EXHIBIT 4.5
$150,000,000 Dallas, Texas September 29, 1997
ENSERCH EXPLORATION, INC., a Texas corporation
("Maker"), for value received, promises and agrees to pay on
demand, or if no demand has been made, on August 4, 2005, to the
order of EEX CAPITAL INC., a Delaware corporation ("Payee") as
successor by merger to EEX Capital L.L.C., a Delaware limited
liability company, in lawful money of the United States of
America the sum of ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000.00), together with interest thereon from and after
the date hereof until maturity. Capitalized terms used and not
otherwise defined herein shall have the meanings attributed
thereto in that certain Subordinated Promissory Note dated
September 29, 1997 made by Payee in favor of MIStS Issuer L.L.C.
("MIStS Issuer") in the principal amount of $75,000,000 (the "EEX
Capital Subordinated Note").
From and after the date hereof, this Subordinated
Promissory Note: (a) shall be subject to the terms of that
certain Subordination Agreement dated as of September 29, 1997
executed by Payee in favor of The Chase Manhattan Bank, as
Administrative Agent and for the benefit of the Lenders from time
to time party to the EEX Credit Agreement hereinafter described
(the "Subordination Agreement"), and (b) shall replace that
certain demand note dated June 5, 1997 in the original face
principal amount of $150,000,000 made by Maker in favor of Payee
(the "Existing Note") and to re-evidence the loan evidenced by
the Existing Note, which loan remains outstanding as of the date
hereof. Notwithstanding the execution of the replacement of the
Existing Note with this Subordinated Promissory Note, any accrued
and unpaid interest under the Existing Note as of the date hereof
shall remain outstanding and shall be payable in full on the next
Interest Payment Date hereunder.
Section 1. Interest and Payment. Subject in each of
the following cases to the terms of the Subordination Agreement:
(a) Interest shall accrue on the unpaid principal
balance of this Subordinated Promissory Note for each Interest
Period at the rate of interest equal to the lesser of (i) the sum
of the Dividends and Additional Amounts owing for the continuous
Dividend Period for the Preferred Securities whether or not such
Dividends or Additional Amounts are described or paid and (ii)
the Maximum Rate (defined below);
(b) The outstanding principal balance of this
Subordinated Promissory Note shall be due and payable on demand,
but if no demand has been made, on August 4, 2005. Interest on
the unpaid principal balance of this Subordinated Promissory Note
shall be due and payable on each Interest Payment Date,
commencing on the Interest Payment Date occurring on December 31,
1997, until the maturity hereof (whether due to demand, a
Maturing Event, or expiration of term), at which time all unpaid
principal of and accrued interest on this Subordinated Promissory
Note shall be due and payable; and
(c) Maker may prepay principal on this Subordinated
Promissory Note upon ten (10) Business Days' prior notice to
Payee and the Placement Agent which notice shall specify the
prepayment date (which shall be a Dividend Payment Date) and the
amount of the prepayment (which shall be at least $10,000,000 or
any whole multiple of $100,000 in excess thereof or the remaining
aggregate principal balance outstanding on this Subordinated
Promissory Note) and shall be irrevocable and effective only upon
receipt by Payee and the Placement Agent, provided that interest
on the principal prepaid, accrued to the prepayment date, shall
be paid on the prepayment date.
Section 2. General Provisions.
All principal, interest and other sums payable under
this Subordinated Promissory Note shall be paid on the day when
due in immediately available funds in lawful money of the United
States of America. All payments made as scheduled on this
Subordinated Promissory Note shall be applied, to the extent
thereof, first to accrued but unpaid interest and the balance to
unpaid principal.
Notwithstanding the failure of the holder hereof to
make prior actual demand hereon, this Subordinated Promissory
Note shall mature and, subject to the Subordination Agreement, be
due and payable at once, without demand, upon the occurrence of
any of the following events (each, a "Maturing Event"):
(a) If Maker shall fail to pay when due any principal of or
interest on this Subordinated Promissory Note and such failure
shall continue unremedied for a period of thirty (30) days; or
(b) If Maker, Payee or MIStS Issuer shall admit in
writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(c) If Maker, Payee or MIStS Issuer shall (i) apply
for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Federal Bankruptcy Code (as now or
hereafter in effect), (iv) file a petition, as debtor, seeking to
take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Federal
Bankruptcy Code, or (vi) take any corporate or partnership action
for the purpose of effecting any of the foregoing;
(d) If a proceeding or case shall be commenced,
without the application or consent of Maker, Payee or MIStS
Issuer in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of Maker,
Payee or MIStS Issuer of all or any substantial part of its
Property, or (iii) similar relief in respect of Maker, Payee or
MIStS Issuer under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect,
for a period of 60 days; or (iv) an order for relief against
Maker, Payee or MIStS Issuer shall be entered in an involuntary
case under the Federal Bankruptcy Code; or
(e) If any "Event of Default" under and as defined in
the EEX Capital Subordinated Note shall occur which is not
covered by the foregoing subparagraph (b), (c) or (d).
Upon the occurrence of a Maturing Event under
subparagraph (a) or (e) above, subject to the terms of the
Subordination Agreement, Payee shall have the right to declare
the unpaid principal balance and accrued but unpaid interest on
this Subordinated Promissory Note at once due and payable (and
upon such declaration, the same shall be at once due and payable)
and to exercise any of its other rights, powers and remedies
under this Subordinated Promissory Note or at law or in equity.
Upon the occurrence of a Maturing Event under subparagraph (b),
(c) or (d) above, the entire unpaid principal balance of this
Subordinated Promissory Note and all accrued but unpaid interest
thereon shall automatically be accelerated and immediately due
and payable in full, without notice, presentment, protest, demand
or notice of any kind, each of which is hereby expressly waived
by Maker.
Subject to the terms of the Subordination Agreement,
this Subordinated Promissory Note is a demand note subject to
being called at any time without reason upon actual demand by the
holder hereof. The inclusion of a payment schedule and maturity
clause in this Subordinated Promissory Note is merely to provide
terms for payment and acceleration in the absence of actual
demand, and does not affect or impair the holder's absolute
right, subject to the Subordination Agreement, to demand payment
of this Subordinated Promissory Note at any time without reason.
Maker has agreed that the holder may delay demand until, or make
demand at any time before, the maturity date otherwise specified
above.
Neither the failure by the holder hereof to exercise,
nor delay by the holder hereof in exercising, the right to
accelerate the maturity of this Subordinated Promissory Note or
any other right, power or remedy upon any Maturing Event shall be
considered as a waiver of such Maturing Event or as a waiver of
the right to exercise any such right, power or remedy at any
time. Without limiting the generality of the foregoing
provisions, the acceptance by Payee from time to time of any
payment under this Subordinated Promissory Note which is past due
or which is less than the payment in full of all amounts due and
payable at the time of such payment, shall not constitute a
waiver of or impair or establish any right or remedy of Payee.
It is the intent of Payee and Maker in the execution of
this Subordinated Promissory Note to contract in strict
compliance with applicable usury law. In furtherance thereof,
Payee and Maker stipulate and agree that none of the terms and
provisions contained in this Subordinated Promissory Note, or in
any other instrument executed in connection herewith, shall ever
be construed to create a contract to pay for the use, forbearance
or detention of money, or interest at a rate in excess of the
Maximum Rate; that neither Maker nor any guarantors, endorsers or
other parties now or hereafter becoming liable for payment of
this Subordinated Promissory Note shall ever be obligated or
required to pay interest on this Subordinated Promissory Note at
a rate in excess of the Maximum Rate; and that the provisions of
this paragraph shall control over all other provisions of this
Subordinated Promissory Note and any other instruments now or
hereafter executed in connection herewith which may be in
apparent conflict herewith. The holder of this Subordinated
Promissory Note expressly disavows any intention to charge or
collect excessive unearned interest or finance charges in the
event demand is made prior to the maturity date hereof or if the
maturity of this Subordinated Promissory Note is accelerated. If
demand shall be made, or if the maturity of this Subordinated
Promissory Note shall be accelerated for any reason or if the
principal of this Subordinated Promissory Note is paid prior to
maturity of this Subordinated Promissory Note, and as a result
thereof the interest received for the actual period of existence
of the loan evidenced by this Subordinated Promissory Note
exceeds the Maximum Rate, the holder of this Subordinated
Promissory Note shall, at its option, either refund to Maker the
payment of such excess or credit the amount of such excess
against the principal balance of this Subordinated Promissory
Note then outstanding and thereby shall render inapplicable any
and all penalties of any kind provided by applicable law as a
result of such excess interest. In the event that Payee or any
other holder of this Subordinated Promissory Note shall contract
for, charge or receive any amount or amounts and/or any other
thing of value which is determined to constitute interest which
would increase the effective interest rate on this Subordinated
Promissory Note to a rate in excess of the Maximum Rate, an
amount equal to interest in excess of the Maximum Rate shall,
upon such determination, at the option of the holder of this
Subordinated Promissory Note, be either immediately returned to
Maker or credited against the principal balance of this
Subordinated Promissory Note then outstanding, in which event any
and all penalties of any kind under applicable law a result of
such excess interest shall be inapplicable. As used herein, the
term "Maximum Rate" means the maximum nonusurious rate of
interest per annum permitted by Texas law, including to the
extent permitted by applicable law, any amendments thereof
hereafter or any new law hereafter coming into effect to the
extent a higher Maximum Rate is permitted thereby. To the
extent, if any, that Chapter One ("Chapter One") of Title 79,
Texas Revised Civil Statutes, 1925, as amended, establishes the
Maximum Rate, the Maximum Rate shall be the "indicated rate
ceiling" (as defined in Chapter One) in effect from time to time.
The Maximum Rate shall be applied by taking into account all
amounts characterized by applicable law as interest on the debt
evidenced by this Subordinated Promissory Note, so that the
aggregate of all interest does not exceed the maximum nonusurious
amount permitted by applicable law.
Maker waives demand (unless upon occurrence of the
stated maturity date), presentment for payment, notice of
dishonor, protest and notice of protest, diligence in collecting
or in bringing suit against any party to this Subordinated
Promissory Note, and the application of any bank balance or
collateral security or the proceeds therefrom as payment or part
payment on this obligation or as an offset to this note, and
agrees to all extensions and partial payments, with or without
notice, before or after maturity (whether due to demand, a
Maturing Event or expiration of term).
All of the covenants, stipulations, promises, and
agreements contained in this Subordinated Promissory Note by or
on behalf of Maker shall bind its successors and assigns.
THIS SUBORDINATED PROMISSORY NOTE, AND ITS VALIDITY,
ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW.
Time shall be of the essence in this Subordinated
Promissory Note with respect to all of Maker's obligations
hereunder.
THIS NOTICE REPRESENTS THE FINAL AGREEMENT BETWEEN
MAKER AND PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF MAKER AND PAYEE.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN MAKER AND PAYEE.
ENSERCH EXPLORATION, INC.
By:/s/ J. T. Leary
-----------------------------
J.T. Leary
Vice President-Finance