EXHIBIT 4.9
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FORM OF CINERGY CORP.
GUARANTEE AGREEMENT
CC FUNDING TRUST I
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Dated as of ____________, 2001
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS............................................................ 1
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION....................................... 5
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES............................... 6
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE....................................... 6
SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.............................. 6
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT....................... 7
SECTION 2.06. EVENTS OF DEFAULT; WAIVER.............................................. 7
SECTION 2.07. DISCLOSURE OF INFORMATION.............................................. 7
SECTION 2.08. CONFLICTING INTEREST................................................... 8
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE............................. 8
SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE..................... 9
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.................. 12
SECTION 3.04. THE GUARANTEE TRUSTEE MAY OWN PREFERRED SECURITIES..................... 12
SECTION 3.05. MONEYS RECEIVED BY THE GUARANTEE TRUSTEE TO BE HELD IN TRUST
WITHOUT INTEREST............................................................. 12
SECTION 3.06. COMPENSATION AND EXPENSES OF GUARANTEE TRUSTEE......................... 12
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. QUALIFICATIONS......................................................... 13
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE TRUSTEE.......... 13
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ARTICLE 5
GUARANTEE
SECTION 5.01. GUARANTEE.............................................................. 14
SECTION 5.02. WAIVER OF NOTICE....................................................... 15
SECTION 5.03. OBLIGATIONS NOT AFFECTED............................................... 15
SECTION 5.04. ENFORCEMENT OF GUARANTEE............................................... 16
SECTION 5.05. GUARANTEE OF PAYMENT................................................... 16
SECTION 5.06. SUBROGATION............................................................ 17
SECTION 5.07. INDEPENDENT OBLIGATIONS................................................ 17
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS............................................. 17
SECTION 6.02. SUBORDINATION.......................................................... 18
ARTICLE 7
TERMINATION
SECTION 7.01. TERMINATION............................................................ 19
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. EXCULPATION............................................................ 19
SECTION 8.02. INDEMNIFICATION........................................................ 20
SECTION 8.03. SURVIVE TERMINATION.................................................... 20
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS................................................. 20
SECTION 9.02. AMENDMENTS............................................................. 20
SECTION 9.03. NOTICES................................................................ 20
SECTION 9.04. GENDERS................................................................ 21
SECTION 9.05. BENEFIT................................................................ 21
SECTION 9.06. GOVERNING LAW.......................................................... 22
SECTION 9.07. COUNTERPARTS........................................................... 22
ii
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SECTION 9.08. INTENTIONALLY OMITTED.................................................. 22
SECTION 9.09. LIMITED LIABILITY...................................................... 22
iii
GUARANTEE AGREEMENT
This
GUARANTEE AGREEMENT, dated as of _________, 2001, is executed and
delivered by
CINERGY CORP., a Delaware corporation (the "GUARANTOR"), and THE
BANK OF
NEW YORK, a
New York banking corporation, as the initial Guarantee
Trustee (as defined herein) for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein) of CC Funding
Trust I, a Delaware statutory business trust (the "ISSUER").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"DECLARATION"), dated as of ___________, 2001 among the trustees of the Issuer
named therein,
Cinergy Corp., as Sponsor, and the Holders from time to time of
preferred undivided beneficial interests in the assets of the Issuer, the Issuer
may issue $___________ [($___________ if the over-allotment option granted in
the Underwriting Agreement (as defined herein) is exercised in full)] aggregate
liquidation amount of its Preferred Securities (the "PREFERRED SECURITIES")
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Declaration; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the purchase by the initial
purchasers thereof of Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time.
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS.
(a) Capitalized terms used in this
Guarantee Agreement but not defined
in the preamble or recitals above have the respective meanings assigned to them
in this Section 1.01.
(b) A term defined anywhere in this
Guarantee Agreement has the same
meaning throughout.
(c) All references to "the
Guarantee Agreement" or "this
Guarantee
Agreement" are to this
Guarantee Agreement as modified, supplemented or amended
from time to time.
(d) All references in this
Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice versa.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
of a Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"BUSINESS DAY" has the meaning set forth in the Indenture.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in Article 7 of the Declaration.
"DECLARATION" has the meaning set forth in the recitals above.
"DISTRIBUTIONS" means the periodic distributions and other payments
payable to Holders in accordance with the terms of the Preferred Securities set
forth in Article 7 of to the Declaration.
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"DOLLAR" has the meaning set forth in the Indenture.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; PROVIDED, HOWEVER,
that, except with respect to a default in payment of any Guarantee Payment, any
such default shall constitute an Event of Default only if the Guarantor shall
have received notice of such default and shall not have cured such default
within 90 days after receipt of such notice.
"EXTENSION PERIOD" has the meaning set forth in Section 2.8 of the
Supplemental Indenture.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions and the Redemption Price, including all accumulated and unpaid
Distributions to the date of redemption, with respect to the Preferred
Securities called for redemption by the Issuer but only if and to the extent
that in each case the Guarantor has made a payment to the Property Trustee of
principal of or any premium or interest on the Notes and (ii) upon a voluntary
or involuntary dissolution, winding-up or termination of the Issuer (other than
in connection with the distribution of Notes to Holders in exchange for
Preferred Securities or the redemption of the Preferred Securities in full upon
the maturity or redemption of the Notes as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer as required by applicable law.
"GUARANTEE TRUSTEE" means The Bank of
New York, a
New York banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"HOLDER" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
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"INDENTURE" means the Indenture dated as of September 12, 2001 between
the Guarantor and Fifth Third Bank, as trustee, as supplemented or amended from
time to time, pursuant to which the Notes are to be issued to the Property
Trustee.
"MAJORITY OF OUTSTANDING PREFERRED SECURITIES" means Holder(s) of
outstanding Preferred Securities, voting together as a single class, who are the
record owners of Preferred Securities representing more than 50% of the
outstanding Preferred Securities.
"NOTES" means the series of unsecured subordinated notes issued to the
Property Trustee by the Guarantor under the Indenture and entitled the "[ ]%
[Subordinated] Notes due [ ]."
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of such Person, and delivered to the Guarantee Trustee. One
of the officers signing an Officers' Certificate given pursuant to Section 2.04
shall be the principal executive, financial or accounting officer of the
Guarantor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall include:
(i) a statement that the person making such certificate has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate are based;
(iii) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
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"PREFERRED SECURITIES" has the meaning set forth in the recitals above.
"PROPERTY TRUSTEE" means the Person acting as Property Trustee under
the Declaration.
"REDEMPTION PRICE" means the amount payable on redemption of the
Preferred Securities in accordance with the terms of the Preferred Securities.
"RESPONSIBLE OFFICER" means, when used with respect to the Guarantee
Trustee, any officer within the corporate trust department of the Guarantee
Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Guarantee Trustee who customarily performs functions similar to those performed
by the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such Person's knowledge of and
familiarity with the particular subject and, in either case, who shall have
direct responsibility for the administration of this Guarantee Agreement.
"SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.01.
"SUPPLEMENTAL INDENTURE" means the [ ] Supplemental Indenture dated as
of _____________, 2001 between the Guarantor and Fifth Third Bank, as trustee,
relating to the issuance of the Notes.
"TRUST ENFORCEMENT EVENT" has the meaning specified in the Declaration.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
["UNDERWRITING AGREEMENT" has the meaning set forth in the
Declaration.]
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
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(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(c) The application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing preferred undivided beneficial interests in the assets
of the Issuer.
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) The Guarantor shall provide the Guarantee Trustee (unless the
Guarantee Trustee is the registrar of the Preferred Securities) (i) within 14
days after each record date for payment of Distributions, a list, in such form
as the Guarantee Trustee may reasonably require, of the names and addresses of
the Holders ("LIST OF HOLDERS") as of such date, and (ii) at any other time,
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 15 days before such List of Holders is given
to the Guarantee Trustee; PROVIDED that in each case the Guarantor shall not be
obligated to provide such List of Holders at any time that the List of Holders
does not differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor. The Guarantee Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in the Lists of
Holders given to it; PROVIDED that the Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE.
Within 60 days after ___________ of each year, commencing
___________, 2002, the Guarantee Trustee shall deliver to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form, in the manner and at the times provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act. A copy of each such
report shall, at the time of such transmission to the Holders, be filed by
the Guarantee Trustee with the Guarantor, with each stock exchange or
quotation system upon which any Preferred Securities are listed or traded (if
so listed or traded) and also with the Commission. The Guarantor agrees to
promptly notify the Guarantee Trustee when any Preferred Securities become
listed on any stock exchange or quotation system and of any delisting thereof.
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SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee, the Commission
and the Holders, as applicable, such documents, reports and information (if
any) as required by Section 314(a)(1)-(3) of the Trust Indenture Act and the
compliance certificates required by Section 314(a)(4) and (c) of the Trust
Indenture Act, any such certificates to be provided in the form, in the
manner and at the times required by Section 314(a)(4) and (c) of the Trust
Indenture Act (PROVIDED that any certificate to be provided pursuant to
Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Issuer). Delivery of such reports,
information and documents to the Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained therein,
including the Guarantor's compliance with any of its covenants hereunder (as
to which the Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates or on certificates provided pursuant to this Section 2.04).
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
Agreement which 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) may be given in the form of an Officers'
Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority of Outstanding Preferred Securities
may, by vote, on behalf of the Holders, 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 Guarantee Agreement, but no such waiver
shall extend to any subsequent or other default or Event of Default, or
impair any right consequent thereon.
(b) The right of any Holder to receive payment of the Guarantee
Payments in accordance with this Guarantee Agreement, or to institute suit for
the enforcement of any such payment, shall not be impaired without the consent
of each such Holder.
SECTION 2.07. DISCLOSURE OF INFORMATION.
The disclosure of information as to the names and addresses of the
Holders in accordance with Section 312 of the Trust Indenture Act, regardless of
the source from
7
which such information was derived, shall not be deemed to be a violation of
any existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the Guarantee
Trustee be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
SECTION 2.08. CONFLICTING INTEREST.
(a) The Declaration shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 310(b) and 311 of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
in trust for the benefit of the Holders. The Guarantee Trustee shall not
transfer its right, title and interest in this Guarantee Agreement to any
Person except a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee or to a
Holder exercising his or her rights pursuant to Section 5.04(iv). The right,
title and interest of the Guarantee Trustee to this Guarantee Agreement shall
vest automatically in each Person who may hereafter be appointed as Guarantee
Trustee in accordance with Article 4. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed
and delivered.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) This Guarantee Agreement and all moneys received by the Guarantee
Trustee in respect of the Guarantee Payments will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of, or for the
benefit of, the Guarantee Trustee or its agents or their creditors.
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(d) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default actually known to a Responsible Officer of the Guarantee
Trustee, transmit by mail, first class postage prepaid, to the Holders, as their
names and addresses appear upon the List of Holders, notice of all such Events
of Default, unless such defaults shall have been cured before the giving of such
notice; PROVIDED that the Guarantee Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders. The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Guarantee Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Guarantee Agreement shall have obtained
written notice of such Event of Default.
(e) The Guarantee Trustee shall continue to serve as a trustee until a
Successor Guarantee Trustee has been appointed and accepted that appointment in
accordance with Article 4.
SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) The Guarantee Trustee, before the occurrence of an Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, 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 own affairs.
(b) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an 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 Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth
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in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee; and
(B) in the absence of willful misconduct on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; PROVIDED,
HOWEVER, that in the case of any such certificates or opinions
that by any provision hereof or the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Guarantee Agreement or the Trust
Indenture Act, as the case may be (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein);
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority of
Outstanding Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Guarantee Agreement or indemnity reasonably satisfactory to it against
such risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and 3.02(b):
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(i) whenever in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of
willful misconduct on its part, request and rely upon an Officers'
Certificate, which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel of its
selection (which may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees) selected by it in good
faith and with due care 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 reliance thereon and in accordance with
such advice and opinion and (B) shall have the right at any time to
seek, at the expense of the Guarantor, instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any willful misconduct or negligence on the part of any
agent or attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have offered to the Guarantee Trustee security and indemnity
satisfactory to the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction;
PROVIDED that nothing contained in this clause (iv) shall relieve
the Guarantee Trustee of the obligation, upon the occurrence of an
Event of Default (which has not been cured or waived) to exercise
such of the rights and powers vested in it by this Guarantee
Agreement, and to use the same degree of care and skill in this
exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third
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party shall be required to inquire as to the authority of the
Guarantee Trustee to so act, or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which
shall be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee Agreement.
SECTION 3.04. THE GUARANTEE TRUSTEE MAY OWN PREFERRED SECURITIES.
The Guarantee Trustee, in its individual or any other capacity, may
become the owner or pledgee of Preferred Securities and may otherwise deal with
the Guarantor with the same rights it would have if it were not the Guarantee
Trustee.
SECTION 3.05. MONEYS RECEIVED BY THE GUARANTEE TRUSTEE TO BE HELD IN
TRUST WITHOUT INTEREST.
All moneys received by the Guarantee Trustee in respect of Guarantee
Payments shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Guarantee Trustee shall be under
no liability for interest on any moneys received by it hereunder except such as
it may agree in writing to pay thereon.
SECTION 3.06. COMPENSATION AND EXPENSES OF GUARANTEE TRUSTEE.
The Guarantor covenants and agrees to pay to the Guarantee Trustee from
time to time, and the Guarantee Trustee shall be entitled to, such compensation
as the Guarantor and the Guarantee Trustee shall from time to time agree in
writing (which shall not be limited by any provision of law in regard to the
compensation of a Guarantee Trustee of an express trust) for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Guarantee Trustee, and the Guarantor will pay or reimburse the
Guarantee Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Guarantee Trustee in accordance with any of
the provisions of this Guarantee Agreement (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense,
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disbursement or advance as may arise from its negligence or willful
misconduct. The Guarantor also covenants to indemnify each of the Guarantee
Trustee or any predecessor Guarantee Trustee and their officers, agents,
directors and employees for, and to hold them harmless against, any and all
loss, liability, damage, claim or expense including taxes (other than taxes
based upon, measured by or determined by the income, profit, franchise or
doing business of the Guarantee Trustee) incurred without negligence or
willful misconduct on the part of the Guarantee Trustee and arising out of or
in connection with the acceptance or administration of this trust, including
the reasonable costs and expenses of defending itself against any claim
(whether asserted by the Guarantor, any Holder or any other Person) of
liability in the premises. The provisions of this Section 3.06 shall survive
the termination of this Guarantee Agreement and resignation or removal of the
Guarantee Trustee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. QUALIFICATIONS.
There shall at all times be a Guarantee Trustee that shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a national banking association or 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 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 $50,000,000, 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 clause (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.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i) and (ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. If
the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture
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Act, the Guarantee Trustee and the Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee
Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until
its successor shall have been appointed or until its removal or resignation.
(d) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "RESIGNATION REQUEST") in
writing signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that no such resignation of the Guarantee
Trustee shall be effective until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request or receipt of a notice of
removal by the Guarantee Trustee, the Guarantee Trustee resigning or to be
removed may, at the expense of the Guarantor, petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may
thereupon after such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
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ARTICLE 5
GUARANTEE
SECTION 5.01. 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), as and when due, regardless of any defense, right of
set-off or counterclaim which 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 to the Guarantee Trustee for
remittance to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.02. WAIVER OF NOTICE.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement 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. Notwithstanding anything to the contrary herein, the Guarantor retains
all of its rights under the Indenture to extend the interest payment period on
the Notes and the Guarantor shall not be obligated hereunder to make any
Guarantee Payment during any Extension Period with respect to the Distributions
on the Preferred Securities.
SECTION 5.03. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement 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 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 (other than an extension of time for payment of
Distributions that result from any Extension Period), Redemption Price,
Liquidation Distribution (as defined in the Declaration) or any other sums
payable under the terms of the Preferred Securities or the extension of time for
the performance of any other obligation under, arising out
15
of, or in connection with, the Preferred Securities (other than an extension
of time for payment of Distributions that result from any Extension Period);
(c) any failure, omission, delay or lack of diligence on the part of
the Guarantee Trustee or the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Guarantee Trustee or the Holders
pursuant to the terms hereof or of the Preferred Securities, respectively, 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 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 5.03 that the obligations of the Guarantor with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Guarantee Trustee or the Holders to
give notice to, or obtain consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.04. ENFORCEMENT OF GUARANTEE.
The Guarantor and the Guarantee Trustee expressly acknowledge and
agree that (i) this Guarantee Agreement will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee
has the right to enforce this Guarantee Agreement on behalf of the Holders;
(iii) Holders representing not less than a Majority of Outstanding Preferred
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect
of this Guarantee Agreement or exercising any trust or other power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and (iv) if the
Guarantee Trustee fails to enforce this Guarantee Agreement as provided in
clauses (ii) and (iii) above, any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first
16
instituting a legal proceeding against the Issuer, the Guarantee Trustee or
any other Person. Notwithstanding the foregoing, if the Guarantor has failed
to make a Guarantee Payment, a Holder may directly institute a proceeding
against the Guarantor for enforcement of this Guarantee Agreement for such
payment without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee or any other Person.
SECTION 5.05. GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not merely
of collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon the distribution of the Notes to the Holders as
provided in the Declaration.
SECTION 5.06. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; PROVIDED, HOWEVER, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. 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 or to the Guarantee Trustee for remittance to
the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the 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 Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.03 hereof.
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ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if at such
time (i) the Guarantor shall be in default with respect to its Guarantee
Payments or other payment obligations hereunder, (ii) there shall have
occurred and be continuing any event of default under the Declaration or
(iii) the Guarantor shall have given notice of its election of an Extension
Period and such period, or any extension thereof, is continuing, the
Guarantor shall not (a) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities that rank
junior to the Notes in the right of payment issued by the Guarantor, or (b)
make any guarantee payments with respect to any guarantee by the Guarantor of
any securities of any of its subsidiaries if such guarantee ranks junior to
the Notes in the right of payment, (c) declare or pay any dividends or
distributions on any of the Guarantor's capital stock or (d) redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Guarantor's capital stock. Notwithstanding the foregoing, the Guarantor may
(1) purchase or acquire its capital stock in connection with the satisfaction
by it of its obligations under any employee benefit plans or pursuant to any
contract or security outstanding on the first day of any such event requiring
it to purchase its capital stock; (2) reclassify its capital stock or
exchange or convert one class or series of its capital stock for another
class or series of its capital stock; (3) purchase fractional interests in
shares of its capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged; (4)
declare dividends or distributions in its capital stock; (5) redeem or
repurchase any rights pursuant to a rights agreement; and (6) make payments
under this Guarantee related to the Preferred Securities. In addition, so
long as any Preferred Securities remain outstanding, the Guarantor (i) will
remain the sole direct or indirect owner of all of the outstanding Common
Securities and shall not cause or permit the Common Securities to be
transferred except to the extent such transfer is permitted under the
Declaration; PROVIDED that any permitted successor of the Guarantor under the
Indenture may succeed to the Guarantor's direct or indirect ownership of the
Common Securities, (ii) will cause the holder of the Common Securities to
satisfy the requirements of Section 5.03 of the Declaration and (iii) will
use reasonable efforts to cause the Issuer to continue to be treated as a
grantortrust for United States federal income tax purposes, except in
connection with a distribution of Notes as provided in the Declaration.
SECTION 6.02. SUBORDINATION.
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If a Trust Enforcement Event has occurred and is continuing under the
Declaration the rights of the holders of the Common Securities to receive any
payments will be subordinated to the rights of the Holders of the Preferred
Securities to receive Guarantee Payments.
ARTICLE 7
TERMINATION
SECTION 7.01. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force and
effect (i) upon full payment of the Redemption Price of, plus all accumulated
and unpaid Distributions on, all Preferred Securities, (ii) upon the
distribution of Notes to Holders and holders of Common Securities in exchange
for all of the Preferred Securities and Common Securities or (iii) upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to the Preferred Securities or under this Guarantee Agreement.
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Holder 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
Guarantee Agreement and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee Agreement or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or
19
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 might properly be paid.
SECTION 8.02. INDEMNIFICATION.
To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Guarantee Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
SECTION 8.03. SURVIVE TERMINATION.
The provisions of Sections 8.01 and 8.02 shall survive the termination
of this Guarantee Agreement or the resignation or removal of the Guarantee
Trustee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assignees, receivers, trustees and representatives
of the Guarantor and shall inure to the benefit of the Guarantee Trustee and
the Holders then outstanding. Except in connection with a consolidation,
merger or sale involving the Guarantor that is permitted under Article 8 of
the Indenture, the Guarantor shall not assign its obligations hereunder.
20
SECTION 9.02. AMENDMENTS.
Except with respect to any changes which do not adversely affect the
rights of Holders in any material respect (in which case no consent of Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Guarantor, the Guarantee Trustee and the Holders of not less
than a Majority of Outstanding Preferred Securities. The provisions of Section
11.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
SECTION 9.03. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, in English, duly signed by the party giving
such notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders:
Cinergy Corp.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention:
Facsimile:
with a copy to:
[ ]
[ ]
[ ]
(b) if given to the Guarantee Trustee, to the address set forth below
or such other address as the Guarantee Trustee may give notice of to the
Holders:
[ ]
[ Address ]
Attention:
Facsimile:
(c) if given to any Holder, at the address set forth on the books
and records of the Issuer.
21
All notices hereunder shall be deemed to have been given when (i)
received in person, (ii) telecopied with receipt confirmed, or (iii) mailed by
first class mail, postage prepaid, when received, 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 9.04. GENDERS.
The masculine, feminine and neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 9.05. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Guarantee
Trustee and the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 9.06. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. COUNTERPARTS.
This Guarantee Agreement may be executed in counterparts, each of which
shall be an original; but such counterparts shall together constitute one and
the same instrument.
SECTION 9.08. INTENTIONALLY OMITTED.
SECTION 9.09. LIMITED LIABILITY.
Neither the Guarantee Trustee nor the Holders, in their capacities as
such, shall be personally liable for any liabilities or obligations of the
Guarantor arising out of this Guarantee Agreement. The parties further hereby
agree that the Holders, in their capacities as such, shall be entitled to the
same limitation of personal liability extended to the stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
22
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
CINERGY CORP.
By:
---------------------------------------
Name:
Title:
THE BANK OF
NEW YORK,
as Guarantee Trustee
By:
---------------------------------------
Name:
Title:
