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EXHIBIT 4(e)
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
ENRON CAPITAL TRUST II
DATED AS OF _____________, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . 4
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . 4
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee . . . . . . 4
SECTION 2.4 Periodic Reports to Trust Preferred Guarantee Trustee . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . 5
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . 5
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Guarantee Trustee . 5
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee . . . . 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility . . . . . . . 9
SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred
Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . 10
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . 10
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . 12
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . . 12
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . 14
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.3 Merger of the Guarantor . . . . . . . . . . . . . . . . . . 14
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 15
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Trust
Preferred Securities Guarantee"), dated as of ______________, 1997, is executed
and delivered by Enron Corp., a Delaware corporation (the "Guarantor" or the
"Company"), and The Chase Manhattan Bank, a New York banking corporation, as
trustee (the "Trust Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Trust Preferred Securities
(as defined herein) of Enron Capital Trust II, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _____________, 1997, among the trustees of the
Issuer named therein, Enron Corp., as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof __________ Trust Originated Preferred Securities,
having an aggregate liquidation amount of $___________, designated the ____%
Trust Originated Preferred Securities (the "Trust Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Preferred Securities Guarantee, to pay to
the Holders of the Trust Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein and;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Trust Common Securities Guarantee") in substantially identical
terms to this Trust Preferred Securities Guarantee for the benefit of the
holders of the Trust Common Securities (as defined herein), except that if the
Company is in default on any of its obligations under the Trust Preferred
Securities Guarantee, the Partnership Guarantee, or any Investment Guarantee,
or any default has occurred and is continuing with respect to an Affiliate
Investment Instrument (as defined herein), the rights of holders of the Trust
Common Securities to receive Guarantee Payments under the Trust Common
Securities Guarantee are subordinated to the rights of Holders of Trust
Preferred Securities to receive Guarantee Payments under this Trust Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Trust Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Trust Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Preferred Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Trust Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) capitalized terms used in this Trust Preferred Securities
Guarantee but not otherwise defined herein shall have the
meanings assigned to them in the Declaration or the
Partnership Agreement, as the case may be;
(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
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(d) all references to "the Trust Preferred Securities Guarantee"
or "this Trust Preferred Securities Guarantee" are to this
Trust Preferred Securities Guarantee as modified, supplemented
or amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Trust Preferred Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Preferred Securities Guarantee, unless
otherwise defined in this Trust Preferred Securities Guarantee
or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with, such specified person.
"Affiliate Investment Instruments" has the meaning set forth in the
Partnership Agreement.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by
any applicable law to close.
"Comparable Equity Interest" shall mean the 8% Cumulative Guaranteed
Monthly Income Preferred Shares of Enron Capital LLC, the 9% Cumulative
Guaranteed Preferred Securities, Series A of Enron Capital Resources, L.P., the
8.30% Trust Preferred Securities of Enron Capital Trust I and any preferred
security hereafter issued by any finance subsidiary of which the Company is the
parent company and the principal purpose of which is to lend the proceeds of
the sale thereof to the Company or to eligible affiliates of the Company.
"Corporate Trust Office" means the principal trust office of the Trust
Preferred Guarantee Trustee at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof is
located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Global Trust Services.
"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Trust Preferred Securities to the extent the Issuer shall have funds
available therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Trust Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Partnership Preferred Securities to the
Holders as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Trust
Preferred Securities to the date of payment and (b) the amount of assets of the
Issuer, after satisfaction of all liabilities, remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Issuer of any Trust Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Trust Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
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"Indemnified Person" means the Trust Preferred Guarantee Trustee, any
Affiliate of the Trust Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Trust Preferred Guarantee Trustee.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
investment company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under an
Affiliate Investment Instrument.
"Majority in liquidation amount of the Trust Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Trust Preferred Securities, voting separately as a class, of more than 50% of
the liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Trust
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary
to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Partnership" means Enron Preferred Funding II, L.P.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of __________, 1997, among
Enron Corp., a Delaware corporation, as general partner, Organizational
Partner, Inc., a Delaware corporation, as initial limited partner and such
other persons who become limited partners as provided therein.
"Partnership Preferred Securities" means those securities representing
limited partnership interests in the Partnership.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Trust Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the Trust
Preferred Guarantee Trustee, including any vice president, any assistant vice
president, any secretary, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Trust Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
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"Successor Trust Preferred Guarantee Trustee" means a successor Trust
Preferred Guarantee Trustee possessing the qualifications to act as Trust
Preferred Guarantee Trustee under Section 4.1.
"Trust Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Preferred Guarantee Trustee" means The Chase Manhattan Bank, a
national banking association, until a Successor Trust Preferred Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Trust Preferred Securities Guarantee and thereafter means each
such Successor Trust Preferred Guarantee Trustee.
"Trust Securities" means the Trust Common Securities together with the
Trust Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be
part of this Trust Preferred Securities Guarantee and shall,
to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Trust
Preferred Securities Guarantee limits, qualifies or conflicts
with the duties imposed by Section 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Trust Guarantee Trustee shall preserve in as current a
form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders of Trust
Preferred Securities. If the Trust Guarantee Trustee is not
the Registrar, the Guarantor shall furnish to the Trust
Guarantee Trustee semi-annually on or before the last day of
June and December in each year, and at such other times as the
Trust Guarantee Trustee may request in writing, a list, in
such form and as of such date as the Trust Guarantee Trustee
may reasonably require, containing all the information in the
possession or control of the Registrar, the Guarantor or any
of its Paying Agents other than the Trust Guarantee Trustee as
to the names and addresses of Holders of Trust Preferred
Securities. If there are unregistered securities outstanding,
even if the Trust Guarantee Trustee is the Registrar, the
Company shall furnish to the Trust Guarantee Trustee such a
list containing such information with respect to Holders of
such unregistered securities only.
(b) The Trust Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b)
of the Trust Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Trust Preferred
Guarantee Trustee shall provide to the Holders of the Trust Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Trust Preferred Guarantee Trustee shall also comply with
the requirements of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Trust Preferred Guarantee Trustee
The Guarantor shall provide to the Trust Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trust Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Trust Preferred Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Trust Preferred Securities Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Trust Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Trust
Preferred Securities, notices of all Events of Default
actually known to a Responsible Officer of the Trust Preferred
Guarantee Trustee, unless such defaults have been cured before
the giving of such notice, provided, that, the Trust Preferred
Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trust
Preferred Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders
of the Trust Preferred Securities Trust Preferred Securities.
(b) The Trust Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Trust
Preferred Guarantee Trustee shall have received written
notice, or of which a Responsible Officer of the Trust
Preferred Guarantee Trustee charged with the administration of
the Declaration shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Trust Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Guarantee Trustee
(a) This Trust Preferred Securities Guarantee shall be held by the
Trust Preferred Guarantee Trustee for the benefit of the
Holders of the Trust Preferred Securities, and the Trust
Preferred Guarantee Trustee shall not transfer this Trust
Preferred Securities Guarantee to any Person except a Holder
of Trust Preferred Securities exercising his or her rights
pursuant to Section 5.4(b) or to a
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Successor Trust Preferred Guarantee Trustee on acceptance by
such Successor Trust Preferred Guarantee Trustee of its
appointment to act as Successor Trust Preferred Guarantee
Trustee. The right, title and interest of the Trust Preferred
Guarantee Trustee shall automatically vest in any Successor
Trust Preferred Guarantee Trustee, and such vesting and
cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Trust Preferred
Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Trust Preferred Guarantee Trustee has occurred and is
continuing, the Trust Preferred Guarantee Trustee shall
enforce this Trust Preferred Securities Guarantee for the
benefit of the Holders of the Trust Preferred Securities.
(c) The Trust Preferred Guarantee Trustee, before the occurrence
of any Event of Default and after the curing or waiver of all
Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Trust Preferred Securities Guarantee, and no implied covenants
shall be read into this Trust Preferred Securities Guarantee
against the Trust Preferred Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Trust Preferred Guarantee Trustee,
the Trust Preferred Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Trust Preferred
Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his
or her own affairs.
(d) No provision of this Trust Preferred Securities Guarantee
shall be construed to relieve the Trust Preferred Guarantee
Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct,
except that:
(i) Prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Trust
Preferred Guarantee Trustee shall be
determined solely by the express provisions
of this Trust Preferred Securities Guarantee,
and the Trust Preferred Guarantee Trustee
shall not be liable except for the
performance of such duties and obligations as
are specifically set forth in this Trust
Preferred Securities Guarantee, and no
implied covenants or obligations shall be
read into this Trust Preferred Securities
Guarantee against the Trust Preferred
Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Trust Preferred Guarantee Trustee, the
Trust Preferred Guarantee Trustee may
conclusively rely, as to the truth of the
statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Trust Preferred Guarantee Trustee and
conforming to the requirements of this Trust
Preferred Securities Guarantee; but in the
case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Trust
Preferred Guarantee Trustee, the Trust
Preferred Guarantee Trustee shall be under a
duty to examine the same to determine whether
or not they conform to the requirements of
this Trust Preferred Securities Guarantee;
(ii) The Trust Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith
by a Responsible Officer of the Trust Preferred
Guarantee Trustee, unless it shall be proved that the
Trust Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such
judgment was made;
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(iii) The Trust Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the
direction of the Holders of Trust Preferred
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to
the Trust Preferred Guarantee Trustee, or exercising
any trust or power conferred upon the Trust Preferred
Guarantee Trustee under this Trust Preferred
Securities Guarantee; and
(iv) No provision of this Trust Preferred Securities
Guarantee shall require the Trust Preferred Guarantee
Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance
of any of its duties or in the exercise of any of its
rights or powers, if the Trust Preferred Guarantee
Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not
reasonably assured to it under the terms of this
Trust Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Trust Preferred
Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust Preferred Guarantee Trustee may
conclusively rely, and shall be fully protected in
acting or refraining from acting upon, any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Trust Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust
Preferred Securities Guarantee, the Trust Preferred
Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking,
suffering or omitting any action hereunder, the Trust
Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered
by the Guarantor.
(iv) The Trust Preferred Guarantee Trustee shall have no
duty to see to any recording, filing or registration
of any instrument (or any rerecording, refiling or
registration thereof).
(v) The Trust Preferred Guarantee Trustee may, at the
expense of the Sponsor, consult with counsel of its
selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and
complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include
any of its employees. The Trust Preferred Guarantee
Trustee shall have the right at any time to seek
instructions concerning the administration of this
Trust Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Trust Preferred Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers
vested in it by this Trust Preferred Securities
Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Trust
Preferred Guarantee Trustee such security and
indemnity, reasonably satisfactory to the
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Trust Preferred Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and
the expenses of the Preferred Guarantee Trustee's
agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such
request or direction, including such reasonable
advances as may be requested by the Trust Preferred
Guarantee Trustee; provided that, nothing contained
in this Section 3.2(a)(vi) shall be taken to relieve
the Trust Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by
this Trust Preferred Securities Guarantee.
(vii) The Trust Preferred Guarantee Trustee shall not be
bound to make any investigation into the facts or
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper
or document, but the Trust Preferred Guarantee
Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters
as it may see fit.
(viii) The Trust Preferred Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the
Trust Preferred Guarantee Trustee shall not be
responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care
by it hereunder.
(ix) Any action taken by the Trust Preferred Guarantee
Trustee or its agents hereunder shall bind the
Holders of the Trust Preferred Securities, and the
signature of the Trust Preferred Guarantee Trustee or
its agents alone shall be sufficient and effective to
perform any such action. No third party shall be
required to inquire as to the authority of the Trust
Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of
this Trust Preferred Securities Guarantee, both of
which shall be conclusively evidenced by the Trust
Preferred Guarantee Trustee or its agent taking such
action.
(x) Whenever in the administration of this Trust
Preferred Securities Guarantee the Trust Preferred
Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Trust
Preferred Guarantee Trustee (i) may request
instructions from the Holders of a Majority in
liquidation amount of the Trust Preferred Securities,
(ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions
are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with
such instructions.
(xi) The Trust Preferred Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to
be taken by it in good faith and reasonably believed
by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust
Preferred Securities Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Trust
Preferred Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be
illegal, or in which the Trust Preferred Guarantee Trustee
shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive
power or authority available to the Trust Preferred Guarantee
Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee
The recitals contained in this Trust Preferred Securities Guarantee
shall be taken as the statements of the Guarantor, and the Trust Preferred
Guarantee Trustee does not assume any responsibility for their correctness.
The Trust Preferred Guarantee Trustee makes no representation as to the
validity or sufficiency of this Trust Preferred Securities Guarantee.
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the
requirements of the supervising or examining
authority referred to above, then, for the purposes
of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Trust Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Trust
Preferred Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Trust Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Trust Preferred
Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred
Guarantee Trustee
(a) Subject to Section 4.2(b), the Trust Preferred Guarantee
Trustee may be appointed or removed without cause at any time
by the Guarantor except during an Event of Default.
(b) The Trust Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Trust
Preferred Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by
such Successor Trust Preferred Guarantee Trustee and delivered
to the Guarantor.
(c) The Trust Preferred Guarantee Trustee appointed to office
shall hold office until a Successor Trust Preferred Guarantee
Trustee shall have been appointed or until its removal or
resignation. The Trust Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trust Preferred
Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Trust
Preferred Guarantee Trustee has been appointed and has
accepted such appointment by instrument
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in writing executed by such Successor Trust Preferred
Guarantee Trustee and delivered to the Guarantor and the
resigning Trust Preferred Guarantee Trustee.
(d) If no Successor Trust Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery of an instrument of
removal or resignation, the Trust Preferred Guarantee Trustee
resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Trust Preferred
Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper,
appoint a Successor Trust Preferred Guarantee Trustee.
(e) No Trust Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Trust Preferred
Guarantee Trustee.
(f) Upon termination of this Trust Preferred Securities Guarantee
or removal or resignation of the Trust Preferred Guarantee
Trustee pursuant to this Section 4.2, and before the
appointment of any Successor Trust Preferred Guarantee Trustee
the Guarantor shall pay to the Trust Preferred Guarantee
Trustee all amounts to which it is entitled to the date of
such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), if, as and when due, regardless of any defense, right of
setoff or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing the Issuer
to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Trust Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Trust Preferred Securities to be performed or observed by the
Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Trust Preferred Securities or the extension of
time for the performance of any other obligation under,
arising out of, or in connection with, the Trust Preferred
Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or
other
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sum payable that results from the extension of any interest
payment period on the Partnership Preferred Securities or any
extension of the maturity date of the Partnership Preferred
Securities permitted by the Partnership Agreement);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant
to the terms of the Trust Preferred Securities, or any action
on the part of the Issuer granting indulgence or extension of
any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets
of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Trust
Preferred Securities have the right to direct the time, method
and place of conducting of any proceeding for any remedy
available to the Trust Preferred Guarantee Trustee in respect
of this Trust Preferred Securities Guarantee or exercising any
trust or power conferred upon the Trust Preferred Guarantee
Trustee under this Trust Preferred Securities Guarantee.
(b) If the Trust Preferred Guarantee Trustee fails to enforce its
rights under the Trust Preferred Securities Guarantee after a
Holder of Trust Preferred Securities has made a written
request, such Holder of Trust Preferred Securities may
institute a legal proceeding directly against the Guarantor to
enforce the Trust Preferred Guarantee Trustee's rights under
this Trust Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Trust
Preferred Guarantee Trustee or any other person or entity.
Notwithstanding the foregoing, if the Guarantor has failed to
make a guarantee payment, a Holder of Trust Preferred
Securities may directly institute a proceeding in such
Holder's own name against the Guarantor for enforcement of the
Trust Preferred Securities Guarantee for such payment. The
Guarantor waives any right or remedy to require that any
action be brought first against the Issuer or any other person
or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Trust Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Trust Preferred
Securities
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Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Trust Preferred Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Trust Preferred Securities Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Trust
Preferred Securities, and that the Guarantor shall be liable as principal and
as debtor hereunder to make Guarantee Payments pursuant to the terms of this
Trust Preferred Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Preferred Securities remain outstanding, if for
any distribution period, (a) full distributions on a cumulative basis on any
Trust Preferred Securities have not been paid or declared and set apart for
payment, (b) an Investment Event of Default by any Investment Affiliate in
respect of any Affiliate Investment Instrument has occurred and is continuing,
or (c) the Company is in default of its obligations under the Trust Preferred
Securities Guarantee, the Trust Common Securities Guarantee, the Partnership
Guarantee or any Investment Guarantee, then, during such period (i) the Company
shall not declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to any
of its capital stock (except for dividends or distributions in shares of its
common stock and exchanges of common stock of one class for common stock of
another class), (ii) the Company shall not make any payment or cause any
payment to be made that would result in and shall take such action as shall be
necessary to prevent, the payment of dividends on, any distribution with
respect to, any redemption, purchase or other acquisition of, or any
liquidation payment with respect to, any Comparable Equity Interest, and (iii)
the Company shall not make any guarantee payments with respect to the
foregoing.
SECTION 6.2 Ranking
This Trust Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor, including, without
limitation, the fees, charges, expenses and indemnities due to the Property
Trustee or the Delaware Trustee in respect of the Declaration of Trust, the
Trust Preferred Securities Guarantee and the Affiliate Debenture Guarantee
Agreement, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Guarantor and with any guarantee now or
hereafter entered into by the Guarantor in respect of any preferred security of
any Affiliate of the Guarantor, and (iii) senior to the Guarantor's common
stock. Any similar guarantee given hereafter by the Company with respect to
Trust Preferred Securities that is silent as to seniority will rank pari passu
with this Trust Preferred Securities Agreement.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Preferred Securities Guarantee shall terminate upon (i)
full payment of the Redemption Price of all Trust Preferred Securities, (ii)
upon the distribution of the Partnership Preferred Securities to the Holders of
all of the Trust Preferred Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Trust Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Trust Preferred Securities must restore payment of any sums
paid under the Trust Preferred Securities or under this Trust Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Trust
Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this
Trust Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the
Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's
professional or expert competence and who has been selected
with reasonable care by or on behalf of the Guarantor,
including information, opinions, reports or statements as to
the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Trust
Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without gross negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of
this Trust Preferred Securities Guarantee or the earlier resignation or removal
of the Trust Preferred Guarantee Trustee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Trust Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Trust Preferred Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all the outstanding Trust Preferred Securities.
The provisions of Section 13.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Merger of the Guarantor
The Guarantor covenants that it will not merge or consolidate with any
other corporation or other entity or sell or convey all or substantially all of
its assets to any person (other than such a sale or conveyance to a Subsidiary
or any successor thereto (such a sale or conveyance being called an "Asset
Drop-Down")), unless (i) either the Guarantor shall be the continuing
corporation or the successor corporation or other entity or the person which
acquires by sale or conveyance substantially all the assets of the Guarantor
shall expressly assume the obligations of the Guarantor hereunder, according to
their tenor, and the due and punctual performance and observance of all of the
covenants hereof to be performed or observed by the Guarantor, by instrument in
form satisfactory to the Trust Preferred Securities Guarantee Trustee, executed
and delivered to the Trust Preferred Securities Guarantee Trustee by such
corporation or other entity, and (ii) the Guarantor or such successor
corporation or other entity, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition. In the event of any Asset
Drop-Down after the date hereof, any subsequent sale or conveyance of assets by
a Subsidiary to which assets were transferred in such Asset Drop-Down will be
deemed to be a sale or conveyance of assets by the Company for purposes of this
provision.
SECTION 9.4 Notices
All notices provided for in this Trust Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Trust Preferred Guarantee Trustee, at the
Trust Preferred Guarantee Trustee's mailing address set forth
below:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Trust Services
Telecopy: (000) 000-0000
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Trust Preferred
Securities):
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Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasury Department
Telecopy: (000) 000-0000
(c) If given to any Holder of Trust Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.5 Benefit
This Trust Preferred Securities Guarantee is solely for the benefit of
the Holders of the Trust Preferred Securities and, subject to Section 3.1(a),
is not separately transferable from the Trust Preferred Securities.
SECTION 9.6 Governing Law
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.
ENRON CORP.,
as Guarantor
By:
------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trust Preferred Guarantee Trustee
By:
------------------------------------
Name:
Title:
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