EXHIBIT 4.6
SUBORDINATED PROMISSORY NOTE
$75,000,000 September 29, 1997
EEX CAPITAL INC., a Delaware corporation ("EEX Capital"), as
successor by merger to EEX Capital L.L.C., a Delaware limited
liability company, 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 MIStS ISSUER L.L.C., a Delaware limited liability
company ("MIStS Issuer"), at its account with The Chase Manhattan
Bank, account number 910-2-745156, 1 Chase Manhattan Plaza, New
York, New York 10005, in lawful money of the United States of
America the sum of SEVENTY-FIVE MILLION DOLLARS ($75,000,000),
together with interest thereon from and after the date hereof
until maturity as specified in Section 2.02 below.
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 MIStS Issuer in favor of The Chase Manhattan Bank, as
Administrative Agent, for the benefit of the lenders from time to
time party to the EEX Syndicated Credit Agreement hereinafter
described (the "Subordination Agreement"), and (b) shall be
deemed to replace that certain demand note dated August 4, 1995,
and amended on October 31, 1996 and June 27, 1997, in the
original face principal amount of $150,000,000 made by EEX
Capital L.L.C. in favor of MIStS Issuer (the "Existing Note") on
which a principal payment of $75,000,000 was made and received as
of the date hereof; provided, however, that nothing herein shall
be deemed to compromise or otherwise forgive any accrued and
unpaid interest under the Existing Note.
ARTICLE I
Definitions
Section 1.01 Certain Defined Terms. As used herein,
(a) capitalized terms used and not otherwise defined herein shall
have the meanings attributed thereto in the Subscription
Agreement, and (b) the following terms shall have the following
meanings (all terms defined in this Article I or in other
provisions of this Subordinated Promissory Note in the singular
to have the same meanings when used in the plural and vice versa):
"Additional Amounts" shall mean, collectively, (a)
all "Additional Dividends" under and as defined in the
MIStS Issuer LLC Agreement, and (b) all "Additional
Costs" under and as defined in the Subscription
Agreement.
"Affiliate" shall mean with respect to any Person,
any other Person that, directly or indirectly, through
one or more intermediaries, controls, or is controlled
by, or is under common control with, such Person. For
purposes of the foregoing definition, "control" means
the direct or indirect ownership of more than 50% of
the outstanding capital stock or other equity interests
having ordinary voting power.
"Business Day" shall have the meaning assigned in
the Subscription Agreement.
"Certificate of Designations" shall have the
meaning assigned in the Subscription Agreement.
"Closing Date" shall mean September 29, 1997.
"Collection Account" shall have the meaning
assigned in the MIStS Issuer LLC Agreement.
"Debt" shall have the meaning assigned in the
Subscription Agreement.
"Default" shall mean an Event of Default or an
event which with notice or lapse of time or both would
become an Event of Default.
"Designated Subsidiary" shall have the meaning
assigned in the EEX Syndicated Credit Agreement.
"Dividend Payment Date" shall have the meaning
assigned in the MIStS Issuer LLC Agreement.
"Dividend Period" shall have the meaning assigned
in the MIStS Issuer LLC Agreement.
"Dividends" shall mean, collectively, (a)
"Dividends" under and as defined in the MIStS Issuer
LLC Agreement, and (b) "Dividends" under and as defined
in the Certificate of Designations.
"Dollars" and "$" shall mean lawful money of the
United States of America.
"EEX" shall mean Enserch Exploration, Inc., a
Texas corporation.
"EEX Guaranty Agreement" shall mean the Amended
and Restated Guaranty Agreement dated as of September
29, 1997 executed by EEX guaranteeing the payment of
this Subordinated Promissory Note, as the same may be
amended, supplemented, restated or replaced from time
to time.
"EEX Subordinated Note" shall mean that certain
Subordinated Promissory Note dated September 29, 1997
executed by EEX in favor of EEX Capital in the face
principal amount of $75,000,000, as the same may be
amended, supplemented, restated or replaced from time
to time.
"EEX Syndicated Credit Agreement" shall mean that
certain Credit Agreement dated as of May 1, 1995 among
EEX, as borrower, The Chase Manhattan Bank, as
Administrative Agent and the lenders signatory thereto,
as amended by First Amendment dated September 19, 1996,
and Second Amendment dated June 27, 1997, and in effect
on the Closing Date, together with such amendments
thereto as be adopted in accordance therewith and
consented to by the Majority Holders.
"Event of Default" shall have the meaning assigned
such term in Section 5.01 of this Subordinated
Promissory Note.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect
from time to time.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision
thereof and any Person exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Governmental Requirement" shall mean any law,
statute, code, ordinance, order, determination, rule,
regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other
directive or requirement (whether or not having the
force of law), including, without limitation,
Environmental Laws, energy regulations and
occupational, safety and health standards or controls,
of any Governmental Authority.
"Guarantors" shall mean EEX and the Subsidiary
Guarantors.
"Guaranty Agreements" shall mean the EEX Guaranty
Agreement and the Subsidiary Guaranty Agreements.
"Hedging Agreements" shall mean any commodity,
interest rate or currency swap, rate cap, rate floor,
rate collar, forward agreement or other exchange or
rate protection agreements or any option with respect
to any such transaction.
"Holders" shall have the meaning specified in the
Subscription Agreement.
"Indebtedness" shall have the meaning specified in
the Subscription Agreement.
"Interest Payment Date" shall mean a day which is
a Dividend Payment Date.
"Interest Periods" shall mean the periods (i) in
the case of the first Interest Period, from the date
hereof to but excluding December 31, 1997, and in the
case of each subsequent Interest Period, from the last
Business Day of a calendar quarter to but excluding the
last Business Day of the following calendar quarter or,
if earlier, the maturity date of this Subordinated
Promissory Note.
"Lien" shall mean, with respect to EEX Capital or
MIStS Issuer, any interest in Property securing an
obligation owed to, or a claim by, a Person other than
the owner of the Property, whether such interest is
based on the common law, statute or contract, and
whether such obligation or claim is fixed or
contingent, and including but not limited to (i) the
lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or
bailment for security purposes or (ii) production
payments and the like payable out of Properties. For
the purposes of this Subordinated Promissory Note, each
of EEX Capital and MIStS Issuer shall be deemed to be
the owner of any Property which it has acquired or
holds subject to a conditional sale agreement, or
leases under a financing lease or other arrangement
pursuant to which title to the Property has been
retained by or vested in some other Person in a
transaction intended to create a financing.
"Majority Holders" shall mean, on any date of
determination, Holders holding more than fifty percent
(50%) of the aggregate Liquidation Preference of the
Preferred Securities then outstanding, considered as if
such securities were of a single class and a single
issuer.
"Material Adverse Effect" shall mean any material
and adverse change in the financial condition, business
or results of operations of EEX and its Subsidiaries
taken as a whole which makes them unable to perform
their obligations under the Operative Documents.
"MIStS Issuer LLC Agreement" shall mean the Second
Amended and Restated Limited Liability Company
Agreement of MIStS Issuer dated as of September 29,
1997, as the same may be amended or restated from time
to time.
"Operative Documents" shall mean the documents
described on Schedule 1 of this Subordinated Promissory
Note and all amendments, supplements, renewal,
extensions, rearrangements, and replacements thereof.
"Person" shall mean any individual, corporation,
company, limited liability company, voluntary
association, partnership, joint venture, trust,
unincorporated organization or government or any
agency, instrumentality or political subdivision
thereof, or any other form of entity.
"Placement Agent" shall mean UBS Securities LLC,
in such capacity under the Subscription Agreement and
any successors in such capacity.
"Preferred Securities" shall mean, collectively,
on any date of determination, the issued and
outstanding Preferred Stock and the issued and
outstanding Preferred Interests, each as defined in the
Subscription Agreement.
"Prohibited Indebtedness" shall mean any
Indebtedness of or guaranteed by EEX Capital or MIStS
Issuer other than (a) the Indebtedness evidenced by
this Subordinated Promissory Note (and subordinated
promissory notes issued in replacement hereof in
accordance with Section 4.02), (b) additional
Indebtedness of EEX Capital and/or MIStS Issuer to EEX,
one another or another Affiliate not to exceed
$10,000,000 in aggregate principal amount, and (c)
Hedging Obligations permitted under Section 4.03(f) of
this Subordinated Promissory Note.
"Property" shall mean any interest in any kind of
property or asset, whether real, personal or mixed, or
tangible or intangible.
"Responsible Officer" shall mean, as to EEX or any
Subsidiary, the Chief Executive Officer, the President
or any Vice President of EEX Capital and, with respect
to financial matters, the term "Responsible Officer"
shall include the Chief Financial Officer, Controller,
Vice President, Finance, Treasurer or Treasury Officer
of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a
Responsible Officer of EEX.
"Special Entity" shall mean any joint venture,
limited liability company, general or limited
partnership or any other type of partnership or company
in which EEX or one or more of its other Subsidiaries
is a member, owner, partner or joint venturer and owns
at least a majority of the equity of such entity.
"Subscription Agreement" shall mean the Preferred
Interests and Preferred Stock Subscription Agreement
dated as of September 29, 1997 by and among EEX, EEX
Capital, MIStS Issuer and UBS Securities, LLC,
individually and as Placement Agent for the holders of
the Preferred Securities, as the same may be amended,
supplemented, restated or replaced from time to time.
"Subsidiary" shall mean, with respect to any
Person, (i) any corporation, association or other
business entity of which more than 50% of the total
voting power of shares of Voting Stock thereof is at
the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or the
managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination
thereof).
"Subsidiary Guarantor" shall mean any Subsidiary
or Special Entity that has executed a Subsidiary
Guaranty Agreement.
"Subsidiary Guaranty Agreement" shall mean any
Guaranty Agreement executed by a Subsidiary or a
Special Entity as required by Section 3.08 of Schedule
1 of the EEX Guaranty Agreement as such agreement may
be amended, supplemented or restated from time to time.
Article II
Payments of Principal and Interest
Section 2.01 Repayment. Subject to the Subordination
Agreement, EEX Capital will pay to MIStS Issuer the aggregate
principal amount outstanding under this Subordinated Promissory
Note upon demand, or if no demand has been made, on August 4,
2005.
Section 2.02 Interest.
(a) Regular Interest. Subject to the Subordination
Agreement, EEX Capital will pay to MIStS Issuer interest on
the unpaid principal amount of this Subordinated Promissory
Note for each Interest Period equal to the sum of the
Dividends and Additional Amounts owing for the coterminous
Dividend Period for the Preferred Interests whether or not
such Dividends or Additional Amounts are declared or paid.
(b) Interest Payments. Accrued interest on this
Subordinated Promissory Note shall be payable on each
Interest Payment Date, commencing on the Interest Payment
Date occurring on December 31, 1997.
Section 2.03 Prepayments. Subject to the terms of the
Subordination Agreement:
(a) Optional Prepayments. EEX Capital may prepay
principal on this Subordinated Promissory Note upon ten (10)
Business Days' prior notice to MIStS Issuer 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 $5,000,000 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 MIStS Issuer, provided that
interest on the principal prepaid, accrued to the prepayment
date, shall be paid on the prepayment date.
(b) Penalties; Premium. Prepayments permitted under
this Section 2.03 shall be without premium or penalty,
except for an amount equal to any Additional Amounts
required to be paid by MIStS Issuer in connection with a
corresponding redemption of the Preferred Interests.
Section 2.04 Payments. Except to the extent otherwise
provided herein, all payments of principal, interest and other
amounts to be made by EEX Capital under this Subordinated
Promissory Note shall be made in Dollars, in immediately
available funds, to the Collection Account, not later than 1:00
p.m. (Central time) on the date on which such payments shall
become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding
Business Day). Such payments shall be made without (to the
fullest extent permitted by applicable law) defense, set-off or
counterclaim. If the due date of any payment under this
Subordinated Promissory Note would otherwise fall on a day which
is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall be payable for any
principal so extended for the period of such extension.
Section 2.05 Taxes.
(a) Payments Free and Clear. Any and all payments by
EEX Capital hereunder shall be made free and clear of and
without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, including, taxes
imposed on MIStS Issuer's income, and franchise or similar
taxes imposed on MIStS Issuer, (all such taxes, levies,
imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If EEX Capital
shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to MIStS Issuer (i) the
sum payable shall be increased by the amount necessary so
that after making all required deductions (including
deductions applicable to additional sums payable under this
Section 2.05) MIStS Issuer shall receive an amount equal to
the sum it would have received had no such deductions been
made, (ii) EEX Capital shall make such deductions and
(iii) EEX Capital shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in
accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent
permitted by applicable law, EEX Capital agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Subordinated Promissory Note (hereinafter referred to
as "Other Taxes").
(c) indemnification. to the fullest extent permitted by applicable
law, EEX Capital will indemnify MIStS Issuer for the full amount of Taxes
and Other Taxes (including, but not limited to, any Taxes or Other Taxes
imposed by any Governmental Authority on amounts payable under this section
2.05) paid by MIStS Issuer and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted
unless the payment of such Taxes was not correctly or legally asserted and
MIStS Issuer's payment of such Taxes or Other Taxes was the result of its
gross negligence or willful misconduct. any payment pursuant to such
indemnification shall be made within thirty (30) days after the date MIStS
Issuer makes written demand therefor. if MIStS Issuer receives a refund
or credit in respect of any Taxes or Other Taxes for which EEX Capital has
received payment from EEX Capital it shall promptly notify EEX Capital of
such refund or credit and shall, if no default has occurred and is
continuing, within thirty (30) days after receipt of a request by EEX
Capital (or promptly upon receipt, if EEX Capital, has requested
application for such refund or credit pursuant hereto), pay an amount equal
to such refund or credit to EEX Capital, without interest (but with any
interest so refunded or credited), provided that EEX Capital agrees to
return such refund or credit (plus penalties, interest or other charges) to
MIStS Issuer in the event MIStS Issuer is required to repay such refund
or credit.
ARTICLE III
Representations and Warranties
EEX Capital represents and warrants to MIStS Issuer that:
Section 3.01 Corporate Existence. EEX Capital:
(i) is duly organized, legally existing and in good standing as a
corporation under the laws of Delaware; (ii) has all requisite
corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed to
be conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to
qualify would have a Material Adverse Effect.
Section 3.02 No Breach. Neither the execution and
delivery of this Subordinated Promissory Note, nor compliance
with the terms and provisions hereof will conflict with or result
in a breach of, or require any consent which has not been
obtained as of the Closing Date under, the certificate of
incorporation of EEX Capital, or any Governmental Requirement or
any agreement or instrument for borrowed money to which EEX
Capital is a party or by which it is bound or to which it or its
Properties are subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition
of any Lien upon any of the revenues or assets of EEX Capital
pursuant to the terms of any such agreement or instrument.
Section 3.03 Authority. EEX Capital has all necessary
power and authority to execute, deliver and perform its obliga-
tions under this Subordinated Promissory Note; and the execution,
delivery and performance by EEX Capital of this Subordinated
Promissory Note have been duly authorized by all necessary action
on its part; and this Subordinated Promissory Note constitutes
the legal, valid and binding obligation of EEX Capital, enforce-
able in accordance with its terms, except to the extent that
enforcement may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditor's rights generally.
Section 3.04 Approvals. No authorizations, approvals
or consents of, and no filings or registrations with, any
Governmental Authority are necessary for the execution, delivery
or performance by EEX Capital of this Subordinated Promissory
Note or for the validity or enforceability thereof.
Section 3.05 Use of Proceeds. The proceeds of the
Existing Note were used to purchase preferred stock from EEX with
EEX receiving all of the $150,000,000. EEX Capital is not
engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin
stock (within the meaning of Regulation G, U or X of the Board of
Governors of the Federal Reserve System). Following application
of the proceeds of this Subordinated Promissory Note, not more
than 25 percent of the value of the assets of EEX Capital, which
are subject to any arrangement with MIStS Issuer (herein or
otherwise) whereby EEX Capital's right or ability to sell, pledge
or otherwise dispose of assets is in any way restricted, will be
margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System).
ARTICLE IV
Covenants
EEX Capital covenants and agrees that, until payment in full
of the principal outstanding on the Subordinated Promissory Note,
all interest thereon and all other amounts payable by EEX Capital
under this Subordinated Promissory Note:
Section 4.01 Maintenance, Etc. EEX Capital shall
preserve and maintain its corporate existence and all of its
material rights, privileges and franchises and comply with all
Governmental Requirements if failure to comply with such
requirements will have a Material Adverse Effect.
Section 4.02 Further Assurances. EEX Capital will
cure promptly any defects in the creation and issuance of this
Subordinated Promissory Note. At the request of MIStS Issuer,
EEX Capital will promptly issue a new subordinated promissory
note to replace this Subordinated Promissory Note upon the same
terms as set forth herein, but dated as of the date requested by
MIStS Issuer.
Section 4.03 Indebtedness, Liens, Etc.. EEX Capital
will not, and will not permit MIStS Issuer to:
(a) create, incur, assume or suffer to exist any
Prohibited Indebtedness or any Lien on any of its Properties
(now owned or hereafter acquired);
(b) make or permit to remain outstanding any loans or
advances to or investments in any Person, except for (i) in
the case of EEX Capital, the EEX Subordinated Note and the
common membership of MIStS Issuer, and (ii) in the case of
MIStS Issuer, this Subordinated Promissory Note;
(c) declare or pay any dividend, purchase, redeem or
otherwise acquire for value any of its stock now or
hereafter outstanding, return any capital to its members or
make any distribution of its assets to its members, in each
case, expect (i) in the case of EEX Capital, as provided in
the Certificate of Designations, and (ii) in the case of
MIStS Issuer, as provided in the MIStS Issuer LLC Agreement;
(d) conduct any business other than as permitted in
(i) in the case of EEX Capital, the Certificate of
Designations, and (ii) in the case of MIStS Issuer, the
MIStS Issuer LLC Agreement;
(e) own any Property other than (i) in the case of EEX
Capital, its common membership of MIStS Issuer and the EEX
Subordinated Note, and (ii) in the case of MIStS Issuer,
this Subordinated Promissory Note and the EEX Guaranty
Agreement;
(f) create, incur, assume or suffer to exist any
lease obligation or suffer to exist any Hedging Agreements
except Hedging Agreements relating to interest rates which,
when in effect, have, in the aggregate, a notional amount
not in excess of the principal amount of this Subordinated
Promissory Note;
(g) merge into or consolidate with any Person except
that MIStS Issuer may merge with and into EEX Capital, or
sell any of its Property if such merger, consolidation or
sale would result in a Default or Event of Default
hereunder;
(h) issue any equity securities other than the
Preferred Securities and the equity securities issued to EEX
at the formation of EEX Capital L.L.C.; or
(i) create any partnership, joint venture, limited
liability company or partnership, subsidiary or any other
Person of any kind, other than MIStS Issuer.
ARTICLE V
Events of Default; Remedies
Section 5.01 Events of Default. One or more of the
following events shall constitute an "Event of Default":
(a) EEX Capital shall default in the payment or
prepayment of any principal, interest or other amounts owing
under this Subordinated Promissory Note when due and such
default shall continue unremedied for a period of thirty
(30) days; or
(b) a "Maturing Event" under and as defined in the EEX
Subordinated Note shall occur, a "Voting Rights Trigger
Event" under and as defined in Section 8.1(b) of the MIStS
Issuer LLC Agreement shall occur, or an "Event of Default"
under and as defined in the EEX Syndicated Credit Agreement
shall occur; or
(c) any representation, warranty or certification made
or deemed made herein or in any other Operative Documents by
EEX, any Subsidiary, EEX Capital or MIStS Issuer, or any
certificate furnished to MIStS Issuer pursuant to the
provisions hereof or any other Operative Documents, shall
prove to have been false or misleading as of the time made,
deemed made or furnished in any material adverse respect; or
(d) EEX Capital or MIStS Issuer shall incur any
Prohibited Indebtedness; or
(e) EEX or any of its Subsidiaries shall default in
the performance of any of its obligations under any other
Operative Document or EEX Capital shall default in the
performance of any of its obligations under any other
Section of this Subordinated Promissory Note not covered by
Section 5.01(a), (b), (c) or (d) and such default shall
continue unremedied for a period of sixty (60) days after
the earlier to occur of (i) notice thereof to EEX by MIStS
Issuer or the Placement Agent, as MIStS Issuer's attorney-in-fact, or
(ii) a Responsible Officer of EEX otherwise
becoming aware of such default; or
(f) EEX, EEX Capital or MIStS Issuer shall admit in
writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(g) EEX, EEX Capital 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;
(h) a proceeding or case shall be commenced, without
the application or consent of EEX, EEX Capital 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 EEX, EEX Capital or MIStS Issuer of all or any
substantial part of its Property, or (iii) similar relief in
respect of EEX, EEX Capital 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 EEX, EEX Capital or MIStS Issuer shall be entered in
an involuntary case under the Federal Bankruptcy Code; or
(i) the Guaranty Agreements after delivery thereof
shall for any reason, except to the extent permitted by the
terms thereof, cease to be in full force and effect and
valid, binding and enforceable in accordance with their
terms, except to the extent permitted by the terms of this
Subordinated Promissory Note, or EEX or any Subsidiary
Guarantor shall so state in writing, or EEX or any
Subsidiary Guarantor shall default on any of its obligations
and covenants thereunder; or
(j) either (i) EEX shall cease to own 100% of the
common stock of EEX Capital, or (ii) EEX Capital shall cease
to own 100% of the common membership interests of MIStS
Issuer (other than as a result of a merger of MIStS Issuer
with and into EEX Capital); or
(k) any Change of Control shall occur.
Section 5.02 Remedies.
(a) In the case of an Event of Default other than one
referred to in clauses (f), (g), or (h) of Section 5.01,
subject to the terms of the Subordination Agreement, MIStS
Issuer may declare (or the Placement Agent, as MIStS
Issuer's attorney-in-fact, may declare), by notice to EEX
Capital the principal amount then outstanding of, and the
accrued interest on, this Subordinated Promissory Note and
all other amounts payable by EEX Capital hereunder and under
this Subordinated Promissory Note to be forthwith due and
payable, whereupon such amounts shall, subject to the terms
of the Subordination Agreement, be immediately due and
payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other
formalities of any kind, all of which are hereby expressly
waived by EEX Capital.
(b) In the case of the occurrence of an Event of
Default referred to in clauses (f), (g), or (h) of Section
5.01, the principal amount then outstanding of, and the
accrued interest on, this Subordinated Promissory Note and
all other amounts payable by EEX Capital hereunder and under
this Subordinated Promissory Note shall become
automatically, immediately due and, subject to the terms of
the Subordination Agreement, payable without presentment,
demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which
are hereby expressly waived by EEX Capital.
(c) All proceeds received after maturity of this
Subordinated Promissory Note, whether by acceleration or
otherwise, shall be applied first to reimbursement of
expenses and indemnities provided for in this Subordinated
Promissory Note; second to accrued interest on this
Subordinated Promissory Note; third to principal outstanding
on this Subordinated Promissory Note; and any excess shall
be paid to EEX Capital or as otherwise required by any
Governmental Requirement.
Article VI
Miscellaneous
Section 6.01 Waiver. EEX Capital hereby expressly
waives demand and presentment for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, notice of intent
to accelerate the maturity hereof, notice of the acceleration of
the maturity hereof, bringing of suit and diligence in taking any
action to collect amounts called for hereunder and in the
handling of securities at any time existing in connection
herewith. No failure on the part of MIStS Issuer or the
Placement Agent, as MIStS Issuer's attorney-in-fact, to exercise
and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Subordinated
Promissory Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under
this Subordinated Promissory Note preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. EEX Capital agrees
that the statute of limitations for any action to enforce payment
of this Subordinated Promissory Note shall not begin to run until
the earlier of August 4, 2005 or the date that a payment under
this Subordinated Promissory Note is actually demanded in writing
by MIStS Issuer or the Placement Agent, as MIStS Issuer's
attorney-in-fact.
Section 6.02 Notices. All notices and other
communications provided for herein (including, without
limitation, any modifications of, or waivers or consents
hereunder) shall be given or made by telecopy, courier or U.S.
Mail or in writing and telecopied, mailed or delivered to the
intended recipient at the "Address for Notices" specified in the
other Operative Documents or, as to any party, at such other
address as shall be designated by such party in a notice to each
other party. Except as otherwise provided in this Subordinated
Promissory Note or in the other Operative Documents, all such
communications shall be deemed to have been duly given when
transmitted by telecopier, or personally delivered or, in the
case of a mailed notice, the earlier of (i) actual receipt by the
named addressee or (ii) seven (7) days after the date deposited
in the mails, postage prepaid, in each case given or addressed as
aforesaid.
Section 6.03 Amendments, Etc. Any provision of this
Subordinated Promissory Note and the Guaranty Agreements may only
be amended, modified or waived with EEX Capital's, MIStS
Issuer's, the Placement Agent's and the Majority Holders' prior
written consent; provided that (i) no amendment, modification or
waiver which extends the maturity of the interest payment dates,
forgives the principal amount of any Indebtedness outstanding
under this Subordinated Promissory Note or the Guaranty
Agreements, releases or materially diminishes the liabilities
under any Guaranty Agreement, reduces the interest payable to
MIStS Issuer generally, affects this Section 6.03 or modifies the
definition of "Majority Holders" or any provision which by its
terms requires the consent or approval of all of the Holders
shall be effective without consent of all Holders; (ii) no
amendment, modification or waiver which modifies the rights,
duties or obligations of the Placement Agent shall be effective
without the consent of the Placement Agent, and (iii) no
amendment, modification or waiver which extends the maturity of
this Subordinated Promissory Note shall be effective without the
consent of all of the Holders.
Section 6.04 Successors and Assigns. This
Subordinated Promissory Note shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns.
Section 6.05 Invalidity. In the event that any one or
more of the provisions contained in this Subordinated Promissory
Note shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Subordinated Promissory Note.
Section 6.06 Survival. The obligations of the parties
under Section 2.05, shall survive the repayment of this
Subordinated Promissory Note. To the extent that any payments on
the Indebtedness evidenced by this Subordinated Promissory Note
or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, debtor in possession, receiver or
other Person under any bankruptcy law, common law or equitable
cause, then to such extent, the Indebtedness evidenced by this
Subordinated Promissory Note so satisfied shall be revived and
continue as if such payment or proceeds had not been received and
the Liens, security interests, rights, powers and remedies under
this Subordinated Promissory Note shall continue in full force
and effect. In such event, this Subordinated Promissory Note
shall be automatically reinstated and EEX Capital shall take such
action as may be reasonably requested by MIStS Issuer or the
Placement Agent to effect such reinstatement.
Section 6.07 Governing Law; Submission to Jurisdiction.
(a) This Subordinated Promissory Note shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflict of laws rules thereof.
(b) Any legal action or proceeding with respect to this
Subordinated Promissory Note may be brought in the courts of the state of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Subordinated Promissory Note, EEX Capital
hereby accepts for itself and (to the extent permitted by law) in respect of its
Property, generally and unconditionally, the jurisdiction of the aforesaid
courts. EEX Capital hereby irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions. This submission to
jurisdiction is non-exclusive and does not preclude MIStS Issuer or the
Placement Agent, as MIStS Issuer's attorney-in-fact, from obtaining jurisdiction
over EEX Capital in any court otherwise having jurisdiction.
(c) Nothing herein shall affect the right of MIStS Issuer or the
Placement Agent, as MIStS Issuer's attorney-in-fact, to serve process in any
manner permitted by law or to commence legal proceedings or otherwise proceed
against EEX Capital in any other jurisdiction.
(d) EEX Capital hereby (i) irrevocably and unconditionally
waives, to the fullest extent permitted by law, trial by jury in any legal
action or proceeding relating to this Subordinated Promissory Note and for any
counterclaim therein; (ii) irrevocably waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any such
litigation any special, exemplary, punitive or consequential damages, or damages
other than, or in addition to, actual damages; (iii) certifies that no party
hereto nor any representative or agent of counsel for any party hereto has
represented, expressly or otherwise, or implied that such party would not, in
the event of litigation, seek to enforce the foregoing waivers, and
(iv) acknowledges that it has been induced to enter into this Subordinated
Promissory Note, among other things, the mutual waivers and certifications
contained in this Section 6.07.
Section 6.08 Placement Agent's Rights. The Placement
Agent, as MIStS Issuer's attorney-in-fact, has the right in
certain circumstances set forth in the Subscription Agreement, to
make demand on or exercise remedies under this Subordinated
Promissory Note.
<Signature Page Next>
Executed as of the date first written above.
EEX CAPITAL INC.
By: /s/ J. T. Leary
--------------------------
J.T. Leary
Vice President, Finance
and Treasurer
Schedule 1
List of Operative Documents
1. Subordinated Promissory Note dated September 29, 1997 issued
by EEX Capital in favor of MIStS Issuer in the face principal
amount of $75,000,000.
2. Subordinated Promissory Note dated September 29, 1997 issued
by EEX in favor of EEX Capital in the face principal amount of
$150,000,000.
3. Each of the Transaction Documents (under and as defined in
the Subscription Agreement).