{"id":41204,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/payment-and-guarantee-agreement-enron-corp-and-enron-capital.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"payment-and-guarantee-agreement-enron-corp-and-enron-capital","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/payment-and-guarantee-agreement-enron-corp-and-enron-capital.html","title":{"rendered":"Payment and Guarantee Agreement &#8211; Enron Corp. and Enron Capital Resources L.P."},"content":{"rendered":"<pre>\n                        PAYMENT AND GUARANTEE AGREEMENT\n\n\n        THIS PAYMENT AND GUARANTEE AGREEMENT ('Guarantee Agreement'), dated as\nof August 3, 1994, is executed and delivered by Enron Corp., a Delaware\ncorporation (the 'Guarantor'), for the benefit of the Holders (as defined\nbelow) from time to time of the Series A Preferred Securities (as defined\nbelow) of Enron Capital Resources, L.P. (the 'Issuer'), a limited partnership\nformed under the Delaware Revised Uniform Limited Partnership Act (the\n'Delaware Act').\n\n        WHEREAS, Issuer is issuing on the date hereof 3,000,000 shares of its\n9% Cumulative Preferred Securities, Series A (the 'Series A Preferred\nSecurities'), and the Guarantor desires to issue this Guarantee Agreement for\nthe benefit of the Holders, as provided herein;\n\n        WHEREAS, the Issuer pursuant to the Loan Agreement (as defined below)\nwill loan to the Guarantor the proceeds from the issuance and sale of the\nSeries A Preferred Securities and its contribution as general partner (the\n'General Partner') in respect of its general partner interest (the 'GP\nInterest'); and\n\n        WHEREAS, the Guarantor desires hereby irrevocably and unconditionally\nto agree to the extent set forth herein to pay to the Holders the Guarantee\nPayments (as defined below) and to make certain other payments on the terms and\nconditions set forth herein.\n\n        NOW, THEREFORE, in consideration of the purchase by each Holder of the\nSeries A Preferred Securities, which purchase the Guarantor hereby agrees shall\nbenefit the Guarantor, the Guarantor executes and delivers this Guarantee\nAgreement for the benefit of the Holders.\n\n                                   ARTICLE I\n\n        As used in this Guarantee Agreement, the terms set forth below shall,\nunless the context otherwise requires, have the following meanings. \nCapitalized terms used but not otherwise defined herein shall have the meanings\nassigned to such terms in the Amended and Restated Agreement of Limited\nPartnership of the Issuer dated as of August 3, 1994 (the 'Partnership\nAgreement').\n\n        'Dividends' shall mean any distribution on the Series A Preferred\nSecurities, including additional distributions in respect of distributions in\narrears, required to be made pursuant to the terms of the Partnership\nAgreement, other than distributions on liquidation.\n\n        'Expense Agreement' shall mean the provisions of Section the 5.03 of\nthe Partnership Agreement pursuant to which the Guarantor has agreed to\nguarantee the \n\n\npayment of any indebtedness or liabilities incurred by the Issuer (other\nthan obligations to Holders of Series A Preferred Securities in such Holders'\ncapacities as Holders of such Series A Preferred Securities).\n\n        'Guarantee Payments' shall mean the following payments, without\nduplication, to the extent not paid by the Issuer: (i) any accumulated and\nunpaid Dividends which have been theretofore required to be paid pursuant to\nthe terms of the Partnership Agreement, (ii) the Redemption Price payable with\nrespect to any Series A Preferred Securities called for redemption by the\nIssuer, (iii) upon a liquidation of the Issuer, the lesser of (a) the\nLiquidation Distribution and (b) the amount of assets of the Issuer available\nfor distribution to Holders in liquidation of the Issuer and (iv) any\nAdditional Interest (as defined below) payable by the Issuer in respect of the\nSeries A Preferred Securities.\n\n        'Holder' shall mean any holder (as defined in the Partnership\nAgreement) from time to time of any Series A Preferred Securities of the\nIssuer; provided, however, that in determining whether the Holders of the\nrequisite percentage of Series A Preferred Securities have given any request,\nnotice, consent or waiver hereunder, 'Holder' shall not include the Guarantor\nor any entity owned more than 50% by the Guarantor, either directly or\nindirectly.\n\n        'Liquidation Distribution' shall mean the aggregate of the liquidation\npreference of $25 per Series A Preferred Security and all accumulated and \nunpaid Dividends to the date of payment.\n\n        'Loan Agreement' shall mean the agreement, dated as of the date hereof,\npursuant to which the Issuer will loan to the Guarantor the proceeds received\nby the Issuer from the issuance and sale of the Series A Preferred Securities\nand the contribution of the General Partner in respect of the GP Interest.\n\n        'Paying Agent' shall mean Enron Corp., as registrar, transfer agent and\npaying agent.\n\n        'Redemption Price' shall mean $25 per Preferred Security plus\naccumulated and unpaid Dividends to the date fixed for redemption.\n\n                                   ARTICLE II\n\n        SECTION 2.01.  (a) The Guarantor irrevocably and unconditionally agrees\nto pay in full to the Holders the Guarantee Payments, as and when due (except\nto the extent paid by the Issuer), regardless of any defense, right of set-off\nor counterclaim which \n\n                                     -2-\n\n\n\nthe Issuer may have or assert.  The Guarantor's obligation to make a Guarantee \nPayment may be satisfied by direct payment of the required amounts by the \nGuarantor to the Holders or by causing the Issuer to pay such amounts to the \nHolders.\n\n        (b)  All Guarantee Payments shall be made without deduction for or on\naccount of any present or future taxes (other than withholding taxes), duties,\nassessments or governmental charges of whatever nature imposed or levied upon\nthe Issuer by or on behalf of the United States, any state thereof or any other\njurisdiction through which or from which such payment is made, or any authority\ntherein or thereof having power to tax, unless the deduction of such taxes,\nduties, assessments or governmental charges is required by law.  In that event,\nthe Guarantor shall pay such additional amounts ('Additional Interest') as\nmay be necessary in order that the net amounts received by the Holders after\nsuch deduction will equal the amount which would have been receivable in\nrespect of the Series A Preferred Securities in the absence of such deduction.\n\n        SECTION 2.02.  The Guarantor hereby waives notice of acceptance of this\nGuarantee Agreement and of any liability to which it applies or may apply,\npresentment, demand for payment, protest, notice of nonpayment, notice of\ndishonor, notice of redemption and all other notices and demands.\n\n        SECTION 2.03.  The obligations, covenants, agreements and duties of the\nGuarantor under this Guarantee Agreement shall in no way be affected or\nimpaired by reason of the happening from time to time of any of the following:\n\n                (a)  the release or waiver, by operation of law or otherwise,\n        of the performance or observance by the Issuer of any express or\n        implied agreement, covenant, term or condition relating to the Series A\n        Preferred Securities to be performed or observed by the Issuer;\n\n                (b)  the extension of time for the payment by the Issuer of all\n        or any portion of the Dividends, Redemption Price, Liquidation\n        Distribution or any other sums payable under the terms of the Series A\n        Preferred Securities or the extension of time for the performance of\n        any other obligation under, arising out of, or in connection with, the\n        Series A Preferred Securities;\n\n                (c)  any failure, omission, delay or lack of diligence on the\n        part of the Holders to enforce, assert or exercise any right,\n        privilege, power or remedy conferred on the Holders pursuant to the\n        terms of the Series A Preferred Securities, or any action on the part\n        of the Issuer granting indulgence or extension of any kind;\n\n                (d)  the voluntary or involuntary liquidation, dissolution,\n        sale of any collateral, receivership, insolvency, bankruptcy,\n        assignment for the benefit of creditors, reorganization, arrangement,\n        composition or readjustment of debt, of or other similar proceedings\n        affecting, the Issuer or any of the assets of the Issuer;\n\n\n                                     -3-\n\n\n                (e)  any invalidity of, or defect or deficiency in, any of the\n        Series A Preferred Securities; or\n                                    \n                (f)  the settlement or compromise of any obligation guaranteed\n        hereby or hereby incurred.\n\nThere shall be no obligation of the Holders to give notice to, or obtain\nconsent of, the Guarantor with respect to the happening of any of the\nforegoing.\n\n        SECTION 2.04.  This is a guarantee of payment and not of collection.  A\nHolder may enforce this Guarantee Agreement directly against the Guarantor, and\nthe Guarantor will waive any right or remedy to require that any action be\nbrought against the Issuer or any other person or entity before proceeding\nagainst the Guarantor.  Subject to Section 2.05, all waivers herein contained\nshall be without prejudice to the Holders' right at the Holders' option to\nproceed against the Issuer, whether by separate action or by joinder.  The\nGuarantor agrees that this Guarantee Agreement shall not be discharged except\nby payment of the Guarantee Payments in full (to the extent not paid by the\nIssuer) and by complete performance of all obligations of the Guarantor\ncontained in this Guarantee Agreement.\n\n        SECTION 2.05.  The Guarantor shall be subrogated to all (if any) rights\nof the Holders against the Issuer in respect of any amounts paid to the Holders\nby the Guarantor under this Guarantee Agreement and shall have the right to\nwaive payment of any amount of Guaranty Payments in respect of which payment\nhas been made to the Holders by the Guarantor pursuant to Section 2.01;\nprovided, however, that the Guarantor shall not (except to the extent required\nby mandatory provisions of law) exercise any rights which it may acquire by way\nof subrogation or any indemnity, reimbursement or other agreement, in all cases\nas a result of a payment under this Guarantee Agreement, if, at the time of any\nsuch payment, any amounts are due and unpaid under this Guarantee Agreement. If\nany amount shall be paid to the Guarantor in violation of the preceding\nsentence, the Guarantor agrees to pay over such amount to the Holders.\n\n        SECTION 2.06.  The Guarantor acknowledges that its obligations\nhereunder are independent of the obligations of the Issuer with respect to the\nSeries A Preferred Securities and that the Guarantor shall be liable as\nprincipal and sole debtor hereunder to make Guarantee Payments pursuant to the\nterms of this Guarantee Agreement notwithstanding the occurrence of any event\nreferred to in subsections (a) through (f), inclusive, of Section 2.03 hereof.\n\n\n                                  ARTICLE III\n\n        SECTION 3.01.  So long as any Series A Preferred Securities remain\noutstanding, the Guarantor shall not declare or pay any dividend on, or redeem,\npurchase, \n\n                                     -4-\n\n\nacquire or make a liquidation payment with respect to, any of its capital \nstock (other than (i) payments under this Guarantee Agreement and (ii)\nguarantee payments under guarantee agreements ranking pari passu with this\nGuarantee Agreement) if at such time the Guarantor shall be in default with\nrespect to its payment or other obligations hereunder or under the Expense\nAgreement or there shall have occurred any event that, with the giving of\nnotice or the lapse of time or both, would constitute an Event of Default under\nthe Loan Agreement.\n\n        SECTION 3.02.  The Guarantor covenants, so long as any Series A\nPreferred Securities remain outstanding: (i) to maintain direct or indirect\n100% ownership of the GP Interest and to timely perform all of its duties as\nGeneral Partner of the Issuer; (ii) to cause at least 21% of the total value of\nthe Issuer and at least 21% of all interests in the capital, income, gain,\nloss, deduction and credit of the Issuer to be represented by the GP Interest;\n(iii) not to voluntarily dissolve, wind-up or liquidate the Issuer; (iv) to\nremain the General Partner of the Issuer and to timely perform all of its\nduties as General Partner (including the duty to pay Dividends on the Series A\nPreferred Securities), provided that any permitted successor of the Guarantor\nunder the Loan Agreement may succeed to the Guarantor's duties as General\nPartner; and (v) to use its reasonable efforts to cause the Issuer to remain a\nlimited partnership under the Delaware Act and otherwise continue to be treated\nas a partnership for United States federal income tax purposes.\n\n        SECTION 3.03.  This Guarantee Agreement will constitute an unsecured\nobligation of the Guarantor and will rank (i) subordinate and junior in right\nof payment to all liabilities of the Guarantor, other than the Payment and\nGuarantee Agreement dated as of November 15, 1993 (the 'Pari Passu Guarantee')\nof the Guarantor relating to the 8% Cumulative Monthly Income Preferred Shares\nof Enron Capital LLC, (ii) pari passu with the most senior preferred or\npreference stock now or hereafter issued by the Guarantor, with the Pari Passu\nGuarantee and with any other guarantee now or hereafter entered into by the\nGuarantor in respect of any preferred or preference stock of any affiliate of\nthe Guarantor and (iii) senior to the Guarantor's common stock.  For purposes\nof clause (ii) herein, pari passu means that any payments to which\nbeneficiaries of this Guarantee Agreement are entitled must be shared with\nholders of any preferred or preference stock or beneficiaries of any guaranty\nfor which this Guarantee Agreement is stated to be pari passu ('Pari Passu\nSecurities') to the same extent as would be required under applicable law if\ninstead this Guarantee Agreement constituted a class of preferred or preference\nstock of the Guarantor ranking pari passu with such Pari Passu Securities \n(and if such Pari Passu Securities are a guarantee of Enron affiliate stock, \nas if such Pari Passu Securities were part of the most senior preferred or \npreference stock of Enron) as to such payments.  Each holder of Series A \nPreferred Securities, by acceptance thereof, is deemed to agree to the \nsubordination provisions and other terms of this Guarantee Agreement.\n\n                                     -5-\n\n\n\n                                   ARTICLE IV\n\n        This Guarantee Agreement shall terminate and be of no further force and\neffect upon full payment of the Redemption Price of all Series A Preferred\nSecurities or upon full payment of the amounts payable to the Holders upon\nliquidation of the Issuer; provided, however, that this Guarantee Agreement\nshall continue to be effective or shall be reinstated, as the case may be, if\nat any time any Holder of Series A Preferred Securities must restore payment of\nany sums paid under the Series A Preferred Securities or under this Guarantee\nAgreement for any reason whatsoever.\n\n                                    \n                                   ARTICLE V\n\n        SECTION 5.01.  All guarantees and agreements contained in this\nGuarantee Agreement shall bind the successors, assigns, receivers, trustees and\nrepresentatives of the Guarantor and shall inure to the benefit of the Holders.\nThe Guarantor shall not assign its obligations hereunder without the prior\napproval of the Holders of not less than 66-2\/3% in liquidation preference (as\ndefined in the Partnership Agreement) of all Series A Preferred Securities then\noutstanding.\n\n        SECTION 5.02.  Except with respect to any changes which do not\nadversely affect the rights of holders of Series A Preferred Securities (in\nwhich case no vote will be required), this Guarantee Agreement may only be\namended by instrument in writing signed by the Guarantor with the prior\napproval of the Holders of not less than 66-2\/3% in liquidation preference of\nthe Series A Preferred Securities then outstanding.\n\n        SECTION 5.03.  Any notice, request or other communication required or\npermitted to be given hereunder to the Guarantor shall be given in writing by\ndelivering the same against receipt therefor by facsimile transmission\n(confirmed by mail) or telex, addressed to the Guarantor, as follows (and if so\ngiven, shall be deemed given when mailed or upon receipt of an answer-back, if\nsent by telex), to it:\n\n        Enron Corp.\n        1400 Smith Street\n        Houston, Texas 77002\n\n        Facsimile No.: (713) 853-3920\n        Attention:  Treasurer\n\n        Any notice, request or other communication required or permitted to be\ngiven hereunder to the Holders shall be given by the Guarantor in the same\nmanner as notices sent by the Issuer to the Holders pursuant to the Partnership\nAgreement.\n\n        SECTION 5.04.  The masculine and neuter genders used herein shall\ninclude the masculine, feminine and neuter genders.\n\n\n                                     -6-\n\n\n\n\n        SECTION 5.05.  This Guarantee Agreement is solely for the benefit of\nthe Holders and is not separately transferable from the Series A Preferred\nSecurities.\n\n        SECTION 5.06.  THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND\nCONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.\n\n        THIS GUARANTEE AGREEMENT is executed as of the day and year first above\nwritten.\n\n        \n                                         ENRON CORP.\n\n\n\n                                         By:__________________________ \n                                            Name: \n                                            Title:\n\n\n\n\n\n                                      -7-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7454],"corporate_contracts_industries":[9535],"corporate_contracts_types":[9560,9565],"class_list":["post-41204","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-enron-corp","corporate_contracts_industries-utilities__gas","corporate_contracts_types-finance","corporate_contracts_types-finance__guaranty"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41204","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41204"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41204"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41204"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}