nor cancel, set off or otherwise discharge any
part of the Debt; and
(iii) Neither the Issuer or Co-Issuer nor the Payee shall be
permitted to otherwise take any action prejudicial to or inconsistent
with the holders of the Senior Indebtedness' priority position over the
Payee created by the subordination provisions of this Section 5.
(k) Conflict with other Financing Documents. If there is a conflict or
inconsistency between the subordination provisions of this Note and those
contained in the other Financing Documents, then the subordination provisions
contained in such other Financing Documents shall control.
6. Redemptions. The Issuers may redeem all of this Note at any time
after (i) the repayment in full of the Liquidity Facility, the Backup Facility,
the Liquidity Notes, if any, the Funding Availability Notes, if any, Class A
Notes, Class B Notes and Class C Notes, including accrued interest and Premium,
if any and (ii) a termination, retirement or liquidation of the Class I
Interests, at a redemption price equal to the face value of this Note plus all
accrued and unpaid interest thereon. Any redemption hereunder shall be subject
to any applicable terms and conditions of the Financing Documents.
7. Assignment and Transfer. The Issuers shall maintain a register in
which shall be entered the name of the registered holder of this Note. No
assignment or transfer of this Note shall be effective until it has been
recorded in such register, and the Issuers shall treat the registered holder of
this Note as the Person entitled to all payments hereunder notwithstanding any
notice to the contrary. The Issuers shall not record or otherwise recognize any
assignment or transfer of this Note unless (a) the assignee or transferee shall
have delivered to the Issuer certification in the form of Exhibit F to the
Support Agreement, with relevant tax forms duly completed and attached, that (i)
either (A) such assignee or transferee is a United States person as defined by
the United States Internal Revenue Code as then effective or (B) all income to
be received by such assignee or transferee with respect to this Note (whether it
is treated as a partnership interest in or debt of the Issuer) will be entitled
to a complete exemption from the withholding of United States federal income tax
and (ii) either (A) such assignee or transferee is not for United States federal
income tax purposes a partnership, grantor trust, S corporation or other
pass-through entity or (B) such assignee or transferee was not formed for the
purpose of acquiring Class C Notes, Support Notes or Interests in the Issuer and
not more than 50% of the value of a beneficial owner's interest in such assignee
or transferee will be attributable to Class C Notes, Support Notes or Interests
in the Issuer held by the
C-6
45
transferee or assignee, (b) the assignee or transferee represents that it will
take no action that would cause the Issuer to become a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes and (c) the Program Manager shall have determined (on the basis of the
Issuer's registers of the holders of the Support Notes, Class C Notes and Class
II Interests and treating any unfunded obligations as having been funded for
purposes of this determination) that, after giving effect to the transfer or
assignment, there would be no more than forty-six (46) holders of the aggregate
of the Support Notes, the Class II Interests and the Class C Notes for purposes
of Code Section 7704 of the United States Internal Revenue Code.
8. No Petition. The Payee hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of all
outstanding Notes, it will not institute against, or join with any other person
in instituting against, the Issuer or Co-Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other similar proceeding
under the laws of any jurisdiction.
9. Severability. If any provision of this Note or the application
thereof to any party or circumstance is held invalid or unenforceable, the
remainder of this Note and the application of such provision to other parties or
circumstances shall not be affected thereby, the provisions of this Note being
severable in any such instance.
10. Successors. This Note shall be binding upon and shall inure to the
benefit of Issuers and Payee and their respective successors and assigns.
11. Governing Law. THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW.
ENRON INTERNATIONAL CPO, L.P.
By: ENRON CPO HOLDINGS, INC.,
its general partner
By:
--------------------------
Name:
------------------------
Title:
-----------------------
C-7
46
EXHIBIT D
TERMS OF PURCHASE BY ENRON OR ITS DESIGNEE
OF CLASS C NOTES
On the Business Day specified in the Election Notice under Section 2.3
as the date on which Enron or its designee intends to purchase Class C Notes or
on the Quarterly Payment Date on which Enron or its permitted assignee is
required to purchase Class C Notes under Section 4.1(a), Enron or such designee
or assignee shall wire transfer to an account designated by EICPO same day funds
in an amount equal to 100% of the principal amount of the Class C Notes as
specified in the Election Notice or the Final Credit Support Notice, as the case
may be (provided that, if no Final Credit Support Notice is delivered, the
amount required by Section 4.1(a) shall be the amount required to be
transferred), in exchange for a Class C Note with a principal amount as
specified in the Election Notice or the Final Credit Support Notice, as the case
may be (provided that, if no Final Credit Support Notice is delivered, the
amount required by Section 4.1(a) shall be the principal amount of such Class C
Note). EICPO shall provide each purchaser of Class C Notes with customary legal
opinions in connection with the issuance of the Class C Notes as reasonably
requested by the purchaser of Class C Notes. In the event of a purchase of a
Class C Note by a designee or assignee of Enron, such designee shall provide to
EICPO the documentation required under Section 2.5(a) and (b), and the Program
Manager shall have made the determination under Section 2.5(c), of the Support
Agreement at the time of purchase of such Class C Note.
47
EXHIBIT E
FORM OF ELECTION NOTICE UNDER SECTION 2.3 OR 5.2
[Enron Corp.][Name of Enron Credit Counterparty or Acceptable Credit Provider]
hereby elects to [exercise the Class C Option under Section 2.3][make a
commitment to EICPO under Section 5.2] of the Support Agreement dated
________________, 1998 between Enron International CPO, L.P. and Enron Corp.
[with respect to the Project Loan to be made in connection with the [insert name
of Project]][with respect to failure of EICPO to satisfy [insert name of test,
i.e., the Funding Availability Test/the Liquidity Test/the Credit Support
Tests] as follows:
Total Principal Amount of Class C Notes: ___________
Principal Amount of Class C Notes to be
Purchased by Enron Corp.: ___________
Principal Amount of Class C Notes to be Purchased
by Persons other than Enron: ___________
Names of any Third Party Purchasers: ___________
Principal Amount of Class C Notes for which
Enron Corp. Commits to Purchase: ___________
Principal Amount of Class C Notes for which each
Enron Credit Counterparty and Acceptable Credit
Provider Commits to Purchase: ____________
Enron Credit Counterparties: ____________
Acceptable Credit Providers: ____________
Amount for which Enron (or any applicable designee)
commits to pay to EICPO under Section 5.2 in
order to satisfy [insert name of test]: _____________
Amount for which Enron Credit Counterparty or Acceptable
Credit Provider commits to pay to EICPO under Section 5.2
in order to satisfy [insert name of test]: _____________
Name and Address for Notices, if other than Enron: _____________
Termination date or conditions ______________
48
In connection with any [commitment to purchase Class C
Notes][commitment to make a payment under Section 5.2] under this Election
Notice [Enron][Name of Enron Credit Counterparty/Acceptable Credit Provider]
hereby agrees to [purchase Class C Notes][make the payment to EICPO] in the
amount indicated in this Election Notice and in accordance with the terms and
provisions of [Exhibit E to the Support Agreement][Article IV of the Support
Agreement]. [Name of Enron Credit Counterparty/Acceptable Credit Provider] has
executed an Assumption Agreement in the form set forth in Exhibit A to the
Support Agreement]. This election Notice shall be effective upon execution
hereof.
Date of Exercise:
Date:
----------------
ENRON CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
X-0
00
XXXXXXX X
FORM OF CERTIFICATE OF TRANSFEREE,
ASSIGNEE OR DESIGNEE OF ENRON CORP., PURSUANT
TO SUPPORT AGREEMENT
I, _______________________, as an officer of ____________________, the
transferee, designee, or assignee of Enron ("Transferee"), do hereby certify,
represent and warrant, pursuant to Section ___ of the Support Agreement among
Enron Corp. and Enron International CPO, L.P. ("EICPO") and Enron International
CPO, Inc., dated __________________, as follows:
1. [Transferee is a United States person as defined in the U.S.
Internal Revenue Code] or [all income to be received by Transferee with respect
to the [Class C Notes (whether they are treated as partnership interests in or
debts of EICPO)] [Class II Interests] [Support Notes] will be entitled to a
complete exemption from the withholding of United States federal income tax];
and
2. [Transferee is not, for United States federal income tax purposes, a
partnership, grantor trust, S corporation or other pass-through entity], or
[Transferee was not formed for the purpose of acquiring Class C Notes or
Interests and not more than 50% of the value of the beneficial owner's interest
in Transferee will be attributable to Class C Notes, Support Notes or Interests
held by the Transferee]; and
3. Transferee will take no action that would cause EICPO to become a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
The relevant tax forms evidencing the above representations have been
completed and are attached thereto.
Date: _________________
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
50
EXHIBIT G
TERMS OF PURCHASE OF CLASS II INTERESTS
On the Quarterly Payment Date on which Enron is required to purchase
Class II Interests under Section 4.1(b), Enron shall wire transfer to an account
designated by EICPO same day funds in an amount equal to the amount of the Class
II Interests specified in the Final Credit Support Notice (provided that if no
such Final Credit Support Notice is provided, the amount required by Section
4.1(b) shall be the amount transferred) in exchange for the amount of Class II
Interests specified in the Final Credit Support Notice (provided that if no such
Final Credit Support Notice is provided, the amount required by Section 4.1(b)
shall be the amount of Class II Interests purchased). EICPO shall provide each
purchaser of Class II Interests with customary legal opinions in connection with
the issuance of the Class II Interests as reasonably requested by the purchaser
of Class II Interests. In the event of a purchase of Class II Interests by an
Enron Affiliate, an Acceptable Credit Provider or any other Person, such Enron
Affiliate, Acceptable Credit Provider or Person shall provide to EICPO the
documentation required under clauses (a) and (b) of the proviso in Section 3.2
of the Support Agreement and the Program Manager shall have made the
determination under clause (c) of the proviso in Section 3.2 of the Support
Agreement, at the time of purchase of Class II Interests.
51
EXHIBIT H
FORM OF LIQUIDITY NOTE
ENRON INTERNATIONAL CPO, L.P.
ENRON INTERNATIONAL CPO, INC.
LIQUIDITY NOTE
DUE 2018
THIS ISSUANCE OF THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR QUALIFICATION UNDER
SAID ACT OR ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION THEREFROM.
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE
PRIOR PAYMENT IN FULL OF THE SENIOR INDEBTEDNESS (AS DEFINED HEREIN) PURSUANT
TO, AND TO THE EXTENT PROVIDED IN, THE INDENTURE DESCRIBED HEREIN.
$__________________________, 199__
ENRON INTERNATIONAL CPO, L.P., a Delaware limited partnership (the
"Issuer"), and ENRON INTERNATIONAL CPO, INC., a Delaware corporation (the
"Co-Issuer" and, together with the Issuer, the "Issuers"), for value received,
promise to pay to _____________ or its registered assigns ("Payee"), at
___________________, or at such other address as to which Payee (or any
subsequent holder of this Note) shall notify Issuer in writing, in lawful money
of the United States of America, the principal sum of ____________DOLLARS
($_________), on or before _____________, payable together with interest on the
unpaid balance thereof except as provided below and in the Financing Documents.
Capitalized terms used herein but not defined shall have the meanings given to
them in the Common Agreement dated as of the date hereof among the Issuer, the
Co-Issuer, __________, as Trustee, ________ as Liquidity Facility Agent,
________, as Backup Agent and ________ , as Collateral Agent (as amended,
modified or supplemented from time to time, the "Common Agreement").
The obligations of the Issuers under this Note and the other Financing
Documents are limited recourse obligations of the Issuers payable solely from
the Collateral, and following realization of the Collateral, all claims of the
holder of this Note shall be extinguished. Except as otherwise provided in the
Indenture and the other Financing Documents, the principal of this Note shall be
payable no later than the Stated Maturity unless the unpaid principal of this
Note becomes due and payable at an earlier date by declaration of acceleration,
call for redemption or otherwise.
1. Interest Payments. Interest shall accrue from and after the date
hereof on the principal balance hereof from time to time remaining unpaid at an
annual rate equal to _________________, calculated on the basis of a year of 360
days consisting of twelve 30-day months. Interest shall be payable on January
10, April 10, July 10 and October 10, commencing on _________________, ____
(each, a "Quarterly Payment Date") in accordance with Article 4 of the Security
Agreement. Notwithstanding the foregoing, during any period that the Issuers
shall have failed to make all scheduled interest payments due and owing under
this Note (including without limitation any failure to make a payment that is
required by the subordination provisions hereof), then the amount of such
52
scheduled payments shall be added to outstanding principal hereunder and shall
bear interest in accordance with the terms of this Note.
2. Principal Payments. [Principal on this Note shall be payable in
accordance with Article 4 of the Security Agreement.] [ADDRESS PRINCIPAL
REPAYMENT PROVISIONS OF LIQUIDITY FACILITY TERM SHEET]
3. Waivers. Issuers, and all persons liable or who become liable for
all or any part of this Note, expressly waive demand and presentment for
payment, notice of nonpayment, protest, demand, notice of protest, notice of
dishonor, dishonor, bringing of suit, notice of extension and diligence in
taking any action to collect amounts called for hereunder and in the handling of
securities at any time existing in connection herewith; and are liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder or in connection with any right, lien, interest or
property at any and all times had or existing as security for any amount called
for hereunder.
4. No Release. The granting to Issuers of an extension or extensions or
time for the payment of any sum or sums due under this Note or any other
agreement by Issuers with the Payee or any subsequent holder of this Note in
respect of such Note, or the exercising or failure to exercise any right or
power under this Note, or any agreement by Issuers with the Payee or any
subsequent holder of this Note, shall not in any way release or affect the
liability of Issuers hereunder.
5. Subordination. Payments of principal of and interest on this Note
are subordinated to the payment of certain other amounts in accordance with the
Priority of Payments, the Priority of Acceleration Payments and Section 3.1 of
the Intercreditor Agreement.
6. Redemptions. This Note shall be subject to redemption by the Issuers
under Article 10 of the Common Agreement.
7. Assignment and Transfer. The Issuers shall maintain a register in
which shall be entered the name of the registered holder of this Note. No
assignment or transfer of this Note shall be effective until it has been
recorded in such register, and the Issuers shall treat the registered holder of
this Note as the person entitled to all payments hereunder notwithstanding any
notice to the contrary.
8. Severability. If any provision of this Note or the application
thereof to any party or circumstance is held invalid or unenforceable, the
remainder of this Note and the application of such provision to other parties or
circumstances shall not be affected thereby, the provisions of this Note being
severable in any such instance.
9. Successors. This Note shall be binding upon and shall inure to the
benefit of Issuers and Payee and their respective successors and assigns.
X-0
00
00. Xx Xxxxxxxx. The Payee hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of all
outstanding Notes, it will not institute against, or join with any other person
in instituting against, the Issuer or Co-Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other similar proceeding
under the laws of any jurisdiction.
11. Governing Law. THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW.
ENRON INTERNATIONAL CPO, L.P.
By: ENRON CPO HOLDINGS, INC.,
its general partner
By:
--------------------------
Name:
------------------------
Title:
-----------------------
H-3
54
EXHIBIT I
FORM OF FUNDING AVAILABILITY NOTE
ENRON INTERNATIONAL CPO, L.P.
ENRON INTERNATIONAL CPO, INC.
BACK UP FACILITY NOTES
DUE 2018
THIS ISSUANCE OF THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR QUALIFICATION UNDER
SAID ACT OR ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION THEREFROM.
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE
PRIOR PAYMENT IN FULL OF THE SENIOR INDEBTEDNESS (AS DEFINED HEREIN) PURSUANT
TO, AND TO THE EXTENT PROVIDED IN, THE INDENTURE DESCRIBED HEREIN.
$__________________________, 199__
ENRON INTERNATIONAL CPO, L.P., a Delaware limited partnership (the
"Issuer"), and ENRON INTERNATIONAL CPO, INC., a Delaware corporation (the
"Co-Issuer" and, together with the Issuer, the "Issuers"), for value received,
promise to pay to _____________ or its registered assigns ("Payee"), at
___________________, or at such other address as to which Payee (or any
subsequent holder of this Note) shall notify Issuer in writing, in lawful money
of the United States of America, the principal sum of ____________DOLLARS
($_________), on or before _____________, payable together with interest on the
unpaid balance thereof, except as provided below and in the Financing Documents.
Capitalized terms used herein but not defined shall have the meanings given to
them in the Common Agreement dated as of the date hereof among the Issuer, the
Co-Issuer, __________, as Trustee, ___________ as Liquidity Facility Agent,
__________, as Backup Agent and ___________, as Collateral Agent (as amended,
modified or supplemented from time to time, the "Common Agreement").
The obligations of the Issuers under this Note and the other Financing
Documents are limited recourse obligations of the Issuers payable solely from
the Collateral, and following realization of the Collateral, all claims of the
holder of this Note shall be extinguished. Except as otherwise provided in the
Indenture and the other Financing Documents, the principal of this Note shall be
payable no later than the Stated Maturity unless the unpaid principal of this
Note becomes due and payable at an earlier date by declaration of acceleration,
call for redemption or otherwise.
1. Interest Payments. Interest shall accrue from and after the date
hereof on the principal balance hereof from time to time remaining unpaid at an
annual rate equal to _________________, calculated on the basis of a year of 360
days consisting of twelve 30-day months. Interest shall be payable on January
10, April 10, July 10 and October 10, commencing on _________________, 1998
(each, a "Quarterly Payment Date") in accordance with Article 4 of the Security
Agreement. Notwithstanding the foregoing, during any period that the Issuers
shall have failed to make all scheduled interest payments due and owing under
this Note (including without limitation any failure
55
to make a payment that is required by the subordination provisions hereof), then
the amount of such scheduled payments shall be added to outstanding principal
hereunder and shall bear interest in accordance with the terms of this Note.
2. Principal Payments. [Principal on this Note shall be payable in
accordance with Article 4 of the Security Agreement.] [ADDRESS PRINCIPAL
REPAYMENT PROVISIONS OF BACKUP FACILITY TERM SHEET]
3. Waivers. Issuers, and all persons liable or who become liable for
all or any part of this Note, expressly waive demand and presentment for
payment, notice of nonpayment, protest, demand, notice of protest, notice of
dishonor, dishonor, bringing of suit, notice of extension and diligence in
taking any action to collect amounts called for hereunder and in the handling of
securities at any time existing in connection herewith; and are liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder or in connection with any right, lien, interest or
property at any and all times had or existing as security for any amount called
for hereunder.
4. No Release. The granting to Issuers of an extension or extensions or
time for the payment of any sum or sums due under this Note or any other
agreement by Issuers with the Payee or any subsequent holder of this Note in
respect of such Note, or the exercising or failure to exercise any right or
power under this Note, or any agreement by Issuers with the Payee or any
subsequent holder of this Note, shall not in any way release or affect the
liability of Issuers hereunder.
5. Subordination. Payments of principal of and interest on this Note
are subordinated to the payment of certain other amounts in accordance with the
Priority of Payments, the Priority of Acceleration Payments and Section 3.1 of
the Intercreditor Agreement.
6. Redemptions. This Note shall be subject to redemption by the Issuers
under Article 10 of the Common Agreement.
7. Assignment and Transfer. The Issuers shall maintain a register in
which shall be entered the name of the registered holder of this Note. No
assignment or transfer of this Note shall be effective until it has been
recorded in such register, and the Issuers shall treat the registered holder of
this Note as the person entitled to all payments hereunder notwithstanding any
notice to the contrary.
8. Severability. If any provision of this Note or the application
thereof to any party or circumstance is held invalid or unenforceable, the
remainder of this Note and the application of such provision to other parties or
circumstances shall not be affected thereby, the provisions of this Note being
severable in any such instance.
9. Successors. This Note shall be binding upon and shall inure to the
benefit of Issuers and Payee and their respective successors and assigns.
I-2
56
10. No Petition. The Payee hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of all
outstanding Notes, it will not institute against, or join with any other person
in instituting against, the Issuer or Co-Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other similar proceeding
under the laws of any jurisdiction.
11. Governing Law. THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW.
ENRON INTERNATIONAL CPO, L.P.
By: ENRON CPO HOLDINGS, INC.,
its general partner
By:
--------------------------
Name:
------------------------
Title:
-----------------------
I-3
57
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions..............................................................................................1
1.1 Reference to Common Agreement..........................................................1
1.2 Other Definitions......................................................................1
ARTICLE II.
Option to Purchase Class C Notes.........................................................................5
2.1 Option.................................................................................5
2.2 Term of Option.........................................................................5
2.3 Notice of Exercise.....................................................................6
2.4 Right to Reduce Class C Note Purchase Commitment.......................................6
2.5 Assignment and Transfer................................................................6
ARTICLE III.
Class II Interests.......................................................................................7
3.1 Commitment to Purchase Class II Interests..............................................7
3.2 Assignment and Transfer................................................................7
ARTICLE IV.
Support for Payment Obligations..........................................................................8
4.1 Insufficient Collateral Proceeds on a Quarterly Payment Date...........................8
4.2 Insufficient Collateral Proceeds Upon an Acceleration..................................9
4.3 Liquidity Shortfalls..................................................................10
4.4 Notice of Credit Support Obligation...................................................10
4.5 Record Keeping and Audit Right........................................................10
ARTICLE V.
Support Upon the Occurrence of Certain Events...........................................................11
5.1 Support upon the Occurrence of a Tax Event............................................11
5.2 Support upon a Failure by EICPO to satisfy Certain Tests under the Common
Agreement.............................................................................11
5.3 Support for Redemptions...............................................................11
5.4 Support for Shortfalls in Funding of Project Loans....................................11
C-i
58
5.5 Additional Security for Quarter Project Distributions and Project
Distributions Reserved................................................................12
5.6 Assignments and Transfers.............................................................12
ARTICLE VI.
Support Notes...........................................................................................13
6.1 Issuance of Support Notes.............................................................13
6.2 Restrictions on Designees.............................................................13
ARTICLE VII.
Notification of Investment Opportunities; Limitation on Competition;
Maintenance of Enron Credit Counterparties..............................................................14
7.1 Notification of Investment Opportunities..............................................14
7.2 Limitation on Competition.............................................................14
7.3 Limitation on Amendment of JEDI Partnership Agreement.................................14
7.4 Maintenance of Enron Credit Counterparties............................................14
ARTICLE VIII.
Equity Disposition......................................................................................15
ARTICLE IX.
Guaranty of Certain Obligations of Program Manager
under Management Agreement..............................................................................15
9.1 Guaranty..............................................................................15
9.2 Obligation Absolute and Unconditional, Continuing, etc................................16
9.3 Waiver of Demands, Notices, etc.......................................................17
ARTICLE X.
Termination of Support Agreement and Obligations Hereunder..............................................17
ARTICLE XI.
Representations and Warranties of EICPO.................................................................18
11.1 Status................................................................................18
11.2 Powers................................................................................18
11.3 No Violation or Conflict..............................................................18
11.4 Consents..............................................................................19
11.5 Absence of Litigation.................................................................19
11.6 No Required Registration..............................................................19
C-ii
59
ARTICLE XII.
Representations and Warranties of Enron.................................................................19
12.1 Status................................................................................19
12.2 Powers................................................................................19
12.3 No Violation or Conflict..............................................................19
12.4 Consents..............................................................................20
12.5 Absence of Litigation.................................................................20
12.6 No Required Registration..............................................................20
ARTICLE XIII.
Indemnification.........................................................................................20
13.1 Indemnification of EICPO..............................................................20
13.2 Indemnification of Enron..............................................................20
13.3 Limitation on Recovery of Certain Types of Damages....................................20
13.4 Indemnification Procedures............................................................21
ARTICLE XIV.
Miscellaneous...........................................................................................21
14.1 Unconditional Obligation; Waiver of Defenses..........................................21
14.2 No Petition...........................................................................22
14.3 Governing Law.........................................................................22
14.4 Notices...............................................................................22
14.5 Entire Agreement; Supersedure.........................................................22
14.6 Effect of Waiver or Consent...........................................................22
14.7 Amendment or Modification.............................................................22
14.8 Assignment............................................................................22
14.9 Counterparts..........................................................................24
14.10 Severability..........................................................................24
14.11 Further Assurances....................................................................24
14.12 U.S. Currency.........................................................................24
14.13 Laws and Regulations..................................................................24
14.14 Negation of Rights of Limited Partners, Assignees, and Third Parties..................24
14.15 Binding Effect........................................................................24
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