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Exhibit 4.13
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FORM OF CAPITAL SECURITIES GUARANTEE AGREEMENT
K N Capital Trust II
Dated as of _____ __, ____
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TABLE OF CONTENTS
Page(s)
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation..................... 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application................... 4
Section 2.2 List of Holders.................................... 5
Section 2.3 Reports by the Guarantee Trustee................... 5
Section 2.4 Periodic Reports to Guarantee Trustee.............. 5
Section 2.5 Evidence of Compliance with Conditions Precedent... 5
Section 2.6 Events of Default; Waiver.......................... 6
Section 2.7 Event of Default; Notice........................... 6
Section 2.8 Conflicting Interests.............................. 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee......... 6
Section 3.2 Certain Rights of Guarantee Trustee................ 8
Section 3.3 Not Responsible for Recitals or Issuance of Capital
Securities Guarantee......................... 10
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Capital Guarantee: Eligibility..................... 10
Section 4.2 Appointment, Removal and Resignation of Guarantee
Trustee...................................... 11
ARTICLE V
DEFINITIONS AND INTERPRETATION
Section 5.1 Guarantee.......................................... 11
Section 5.2 Subordination...................................... 12
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Page(s)
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Section 5.3 Waiver of Notice and Demand........................ 12
Section 5.4 Obligations Not Affected........................... 12
Section 5.5 Rights of Holders.................................. 13
Section 5.6 Guarantee of Payment............................... 13
Section 5.7 Subrogation........................................ 13
Section 5.8 Independent Obligations............................ 13
ARTICLE VI
LIMITATION OF TRANSACTIONS; RANKING
Section 6.1 Limitation of Transactions......................... 14
Section 6.2 Ranking............................................ 14
ARTICLE VII
TERMINATION
Section 7.1 Termination........................................ 14
ARTICLE VIII
COMPENSATION AND EXPENSES OF
GUARANTEE TRUSTEE
ARTICLE IX
INDEMNIFICATION
Section 9.1 Exculpation........................................ 15
Section 9.2 Indemnification.................................... 16
ARTICLE X
MISCELLANEOUS
Section 10.1 Successors and Assigns............................. 16
Section 10.2 Amendments......................................... 16
Section 10.3 Notices............................................ 17
Section 10.4 Benefit............................................ 17
Section 10.5 Governing Law...................................... 17
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FORM OF CAPITAL SECURITIES GUARANTEE AGREEMENT
This FORM OF CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Capital
Securities Guarantee"), dated as of _____ __, ____, is executed and delivered by
K N Energy, Inc., a Kansas corporation (the "Guarantor"), and Wilmington Trust
Company, as trustee (the "Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Capital Securities (as defined
herein) of K N Capital Trust II, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of the date hereof, among the trustees and
administrators of the Issuer named therein, the Guarantor, as sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof _______ capital securities,
having an aggregate liquidation amount of $___________, designated the ____%
Capital Securities (the "Capital Securities");
WHEREAS, the Capital Securities are being issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined in the Declaration), will be used to purchase the
Debentures (as defined in the Declaration) of the Guarantor, which will be
deposited with Wilmington Trust Company, as Institutional Trustee under the
Declaration, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of the Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") with
substantially identical terms to this Capital Securities Guarantee for the
benefit of the holders of the Common Securities, except that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of the Common Securities to receive guarantee payments under
the Common Securities Guarantee are subordinated, to the extent and in the
manner set forth in the Common Securities Guarantee, to the rights of the
Holders of Capital Securities to receive Guarantee Payments under this Capital
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the
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Guarantor executes and delivers this Capital Securities Guarantee for the
benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation.
In this Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Capital Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Capital Securities Guarantee have the same meaning when used in this
Capital Securities Guarantee unless otherwise defined in this Capital
Securities Guarantee;
(c) a term defined anywhere in this Capital Securities Guarantee has
the same meaning throughout;
(d) all references to "the Capital Securities Guarantee" or "this
Capital Securities Guarantee" are to this Capital Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Capital Securities Guarantee to Articles
and Sections are to Articles and Sections of this Capital Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Capital Securities Guarantee, unless otherwise defined
in this Capital Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"Capital Securities" has the meaning set forth in the recitals.
"Capital Securities Guarantee" has the meaning set forth in the recitals.
"Common Securities Guarantee" has the meaning set forth in the recitals.
"Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
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"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Debentures" has the meaning set forth in the recitals.
"Declaration" has the meaning set forth in the recitals.
"Guarantee Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Capital Securities Guarantee;
provided that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not have
cured such default within 90 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Capital
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price (the "Redemption Price"), plus all accumulated and unpaid
Distributions to the date of redemption with respect to any Capital Securities
called for redemption by the Issuer, to the extent the Issuer has funds
available therefor, and (iii) upon a voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Issuer (other than in connection
with a distribution of the Debentures to the Holders or the redemption of all
the Capital Securities), the lesser of (a) the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the Capital Securities to
the date of payment, to the extent the Issuer shall have funds available
therefor, 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 Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Capital Securities Guarantee and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" has the meaning set forth in the recitals.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Capital Securities; provided, that, in determining whether the
holders of the requisite percentage of Capital 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, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.
"Indenture" means the Indenture dated as of the date hereof between the
Guarantor and Wilmington Trust Company, as trustee, as supplemented by the First
Supplemental Indenture dated as of the date hereof among the Guarantor and
Wilmington Trust Company, as trustee.
"Issuer" has the meaning set forth in the recitals.
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"List of Holders" has the meaning set forth in Section 2.2.
"Liquidation Distribution" has the meaning set forth in the definition of
Guarantee Payments.
"Majority in Liquidation Amount" of the Capital Securities means, except
as provided in the terms of the Capital Securities, or except as provided by the
Trust Indenture Act, a vote by Holder(s), voting separately as a class, of more
than 50% of the liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Capital Securities.
"Redemption Price" has the meaning set forth in the definition of
Guarantee Payment.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee, including
any vice president, any assistant vice president, any assistant secretary, the
treasurer, any assistant treasurer or other officer of the Corporate Trust
Office 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.
"Securities Guarantees" means this Capital Securities Guarantee and the
Common Securities Guarantee, collectively.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Securities" means the Common Securities and the Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application. (a) This Capital Securities
Guarantee is subject to the provisions of the Trust Indenture Act that are
required to be part of this Capital Securities Guarantee and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Capital Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
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Section 2.2 List of Holders. (a) The Guarantor and the Administrators on
behalf of the Issuer shall provide the Guarantee Trustee (i) within 1 Business
Day 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 of the Capital Securities (the "List of Holders") as of such record
date; provided, that neither the Guarantor nor the Administrators on behalf of
the Issuer shall 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 and the Administrators on behalf of the
Issuer, and (ii) at any other time, within 30 days of receipt by the Guarantor
of a written request for a List of Holders, a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Guarantee Trustee.
The Guarantee Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in 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 Sections
311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Guarantee Trustee. Within 90 days after
___________ of each year, commencing _________________, 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 2.4 Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee such documents, reports and information as are
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.
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).
Section 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with the conditions precedent, if any, provided for in this Capital Securities
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of Capital Securities may, by vote, on behalf of the Holders
of all of the Capital Securities, waive any past Guarantee Event of Default and
its consequences. Upon such waiver, any such Guarantee Event of Default shall
cease to exist, and any Guarantee Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this
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Capital Securities Guarantee, but no such waiver shall extend to any subsequent
or other default or Guarantee Event of Default or impair any right consequent
thereon.
Section 2.7 Event of Default; Notice. (a) The Guarantee Trustee shall,
within 30 days after the occurrence of a Guarantee Event of Default, transmit by
mail, first class postage prepaid, to the Holders, notices of all Guarantee
Events of Default with respect to this Capital Securities Guarantee actually
known to a Responsible Officer of the Guarantee Trustee, unless such Guarantee
Events of Default 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 a Responsible Officer 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
Guarantee Event of Default unless the Guarantee Trustee shall have received
written notice thereof, or a Responsible Officer of the Guarantee Trustee
charged with the administration of the Capital Securities Guarantee shall have
obtained actual knowledge thereof.
Section 2.8 Conflicting Interests. The Declaration shall be deemed to be
specifically described in this Capital Securities Guarantee for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act and such Section 310(b) applied to the Capital Securities
Guarantee.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee. (a) This Capital
Securities Guarantee shall be held by the Guarantee Trustee for the benefit of
the Holders and the Guarantee Trustee shall not transfer this Capital Securities
Guarantee to any Person except a Holder exercising his or her rights pursuant to
Section 5.5(b) 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
succession 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 a Guarantee Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Capital Securities Guarantee for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Guarantee Event of
Default and after the curing of all Guarantee Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Guarantee Trustee. In
case a Guarantee Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the
rights and
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powers vested in it by this Capital Securities Guarantee, and shall 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 Capital Securities Guarantee 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 Guarantee Event of Default and
after the curing or waiving of all such Guarantee 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 Capital
Securities Guarantee, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Capital Securities Guarantee, and no
implied covenants or obligations shall be read into this Capital
Securities Guarantee against the Guarantee Trustee; 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
Capital Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the 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
Capital Securities Guarantee;
(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 not less than a Majority in Liquidation
Amount of the Capital 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 Capital Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee 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
Capital Securities Guarantee or indemnity, reasonably
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satisfactory to the Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
Section 3.2 Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Capital Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Capital Securities
Guarantee, 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 conclusively rely upon an Officers' Certificate that, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or re-registration thereof).
(v) The Guarantee Trustee may consult with counsel of its selection,
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Capital Securities
Guarantee from any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Capital Securities
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee
Trustee; provided, that nothing contained in this Section 3.2(a)(vi) shall
be taken to relieve the Guarantee Trustee, upon the occurrence of a
Guarantee Event of Default, of its obligation to exercise the rights and
powers vested in it by this Capital Securities Guarantee.
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(vii) 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, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the 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. No third 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 Capital Securities Guarantee, both
of which shall be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Capital Securities
Guarantee 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 (i) may request instructions
from the Holders of a Majority in Liquidation Amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(xi) The 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.
(xii) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Capital Securities Guarantee.
(b) No provision of this Capital Securities Guarantee 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.
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Section 3.3 Not Responsible for Recitals or Issuance of Capital Securities
Guarantee. The recitals contained in this Capital Securities Guarantee 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
representation as to the validity or sufficiency of this Capital Securities
Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Capital Guarantee: 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
permitted by the Securities and Exchange Commission to act as
an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(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 4.2 Appointment, Removal and Resignation of Guarantee Trustee. (a)
Subject to Section 4.2(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
4.2(a) 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.
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(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 4.2 within 60 days after
delivery of an instrument of resignation or removal, the Guarantee Trustee
resigning or being removed 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.
(e) No Guarantee Trustee shall be liable for the acts or omissions to act
of any Successor Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Guarantee Trustee all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE V
DEFINITIONS AND INTERPRETATION
Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
Section 5.2 Subordination. If an Event of Default has occurred and is
continuing, the rights of Holders of the Common Securities to receive guarantee
payments under the Common Securities Guarantee are subordinated to the rights of
the Holders of the Capital Securities to receive Guarantee Payments under this
Capital Securities Guarantee.
Section 5.3 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Capital Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 5.4 Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Capital Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
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(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 Capital 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 Capital Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension of time for
payment of Distributions, the 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 Capital 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 Capital 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 5.4 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 5.5 Rights of Holders. (a) The Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting of any proceeding for any remedy available to the
Guarantee Trustee in respect of this Capital Securities Guarantee or exercising
any trust or power conferred upon the Guarantee Trustee under this Capital
Securities Guarantee.
(b) If the Guarantee Trustee fails to enforce such Capital Securities
Guarantee, any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights under
this Capital Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Guarantee Trustee or any other person or entity.
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The Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
Section 5.6 Guarantee of Payment. This Capital Securities Guarantee
creates a guarantee of payment and not of collection.
Section 5.7 Subrogation. The Guarantor shall be subrogated to all (if any)
rights of the Holders of Capital Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Capital Securities
Guarantee; provided, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Capital Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Holders.
Section 5.8 Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Capital Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Capital Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.4.
ARTICLE VI
LIMITATION OF TRANSACTIONS; RANKING
Section 6.1 Limitation of Transactions. So long as any Capital Securities
remain outstanding, if (i) the Guarantor has exercised its option to defer
interest payments on the Debentures by extending the interest payment period and
such extension shall be continuing, (ii) the Guarantor shall be in default with
respect to its Guarantee Payments or other obligations under this Capital
Securities Guarantee or (iii) there shall have occurred and be continuing any
event that, with the giving of notice, would constitute an Event of Default then
the Guarantor (a) shall not declare or pay any dividend on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock (other than (i) purchases or
acquisitions of shares of its common stock in connection with the satisfaction
by the Guarantor or any of its subsidiaries of their respective obligations
under any benefit plans for directors, officers, agents or employees or the
Guarantor's dividend reinvestment or director, officer, agent or employee stock
purchase plans, (ii) as a result of a reclassification of its capital stock or
the exchange or conversion of one class or series of its capital stock for
another class or series of its capital stock, (iii) the purchase of 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
for capital stock, (iv) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of its capital stock of
the Guarantor or (v) any declaration of a dividend in connection with the
implementation or extension of a stockholders' rights plan,
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or the issuance of stock under any such plan (including any plan existing on the
date hereof) in the future or the redemption or repurchase or any such rights
pursuant thereto), (b) shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Guarantor which rank pari passu with or junior to the Debentures and (c)
shall not make any guarantee payments with respect to any guarantee by the
Guarantor of any securities of any subsidiary of the Guarantor if such guarantee
ranks pari passu with or junior in right of payment to the Debentures.
Section 6.2 Ranking. This Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank pari passu in right of
payment to all other senior unsecured obligations of the Guarantor.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Capital Securities Guarantee shall terminate
as to each Holder upon (i) full payment of the Redemption Price and accumulated
and unpaid Distributions with respect to all Capital Securities or (ii) upon the
distribution of the Debentures held by the Issuer to the Holders of the Capital
Securities or (iii) upon dissolution of the Issuer and will terminate completely
upon full payment of the amounts payable in accordance with the Declaration.
Notwithstanding the foregoing, this Capital Securities Guarantee 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 under the Capital Securities or
under this Capital Securities Guarantee.
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ARTICLE VIII
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 shall be agreed to in writing between the Guarantor and the
Guarantee Trustee (which agreement shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust), 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 Capital
Securities Guarantee (including reasonable compensations and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Guarantor also covenants to indemnify the Guarantee
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Guarantee Trustee)
incurred without negligence or bad faith on the part of the Guarantee Trustee
and arising out of or in connection with the acceptance or administration of
this Capital Securities Guarantee, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Guarantor under this Article VIII to compensate and indemnify the Guarantee
Trustee and to pay or reimburse the Guarantee Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Capital Securities upon all property and funds held or collected by the
Guarantee Trustee, except funds held in trust for the benefit of the holders of
the Capital Securities.
The provisions of this Article shall survive the termination of this
Capital Securities Guarantee or the earlier resignation or removal of the
Guarantee Trustee.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage, liability, expense or claim incurred by
reason of any act or omission performed or omitted by such Indemnified Person in
good faith in accordance with this Capital Securities Guarantee and in a manner
that such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Capital Securities
Guarantee or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are
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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 9.2 Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Capital Securities Guarantee.
When the Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 4.1(d) or Section
4.1(e) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
ARTICLE X
MISCELLANEOUS
Section 10.1 Successors and Assigns. All guarantees and agreements
contained in this Capital Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Capital Securities then outstanding.
Except in connection with any permitted merger or consolidation of the Guarantor
with or into another entity or any permitted sale, transfer or lease of the
Guarantor's assets to another entity (as described in Article 7 of the
Indenture), the Guarantor may not assign its rights or delegate its obligations
under the Guarantee without the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities then outstanding.
Section 10.2 Amendments. Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Capital Securities Guarantee may only be amended
with the prior approval of the Holders of at least a Majority in Liquidation
Amount of all the outstanding Capital Securities. The provisions of Section
12.02 of the Declaration with respect to meetings of Holders apply to the giving
of such approval.
Section 10.3 Notices. All notices provided for in this Capital Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
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(a) if given to the Guarantee Trustee, at the Guarantee Trustee's mailing
address set forth below (or such other address as the Guarantee Trustee may give
notice of to the Holders of the Capital Securities):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(b) if given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities):
K N Energy, Inc.
000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
(c) if given to any Holder of Capital Securities, at the address set forth
on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 10.4 Benefit. This Capital Securities Guarantee is solely for the
benefit of the Holders of the Capital Securities and, subject to Section 3.1(a),
is not separately transferable from the Capital Securities.
Section 10.5 Governing Law. THIS CAPITAL SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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THIS CAPITAL SECURITIES GUARANTEE AGREEMENT is executed as of the day and
year first above written.
K N ENERGY, INC.,
as Guarantor
By:____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Guarantee Trustee
By:____________________________________
Name:
Title:
