Exhibit 4(c)
GUARANTEE AGREEMENT
Between
Texas Utilities Electric Company
(as Guarantor)
and
dated as of
_____________ ___, 1995
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS................................................ 1
SECTION 1.01 Definitions...................................... 1
ARTICLE II TRUST INDENTURE ACT................................... 4
SECTION 2.01 Trust Indenture Act; Application................. 4
SECTION 2.02 Lists of Holders of Securities................... 4
SECTION 2.03 Reports by the Guarantee Trustee................. 4
SECTION 2.04 Periodic Reports to Guarantee Trustee............ 4
SECTION 2.05 Evidence of Compliance with Conditions Precedent. 5
SECTION 2.06 Events of Default; Waiver........................ 5
SECTION 2.07 Event of Default; Notice......................... 5
SECTION 2.08 Conflicting Interests............................ 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE........ 5
SECTION 3.01 Powers and Duties of the Guarantee Trustee....... 5
SECTION 3.02 Certain Rights of Guarantee Trustee.............. 7
ARTICLE IV GUARANTEE TRUSTEE..................................... 9
SECTION 4.01 Guarantee Trustee; Eligibility................... 9
SECTION 4.02 Appointment, Removal and Resignation of
Guarantee Trustee................................ 10
ARTICLE V GUARANTEE.................................................. 10
SECTION 5.01 Guarantee........................................ 10
SECTION 5.02 Waiver of Notice and Demand...................... 10
SECTION 5.03 Obligations Not Affected......................... 11
SECTION 5.04 Rights of Holders................................ 11
SECTION 5.05 Guarantee of Payment............................. 12
SECTION 5.06 Subrogation...................................... 12
SECTION 5.07 Independent Obligations.......................... 12
ARTICLE VI SUBORDINATION......................................... 12
SECTION 6.01 Subordination.................................... 12
ARTICLE VII TERMINATION........................................... 13
SECTION 7.01 Termination...................................... 13
ARTICLE VIII MISCELLANEOUS......................................... 13
SECTION 8.01 Successors and Assigns........................... 13
SECTION 8.02 Amendments....................................... 13
SECTION 8.03 Notices.......................................... 13
SECTION 8.04 Benefit.......................................... 14
SECTION 8.05 Interpretation................................... 14
SECTION 8.06 Governing Law.................................... 16
CROSS-REFERENCE TABLE
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Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ----------
310(a) ................................................... 4.01(a)
310(b) ................................................... 4.01(c), 2.08
310(c) ................................................... Inapplicable
311(a) ................................................... 2.02(b)
311(b) ................................................... 2.02(b)
311(c) ................................................... Inapplicable
312(a) ................................................... 2.02(a)
312(b) ................................................... 2.02(b)
313 ................................................... 2.03
314(a) ................................................... 2.04
314(b) ................................................... Inapplicable
314(c) ................................................... 2.05
314(d) ................................................... Inapplicable
314(e) ................................................... 1.01, 2.05,
3.02
314(f) ................................................... 2.01, 3.02
315(a) ................................................... 3.01(d)
315(b) ................................................... 2.07
315(c) ................................................... 3.01
315(d) ................................................... 3.01(d)
316(a) ................................................... 5.04(a), 2.06
316(b) ................................................... 5.03
316(c) ................................................... 2.02
317(a) ................................................... Inapplicable
317(b) ................................................... Inapplicable
318(a) ................................................... 2.01(b)
318(b) ................................................... 2.01
318(c) ................................................... 2.01(a)
_____________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
__________ __, 1995, is executed and delivered by Texas Utilities Electric
Company, a Texas corporation (the "Guarantor"), and The Bank of New York,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of TU Electric Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _________ __, 1995 among the Trustees of
the Issuer named therein and Texas Utilities Electric Company, as
Depositor, the Issuer is issuing as of the date hereof $___________
aggregate liquidation amount of its ____% Trust Originated Preferred
Securities (the "Preferred Securities") representing ownership interests in
the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the proceeds of the Preferred Securities to be issued by
the Issuer in exchange for the Debentures (as defined in the Trust
Agreement); and
WHEREAS, in order to enhance the value of the 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 of Debentures,
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 I
DEFINITIONS
SECTION 1.01 Definitions. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires,
have the following meanings. Capitalized or otherwise defined terms used
but not otherwise defined herein shall have the meanings assigned to such
terms in the Trust Agreement as in effect on the date hereof.
"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 the purposes of
this definition, "control" when used with respect to any specified Person
means 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" have
meanings correlative to the foregoing.
"Common Securities" means the securities representing common
ownership interests in the assets of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean 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 accrued and unpaid Distributions that are required to be paid on
such Preferred Securities but only if and to the extent that the Property
Trustee has available in the Payment Account funds sufficient to make such
payment, (ii) the redemption price (the "Redemption Price"), and all
accrued 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 the Property Trustee has available in the Payment
Account funds sufficient to make such payment, (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other
than in connection with a redemption of all of the Preferred Securities),
the lesser of (a) the aggregate of the liquidation amount and all accrued
and unpaid Distributions on the Preferred Securities to the date of
payment, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York 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" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities then outstanding;
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.
"Indenture" means the Indenture dated as of __________, 1995,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee.
"Majority in liquidation amount of the Securities" means a vote
by Holders, voting separately as a class, of more than 50% of the aggregate
liquidation amount of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Guarantor, and delivered to the Guarantee
Trustee. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
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.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the 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.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
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; and
(b) if and to the extent that any provision of this Guarantee
Agreement 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 2.02 Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than [___________] and
[_________] in each year, 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 a date not more than 15 days prior to the delivery thereof,
and (b) at such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that, the Guarantor shall not be
obligated to provide such List of Holders at any time 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 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 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03 Reports by the Guarantee Trustee. Within 60 days
after [______] of each year, the Guarantee Trustee shall provide to the
Holders 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 Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04 Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the 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 2.05 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 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) of the Trust Indenture
Act may be given in the form of an Officers' Certificate.
SECTION 2.06 Events of Default; Waiver. The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of all 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.
SECTION 2.07 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the
Guarantee Trustee, unless such defaults 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 or Responsible
Officers of the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the administration of
the Trust Agreement shall have obtained written notice, of such Event of
Default.
SECTION 2.08 Conflicting Interests. The Trust Agreement 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.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement or any rights hereunder to any Person
except a Holder exercising his or her rights pursuant to Section 5.04 or to
a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor 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 Guarantee
Trustee.
(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) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing 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 or her
own affairs.
(d) 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 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 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 in this
Guarantee Agreement; and
(B) in the absence of bad faith 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; but in the
case of any such certificates or opinions that by any
provision hereof 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;
(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 or such Responsible Officer 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 in liquidation amount of the 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 the 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 Guarantee
Agreement or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 3.02 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may 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
reasonably 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 Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of
its choice, and the written 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 Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent
jurisdiction;
(v) 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 provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of 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, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.02(a)(v) shall
be taken to relieve the Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Guarantee Agreement;
(vi) the 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
reasonably believed by it to be genuine, but the Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(vii) 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 misconduct or negligence
on the part of any agent or attorney appointed with due care by
it hereunder; and
(viii) whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee Trustee
(1) may request instructions from the Holders, (2) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (3) shall be protected
in acting in accordance with such instructions;
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the 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 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 Guarantee Trustee shall be construed to be a duty.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 Guarantee Trustee; Eligibility.
(a) There shall at all times be a 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 4.01(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 Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Guarantee Trustee and 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 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 until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) 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 an instrument of resignation, the
resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court
may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
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 by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.02 Waiver of Notice and Demand. 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.
SECTION 5.03 Obligations Not Affected. The obligation of the
Guarantor to make the Guarantee Payments 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, Redemption Price, Liquidation
Distribution 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 of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(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 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 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 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 5.04 Rights of Holders. The Guarantor expressly
acknowledges 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) the Holders of a Majority in liquidation
amount of the 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 power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) if the Guarantee Trustee fails to enforce this
Guarantee Agreement as above provided, any Holder may, after a period of 30
days has elapsed from such Holder's written request to the Guarantee
Trustee to enforce this Guarantee Agreement, institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement and the Guarantee Trustee's failure to so enforce this Guaranty
Agreement, without first instituting a legal proceeding against the Issuer
or any other person or entity.
SECTION 5.05 Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee
Payments in full (without duplication).
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 of Guarantee Payments 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.
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.
ARTICLE VI
SUBORDINATION
SECTION 6.01 Subordination. This Guarantee Agreement 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 the Debentures, except those made pari passu or
subordinate by their terms, (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 or preference stock of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.01 Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon: (i) full payment of
the Redemption Price of all Preferred Securities, and all accrued and
unpaid Distributions to the date of redemption, (ii) the distribution of
Debentures to Holders in exchange for all of the Preferred Securities or
(iii) full payment of the amounts payable in accordance with the Trust
Agreement 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 Preferred Securities or under this
Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article [____] of the
Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 8.02 Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than 66 2/3% in
aggregate liquidation amount of all the outstanding Preferred Securities.
The provisions of Article Six of the Trust Agreement concerning meetings of
Holders shall apply to the giving of such approval.
SECTION 8.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in
writing, 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
of the Preferred Securities:
Texas Utilities Electric Company
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: 214-812-[____]
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustees') address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice to the Holders:
TU Electric Capital I
c/o Texas Utilities Electric Company
Energy Plaza
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: 214-812-[____]
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the " " may give notice of to the
Holders of the Preferred Securities:
The Bank of New York
000 Xxxxxxx Xxxxxx
00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No:
Attention: Corporate Trust Trustee Administration
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder 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 8.04 Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and, subject to Section 3.01(a), is not
separately transferable from the Preferred Securities.
SECTION 8.05 Interpretation. In this Guarantee Agreement,
unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned
to them in 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; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
Texas Utilities Electric Company
By: _____________________________
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By: ____________________________
Name:
Title:
