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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENRON CAPITAL RESOURCES, L.P.
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENRON CAPITAL RESOURCES, L.P.
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ENRON
CAPITAL RESOURCES, L.P. (this "Agreement") is made and entered into as of
August 3, 1994, by and among Enron Corp., a Delaware corporation ("Enron"),
as the General Partner, and Organizational Partner, Inc., a Delaware
corporation, as the Organizational Limited Partner, together with any other
Persons who become Partners (as defined below) in the Company (as defined
below) or parties hereto as provided herein.
FOR AND IN CONSIDERATION OF the mutual covenants, rights and
obligations set forth in this Agreement, the benefits to be derived therefrom
and other good and valuable consideration, the receipt and the sufficiency of
which each Partner acknowledges and confesses, the Partners agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
"Act" means the Delaware Revised Uniform Limited Partnership
Act and any successor statute, as amended from time to time.
"Action" has the meaning set forth in Section 3.04(c).
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under common control with that
first Person. As used in this definition, the term "control" includes
(a) with respect to any corporation or other Entity having voting
shares or the equivalent and elected directors, managers or Persons
performing similar functions, the ownership or power to vote, directly
or indirectly, shares or the equivalent representing 50% or more of the
power to vote in the election of directors, managers or Persons
performing similar functions, (b) ownership of 50% or more of the
equity or beneficial interest in any other Entity and (c) the ability
to direct the business and affairs of any Entity by acting as a general
partner, manager or otherwise.
"Agreement" has the meaning given that term in the
introductory paragraph hereof.
"Beneficiaries" has the meaning given that term in Section
5.03(a) hereof.
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"Book Entry Interest" means a beneficial interest in
the Preferred Security Certificates, ownership and transfers of which
shall be made through book entries by a Clearing Agency as described in
Section 3.07. ``Business Day'' means any day other than a day on which
banking institutions in The City of New York are authorized or
required by law to close.
"Capital Contribution" means any contribution or
contributions by one or more Partners to the capital of the Company.
"Cause" means a court of competent jurisdiction has entered a
final, non-appealable judgment finding the General Partner liable for
actual fraud, gross negligence or willful or wanton misconduct in its
capacity as general partner of the Company.
"Certificate" means the certificate of limited partnership of
the Company filed on May 26, 1994 with the Secretary of State of
Delaware, as amended or restated from time to time.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is
acting as depository for the Series A Preferred Securities and in whose
name shall be registered a global Preferred Security Certificate and
which shall undertake to effect book entry transfers and pledges of the
Series A Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
the Clearing Agency effects book entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Time" means the time of issuance of the Series A
Preferred Securities pursuant to the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986 and any
successor statute, as amended from time to time.
"Company" has the meaning given that term in Section 2.01(a).
"Covered Person" means any Partner, any Affiliate of a
Partner or any officers, directors, shareholders, partners, employees,
representatives or agents of a Partner or its respective Affiliates, or
any employee or agent of the Company or its Affiliates.
"Departing Partner" has the meaning given that term in Section
11.03.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Dispose," "Disposing," or "Disposition" means a sale,
assignment, transfer, exchange, mortgage, pledge, grant of a security
interest or other disposition or encumbrance or the acts thereof.
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"Dividends" means all distributions, other than distributions
on liquidation, of income paid or payable to any Limited Partner who is
a Preferred Security holder pursuant to the terms of the Preferred
Securities held by such Limited Partner, including any additional
distributions payable on Dividends in arrears.
"Enron" means Enron Corp., a Delaware corporation.
"Entity" means a corporation, limited liability company,
partnership, limited partnership, venture, trust, estate, governmental
entity or other entity.
"Event of Withdrawal" has the meaning given that term in
Section 11.01.
"Final Supplemented Prospectus" means the Company's
Prospectus Supplement (including the Prospectus dated July 15, 1994)
dated July 27, 1994, as filed with the Securities and Exchange
Commission, relating to the public offering of the Series A Preferred
Securities by the Company.
"General Interest Rate" means a rate per annum equal to the
lesser of (a) a varying rate per annum that is equal to the interest
rate publicly quoted by Chemical Bank, N.A. from time to time as its
prime commercial or similar reference interest rate, with adjustments
in that varying rate to be made on the same date as any change in that
rate and (b) the maximum rate permitted by applicable law.
"General Partner" means Enron as general partner as provided
in this Agreement.
"Guarantee" means the Payment and Guarantee Agreement dated
as of the date hereof executed and delivered by Enron for the benefit
of the holders from time to time of the Series A Preferred Securities.
"Indemnified Person" means the General Partner, any Affiliate
of the General Partner or any officers, directors, shareholders,
partners, employees, representatives or agents of the General Partner
or any of its Affiliates, or any employee or agent of the Company or
its Affiliates.
"Limited Partner" means the Organizational Limited Partner or
any Person hereafter admitted to the Company as a limited partner as
provided in this Agreement, but does not include any Person who has
ceased to be a limited partner in the Company.
"Loan" means the loan to Enron of the proceeds of the Series
A Preferred Securities and the General Partner's contribution referred
to in Section 3.01(c).
"Loan Agreement" means the Loan Agreement dated as of the
date hereof executed and delivered by Enron and the Company governing
the Loan.
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"majority in liquidation preference of the Preferred
Securities" means the holders of a series of Preferred Securities
entitled to vote on a proposal (or if there is more than one series of
Preferred Securities entitled to vote on such proposal the holders of
all series of Preferred Securities so entitled to vote, voting as a
class) whose liquidation preference (including the stated preferential
amount payable upon liquidation, plus accrued and unpaid Dividends to
the date upon which voting rights are determined) represents more than
50% of the total liquidation preference of all of the Preferred
Securities of such series (or of all such series entitled to vote on
such proposal).
"Net Income" and "Net Loss" mean, respectively, for any
period the income and loss of the Company for such period as determined
in accordance with the method of accounting followed by the Company for
federal income tax purposes, including, for all purposes, any income
exempt from tax and any expenditures of the Company which are described
in Code Section 705(a)(2)(B).
"Obligations" has the meaning given that term in Section
5.03(a) hereof.
"Organizational Limited Partner" means Organizational
Partner, Inc., a Delaware corporation, in its capacity as the
organizational limited partner of the Company pursuant to this
Agreement.
"Partner" means any General Partner or Limited Partner.
"Partnership Interest" means the interest of a Partner in the
Company, including, without limitation, rights to distributions
(liquidating or otherwise), allocations and information and to consent
or approve.
"Person" has the meaning given that term in Section
17-101(12) of the Act.
"Preferred Security Certificate" means a certificate in such
form as may be adopted by the General Partner in its sole discretion,
issued by the Company evidencing ownership of one or more Preferred
Securities.
"Preferred Securities" means the Partnership Interests of
Limited Partners issued pursuant to Section 3.04; provided, that each
Preferred Security of any series of Preferred Securities at any time
outstanding shall represent the same fractional part of the Partnership
Interests of all Limited Partners holding Preferred Securities of such
series as each other Preferred Security of such series.
"Preferred Security Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
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"Purchase Price" means the price to be paid to the Company
for the Series A Preferred Securities to be issued at the Closing Time
pursuant to the Underwriting Agreement and, with respect to Preferred
Securities other than the Series A Preferred Securities, the price
determined by the General Partner at which the Preferred Securities
will be sold by the Company.
"Record Holder" and "holder" means the Person in whose name
a Preferred Security is registered on the books of the Transfer Agent
as contemplated in Section 3.06(a).
"Series A Preferred Securities" means the series of Preferred
Securities created pursuant to the Action in Article IV hereof.
"Series A Dividends" means Dividends paid or payable on
Series A Preferred Securities.
"Sharing Ratio" means, from and after the Closing Time, 21%
with respect to the General Partner and 79% with respect to the Limited
Partners.
"66-2/3% in liquidation preference of the Preferred
Securities" means the holders of a series of Preferred Securities
entitled to vote on a proposal (or if there is more than one series of
Preferred Securities entitled to vote on such proposal the holders of
all series of Preferred Securities so entitled to vote, voting as a
class) whose liquidation preference (including the stated preferential
amount payable upon liquidation, plus accrued and unpaid Dividends to
the date upon which voting rights are determined) represents more than
66-2/3% of the total liquidation preference of all of the Preferred
Securities of such series (or of all such series entitled to vote on
such proposal).
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Company pursuant to Section 3.06 in place
of and with all the rights of a Limited Partner and who is shown as a
Limited Partner on the books and records of the Company.
"Transfer Agent" means the Company or such bank, trust
company or other Person (including, without limitation, the General
Partner or one of its Affiliates) as shall be appointed from time to
time by the General Partner to act as registrar and transfer agent for
the Preferred Securities.
"Underwriting Agreement" means the Purchase Agreement and
related Pricing Agreement, each dated July 27, 1994, among Enron, the
Company and the underwriters named therein.
"Withdrawal Opinion of Counsel" has the meaning given that
term in Section 11.01(b).
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1.02 OTHER DEFINITIONS. Other terms defined herein have the meanings
so given them.
1.03 REFERENCES. All references herein to one gender shall include the
others and the singular shall include the plural and vice versa as appropriate.
All references to an Entity shall be deemed to include its successors and
assigns, to the extent succession or assignment is not restricted by this
Agreement. Whenever the context requires, the gender of all words used in this
Agreement includes the masculine, feminine and neuter. Unless otherwise
specified, all references to "Articles" and "Sections" refer to articles
and sections of this Agreement.
ARTICLE II
ORGANIZATION
2.01 FORMATION. (a) The General Partner and the Organizational
Limited Partner have previously formed Enron Capital Resources, L.P. as a
limited partnership, referred to herein as the "Company," pursuant to the
provisions of the Delaware Act and hereby amend and restate the original
Agreement of Limited Partnership of Enron Capital Resources, L.P. in its
entirety. Subject to the provisions of this Agreement, the General Partner and
the Organizational Limited Partner hereby continue the Company as a limited
partnership pursuant to the provisions of the Delaware Act. Except as
expressly provided to the contrary in this Agreement, the rights and
obligations of the Partners and the administration, dissolution and termination
of the Company shall be governed by the Delaware Act. All Partnership
Interests shall constitute personal property of the owner thereof for all
purposes.
(b) In connection with the formation of the Company, Enron has been
admitted as a general partner of the Company, and the Organizational Limited
Partner has been admitted as a limited partner of the Company. As of the
Closing Time, after giving effect to the transactions contemplated by Section
4.01 hereof, the interest in the Company of the Organizational Limited Partner
shall be terminated and the Organizational Limited Partner shall withdraw as a
limited partner of the Company.
2.02 NAME. The name of the Company is "Enron Capital Resources,
L.P." and all Company business must be conducted in that name or such other
names that comply with applicable law as the General Partner may select from
time to time.
2.03 REGISTERED OFFICE; REGISTERED AGENT; OTHER OFFICES. The
registered office of the Company in the State of Delaware shall be at such
place as the General Partner may designate from time to time. The registered
agent for service of process on the Company in the State of Delaware or any
other jurisdiction shall be such Person or Persons as the General Partner may
designate from time to time. The Company may have such other offices as the
General Partner may designate from time to time.
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2.04 PURPOSES. The purpose and nature of the business to be
conducted by the Company shall be to issue Preferred Securities from time to
time in accordance with this Agreement and to lend the net proceeds of the sale
thereof (together with the Capital Contributions required to be made by the
General Partner in respect thereof) to Enron (or any Affiliate of Enron
designated by it, provided that the obligations of such Affiliate to repay such
loan and interest thereon are guaranteed by Enron under an agreement containing
subordination provisions similar to the subordination provisions of the Loan
Agreement) and to engage in any other business or activity that now or
hereafter may be necessary, incidental, proper, advisable or convenient to
accomplish the foregoing purposes and that is not forbidden by the law of the
jurisdiction in which the Company engages in that business; provided that the
Company shall have no power to borrow money, to become liable for the
borrowings of any third party or to engage in any financial or other trade or
business. Specifically, the Company may invest in investment assets, such as
the Loan, but may not invest in assets which are likely to result in Company
liabilities, such as active business assets.
2.05 FOREIGN QUALIFICATION. Prior to the Company's conducting business
in any jurisdiction other than Delaware, the General Partner shall cause the
Company to comply, to the extent those matters are reasonably within the
control of the General Partner, with all requirements necessary to qualify the
Company as a foreign limited partnership (or a partnership in which the Limited
Partners have limited liability) in that jurisdiction. At the request of the
General Partner, each Partner shall execute, acknowledge, swear to and deliver
all certificates and other instruments conforming with this Agreement that are
necessary or appropriate to continue and terminate the Company as a limited
partnership under the law of the State of Delaware and to qualify, continue and
terminate the Company as a foreign limited partnership (or a partnership in
which the Limited Partners have limited liability) in all other jurisdictions
in which the Company may conduct business, and to this end the General Partner
may use the power of attorney described in Section 7.07.
2.06 TERM. The Company shall continue in existence until its business
and affairs are wound up following dissolution automatically at the close of
Company business on December 31, 2084, or such earlier time as this Agreement
may specify.
2.07 MERGER OR CONSOLIDATION. Except as otherwise provided in Section
3.06(f), the Company may merge or consolidate with or into another limited
partnership or other Entity, or enter into an agreement to do so, only with the
consent of the General Partner and the holders of 66-2/3% in liquidation
preference of the Preferred Securities.
ARTICLE III
ISSUANCE AND DISPOSITION OF INTERESTS
3.01 PARTNERS. (a) The General Partner and the Organizational Limited
Partner have previously formed the Company as a limited partnership pursuant to
the provisions of the Delaware Act and were admitted to the Company as a
general partner and a limited partner, respectively.
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(b) Without necessity for execution of this Agreement, upon receipt by
a Person of a Preferred Security Certificate and payment of the Purchase Price
for the Preferred Securities represented by such Preferred Security Certificate
in connection with the initial issuance by the Company of such Preferred
Securities, which shall be deemed to constitute a request by such Person that
the books and records of the Company reflect such Person's admission as a
Limited Partner, such Person shall be admitted to the Company as a Limited
Partner and shall become bound by this Agreement.
(c) At the Closing Time, the General Partner will pay to the Company
as a Capital Contribution an aggregate of $19,936.709 in cash, which amount is
equal to 21% of the total Capital Contributions to be made at the Closing Time,
including the Capital Contributions of the holders of Series A Preferred
Securities issued at the Closing Time, as provided in Section 4.01 hereof; and
each Person who acquires a Series A Preferred Security in connection with the
initial issuance by the Company of Series A Preferred Securities will pay to
the Company as a Capital Contribution cash in an amount equal to the Purchase
Price for such Series A Preferred Security. After the Closing Time, the
General Partner may issue no additional Limited Partner interests in the
Company other than Preferred Securities authorized as provided in Section 3.04
hereof and issued for cash paid to the Company as a Capital Contribution, and
upon each such issuance of additional Preferred Securities the General Partner
shall pay to the Company as a Capital Contribution cash in an amount equal to
21% of the sum of (i) the total amount paid to the Company as a Capital
Contribution for such additional Preferred Securities and (ii) such Capital
Contribution of the General Partner. The General Partner agrees that it will
take such action as is necessary, including the making of additional Capital
Contributions, to ensure that at all times at least 21% of the total value of
the Company and at least 21% of each item of capital, income, gain, loss,
deduction and credit of the Company will be attributable to its interest as
General Partner.
(d) The name and mailing address of each Partner and the amount paid
by such Partner to the Company as a Capital Contribution shall be listed on the
books and records of the Company. The General Partner shall be required to
update the books and records from time to time as necessary to accurately
reflect the information therein. A Series A Preferred Security holder's
interest in the Company shall be represented by the Preferred Security
Certificates held by such Series A Preferred Security holder. No Limited
Partner, including a Series A Preferred Security Holder, shall have an interest
in specific Company property.
3.02 REPRESENTATIONS AND WARRANTIES. Each of the General Partner and
the Organizational Partner represents and warrants to the Company and each
other Partner that (a) it is duly organized, validly existing and in good
standing under the law of the state of its incorporation and is duly qualified
and in good standing as a foreign corporation in the jurisdiction of its
principal place of business, (b) that it has full corporate power and authority
to enter into this Agreement and to perform its obligations hereunder, and all
necessary actions by its board of directors, shareholders and other Persons
necessary for the due authorization, execution, delivery and performance of
this Agreement by it have been duly taken, (c) that it has duly executed and
delivered this Agreement, and (d) that its
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authorization, execution, delivery and performance of this Agreement do not
conflict with any other agreement or arrangement to which it is a party or by
which it is bound.
3.03 ADDITIONAL PARTNERS. Additional Persons may be admitted to the
Company and new Partnership Interests issued to existing or new Partners only
in accordance with the provisions of this Article III. To be effective, any
such creation of Partnership Interests and admissions must be reflected in an
Action as provided in Section 3.04 hereof.
3.04 ISSUANCES OF PREFERRED SECURITIES. (a) The General Partner is
hereby authorized to cause the Company to issue, in addition to the Partnership
Interests issued pursuant to Section 3.01(a), Preferred Securities, in one or
more series, for any Company purpose, at any time or from time to time, for
such consideration and on such terms and conditions as shall be established by
the General Partner in its sole discretion, all without the approval of any
Limited Partners except as otherwise provided in this Agreement or any Action
creating any series of Preferred Securities. The General Partner shall have
sole discretion, subject to the guidelines set forth in this Section 3.04 and
the requirements of the Delaware Act, in determining the consideration and
terms and conditions with respect to any issuance of Preferred Securities.
(b) Notwithstanding the foregoing, the proceeds received by the
Company from the issuance of any series of Preferred Securities, together with
the proceeds of any Capital Contribution of the General Partner made at the
time of such issuance as required by Section 3.01(c) hereof, shall be loaned by
the Company:
(i) upon issuance of the Series A Preferred Securities to be
issued at the Closing Time, to Enron pursuant to the Loan Agreement; or
(ii) upon issuance of any series of Preferred Securities
issued after the Closing Time, either (x) to Enron pursuant to a loan
agreement containing terms and provisions similar to the Loan Agreement
and ranking pari passu with the Loan Agreement or (y) to an Affiliate
of Enron designated by it, provided that the obligations of such
Affiliate to repay such loan and interest thereon are guaranteed by
Enron under an agreement ranking pari passu with the Loan Agreement and
containing subordination provisions similar to the subordination
provisions of the Loan Agreement.
(c) Preferred Securities to be issued by the Company shall be issuable
from time to time in one or more series, with such designations, preferences
and relative, participating, optional or other special rights, powers and
duties as shall be fixed by the General Partner in the exercise of its sole
discretion (subject to the limitations herein and under Delaware law) and
reflected in a written action or actions approved by the General Partner (each,
an ``Action,'' each of which shall be deemed an amendment to this Agreement).
The Action with respect to the Series A Preferred Securities is set forth in
Article IV. Each Action shall provide for the issue of Preferred Securities of
a particular series and shall set forth, without limitation, (i) the
allocations of items of Company income, gain, loss, deduction and credit to
such series of Preferred Securities; (ii) the right of such series of Preferred
Securities to share in Company Dividends; (iii) the rights of such series of
Preferred
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Securities upon dissolution and liquidation of the Company; (iv) whether such
series of Preferred Securities is redeemable by the Company and, if so, the
price at which, and the terms and conditions upon which, such series of
Preferred Securities may be redeemed by the Company; (v) whether such series of
Preferred Securities is issued with the privilege of conversion and, if so, the
rate at which, and the terms and conditions upon which, such series of
Preferred Securities may be converted into any other series of Preferred
Securities or other property; (vi) the terms and conditions upon which such
series of Preferred Securities will be issued, evidenced by certificates and
assigned or transferred; and (vii) the right, if any, of such series of
Preferred Securities to vote on Company matters, including, without limitation,
matters relating to the relative rights, preferences and privileges of such
series. Without the consent of the holders of 66-2/3% in liquidation
preference of the Preferred Securities, however, the General Partner may not
authorize the issuance of any Preferred Securities or any other Limited Partner
interest in the Company, unless such interest is a series of Preferred
Securities that ranks pari passu with each other series of Preferred Securities
then outstanding with respect to participation in the profits and assets of the
Company, including the right to receive Dividends and the right to receive
payments out of the assets of the Company upon voluntary or involuntary
dissolution, winding up or termination of the Company. The General Partner may
execute, swear to, acknowledge, deliver, file and record whatever documents may
be required in connection with the issue from time to time of Preferred
Securities so ranking pari passu in one or more series as shall be necessary,
convenient or desirable to reflect the issue of such series. The General
Partner shall do all things it deems to be appropriate or necessary to comply
with the Act and is authorized and directed to do all things it deems to be
necessary or permissible in connection with any such future issuance, including
compliance with any statute, rule, regulation or guideline of any federal,
state or other governmental agency or any securities exchange. All Preferred
Securities shall rank senior to the General Partner's Partnership Interest with
respect to participation in the profits and assets of the Company, including
the right to receive distributions and the right to receive payments out of the
assets of the Company upon voluntary or involuntary dissolution, winding up or
termination of the Company. All Preferred Securities redeemed, purchased or
otherwise acquired by the Company (including Preferred Securities surrendered
for conversion or exchange) shall be cancelled.
3.05 NO PREEMPTIVE RIGHTS. No Person shall have any preemptive,
preferential or other similar right with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Partnership
Interests, whether unissued or hereafter created; (c) issuance of any
obligations, evidences of indebtedness or other securities of the Company
convertible into or exchangeable for, or carrying or accompanied by any rights
to receive, purchase or subscribe to, any such Partnership Interests; (d)
issuance of any right of subscription to or right to receive, or any warrant or
option for the purchase of, any such Partnership Interests; or (e) issuance or
sale of any other securities that may be issued or sold by the Company.
3.06 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a) The
General Partner shall cause to be kept on behalf of the Company a register in
which, subject to such reasonable regulations as it may prescribe and subject
to the provisions of Section 3.06(b),
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the General Partner will provide for the registration and transfer of Preferred
Securities. The General Partner shall have the right to appoint a Transfer
Agent for the purpose of registering Preferred Securities and transfers of such
Preferred Securities as herein provided, and the General Partner hereby
appoints itself as initial Transfer Agent. The Company shall not recognize
transfers of Preferred Security Certificates unless same are effected in the
manner described in this Section 3.06. Upon surrender for registration of
transfer of any Preferred Securities evidenced by a Preferred Security
Certificate, and subject to the provisions of Section 3.06(b), the Company
shall execute, and the Transfer Agent shall countersign (provided that no such
countersignature shall be required so long as the Company or the General
Partner is the Transfer Agent) and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the holder's
instructions, one or more new Preferred Security Certificates evidencing the
same aggregate number of Preferred Securities as was evidenced by the Preferred
Security Certificate so surrendered.
(b) The Company shall not recognize any transfer of Preferred
Securities until the Preferred Security Certificates evidencing such Preferred
Securities are surrendered for registration of transfer. No charge shall be
imposed by the Company for such transfer, provided, that, as a condition to the
issuance of any new Preferred Security Certificate under this Section 3.06, the
General Partner may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed with respect thereto.
(c) By transfer of a Preferred Security in accordance with this
Section 3.06, the transferor shall be deemed to have given the transferee the
right to seek admission as a Substituted Limited Partner, and each transferee
of a Preferred Security (including, without limitation, any nominee holder or
an agent acquiring such Preferred Security for the account of another Person)
shall become a Substituted Limited Partner with respect to the Preferred
Securities so transferred to such Person when any such admission is shown on
the books and records of the Transfer Agent.
(d) Preferred Securities may be transferred only in the manner
described in this Section 3.06. The transfer of any Preferred Securities and
the admission of any new Partner shall not constitute an amendment to this
Agreement.
(e) Each distribution in respect of Preferred Securities shall be paid
by the Company, directly or through the Transfer Agent or through any other
Person or agent, only to the Record Holders thereof as of the record date set
for the distribution. Such payment shall constitute full payment and
satisfaction of the Company's liability in respect of such payment, regardless
of any claim of any Person who may have an interest in such payment by reason
of an assignment or otherwise.
(f) The General Partner may not transfer all or any part of its
Partnership Interest to any Person without the prior consent of the holders of
66-2/3% in liquidation preference of the Preferred Securities; provided that
the General Partner may merge with or into another entity, or permit another
entity to merge with or into it, or sell, transfer or lease all or
substantially all of its assets to another entity, in each case without the
consent
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of the holders of Preferred Securities, if: (i) at such time no Event of
Default (as defined in the Loan Agreement) has occurred and is continuing, or
would occur as a result of such merger, sale, transfer or lease, (ii) Dividends
on Preferred Securities are not in arrears and (iii) the General Partner is the
survivor of such merger or the survivor of such merger or entity to which the
General Partner's assets are sold, transferred or leased is an entity organized
under the laws of the United States or any state thereof, assumes all of the
General Partner's obligations under this Agreement, the Loan Agreement and the
Guarantee (and similar agreements relating to any series of Preferred
Securities that may be issued after the Closing Time) and becomes the General
Partner.
3.07 BOOK ENTRY INTERESTS. Unless otherwise stated in the Action
creating a series of Preferred Securities, the Preferred Security Certificates,
on original issuance, will be issued in the form of one or more global
Preferred Security Certificate or Preferred Security Certificates representing
the Book Entry Interests, to be delivered to DTC, the initial Clearing Agency,
by, or on behalf of, the Company. Such Preferred Security Certificate or
Preferred Security Certificates shall initially be registered on the books and
records of the Company in the name of Cede & Co., the nominee of DTC, and no
Preferred Security Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Owner's interests in such
Preferred Security Certificate, except as provided in Section 3.10. Unless and
until definitive, fully registered Preferred Security Certificates (the
``Definitive Preferred Security Certificates'') have been issued to the
Preferred Security Owners pursuant to Section 3.10:
(i) The provisions of this Section 3.07 shall be in full
force and effect;
(ii) The Company and the General Partner shall be entitled to
deal with the Clearing Agency for all purposes of this Agreement
(including the payment of Dividends on the Preferred Security
Certificates and receiving approvals, votes or consents hereunder) as
the Preferred Security holder and the sole holder of the Preferred
Security Certificates and shall have no obligation to any Preferred
Security Owner;
(iii) To the extent that the provisions of this Section 3.07
conflict with any other provisions of this Agreement, the provisions of
this Section 3.07 shall control; and
(iv) The rights of the Preferred Security Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred Security
Owners and the Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants and receive and
transmit payments of Dividends on the Preferred Security Certificates
to such Clearing Agency Participants.
3.08 NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Preferred Security holders is required under this
Agreement, unless and until Definitive
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Preferred Security Certificates shall have been issued to the Preferred
Security Owners pursuant to Section 3.10, the General Partner shall give all
such notices and communications specified herein to be given to the Preferred
Security holders to the Clearing Agency and shall have no obligations to the
Preferred Security Owners.
3.09 APPOINTMENT OF SUCCESSOR CLEARING AGENCY. If any Clearing Agency
elects to discontinue its services as securities depository with respect to the
Preferred Securities, the General Partner may, in its sole discretion, appoint
a successor Clearing Agency with respect to the Preferred Securities.
3.10 DEFINITIVE PREFERRED SECURITY CERTIFICATES; APPOINTMENT OF PAYING
AGENT(S). If (i) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities or any series
thereof and a successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 3.09 or (ii) the Company elects to
terminate the book entry system through the Clearing Agency, then (a)
Definitive Preferred Security Certificates shall be prepared by the Company and
(b) the General Partner shall authorize one or more Persons (each, a "Paying
Agent") to pay Dividends, redemption payments or liquidation payments on
behalf of the Company with respect to the Preferred Securities or such series,
as applicable. Upon surrender of the global Preferred Security Certificate or
Preferred Security Certificates representing the Book Entry Interests by the
Clearing Agency, accompanied by registration instructions, the General Partner
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Owners in accordance with the instructions of the Clearing
Agency. Neither the General Partner nor the Company shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on such instructions. Any Person receiving a
Definitive Preferred Security Certificate in accordance with this Section 3.10
shall be admitted to the Company as a Limited Partner upon issuance of such
Definitive Preferred Security Certificate and shall be registered on the books
and records of the Company as a Preferred Security holder. The Clearing Agency
or the nominee of the Clearing Agency, as the case may be, shall cease to be a
Limited Partner under this Section 3.10 at the time that at least one
additional Person is admitted to the Company as a Limited Partner in accordance
with this Section 3.10. The Definitive Preferred Security Certificates shall
be printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the General Partner, as evidenced by its execution
thereof.
ARTICLE IV
ACTION AUTHORIZING SERIES A PREFERRED SECURITIES
4.01 AUTHORIZATION FOR ISSUANCE. A total of 3,000,000 of Series A
Preferred Securities are hereby authorized for issuance at the Closing Time
pursuant to the terms of the Underwriting Agreement. At the Closing Time, the
Company shall issue such Series A Preferred Securities upon receipt of the
Purchase Price as provided in the Underwriting Agreement. The designations,
preferences and relative, participating, optional or other
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special rights, powers and duties relating to the Series A Preferred
Securities are as set forth in this Article IV.
4.02 DIVIDENDS. (a) Series A Dividends are cumulative, accrue from
August 3, 1994 and are payable monthly in arrears on the last day of each
calendar month of each year, commencing August 31, 1994, out of moneys held by
the Company and legally available therefor, except as otherwise provided
herein. The Series A Dividends are fixed at a rate per annum of 9% of $25 per
Series A Preferred Security. Series A Dividends in arrears for more than one
month will accumulate additional Series A Dividends thereon at the rate per
annum of 9% thereof. The amount of Series A Dividends payable for any period
will be computed on the basis of twelve 30-day months and a 360-day year and,
for any period shorter than a full monthly dividend period, will be computed on
the basis of the actual number of days elapsed in such period. Series A
Dividends must be paid on the dates payable to the extent that the General
Partner reasonably anticipates that at the time of payment the Company will
have, and must be paid by the Company to the extent that at the time of
proposed payment it has, (x) funds legally available for the payment of such
Series A Dividends and (y) cash on hand sufficient to permit such payments.
(b) Series A Dividends will be payable to the record holders of Series
A Preferred Securities as they appear on the security register maintained by
the Transfer Agent on the relevant record dates, which will be one Business Day
prior to the relevant payment dates. In the event that any date on which
Series A Dividends are payable is not a Business Day, then payment of the
Series A Dividends payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
4.03 PROHIBITION ON PAYMENTS IN CERTAIN EVENTS. If Series A Dividends
have not been paid in full, the Company shall not:
(a) pay, or set aside for payment, any Dividends on any other
series of Preferred Securities, unless the amount of any Dividends on
any other series of Preferred Securities is paid on such other series
of Preferred Securities and the Series A Preferred Securities on a
pro rata basis on the date such Dividends are paid on such other
series of Preferred Securities, so that
(i) the aggregate amount of Series A Dividends paid on
the Series A Preferred Securities bears to the aggregate amount
of Dividends paid on such other series of Preferred Securities
the same ratio as
(ii) the aggregate of all accrued and unpaid Series A
Dividends in respect of the Series A Preferred Securities bears
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to the aggregate of all accrued and unpaid Dividends in
respect of such other series of Preferred Securities; or
(b) redeem, purchase or otherwise acquire any Preferred
Securities other than the redemption of all outstanding Series A
Preferred Securities at the Redemption Price (as hereinafter defined);
until, in each case, such time as all accrued and unpaid Series A Dividends
shall have been paid in full for all dividend periods terminating on or prior
to, in the case of clause (a), such payment and, in the case of clause (b), the
date of such redemption, purchase or acquisition.
4.04 REDEMPTION. (a) The Series A Preferred Securities are redeemable,
at the option of the Company, in whole or in part from time to time, on or
after August 31, 1999, upon not less than 30 nor more than 60 days' notice, at
the redemption price of $25 per Series A Preferred Security, plus accumulated
and unpaid Series A Dividends to the date fixed for redemption (the
"Redemption Price"). In the event that fewer than all the outstanding Series
A Preferred Securities are to be so redeemed, the Preferred Securities to be
redeemed will be selected as described under "Book-Entry-Only Issuance--The
Depository Trust Company" in the Final Supplemented Prospectus. The Company
may not redeem fewer than all of the outstanding Series A Preferred Securities
unless all accumulated and unpaid Series A Dividends have been paid on all
Series A Preferred Securities for all monthly dividend periods terminating on
or prior to the date of redemption. If a partial redemption would result in a
delisting of the Series A Preferred Securities on any national securities
exchange on which such securities are listed, the Company may only redeem the
Series A Preferred Securities in whole.
(b) If at any time Enron repays or prepays the Loan, the proceeds from
such repayment will be applied to redeem the Series A Preferred Securities at
the Redemption Price upon not less than 30 nor more than 60 days' notice,
provided that no such redemption shall occur if such amounts are reloaned to
Enron in accordance with the following sentence. Such amounts may be reloaned
to Enron, and not used for such redemption, if at the time of each such loan,
and as determined in the judgment of the General Partner and its financial
advisor, (i) Enron is not in bankruptcy, (ii) Enron is not in default on any
loan pertaining to the Series A Preferred Securities, (iii) Enron has made
timely payments on the repaid Loan for the immediately preceding 18 months,
(iv) the Company is not in arrears on payments of Series A Dividends on the
Series A Preferred Securities, (v) Enron is expected to be able to make timely
payment of principal and interest on such loan, (vi) such loan is being made on
terms, and under circumstances, that are consistent with those which a lender
would require for a loan to an unrelated party, (vii) such loan is being made
at a rate sufficient to provide payments equal to or greater than the amount of
Series A Dividends that accrue on the Series A Preferred Securities, (viii) the
senior unsecured long-term debt of Enron is rated BBB- or better by Standard & Poor's Corporation or "Baa3" or better by Moody's Investors Service, Inc. or
the equivalent by any other nationally recognized statistical rating
organization, (ix) such loan is being made for a term that is consistent with
market circumstances and Enron's financial condition, (x) the term
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of such loan is no more than 30 years, and (xi) the final maturity of such
loan is not later than the 49th anniversary of the issuance of the Series A
Preferred Securities.
(c) In the event that, after the Closing Time, legislation is enacted
or existing law is modified or interpreted in a manner that causes the Company
to be treated as an association taxable as a corporation or otherwise taxable
as an entity for federal or state income tax purposes with respect to its
operations for any period prior to August 31, 1999, the Company, subject to the
consent of Enron, may redeem all, but not less than all, of the Series A
Preferred Securities upon not less than 30 nor more than 60 days' notice at the
Redemption Price, even if such redemption occurs prior to August 31, 1999. For
purposes of the foregoing, such right to redeem shall exist in the event that
the General Partner is advised by independent legal counsel that a substantial
risk exists that the Company will be so treated or taxed as a result of such
legislation, modification or interpretation that occurred after the Closing
Time. If the Company exercises its redemption right pursuant to this Section
4.04(c), the date fixed for redemption shall be no earlier than one Business
Day prior to the first day of the earliest period with respect to which Company
may be so treated as an association taxable as a corporation or otherwise
taxable as an entity for federal or state income tax purposes.
(d) If the Company gives a notice of redemption in respect of Series A
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York time, on the redemption date, the Company will irrevocably pay to the
Record Holders of the Series A Preferred Securities funds sufficient to pay the
applicable Redemption Price or will deposit such funds with the Clearing Agency
(or if no Person acts as Clearing Agency, a bank or trust company having
capital, surplus and undivided profits of at least $100 million) for the
benefit of such Record Holders. If notice of redemption shall have been given
and funds deposited as required, then upon the date of such deposit all rights
of holders of such Series A Preferred Securities so called for redemption will
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price, but without interest. In the event that any date fixed
for redemption of Series A Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Series A Preferred Securities is improperly withheld or refused and
not paid either by the Company or by Enron pursuant to the Guarantee, Series A
Dividends on such Preferred Securities will continue to accrue at the then
applicable rate, from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
4.05 LIQUIDATION, DISSOLUTION OR WINDING UP. (a) In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
the holders of the Series A Preferred Securities at the time outstanding will
be entitled to receive, out of the assets of the Company available for
distribution to Partners after satisfaction of liabilities to creditors as
required by the Delaware Act, an amount equal to $25 per Series A
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Preferred Security and all accumulated and unpaid Series A Dividends to the
date of payment (the "Liquidation Distribution").
(b) If, upon any such liquidation, dissolution or winding up, the
Liquidation Distribution and amounts payable in such event to holders of any
other series of Preferred Securities can be paid only in part because the
Company has insufficient assets available to pay in full the aggregate
Liquidation Distribution and the aggregate maximum liquidation distributions on
any other series of Preferred Securities, then the amounts payable by the
Company on the Series A Preferred Securities and on such other series of
Preferred Securities shall be paid on a pro rata basis, so that
(i) the aggregate amount paid in respect of the Liquidation
Distribution bears to the aggregate amount paid as liquidation
distributions on the other series of Preferred Securities the same
ratio as
(ii) the aggregate Liquidation Distribution bears to the
aggregate maximum liquidation distributions on the other series of
Preferred Securities.
4.06 RIGHT OF HOLDERS TO APPOINT TRUSTEE. If (i) the Company fails to
pay Series A Dividends in full on the Series A Preferred Securities for 18
consecutive monthly dividend periods; (ii) an Event of Default (as defined in
the Loan Agreement relating to the Loan) occurs and is continuing on the Loan;
(iii) Enron is in default on any of its payments or other obligations under the
Guarantee, then the holders of a majority in liquidation preference of the
outstanding Series A Preferred Securities, together with the holders of any
other series of Preferred Securities outstanding having the right to vote for
the appointment of a trustee in such event, acting as a single class, shall be
entitled to appoint and authorize a trustee to enforce the Company's creditor
rights under the Loan against Enron, enforce the obligations undertaken by
Enron under the Guarantee and Section 5.03 hereof, enforce any similar
obligations of Enron relating to any such other series and pay Series A
Dividends and distributions on any such other series to the extent the Company
has funds available to pay such amounts. For purposes of determining whether
the Company has failed to pay Series A Dividends in full for 18 consecutive
monthly Series A Dividends periods, Series A Dividends shall be deemed to
remain in arrears, notwithstanding any payments in respect thereof, until full
cumulative Series A Dividends have been or contemporaneously are paid with
respect to all monthly Series A Dividend periods terminating on or prior to the
date of payment of such full cumulative Series A Dividends. Not later than 30
days after such right to appoint a trustee arises, the General Partner will
convene a general meeting for the above purpose. If the General Partner fails
to convene such meeting within such 30-day period, the holders of 10% in
liquidation preference of the outstanding Preferred Securities will be entitled
to convene such meeting. The provisions of the Partnership Agreement relating
to the convening and conduct of the general meetings of the partners will apply
with respect to any such meeting. Any trustee so appointed (i) shall not be
admitted as a Partner in the Company or otherwise be deemed a Partner in the
Company, (ii) shall have no liabilities for the debts, liabilities or
obligations of the Company, (iii) shall vacate office immediately if the
Company (or Enron pursuant to the Guarantee) shall have paid in full all
accumulated and unpaid Series A Dividends and
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distributions on any such other series or such default or breach by Enron, as
the case may be, shall have been cured, and the General Partner will continue
the business of the Company without dissolution.
4.07 VOTING. (a) If any amendment to this Agreement is proposed for
adoption by the Partners of the Company providing for, or the General Partner
otherwise proposes to effect, (x) any variation or abrogation of the rights,
preferences and privileges of the Series A Preferred Securities, whether by way
of amendment to this Agreement or otherwise (including, without limitation, the
authorization or issuance of any securities of the Company ranking, as to
participation in the profits or assets of the Company, senior or junior to the
Series A Preferred Securities) or (y) the liquidation, dissolution or winding
up of the Company, then the holders of outstanding Series A Preferred
Securities will be entitled to vote on such proposal as a class with all other
holders of any series of Preferred Securities similarly affected, and such
action shall not be effective except with the approval of the holders of
66-2/3% in liquidation preference of the Preferred Securities; provided,
however, that no such approval shall be required if the liquidation,
dissolution or winding up of the Company is proposed or initiated upon the
initiation of proceedings, or after proceedings have been initiated, for the
liquidation, dissolution or winding up of Enron.
(b) The rights attached to the Series A Preferred Securities will be
deemed not to be varied by the creation or issue of, and no vote will be
required for the creation or issue of, any series of Preferred Securities
ranking pari passu with the Series A Preferred Securities as provided in
Section 3.04. Holders of Series A Preferred Securities will have no preemptive
rights.
ARTICLE V
CAPITAL CONTRIBUTIONS
5.01 CAPITAL CONTRIBUTIONS. Except as otherwise provided in this
Agreement, a Partner shall not have a right to make any Capital Contributions
to the Company. No Capital Contribution may be made other than in cash.
5.02 RETURN OF CONTRIBUTIONS. A Partner is not entitled to the return
of any part of its Capital Contributions or to be paid interest in respect of
either its capital account or its Capital Contributions. An unrepaid Capital
Contribution is not a liability of the Company or of any Partner. A Partner is
not required to contribute or to lend any cash or property to the Company to
enable the Company to return any Partner's Capital Contributions; provided that
nothing herein shall be deemed to affect the obligations of Enron in Section
5.03 hereof.
5.03 EXPENSE REIMBURSEMENT. (a) Subject to the terms and conditions
hereof, Enron hereby irrevocably and unconditionally guarantees to each person
or entity to whom the Company is now or hereafter becomes indebted or liable
(the "Beneficiaries") (other than obligations to holders of the Preferred
Securities in such holders' capacities as holders of such Preferred Securities;
such obligations being separately guaranteed to the extent set
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forth in the Guarantee), the full payment, when and as due, of any and all such
indebtedness and liabilities of the Company to such Beneficiaries
(collectively, the "Obligations"). The provisions of this Section 5.03 are
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.
(b) The provisions of this Section 5.03 will remain in effect until
such time as all of the Preferred Securities issued by the Company shall have
been redeemed in accordance with their terms or shall have been purchased and
cancelled by the Company or Enron; provided, however, that at any time after
the Preferred Securities shall have been so redeemed or purchased and
cancelled, Enron may cancel this Section 5.03 upon 30 days' notice in writing
to the Company. Except as provided in the preceding sentence, this Section
5.03 is continuing, irrevocable, unconditional and absolute.
(c) Enron hereby waives notice of acceptance of this Section 5.03 and
of any Obligation to which it applies or may apply, and Enron hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
(d) The obligations, covenants, agreements and duties of Enron under
this Section 5.03 shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(i) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Company of any express or
implied agreement, covenant, term or condition relating to the
Obligations to be performed or observed by the Company;
(ii) the extension of time for the payment by the Company of
all or any portion of the Obligations or for the performance of any
other obligation under, arising out of, or in connection with, the
Obligations;
(iii) any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of the Company granting
indulgence or extension of any kind, except that nothing herein shall
require payment by Enron or the Company to any third party of any
obligation barred by any applicable statute of limitations;
(iv) 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 Company or any of the assets of the Company; or
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(v) the settlement or compromise of any Obligation guaranteed
hereby or any obligation hereby incurred.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, Enron with respect to the happening of any of the foregoing.
(e) A Beneficiary may enforce the provisions of this Section 5.03
directly against Enron, and Enron waives any right or remedy to require that
any action be brought against the Company or any other person or entity before
proceeding against Enron.
5.04 CAPITAL ACCOUNTS. A capital account shall be established and
maintained for each Partner in compliance with Treasury Regulation
Section 1.704-1(b)(2)(iv).
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.01 ALLOCATIONS. Except as provided in Section 6.02,
(a) the Company's Net Income for each calendar month shall be
allocated as follows:
(i) First, to the Record Holders of each series of
Preferred Securities as of the record date in such calendar
month for the payment of Dividends on such series of Preferred
Securities in an amount equal to the excess of (x) all
Dividends accrued on such series of Preferred Securities (in
accordance with the Action creating such series) from their
date of issuance through and including the close of such
calendar month over (y) the amount of Net Income allocated to
the Record Holders of such series of Preferred Securities
pursuant to this Section 6.01(a)(i) in all prior calendar
months; amounts allocated to all Record Holders of any series
of Preferred Securities shall be allocated among such Record
Holders in proportion to the number of Preferred Securities of
such series held by such Record Holders; and
(ii) All remaining Net Income shall be allocated to the
General Partner.
(b) The Company's Net Loss for any fiscal period shall be
allocated solely to the General Partner.
6.02 OTHER ALLOCATION PROVISIONS. (a) For purposes of determining
the profits, losses or any other items allocable to any period, profits, losses
and any such other items shall be determined on a daily, monthly or other
basis, as determined by the General
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Partner using any method that is permissible under Section 706 of the Code and
Treasury Regulations thereunder.
(b) Notwithstanding anything to the contrary that may be expressed or
implied in this Article VI, the interest of the General Partner in each item of
income, gain, loss, deduction and credit will be equal to at least 1%
of each such item.
(c) All items of income, gain, loss, deduction and credit allocable to
any Partnership Interest that may have been transferred shall be allocated
between the transferor and the transferee based on the portion of the calendar
year during which each was recognized as owning that Partnership Interest,
without regard to the results of Company operations during any particular
portion of that calendar year and without regard to whether cash distributions
were made to the transferor or the transferee during that calendar year;
provided, however, that this allocation must be made in accordance with a
method permissible under Section 706 of the Code and the Treasury Regulations
thereunder.
6.03 ALLOCATIONS FOR INCOME TAX PURPOSES. The income, gains, losses,
deductions and credits of the Company shall be allocated in the same manner as
the items entering into the computation of Net Income and Net Loss were
allocated under Sections 6.01 and 6.02; provided, however, that solely for
federal, state and local income and franchise tax purposes and not for book or
capital account purposes, income, gain, loss and deduction with respect to any
property properly carried on the Company's books at a value other than the tax
basis of such property shall be allocated in a manner determined in the General
Partner's discretion, so as to take into account (consistently with Code
Section 704(c) principles) the difference between such property's book value
and its tax basis.
6.04 WITHHOLDING. The Company shall comply with withholding
requirements under federal, state and local law and shall remit amounts
withheld to and file required forms with applicable jurisdictions. To the
extent that the Company is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Partner, the
amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Partner. In the event of any claimed over-withholding,
Partners shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual distributions,
the Company may reduce subsequent distributions by the amount of such
withholding. Each Partner agrees to furnish the Company with any
representations and forms as shall reasonably be requested by the Company to
assist it in determining the extent of, and in fulfilling, its withholding
obligations.
6.05 DISTRIBUTIONS. Limited Partners shall receive periodic Dividends,
if any, redemption payments and liquidation distributions in accordance with
the applicable terms of the Preferred Securities. Subject to the rights of the
holders of Preferred Securities, all remaining cash shall be distributed to the
General Partner at such time as the General Partner shall determine.
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ARTICLE VII
MANAGEMENT AND OPERATION
7.01 MANAGEMENT OF COMPANY AFFAIRS. (a) Except for situations in
which the consent of other Partners is expressly required by this Agreement or
by nonwaivable provisions of applicable law, the General Partner shall have
full, complete and exclusive authority to manage and control the business,
affairs and properties of the Company, to make all decisions regarding those
matters and to perform any and all other acts or activities customary or
incident to the management of the Company's business. The General Partner may
make all decisions and take all actions for the Company not otherwise provided
for in this Agreement, including, without limitation, the following:
(i) entering into, making and performing contracts,
agreements and other undertakings binding the Company that may be
necessary, appropriate or advisable in furtherance of the purposes of
the Company and making all decisions and waivers thereunder;
(ii) opening and maintaining bank and investment accounts and
arrangements, drawing checks and other orders for the payment of money
and designating individuals with authority to sign or give instructions
with respect to those accounts and arrangements;
(iii) maintaining the assets of the Company in good order;
(iv) collecting sums due the Company;
(v) to the extent that funds of the Company are available,
paying debts and obligations of the Company;
(vi) selecting, removing and changing the authority and
responsibility of lawyers, accountants and other advisers and
consultants; and
(vii) making all decisions and exercising all rights for the
General Partner under other provisions of this Agreement.
(b) Notwithstanding the provisions of Section 7.01(a), the General
Partner may not cause the Company to do any of the following without the
consent of the holders of a 66-2/3% in liquidation preference of the Preferred
Securities:
(i) engage in any business other than those permitted as
described in Section 2.04; and
(ii) merge, consolidate or combine the Company with or into
any other Entity, except as otherwise provided in Section 3.06(f).
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(c) No Partner (other than the General Partner) has the authority or
power to act for or on behalf of the Company, to do any act that would be
binding on the Company or to incur any expenditures on behalf of the Company.
(d) Any Person dealing with the Company, other than a Partner, may
rely on the authority of the General Partner in taking any action in the name
of the Company without inquiry into the provisions of this Agreement or
compliance herewith, regardless of whether that action actually is taken in
accordance with the provisions of this Agreement.
7.02 COMPENSATION. The General Partner is not entitled to compensation
for its services as General Partner.
7.03 EXCULPATION. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Company or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on
behalf of the Company and in a manner reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this 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 gross
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company 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 Company, 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 Partners might properly be paid.
7.04 FIDUCIARY DUTY. (a) To the extent, that at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to any other Covered Person, an Indemnified
Person acting under this Agreement shall not be liable to the Company or to any
other Covered Person for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of an Indemnified Person otherwise existing at law
or in equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever a
conflict of interest exists or arises between Covered Persons, or (ii) whenever
this Agreement or any other agreement contemplated herein or therein provides
that an Indemnified Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Company or any Partner, the Indemnified
Person shall resolve such conflict of interest, taking such action or providing
such terms, considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement, transaction or
situation and the
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benefits and burdens relating to such interests, any customary or accepted
industry practices and any applicable generally accepted accounting practices
or principles. In the absence of bad faith by the Indemnified Person, the
resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Agreement or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is permitted or
required to make a decision (i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to consider only
such interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Company or any other Person, or (ii) in its "good
faith" or under another express standard, the Indemnified Person shall act
under such express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
7.05 INDEMNIFICATION. (a) To the fullest extent permitted by
applicable law, the Company 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 on behalf of the Company and in a manner
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this 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 gross negligence or willful misconduct
with respect to such acts or omissions; provided, however, that any indemnity
under this Section 7.05 shall be provided out of and to the extent of Company
assets only, and no Covered Person shall have any personal liability on account
thereof.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Company prior to the final disposition to such claim, demand, action,
suit or proceeding upon receipt by the Company of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as authorized in
Section 7.05(a).
7.06 OUTSIDE BUSINESSES. Any Partner or Affiliate thereof may engage
in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Company, and the Company and the Partners shall have no rights
by virtue of this Agreement in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Company, shall not be deemed wrongful or
improper. No Partner or Affiliate thereof shall be obligated to present any
particular investment opportunity to the Company even if such opportunity is of
a character that, if presented to the Company, could be taken by the Company,
and any Partner or Affiliate
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thereof shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
opportunity.
7.07 POWER OF ATTORNEY. Each Partner appoints the General Partner (and
any liquidator appointed pursuant to Section 12.02) as that Partner's
attorney-in-fact for the purpose of executing, swearing to, acknowledging and
delivering all certificates, documents and other instruments as may be
necessary, appropriate or advisable in the judgment of the General Partner (or
the liquidator) in furtherance of the business of the Company or complying with
applicable law, including, without limitation, filings of the type described in
Section 2.05. This power of attorney is irrevocable and is coupled with an
interest. On request by the General Partner (or the liquidator), a Partner
shall confirm its grant of this power of attorney or any use of it by the
General Partner (or the liquidator) and shall execute, swear to, acknowledge
and deliver any such certificate, document or other instrument.
ARTICLE VIII
RIGHTS OF OTHER PARTNERS
8.01 INFORMATION. In addition to the other rights set forth in this
Agreement, each Partner is entitled to all information to which that Partner is
entitled to have access pursuant to applicable law.
8.02 WITHDRAWAL. A Limited Partner does not have the right or power to
withdraw from the Company as a limited partner.
8.03 CONSENTS AND APPROVALS. (a) Subject to the provisions of Section
7.03(a) with respect to the General Partner in its capacity as such, a Partner
may grant or withhold its consent or vote its interest in its sole discretion,
without regard to the interests of the Company or any other Partner.
(b) In any request for consent or approval from another Partner, the
General Partner may specify a response period, ending no earlier than the 20th
Business Day and no later than the 60th Business Day following the date on
which the Partner whose consent or approval is given notice of the request as
described in Section 13.02.
8.04 MEETINGS. The General Partner at any time may call a meeting of
the Partners to transact business that the Partners may conduct as provided in
this Agreement. The call must be made by notice to all other Partners on or
before the 20th Business Day prior to the date of the meeting specifying the
location and the time and stating the business to be transacted at the meeting.
Any required consent or approval of holders of Series A Preferred Securities
may be given by vote at a separate meeting of such holders convened for such
purpose, at a general meeting of Partners or pursuant to written consent. The
Company will cause a notice of any meeting at which holders of the Series A
Preferred Securities are entitled to vote, or of any matter upon which action
by written consent of such holders is to be taken, to be mailed to each holder
of record of Series A Preferred Securities. Each such
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notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any action
proposed for adoption at such meeting on which such holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents. Notwithstanding that
holders of Series A Preferred Securities are entitled to vote or consent under
any of the circumstances provided herein, any of the Series A Preferred
Securities (and any other series of Preferred Securities entitled to vote or
consent with the holders of the Series A Preferred Securities, voting or
consenting as a single class) that are owned by Enron or any entity owned more
than 50% by Enron, either directly or indirectly, shall not be entitled to
vote or consent and shall, for the purposes of such vote or consent, be treated
as if they were not outstanding.
ARTICLE IX
TAXES
9.01 TAX RETURNS. The General Partner shall cause to be prepared and
filed all necessary federal and state income tax returns for the Company,
including making the elections described in Section 9.02. Each Partner shall
furnish to the General Partner all pertinent information in its possession
relating to Company operations that is necessary to enable the Company's income
tax returns to be prepared and filed.
9.02 TAX ELECTIONS. The Company shall make the following elections on
the appropriate tax returns:
(a) to adopt the calendar year as the Company's fiscal year;
(b) to adopt the accrual method of accounting and to keep the
Company's books and records on the accrual method; and
(c) any other election the General Partner may deem
appropriate and in the best interests of the Partners.
Neither the Company nor any Partner may make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law.
9.03 TAX MATTERS PARTNER. The General Partner shall be the "tax
matters partner" of the Company pursuant to Section 6231(a)(7) of the Code.
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ARTICLE X
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
10.01 MAINTENANCE OF BOOKS. The books of account for the Company
shall be maintained on an accrual basis in accordance with the terms of this
Agreement, except that the capital accounts of the Partners shall be maintained
in accordance with Section 5.04. The calendar year shall be the accounting
year of the Company.
10.02 REPORTS AND OTHER INFORMATION. The General Partner shall
furnish such reports and other information as the Partners may agree from time
to time or as shall be required pursuant to any Action.
10.03 ACCOUNTING PRINCIPLES. All accounting of the Company (and all
other accounting done pursuant to this Agreement) shall be done in accordance
with generally accepted accounting principles at the time in effect, to the
extent applicable, except where generally accepted accounting principles are
inconsistent with the requirements of this Agreement.
10.04 ACCOUNTS. The General Partner shall establish and maintain one
or more separate bank and investment accounts and arrangements for Company
funds in the Company name with financial institutions and firms that the
General Partner determines.
ARTICLE XI
WITHDRAWAL AND REMOVAL
11.01 WITHDRAWAL. (a) Except as otherwise provided in Article IV or
in an Action or other amendment to this Agreement providing for the issuance of
Preferred Securities or any series thereof, the General Partner may in its sole
discretion at any time withdraw from the Company as a general partner within
the meaning of Section 17-602(a) of the Act, except that the General Partner
agrees not to withdraw from the Company as a general partner prior to September
1, 1999. The General Partner shall be deemed to have withdrawn from the
Company upon the occurrence of any one of the following events (each such event
herein referred to as an "Event of Withdrawal");
(i) the General Partner voluntarily withdraws from the
Company by giving written notice to the other Partners;
(ii) the General Partner is removed pursuant to Section 11.02;
(iii) the General Partner (A) makes a general assignment for
the benefit of creditors; (B) files a voluntary bankruptcy petition;
(C) files a petition or answer seeking for itself a reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any law; (D) files an answer or other pleading
admitting or failing to contest the
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material allegations of a petition filed against the General Partner
in a proceeding of the type described in clauses (A)-(C) of this
Section 11.01 (a)(iii); or (E) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the General
Partner or of all or any substantial part of its properties;
(iv) a final and non-appealable judgment is entered by a court
with appropriate jurisdiction ruling that the General Partner is
bankrupt or insolvent or a final and non-appealable order for relief is
entered by a court with appropriate jurisdiction against the General
Partner, in each case under any federal or state bankruptcy or
insolvency laws as now or hereafter in effect; or
(v) a certificate of dissolution or its equivalent is filed
for the General Partner, or 90 days expire after the date of notice to
the General Partner of revocation of its charter without a
reinstatement of its charter, under the laws of its state of
incorporation.
If an Event of Withdrawal specified in Section 11.01(a)(iii), (iv) or (v)
occurs, the withdrawing General Partner shall give notice to the Limited
Partners within 30 days after such occurrence. The Partners hereby agree that
only the Events of Withdrawal described in this Section 11.01 shall result in
the withdrawal of the General Partner from the Company.
(b) Except as otherwise provided in any Action providing for the
issuance of any series of Preferred Securities, withdrawal of the General
Partner from the Company upon the occurrence of an Event of Withdrawal shall
not constitute a breach of this Agreement except in the case of an Event of
Withdrawal referred to in Section 11.01(a)(i) prior to September 1, 1999,
provided, that, in the case of an Event of Withdrawal referred to in Section
11.01(a)(i) on or after September 1, 1999, prior to the effective date of such
withdrawal the General Partner delivers to the Company an opinion of counsel
("Withdrawal Opinion of Counsel") that such withdrawal (following the
selection of the successor General Partner) would not result in the loss of the
limited liability of any Limited Partner or cause the Company to be treated as
an association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes. If the General Partner gives a notice of
withdrawal pursuant to Section 11.01(a)(i) or an Event of Withdrawal of the
type described in Sections 11.01(a)(iii)-(v) occurs, holders of at least a
majority in liquidation preference of the of the Preferred Securities and
Sharing Ratio of the Preferred Securities (excluding for purposes of such
determination Preferred Securities owned by the General Partner and its
Affiliates) may, prior to the effective date of such withdrawal, elect a
successor General Partner. If, prior to the effective date of the General
Partner's withdrawal, a successor is not selected by the holders of Preferred
Securities as provided herein or the Company does not receive a Withdrawal
Opinion of Counsel, the Company shall be dissolved in accordance with Article
XII. A successor General Partner approved pursuant to Section 11.01 or 11.02
shall be admitted to the Company as the General Partner, effective immediately
prior to the withdrawal or removal of the General Partner pursuant to
Section 11.01 or 11.02; provided, however, that no such successor shall be
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admitted to the Company until such successor has executed and delivered
such other documents or instruments as may be required to effect such
admission. Any such successor shall, subject to the terms hereof, carry on the
business of the Company without dissolution.
(c) A Limited Partner does not have the right or power to withdraw
from the Company as a limited partner, provided that upon issuance of Series A
Preferred Securities at the Closing Time, the Organizational Limited Partner
shall withdraw as a Limited Partner and, in connection therewith, shall be
entitled to the return of its Capital Contributions, if any.
11.02 REMOVAL OF GENERAL PARTNER. The General Partner may be removed
only if and to the extent provided for in any Action providing for the terms of
the Preferred Securities or any series thereof. Unless otherwise provided in
any such amendment to this Agreement, any such action for removal of the
General Partner must also provide for the election of a successor General
Partner by holders of at least a majority in liquidation preference of the
Preferred Securities and Sharing Ratio of the Preferred Securities (excluding
for purposes of such determination Preferred Securities owned by the General
Partner and its Affiliates). Such removal shall be effective immediately
following the admission of a successor General Partner. The right of the
holders of Preferred Securities to remove the General Partner shall not exist
or be exercised unless the Company has received an opinion opining as to the
matters covered by a Withdrawal Opinion of Counsel.
11.03 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER.
(a) In the event of withdrawal or removal of the General Partner, if a
successor General Partner is elected in accordance with the terms of Section
11.01 or 11.02, the withdrawing or removed General Partner (the "Departing
Partner") shall, at its option exercisable prior to the effective date of the
departure of such Departing Partner, promptly receive from its successor in
exchange for its Partnership Interest as a general partner in the Company an
amount in cash equal to the fair market value of such Partnership Interest,
such amount to be determined and payable as of the effective date of its
departure. Subject to Section 11.03(b), the Departing Partner shall, as of the
effective date of its departure, cease to share in any allocations or
distributions with respect to its Partnership Interest as a general partner in
the Company and Company income, gain, loss, deduction and credit will be
prorated and allocated as set forth in Section 6.02.
For purposes of this Section 11.03(a), the fair market value of the
Departing Partner's Partnership Interest shall be determined by agreement
between the Departing Partner and its successor or, failing agreement within 30
days after the effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert selected by the
Departing Partner and its successor, which, in turn, may rely on other experts
and the determination of which shall be conclusive as to such matter. If such
parties cannot agree upon one independent investment banking firm or other
independent expert within 45 days after the effective date of such departure,
then the Departing Partner shall designate an independent investment banking
firm or other independent expert, the Departing Partner's successor shall
designate an independent
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investment banking firm or other independent expert, and such firms or experts
shall mutually select a third independent investment banking firm or
independent expert, which shall determine the fair market value of the
Partnership Interest. In making its determination, such independent
investment banking firm or other independent expert shall consider the then
current trading price of Preferred Securities on any national securities
exchange on which Preferred Securities are then listed, the value of the
Company's assets, the rights and obligations of the General Partner and other
factors it may deem relevant.
(b) Any successor General Partner shall indemnify the Departing
Partner as to all debts and liabilities of the Company arising on or after the
date on which the Departing Partner withdraws or is removed.
ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION
12.01 DISSOLUTION. The Company shall dissolve and its affairs shall
be wound up on the first to occur of the following (each a "Liquidation
Event"):
(a) the consent of the General Partner and the holders of a
majority in liquidation preference of the Preferred Securities;
(b) the date set forth in Section 2.06;
(c) the occurrence of an Event of Withdrawal specified in
Section 11.01(a)(iii), (iv) or (v);
(d) the occurrence of an Event of Withdrawal specified in
Section 11.01(a)(i) or (ii) if, prior to the effective date of the
General Partner's withdrawal or removal, a successor is not selected by
the holders of Preferred Securities as provided herein or the Company
does not receive a Withdrawal Opinion of Counsel;
(e) any other event causing dissolution as described in
Section 17-801 of the Act; or.
(f) any other event specified as a Liquidation Event in any
amendment to this Agreement providing for the issuance of Preferred
Securities or any series thereof.
12.02 LIQUIDATION AND TERMINATION. On dissolution of the Company, the
General Partner shall act as liquidator or may appoint one or more other
Persons as liquidator; provided, however, that if the Company dissolves on
account of an event of the type described in Section 17-402(a)(4)-(10) of the
Act with respect to the General Partner, the liquidator shall be one or more
Persons selected by the holders of a majority in liquidation preference of the
Preferred Securities. The liquidator shall proceed diligently to wind up the
affairs of the Company and make final distributions as provided herein. The
costs of
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liquidation shall be borne as a Company expense. Until final distribution,
the liquidator shall continue to operate the Company properties with all of
the power and authority of the General Partner. The steps to be accomplished
by the liquidator are as follows:
(a) as promptly as possible after dissolution and again after
final liquidation, the liquidator shall cause a proper accounting to be
made by a recognized firm of certified public accountants of the
Company's assets, liabilities and operations through the last day of
the calendar month in which the dissolution occurs or the final
liquidation is completed, as applicable;
(b) the liquidator shall pay from Company funds all of the
debts and liabilities of the Company (including, without limitation,
all expenses incurred in liquidation) or otherwise make adequate
provision therefor (including, without limitation, the establishment of
a cash escrow fund for contingent liabilities in such amount and for
such term as the liquidator may reasonably determine); and
(c) all remaining assets of the Company shall be distributed
first to the holders of Series A Preferred Securities as provided in
Section 4.05 hereof and in any Action relating to any other series of
Preferred Securities, and any remaining assets shall be distributed to
the General Partner.
The distribution in accordance with the provisions of this Section 12.02
constitutes a complete return to the Partner of its Capital Contributions and a
complete distribution to the Partner of its Partnership Interest and all the
Company's property and constitutes a compromise to which all Partners have
consented within the meaning of Section 17-502(b) of the Act. To the extent
that a Partner returns funds to the Company, it has no claim against any other
Partner for those funds.
12.03 CANCELLATION OF CERTIFICATE. On completion of the distribution
of Company assets as provided herein, the Company is terminated, and the
General Partner (or such other Person or Persons as the Act may require or
permit) shall cause the cancellation of the Certificate and any other filings
made as provided in Section 2.05 and shall take such other actions as may be
necessary to terminate the Company.
ARTICLE XIII
GENERAL PROVISIONS
13.01 OFFSET. Whenever the Company is to pay any sum to any Partner,
any amounts that Partner owes the Company may be deducted from that sum before
payment.
13.02 NOTICES. Any notice, demand, request, report or proxy materials
required or permitted to be given or made to a Partner under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first-class United States mail or by other means of written
communication to the Partner at the address
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described below. Any notice, payment or report to be given or made to a
Partner hereunder shall be deemed conclusively to have been given or made, and
the obligation to give such notice or report or to make such payment shall be
deemed conclusively to have been fully satisfied, upon sending of such notice,
payment or report to the Record Holder at his address as shown on the records
of the Transfer Agent or as otherwise shown on the records of the Company,
regardless of any claim of any Person who may have an interest in Preferred
Securities or the Partnership Interest of the General Partner by reason of any
assignment or otherwise. An affidavit or certificate of making of any notice,
payment or report in accordance with the provisions of this Section 13.02
executed by the General Partner, the Transfer Agent or the mailing organization
shall be prima facie evidence of the giving or making of such notice, payment
or report. If any notice, payment or report addressed to a Record Holder at
the address of such Record Holder appearing on the books and records of the
Transfer Agent or the Company is returned by the United States Post Office
marked to indicate that the United States Postal Service is unable to deliver
it, such notice, payment or report and any subsequent notices, payments and
reports shall be deemed to have been duly given or made without further mailing
(until such time as such Record Holder or another Person notifies the Transfer
Agent or the Company of a change in his address) if they are available for the
Partner at the principal office of the Company for a period of one year from
the date of the giving or making of such notice, payment or report to the other
Partners. Any notice to the Company shall be deemed given if received by the
General Partner at the principal office of the Company designated pursuant to
Section 2.03. The General Partner may rely and shall be protected in relying
on any notice or other document from a Partner or other Person if believed by
it to be genuine.
13.03 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement constitutes the
entire agreement of the Partners and their Affiliates relating to the Company
and supersedes all prior contracts, understandings, negotiations and agreements
with respect to the Company and the subject matter hereof whether oral or
written.
13.04 EFFECT OF WAIVER OR CONSENT. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by
that Person of its obligations with respect to the Company is not a consent or
waiver to or of any other breach or default in the performance by that Person
of the same or any other obligations of that Person with respect to the
Company. Failure on the part of a Person to complain of any act of any Person
or to declare any Person in default with respect to the Company, irrespective
of how long that failure continues, does not constitute a waiver by that Person
of its rights with respect to that default until the applicable
statute-of-limitations period has run.
13.05 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time by the General Partner without the vote or consent
of holders of Preferred Securities, except that no amendment or modification
that adversely affects the rights of the holders of Preferred Securities or any
series thereof may be made without the consent of 66-2/3% in liquidation
preference of the Preferred Securities of all series so affected.
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13.06 BINDING EFFECT; NO THIRD-PARTY BENEFICIARIES. Subject to the
restrictions on Dispositions set forth in this Agreement, this Agreement is
binding on and inures to the benefit of the Partners and their respective
heirs, legal representatives, successors and assigns. Except as otherwise
provided in Section 5.03 and except for the rights of Indemnified Persons and
Covered Persons under Article VII, nothing in this Agreement shall provide any
benefit to any third party or entitle any third party to any claim, cause of
action, remedy or right of any kind, it being the intent of the parties that
this Agreement shall not be construed as a third party beneficiary contract.
13.07 GOVERNING LAW; SEVERABILITY. THIS AGREEMENT IS GOVERNED BY AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE,
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE
GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER
JURISDICTION. If any provision of this Agreement or its application to any
Person or circumstance is held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of that provision to other
Persons or circumstances is not affected and that provision shall be enforced
to the greatest extent permitted by law.
13.08 FURTHER ASSURANCES. In connection with this Agreement and the
transactions contemplated by it, each Partner shall execute and deliver any
additional documents and instruments and perform any additional acts that may
be necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
13.09 WAIVER OF CERTAIN RIGHTS. Each Partner irrevocably waives any
right it may have to maintain any action for dissolution of the Company or for
partition of the property of the Company.
13.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
EXECUTED as of the date first set forth above.
GENERAL PARTNER: ENRON CORP.
By:______________________________
Name:____________________________
Title:___________________________
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LIMITED PARTNER: ORGANIZATIONAL PARTNER, INC.
By:______________________________
Name:____________________________
Title:___________________________
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Agreement of Limited Partnership of Enron Capital Resources L.P. - Enron Corp.
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