EXHIBIT 4.7
AMENDED AND RESTATED GUARANTY AGREEMENT
THIS AMENDED AND RESTATED GUARANTY AGREEMENT is entered
into by ENSERCH EXPLORATION, INC., a Texas corporation ("EEX"),
and MIStS Issuer L.L.C., a limited liability company formed under
the laws of the State of Delaware ("MIStS Issuer"), as of
September 29, 1997.
Recitals
A. EEX executed a Guaranty Agreement dated August 4,
1995 in favor of MIStS Issuer, which was amended by (i) that
certain First Omnibus Amendment to Demand Note and Guaranty
Agreement dated as of October 31, 1996 by and among EEX Capital
L.L.C. ("EEX LLC"), EEX and MIStS Issuer (the "First Amendment")
and (ii) that certain Second Omnibus Amendment to Demand Note and
Guaranty Agreement dated as of June 27, 1997, by and among EEX
LLC, EEX and MIStS Issuer (the "Second Amendment" and, the
Guaranty Agreement as amended by the First Amendment and the
Second Amendment, the "Existing Guaranty"), with respect to a
demand loan made by MIStS Issuer to EEX LLC in the original
principal amount of $150,000,000 (the "Loan").
B. The Loan is evidenced by that certain demand note
dated August 4, 1995 made by EEX LLC to the order of MIStS Issuer
in the original principal amount of $150,000,000, which was
amended by the First Amendment and the Second Amendment (as so
amended, the "Existing Demand Note").
C. On September 26, 1997, EEX LLC merged (the
"Merger") with and into Enserch Preferred Capital Inc., a
Delaware corporation which, as survivor of the Merger, changed
its name to EEX Capital Inc. ("EEX Capital").
D. On the date hereof, EEX Capital issued to UBS
Securities LLC ("UBS") 75,000 Shares of its Class A Cumulative
Perpetual Increasing Dividend Preferred Stock (the "Preferred
Stock") for $75,000,000 in cash, and used such cash proceeds to
make a $75,000,000 principal payment on the Existing Demand Note
(the "Principal Payment"). Also on the date hereof, MIStS Issuer
issued to UBS 75,000 shares of its Class A Cumulative Perpetual
Increasing Dividend Preferred Securities (the "Preferred
Interests" and, together with the Preferred Stock, the "Preferred
Securities") for $75,000,000 in cash. MIStS Issuer used the
proceeds of the Preferred Interests, together with the Principal
Payment and certain other cash available to it to fully redeem
its outstanding Minority Interest Structured Securities (the
"Redemption").
E. As a result of the Merger, the Principal Payment
and the Redemption, (i) the Existing Demand Note has been
replaced on the date hereof with a Subordinated Promissory Note
made by EEX Capital, in its capacity as survivor by Merger to EEX
LLC, in the face principal amount of $75,000,000 (the Existing
Demand Note as so amended and as hereafter amended, extended,
replaced, restated or otherwise modified from time to time, the
"Subordinated Promissory Note") to re-evidence the Loan as
reduced by the Principal Payment, (ii) MIStS Issuer has executed
a Subordination Agreement dated as of September 29, 1997 in favor
of The Chase Manhattan Bank, as administrative agent for the
lenders from time to time party to the EEX Credit Agreement
referenced in the Subordinated Promissory Note (the
"Subordination Agreement"), pursuant to which MIStS Issuer has
subordinated its claims and rights under and in respect of the
Subordinated Promissory Note and this Guaranty Agreement to the
payment of the "Superior Indebtedness" as defined therein, and
(iii) EEX and MIStS Issuer wish to amend and restate the Existing
Guaranty as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree to amend and restate the Existing Guaranty in its
entirety as follows:
ARTICLE 1
General Terms
Section 1.1 Terms Defined Above. As used in this
Guaranty Agreement, the terms defined above, shall have the
meanings indicated above.
Section 1.2 Certain Definitions. As used in this
Guaranty Agreement, the following terms shall have the following
meanings, unless the context otherwise requires:
"Guaranty Agreement" shall mean this Amended and
Restated Guaranty Agreement, including Schedule 1, Schedule 2.14
and Exhibit 1 attached hereto, as the same may from time to time
be amended or supplemented.
"Liabilities" shall mean (a) any and all indebtedness,
obligations and liabilities of EEX Capital pursuant to the
Subordinated Promissory Note, including without limitation, the
unpaid principal of and interest on the Subordinated Promissory
Note, including without limitation, interest accruing subsequent
to the filing of a petition (whether or not an allowable claim)
or other action concerning bankruptcy or other similar
proceeding; and (b) all renewals, rearrangements, increases,
extensions for any period, amendments or supplements in whole or
in part of the Subordinated Promissory Note executed by EEX
Capital or any documents evidencing the above.
Section 1.3 Schedule 1. Unless otherwise defined
herein, all terms beginning with a capital letter which are
defined in the attached Schedule 1 shall have the same meanings
herein as therein.
ARTICLE 2
The Guaranty
Section 2.1 Liabilities Guaranteed. EEX hereby
irrevocably and unconditionally guarantees the prompt payment of
the Liabilities when due, whether at maturity or otherwise. EEX
recognizes that the Subordinated Promissory Note may, subject to
the terms of the Subordination Agreement, be demanded at any
time, with or without cause, and agrees that the Liabilities will
be due at the time of such demand. MIStS Issuer shall execute
and deliver the Subordination Agreement and acknowledges that its
rights to make demand on the Subordinated Promissory Note and
this Guaranty Agreement are limited as set forth in such
Subordination Agreement.
Section 2.2 Nature of Guaranty. This Guaranty
Agreement is an absolute, irrevocable, completed and continuing
guaranty of payment and not a guaranty of collection, and no
notice of the Liabilities or any extension of credit already or
hereafter contracted by or extended to EEX Capital need be given
to EEX. This Guaranty Agreement may not be revoked by EEX and
shall continue to be effective with respect to debt under the
Liabilities arising or created after any attempted revocation by
EEX and shall remain in full force and effect until the
Liabilities are indefeasibly paid in full, notwithstanding that
from time to time prior thereto no Liabilities may be
outstanding. EEX Capital and MIStS Issuer may modify, alter,
rearrange, extend for any period and/or renew from time to time,
the Liabilities, and MIStS Issuer may waive any Default or Events
of Default without notice to EEX and in such event EEX will
remain fully bound hereunder on the Liabilities. This Guaranty
Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of the Liabilities is
rescinded or must otherwise be returned by MIStS Issuer upon the
insolvency, bankruptcy or reorganization of EEX or otherwise, all
as though such payment had not been made. This Guaranty
Agreement may be enforced by MIStS Issuer and any subsequent
holder of any of the Liabilities and shall not be discharged by
the assignment or negotiation of all or part of the Liabilities.
EEX hereby expressly waives presentment, demand, notice of
non-payment, protest and notice of protest and dishonor, notice
of Default or Event of Default, notice of intent to accelerate
the maturity and notice of acceleration of the maturity and any
other notice in connection with the Liabilities, and also notice
of acceptance of this Guaranty Agreement, acceptance on the part
of MIStS Issuer being conclusively presumed by MIStS Issuer's
request for this Guaranty Agreement and delivery of the same to
MIStS Issuer.
Section 2.3 EEX's Waivers. EEX waives any right to
require MIStS Issuer to (a) proceed against EEX Capital or any
other Person liable on the Liabilities, (b) enforce any of its
rights against any other guarantor of the Liabilities,
(c) proceed or enforce any of its rights against or exhaust any
security given to secure the Liabilities, (d) have EEX Capital
joined with EEX in any suit arising out of this Guaranty
Agreement and/or the Liabilities, or (e) pursue any other remedy
in MIStS Issuer's powers whatsoever. MIStS Issuer shall not be
required to mitigate damages or take any action to reduce,
collect or enforce the Liabilities. EEX waives any defense aris-
ing by reason of any lack of authority or power, or other defense
of EEX Capital or any other guarantor of the Liabilities, and
shall remain liable hereon regardless of whether any other
guarantor be found not liable thereon for any reason. Whether
and when to exercise any of the remedies of MIStS Issuer under
any of the Operative Documents shall be in the sole and absolute
discretion of MIStS Issuer, and no delay by MIStS Issuer in
enforcing any remedy, including delay in conducting a foreclosure
sale, shall be a defense to EEX's liability under this Guaranty
Agreement.
Section 2.4 Maturity of Liabilities; Payment. EEX
agrees that if the maturity of any of the Liabilities is demanded
or accelerated by bankruptcy or otherwise, such maturity shall
also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to EEX. EEX will, forthwith
upon notice from MIStS Issuer, pay to MIStS Issuer the amount due
and unpaid by EEX Capital and guaranteed hereby. The failure of
the Placement Agent, as attorney-in-fact for MIStS Issuer, to
give any such notice shall not in any way release EEX hereunder.
Section 2.5 Issuer's Expenses. If EEX fails to pay
the Liabilities after notice from MIStS Issuer, and if MIStS
Issuer obtains the services of an attorney for collection of
amounts owing by EEX hereunder, or obtaining advice of counsel in
respect of any of its rights under this Guaranty Agreement, or if
suit is filed to enforce this Guaranty Agreement, or if
proceedings are had in any bankruptcy, probate, receivership or
other judicial proceedings for the establishment or collection of
any amount owing by EEX hereunder, or if any amount owing by EEX
hereunder is collected through such proceedings, EEX agrees to
pay to MIStS Issuer MIStS Issuer's reasonable attorneys' fees.
Section 2.6 Liability. It is expressly agreed that
the liability of EEX for the payment of the Liabilities
guaranteed hereby shall be primary and not secondary.
Section 2.7 Events and Circumstances Not Reducing or
Discharging EEX's Obligations. EEX hereby consents and agrees to
each of the following to the fullest extent permitted by law, and
agrees that EEX's obligations under this Guaranty Agreement shall
not be released, diminished, impaired, reduced or adversely
affected by any of the following, and waives any rights
(including without limitation rights to notice) which EEX might
otherwise have as a result of or in connection with any of the
following:
(a) Modifications, etc. Any renewal, extension,
modification, increase, decrease, alteration or rearrangement of
all or any part of the Liabilities, or of the Subordinated
Promissory Note or any instrument executed in connection
therewith, or any contract or understanding between EEX Capital
and MIStS Issuer or any other Person pertaining to the
Liabilities;
(b) Adjustment, etc. Any adjustment, indulgence,
forbearance or compromise that might be granted or given by MIStS
Issuer to EEX Capital or EEX or any other Person liable on the
Liabilities;
(c) Condition of EEX Capital or EEX. The insolvency,
bankruptcy arrangement, adjustment, composition, liquidation,
dissolution or lack of power of EEX Capital or EEX or any other
Person at any time liable for the payment of all or part of the
Liabilities; or any dissolution of EEX Capital or EEX, or any
sale, lease or transfer of any or all of the assets of EEX
Capital or EEX, or any changes in the shareholders, partners or
members of EEX Capital or EEX; or any reorganization of EEX
Capital or EEX;
(d) Invalidity of Liabilities. The invalidity,
illegality or unenforceability of all or any part of the
Liabilities, or any document or agreement executed in connection
with the Liabilities, for any reason whatsoever, including
without limitation the fact that the Liabilities, or any part
thereof, exceed the amount permitted by law, the act of creating
the Liabilities or any part thereof is ultra xxxxx, the officers
or representatives executing the documents or otherwise creating
the Liabilities acted in excess of their authority, the
Liabilities violate applicable usury laws, EEX Capital has valid
defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Liabilities wholly or partially
uncollectible from EEX Capital, the creation, performance or
repayment of the Liabilities (or the execution, delivery and
performance of any document or instrument representing part of
the Liabilities or executed in connection with the Liabilities,
or given to secure the repayment of the Liabilities) is illegal,
uncollectible, legally impossible or unenforceable, or the
Subordinated Promissory Note or other documents or instruments
pertaining to the Liabilities have been forged or otherwise are
irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release
of the liability of EEX Capital on the Liabilities or any part
thereof, of any co-guarantors, or any other Person now or
hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee
or assure the payment of the Liabilities or any part thereof, it
being recognized, acknowledged and agreed by EEX that EEX may be
required to pay the Liabilities in full without assistance or
support of any other Person, and EEX has not been induced to
enter into this Guaranty Agreement on the basis of a
contemplation, belief, understanding or agreement that other
parties other than EEX Capital will be liable to perform the
Liabilities, or MIStS Issuer will look to other parties to
perform the Liabilities. Notwithstanding the foregoing, EEX does
not hereby waive or release (expressly or impliedly) any rights
of subrogation, reimbursement or contribution which it may have,
after payment in full of the Liabilities, against others liable
on the Liabilities; EEX's rights of subrogation and reimbursement
are however, subordinate to the rights and claims of MIStS
Issuer;
(f) Other Security. The taking or accepting of any
other security, collateral or guaranty, or other assurance of
payment, for all or any part of the Liabilities;
(g) Release of Collateral, etc. Any release,
surrender, exchange, subordination, deterioration, waste, loss or
impairment (including without limitation negligent, willful,
unreasonable or unjustifiable impairment) of any collateral,
property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the
Liabilities;
(h) Care and Diligence. The failure of MIStS Issuer
or any other Person to exercise diligence or reasonable care in
the preservation, protection, enforcement, sale or other handling
or treatment of all or any part of such collateral, property or
security;
(i) Status of Liens. The fact that any collateral,
security, security interest or lien contemplated or intended to
be given, created or granted as security for the repayment of the
Liabilities shall not be properly perfected or created, or shall
prove to be unenforceable or subordinate to any other security
interest or lien, it being recognized and agreed by EEX that EEX
is not entering into this Guaranty Agreement in reliance on, or
in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral
for the Liabilities. Notwithstanding the foregoing, EEX does not
hereby waive or release (expressly or impliedly) any right to be
subrogated to the rights of MIStS Issuer in any collateral or
security for the Liabilities, after payment in full of the
Liabilities; EEX's rights of subrogation are, however,
subordinate to the rights, claims, liens and security interests
of MIStS Issuer;
(j) Payments Rescinded. Any payment by EEX Capital to
MIStS Issuer is held to constitute a preference under the
bankruptcy laws, or for any reason MIStS Issuer is required to
refund such payment or pay such amount to EEX Capital or someone
else; or
(k) Other Actions Taken or Omitted. Any other action
taken or omitted to be taken with respect to the Liabilities or
the security and collateral therefor, whether or not such action
or omission prejudices EEX or increases the likelihood that EEX
will be required to pay the Liabilities pursuant to the terms
hereof; it being the unambiguous and unequivocal intention of EEX
that EEX shall be obligated to pay the Liabilities when due,
notwithstanding any occurrence, circumstance, event, action, or
omission whatsoever, whether or not contemplated, and whether or
not otherwise or particularly described herein, except for the
full and final payment and satisfaction of the Liabilities.
ARTICLE 3
Representations and Warranties
In order to induce MIStS Issuer to accept this Guaranty
Agreement, EEX represents and warrants to MIStS Issuer (which
representation and warranty will survive the creation of the
Liabilities and any extension of credit thereunder) that:
Section 3.1 By EEX. EEX's guaranty pursuant to this
Guaranty Agreement reasonably may be expected to benefit,
directly or indirectly, EEX.
Section 3.2 No Representation by Issuer. Neither
MIStS Issuer nor any other Person has made any representation,
warranty or statement to EEX in order to induce EEX to execute
this Guaranty Agreement.
Section 3.3 Schedule 1. The representations and
warranties of EEX contained in Schedule 1 are true and correct
and are incorporated herein by reference.
ARTICLE 4
Covenants
EEX covenants and agrees that until payment in full of
all Liabilities, all interest thereon and all other amounts
payable by EEX under this Guaranty Agreement, EEX will perform
the affirmative covenants and the negative covenants set forth in
Articles III and IV of Schedule 1 of this Guaranty Agreement and
such covenants are incorporated herein by reference.
ARTICLE 5
Miscellaneous
Section 5.1 Successors and Assigns. This Guaranty
Agreement is and shall be, in every particular, available to the
successors and assigns of MIStS Issuer and is and shall always be
fully binding upon the legal representatives, heirs, successors
and assigns of EEX, notwithstanding that some or all of the
monies, the repayment of which this Guaranty Agreement applies,
may be actually advanced after any bankruptcy, receivership,
reorganization or other event affecting EEX. Following the
occurrence and during the continuation of an Event of Default
under the Subordinated Promissory Note, or the occurrence of any
event specified in Section 8.1(b) of the Second Amended and
Restated Limited Liability Company Agreement of MIStS Issuer
dated as of September 29, 1997 or of Section 5(b) of the
Certificate of Designations, the Placement Agent, acting on
behalf of the Holders, shall be entitled, at its option, to
direct the exercise of, or to exercise, all the rights, remedies,
power and privileges conferred upon MIStS Issuer under this
Guaranty Agreement (including, without limitation, the
institution of any bankruptcy proceeding), to give or withhold
all consents required to be obtained from MIStS Issuer hereunder,
to give all notices on behalf of MIStS Issuer including demands
for payment of the Liabilities and to receive all payments to be
made to MIStS Issuer hereunder.
Section 5.2 Notices. Any notice or demand to EEX
under or in connection with this Guaranty Agreement may be given
and shall conclusively be deemed and considered to have been
given and received as set forth in the Subscription Agreement.
Section 5.3 Amendments, Etc. Any provision of this
Guaranty Agreement may be amended, modified or waived with EEX's
and the Majority Holders' prior written consent; provided that
(i) no amendment, modification or waiver which extends the
maturity of the Liabilities, forgives the principal amount of any
Liabilities, affects this Section 5.3 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; and (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.
Section 5.4 Construction. This Guaranty Agreement is
a contract made under and shall be construed in accordance with
and governed by the laws of the State of New York, other than the
conflict of laws rules thereof.
Section 5.5 Entire Agreement. This written Guaranty
Agreement embodies the entire agreement and understanding between
MIStS Issuer and EEX and supersedes all other agreements and
understandings between such parties relating to the subject
matter hereof.
Section 5.6 Submission to Jurisdiction. Any legal action or
proceeding with respect to this Guaranty Agreement 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 Guaranty Agreement,
EEX 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 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 from obtaining jurisdiction over EEX in any court otherwise
having jurisdiction. Nothing herein shall affect the right of MIStS Issuer or
the Placement Agent to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against EEX in any other
jurisdiction. Each of EEX and MIStS Issuer 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 Guaranty Agreement 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 acknowledges
that it has been induced to enter into this Guaranty Agreement and the
transactions contemplated hereby and thereby by, among other things, the
mutual waivers and certifications contained in this Section.
Section 5.7 Invalidity. In the event that any one or
more of the provisions contained in this Guaranty Agreement
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 Guaranty Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
WITNESS THE EXECUTION HEREOF, as of the date first above
written.
ENSERCH EXPLORATION, INC.
By: /s/ X. X. Xxxxx
----------------------------
X. X. Xxxxx
Vice President, Finance
and Treasurer
Accepted and Agreed to as of the
date first above written:
MIStS ISSUER, L.L.C.
By: EEX Capital Inc.
By: /s/ X. X. Xxxxx
-------------------------
Name: X. X. Xxxxx
Title:
LIST OF SCHEDULES AND EXHIBITS
Schedule 1 - Definitions; Representations; Covenants
Schedule 2.14 - Subsidiaries and Special Entities as of the
Closing Date; Locations of their Respective
Chief Executive Offices
Exhibit 1 - Form of Compliance Certificate
SCHEDULE 1
To the Guaranty Agreement
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Certain Defined Terms. As used herein,
the following terms shall have the following meanings (all terms
defined in this Article I or in other provisions of this Guaranty
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"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.
"Benefit Plan" shall mean any employee pension benefit
plan, as defined in section 3(2) of ERISA (other than a
Multiemployer Plan), which (a) is currently or hereafter
sponsored, maintained or contributed to by EEX, a Subsidiary or
an ERISA Affiliate or (b) was at any time during the six
preceding years, sponsored, maintained or contributed to by EEX,
a Subsidiary or an ERISA Affiliate.
"Business Day" shall mean any day other than a day on
which commercial banks are authorized or required to close in New
York, New York or Dallas, Texas.
"Capital Lease Obligations" shall mean, as to EEX or
any Subsidiary, the obligations of such Person to pay rent or
other amounts under a lease of (or other agreement conveying the
right to use) real and/or personal property which obligations are
required to be classified and accounted for as a liability for a
capital lease on a balance sheet of such Person in accordance
with GAAP and, for purposes of this Guaranty Agreement, the
amount of such obligations shall be the capitalized amount
thereof.
"Closing Date" shall mean September 29, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute.
"Consolidated Subsidiaries" shall mean each Subsidiary
(whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been)
consolidated with the financial statements of EEX in accordance
with GAAP.
"Debt" shall mean, for EEX or any Subsidiary the sum of
the following (without duplication): (i) all obligations for
borrowed money or evidenced by bonds, debentures, mandatorily
redeemable preferred stock (including such stock of Affiliates)
with maturities before the Revolving Credit Termination Date,
notes or other similar instruments (excluding interest, fees and
charges); (ii) all obligations in respect of bankers'
acceptances, unreimbursed drawings on letters of credit, surety
or other bonds; (iii) all Capital Lease Obligations; (iv) all
Operating Lease Obligations; (v) all financial guaranties in
respect of Debt of unconsolidated Affiliates and unrelated
Persons; (vi) all obligations secured by a Lien on any asset,
whether or not such Debt is assumed, but excluding obligations
secured by Liens permitted by Sections 4.02(c), (e), (f), (h),
(i), (j), (k) and (l); (vii) all production payments in
connection with oil and gas properties; and (viii) all Debt of
Special Entities to the extent EEX or any Subsidiary is liable
for such Debt under GAAP or such Debt is reflected on the
consolidated balance sheet of EEX or any Subsidiary. "Debt"
shall not include "Permitted Subordinated Debt" as such term is
defined in the EEX Credit Agreement.
"Debt to EEX Capital Ratio" shall have the meaning
assigned such term in Section 4.01.
"Default" shall have the meaning assigned such term in
the Subordinated Promissory Note.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"EEX Credit Agreement" shall have the meaning assigned
such term in the Subordinated Promissory Note.
"Environmental Laws" shall mean any and all
Governmental Requirements pertaining to health or the environment
in effect in any and all jurisdictions in which EEX or any
Subsidiary is conducting or at any time has conducted business,
or where any Property of EEX or any Subsidiary is located,
including without limitation, the Oil Pollution Act of 1990, as
amended, ("OPA"), the Clean Air Act, as amended, the
Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980, as amended, ("CERCLA"), the Federal Water
Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, ("RCRA"), the Safe Drinking
Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as
amended, and other environmental conservation or protection laws.
The term "oil" shall have the meaning specified in OPA, the terms
"hazardous substance" and "release" (or "threatened release")
shall have the meanings specified in CERCLA, and the terms "solid
waste" and "disposal" (or "disposed") shall have the meanings
specified in RCRA; provided, however, that (i) in the event
either OPA, CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (ii)
to the extent the laws of the state in which any Property of EEX
or any Subsidiary is located establish a meaning for "oil,"
"hazardous substance," "release," "solid waste" or "disposal"
which is broader than that specified in either OPA, CERCLA or
RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute.
"ERISA Affiliate" shall mean each trade or business
(whether or not incorporated) which together with EEX or a
Subsidiary would be deemed to be a "single employer" within the
meaning of section 4001(b)(1) of ERISA or subsections (b), (c),
(m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event"
described in section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the
provision for 30-day notice to the PBGC), (ii) the withdrawal of
EEX, a Subsidiary or any ERISA Affiliate from a Plan during a
plan year in which it was a "substantial employer" as defined in
section 4001(a)(2) of ERISA, (iii) the filing of a notice of
intent to terminate a Plan or the treatment of a Plan amendment
as a termination under section 4041 of ERISA, (iv) the
institution of proceedings to terminate a Plan by the PBGC, (v)
any other event or condition which might constitute grounds under
section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan or (vi) the partial or
complete withdrawal of EEX, a Subsidiary or any ERISA Affiliate
from a Multiemployer Plan.
"Event of Default" shall have the meaning assigned such
term in Section 5.01 of the Subordinated Promissory Note.
"Financial Statements" shall mean the financial
statement or statements of EEX and its Consolidated Subsidiaries
described or referred to in Section 2.02.
"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 this Guaranty
Agreement and the Subsidiary Guaranty Agreements.
"Hedging Agreement" 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.
"Holder" means the record holder of one or more (i)
shares of Preferred Stock, as shown on the books and records of
EEX Capital, or (ii) Preferred Interests, as shown on the books
and records of MIStS Issuer.
"Indebtedness" shall mean any and all amounts owing or
to be owing by EEX in connection with this Guaranty Agreement and
all renewals, extensions and/or rearrangements of any of the
above.
"Lien" shall mean, with respect to any Person, 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
Guaranty Agreement, EEX or any Subsidiary 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 the Holders of a majority
of the Preferred Securities, considered as if they were a single
class.
"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.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in section 3(37) or 4001(a)(3) of ERISA which is, or
within the six preceding years was, contributed to by EEX, a
Subsidiary or an ERISA Affiliate.
"Net Worth" shall mean, as at any date, the sum of the
following for EEX and its Consolidated Subsidiaries determined
(without duplication) in accordance with GAAP:
(i) the amount of preferred stock (excluding
mandatorily redeemable preferred stock) and common
stock at par plus the amount of paid in capital of
EEX, plus
(ii) the amount of retained earnings (or, in the
case of a retained earnings deficit, minus the
amount of such deficit), minus
(iii) the cost of treasury shares, minus
(iv) unamortized restricted stock compensation,
plus
(v) foreign currency translation adjustment gains
(or minus losses), plus
(vi) any other additions (or minus any other
deductions) to the net worth of EEX required by
GAAP.
"Operating Lease Obligations" shall mean, as to EEX or
any Subsidiary, the obligations of such Person to pay rent or
other amounts under a lease of (or other agreement conveying the
right to use) real and/or personal property which obligations are
not required to be classified and accounted for as a liability
for a capital lease on a balance sheet of such Person and, for
purposes of this Guaranty Agreement, the amount of such
obligations shall be the discounted present value of the lease
payments, discounted in the same manner a capital lease would be
discounted according to GAAP.
"Operative Documents" shall have the meaning specified
in the Subordinated Promissory Note.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation, or any successor thereto.
"Permitted Subordinated Debt" shall mean Debt of EEX or
a Subsidiary owing to EEX or another Subsidiary subordinated to
the Indebtedness on terms substantially similar to the terms set
forth in Exhibit M to the EEX Credit Agreement on terms and
pursuant to documentation acceptable to the requisite parties
thereunder.
"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 its
capacity as placement agent for the Holders.
"Plan" shall mean each Benefit Plan and Multiemployer
Plan.
"Prohibited Debt" shall mean, for MIStS Issuer, the sum
of the following (without duplication): (i) all obligations of
such Person for borrowed money or evidenced by bonds, debentures,
notes or other similar instruments (including principal,
interest, fees and charges); (ii) all obligations of such Person
(whether contingent or otherwise) in respect of bankers'
acceptances, letters of credit, surety or other bonds and similar
instruments; (iii) all obligations of such Person to pay the
deferred purchase price of Property or services (other than for
borrowed money); (iv) all obligations under leases which shall
have been, or should have been, in accordance with GAAP, recorded
as capital leases in respect of which such Person is liable
(whether contingent or otherwise); (v) all obligations under
leases which require such Person or its Affiliate to make
payments over the term of such lease, including payments at
termination, which are substantially equal to at least eighty
percent (80%) of the purchase price of the Property subject to
such lease plus interest as an imputed rate of interest; (vi) all
Debt (as described in the other clauses of this definition) and
other obligations of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person;
(vii) all Debt (as described in the other clauses of this
definition) and other obligations of others guaranteed by such
Person or in which such Person otherwise assures a creditor
against loss of the debtor or obligations of others; (viii) all
obligations or undertakings of such Person to maintain or cause
to be maintained the financial position or covenants of others or
to purchase the Debt or Property of others; (ix) the undischarged
balance of any production payment created by such Person or for
the creation of which such Person directly or indirectly received
payment; and (x) obligations to deliver goods or services in
consideration of advance payments.
"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 such Person and, with respect to financial
matters, the term "Responsible Officer" shall include the Vice
President - Finance, the Chief Financial Officer, Controller,
Treasurer or Treasury Officer of such Person. Unless otherwise
specified, all references to a Responsible Officer herein shall
mean a Responsible Officer of EEX.
"SEC" shall mean the Securities and Exchange Commission
or any successor Governmental Authority.
"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.
"Subsidiary" shall have the meaning assigned to such
term in the Certificate of Designations.
"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 as such agreement may be amended,
supplemented or restated from time to time.
"Withdrawal Liability" shall have the meaning given
such term under Part I of Subtitle E of Title IV of ERISA.
Section 1.02 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be furnished to the Placement Agent or the Holders
hereunder shall be prepared, in accordance with GAAP, applied on
a basis consistent with the audited financial statements of EEX
referred to in Section 2.02 (except for changes concurred with by
EEX's independent public accountants).
ARTICLE II
Representations and Warranties
EEX represents and warrants to MIStS Issuer, the Placement
Agent and the Holders that:
Section 2.01 Existence. Each of EEX, each Subsidiary
Guarantor, EEX Capital and MIStS Issuer: (i) is a corporation or
limited liability company duly organized, legally existing and in
good standing under the laws of the jurisdiction of its
formation; (ii) has all requisite 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 2.02 Financial Condition. The audited balance
sheet of EEX as at December 31, 1996 and the related statements
of operations, cash flows and changes in partners' capital and
common shareholders' equity of EEX and its predecessor for each
of the three years in the period ended on said date, with the
opinion thereon of Deloitte & Touche LLP and the unaudited
interim financial statements of EEX at June 30, 1997 heretofore
furnished to each of the Holders, are complete and correct and
fairly present the financial condition of EEX as at said date and
the results of operations and cash flows of EEX and its
predecessor for the stated periods then ended, all in accordance
with GAAP, subject, in the case of the interim financial
statements, to normal year-end adjustments. Neither EEX, any
Subsidiary, EEX Capital nor MIStS Issuer has on the Closing Date
any material Debt, contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in the Financial
Statements. Since June 30, 1997 to the Closing Date, there has
been no change or event having a Material Adverse Effect. Since
the date of the Financial Statements to the Closing Date, neither
the business nor the Properties of EEX or any Subsidiary have
been materially and adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking
of Property or cancellation of contracts, permits or concessions
by any Governmental Authority, riot, activities of armed forces
or acts of God or of any public enemy.
Section 2.03 Litigation. As of the Closing Date,
there is no litigation, legal, administrative or arbitral
proceeding, investigation or other action of any nature pending
or, to the knowledge of EEX threatened against or affecting EEX,
any Subsidiary, EEX Capital or MIStS Issuer which involves the
possibility of any judgment or liability against EEX, any
Subsidiary, EEX Capital or MIStS Issuer not fully covered by
insurance (except for normal deductibles), and which would have a
Material Adverse Effect.
Section 2.04 No Breach. Neither the execution and
delivery of the Operative Documents to which EEX, any Subsidiary,
EEX Capital or MIStS Issuer is a party, 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 respective charter or by-laws or
other organizational documents of EEX, any Subsidiary, EEX
Capital or MIStS Issuer or any Governmental Requirement or any
agreement or instrument for borrowed money to which any of the
foregoing 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,
any Subsidiary, EEX Capital or MIStS Issuer pursuant to the terms
of any such agreement or instrument.
Section 2.05 Authority. EEX, EEX Capital, MIStS
Issuer and each Subsidiary have all necessary power and authority
to execute, deliver and perform its obligations under the
Operative Documents to which it is a party; and the execution,
delivery and performance by any of the foregoing of the Operative
Documents to which it is a party, have been duly authorized by
all necessary corporate or member action on its part; and the
Operative Documents constitute the legal, valid and binding
obligations of EEX, each Subsidiary, EEX Capital and MIStS
Issuer, enforceable in accordance with their 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 2.06 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, any Subsidiary, EEX Capital or MIStS
Issuer of the Operative Documents or for the validity or enforce-
ability thereof.
Section 2.07 Use of Proceeds. The proceeds of the
Preferred Interests shall be used by EEX Capital to repay
$75,000,000 of the Existing Demand Note. Such repayment, and the
proceeds of the Preferred Interests, shall be used by MIStS
Issuer to redeem all $150,000,000 of its Minority Interest
Structured Securities outstanding on the Closing Date. None of
EEX, EEX Capital nor MIStS Issuer is 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 the
Preferred Securities, not more than 25 percent of the value of
the assets (of EEX and its Subsidiaries on a consolidated basis),
which are subject to any arrangement with MIStS Issuer (herein or
otherwise) whereby EEX's or any Subsidiary'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).
Section 2.08 ERISA. As of the Closing Date, except as
would not have a Material Adverse Effect:
(a) EEX, the Subsidiaries and each ERISA Affiliate
have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.
(b) No act, omission or transaction has occurred which
could result in imposition on EEX, any Subsidiary or any ERISA
Affiliate (whether directly or indirectly) of (i) either a
material civil penalty assessed pursuant to subsections (c), (i)
or (l) of section 502 of ERISA or a tax imposed pursuant to
Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under section 409 of ERISA.
(c) No liability to the PBGC (other than for the
payment of current premiums which are not past due) by EEX, any
Subsidiary or any ERISA Affiliate has been or is expected by EEX,
any Subsidiary or any ERISA Affiliate to be incurred with respect
to any Plan. No ERISA Event with respect to any Plan has
occurred which could result in a liability of EEX, any Subsidiary
or any ERISA Affiliate.
(d) Full payment when due has been made of all amounts
which EEX, the Subsidiaries or any ERISA Affiliate is required
under the terms of each Plan or applicable law to have paid as
contributions to such Plan as of the date hereof, and no
accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Benefit Plan.
(e) The actuarial present value of the benefit
liabilities under each Benefit Plan which is subject to Title IV
of ERISA does not, as of the end of EEX's most recently ended
fiscal year, exceed the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA) of
such Benefit Plan allocable to such benefit liabilities. The
term "actuarial present value of the benefit liabilities" shall
have the meaning specified in section 4041 of ERISA.
(f) Neither EEX, the Subsidiaries nor any ERISA
Affiliate has received any notification (or has knowledge of any
reason to expect) that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, within the
meaning of Title IV of ERISA.
(g) Neither EEX, the Subsidiaries nor any ERISA
Affiliate is required to provide security under section
401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the Plan.
Section 2.09 Taxes. Each of EEX, its Subsidiaries,
EEX Capital and MIStS Issuer has filed all United States Federal
income tax returns and all other tax returns which are required
to be filed by them and has paid all material taxes due pursuant
to such returns or pursuant to any assessment received by EEX or
any Subsidiary or EEX Capital or MIStS Issuer except for any such
tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against
which adequate reserves are being maintained. The charges,
accruals and reserves on the books of EEX and its Subsidiaries in
respect of taxes and other governmental charges are, in the
opinion of EEX, adequate. No tax lien has been filed and, to the
knowledge of EEX, no claim is being asserted with respect to any
such tax, fee or other charge.
Section 2.10 Titles, etc. To the best of EEX's
knowledge:
(a) Each of EEX and the Subsidiary Guarantors has good
and defensible title to its material (individually or in the
aggregate) Properties in all material respects, free and clear of
all Liens except Liens permitted by Section 4.02.
(b) All leases and agreements necessary for the
conduct of the business of EEX and the Subsidiary Guarantors are
valid and subsisting, in full force and effect and there exists
no default or event or circumstance which with the giving of
notice or the passage of time or both would give rise to a
default under any such lease or leases, which would affect in any
material respect the conduct of the business of EEX and the
Subsidiary Guarantors.
(c) The rights, properties and other assets presently
owned, leased or licensed by EEX and the Subsidiary Guarantors
including, without limitation, all easements and rights of way,
include all rights, Properties and other assets necessary to
permit EEX and the Subsidiary Guarantors to conduct their
business in all material respects in the same manner as its
business has been conducted prior to the Closing Date.
Section 2.11 No Material Misstatements. No
information, exhibit or report furnished to the Placement Agent
or any Holder by or on behalf of EEX, any Subsidiary, EEX Capital
or MIStS Issuer in connection with the negotiation and
administration of this Guaranty Agreement contains any material
misstatement of fact or omits to state a material fact necessary
in order to make the statements contained therein not misleading.
Section 2.12 Investment Company Act. Neither EEX, any
Subsidiary, EEX Capital nor MIStS Issuer is an "investment
company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as
amended.
Section 2.13 Public Utility Holding Company Act.
Neither EEX, any Subsidiary, EEX Capital nor MIStS Issuer is a
"holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "sub-
sidiary company" of a "holding company," or a "public utility"
within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 2.14 Subsidiaries and Partnerships. On the
Closing Date, except as set forth on Schedule 2.14, EEX has no
Subsidiaries and neither EEX nor any Subsidiary has any interest
in any general or limited partnerships, but excluding solely tax
partnerships and oil and gas joint ventures under joint operating
agreements.
Section 2.15 Location of Chief Executive Offices. On
the Closing Date, EEX's chief executive offices are located at
the address stated on the signature page of this Guaranty
Agreement. On the Closing Date, the chief executive office of
each Subsidiary is located at the addresses stated on Schedule
2.14.
Section 2.16 Defaults. As of the Closing Date,
neither EEX, any Subsidiary, EEX Capital nor MIStS Issuer is in
default nor has any event or circumstance occurred which, but for
the expiration of any applicable grace period or the giving of
notice, or both, would constitute a default under any agreement
or instrument for borrowed money to which any of the foregoing is
a party or by which it is bound. No Default has occurred and is
continuing.
Section 2.17 Environmental Matters. As of the Closing
Date except as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such
actions would not have a Material Adverse Effect):
(a) Neither any Property of EEX or any Subsidiary nor
the operations conducted thereon violate any order or requirement
of any court or Governmental Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no
Property of EEX or any Subsidiary nor the operations currently
conducted thereon or, to the best knowledge of EEX, by any prior
owner or operator of such Property or operation, are in violation
of or subject to any existing, pending or threatened action,
suit, investigation, inquiry or proceeding by or before any court
or Governmental Authority or to any remedial obligations under
Environmental Laws;
(c) All notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed in
connection with the operation or use of any and all Property of
EEX and each Subsidiary, including without limitation past or
present treatment, storage, disposal or release of a hazardous
substance or solid waste into the environment, have been duly
obtained or filed, and EEX and each Subsidiary are in compliance
with the terms and conditions of all such notices, permits,
licenses and similar authorizations;
(d) All hazardous substances, solid waste, and oil and
gas exploration and production wastes, if any, generated at any
and all Property of EEX or any Subsidiary have in the past been
transported, treated and disposed of in accordance with
Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the
environment, and, to the best knowledge of EEX, all such
transport carriers and treatment and disposal facilities have
been and are operating in compliance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to
public health or welfare or the environment, and are not the
subject of any existing, pending or threatened action,
investigation or inquiry by any Governmental Authority in
connection with any Environmental Laws;
(e) EEX has taken all steps reasonably necessary to
determine and has determined that no hazardous substances, solid
waste, or oil and gas exploration and production wastes, have
been disposed of or otherwise released and there has been no
threatened release of any hazardous substances on or to any
Property of EEX or any Subsidiary except in compliance with
Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the
environment;
(f) To the extent applicable, all Property of EEX and
each Subsidiary currently satisfies all design, operation, and
equipment requirements imposed by the OPA or scheduled as of the
Closing Date to be imposed by OPA during the term of this
Guaranty Agreement, and EEX does not have any reason to believe
that such Property, to the extent subject to OPA, will not be
able to maintain compliance with the OPA requirements during the
term of this Guaranty Agreement; and
(g) Neither EEX nor any Subsidiary has any known
contingent liability in connection with any release or threatened
release of any oil, hazardous substance or solid waste into the
environment.
Section 2.18 Compliance with Laws. As of the Closing
Date, neither EEX, any Subsidiary, EEX Capital nor MIStS Issuer
has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization
necessary for the ownership of any of its Properties or the
conduct of its business, which violation or failure would have
(in the event such violation or failure were asserted by any
Person through appropriate action) a Material Adverse Effect.
Section 2.19 Subordination. The Liabilities and the
obligations of EEX under this Guaranty Agreement are subordinated
to the "Superior Indebtedness" under and as defined in the
Subordination Agreement.
ARTICLE III
Affirmative Covenants
EEX covenants and agrees that, until payment in full of all
Liabilities, all interest thereon and all other amounts payable
by EEX under this Guaranty Agreement:
Section 3.01 Financial Statements. EEX shall deliver,
or shall cause to be delivered, to the Placement Agent with
sufficient copies of each for the Holders:
(a) As soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
EEX, (i) EEX's Form 10-K filed with the SEC or (ii) the audited
consolidated statements of income, shareholders' equity, and cash
flows of EEX and its Consolidated Subsidiaries for such fiscal
year, and the related consolidated balance sheet of EEX and its
Consolidated Subsidiaries as at the end of such fiscal year, and
setting forth in each case in comparative form the corresponding
figures as of the end of and for the preceding fiscal year, and
accompanied by the related opinion of independent public
accountants of recognized national standing acceptable to the
Placement Agent which opinion shall state that said financial
statements fairly present the consolidated financial condition,
results of operations and cash flows of EEX and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year and that
such financial statements have been prepared in accordance with
GAAP except for such changes in such principles with which the
independent public accountants shall have concurred and such
opinion shall not contain a "going concern" or like qualification
or exception, and a certificate of such accountants stating that,
in making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, of any
Default.
(b) As soon as available and in any event within sixty
(60) days after the end of each of the first three fiscal
quarterly periods of each fiscal year of EEX, (i) EEX's Form 10-Q
filed with the SEC or (ii) unaudited consolidated statements of
income, shareholders' equity, and cash flows of EEX and its
Consolidated Subsidiaries for such period and for the period from
the beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheets as at the end
of such period, and setting forth in each case in comparative
form the corresponding figures as of the end of and for the
corresponding period in the preceding fiscal year, accompanied by
the certificate of a Responsible Officer, which certificate shall
state that said financial statements fairly present the
consolidated financial condition, results of operations and cash
flows of EEX and its Consolidated Subsidiaries in accordance with
GAAP, as at the end of, and for, such period (subject to normal
year-end adjustments).
(c) As soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
each of EEX Capital and MIStS Issuer, the unaudited statements of
income, shareholders' equity, and cash flows for such fiscal
year, and the related balance sheet of the each of EEX Capital
and MIStS Issuer as at the end of such fiscal year, and setting
forth in each case in comparative form the corresponding figures
as of the end of and for the preceding fiscal year, and
accompanied by the related Certificate of a Responsible Officer
which certificate shall state that said financial statements
fairly present the consolidated financial condition, results of
operations and cash flows of EEX Capital or MIStS Issuer, as the
case may be, at the end of, and for, such fiscal year and that
such financial statements have been prepared in accordance with
GAAP except for such changes in such principles as are disclosed
therein. If either EEX Capital or MIStS Issuer ever has audited
financial statements, EEX will cause such audited financial
statements to be delivered to the Placement Agent promptly upon
their becoming available.
(d) Promptly after a Responsible Officer of EEX knows
that any Default has occurred, a notice of such Default,
describing the same in reasonable detail and the action EEX
proposes to take with respect thereto.
(e) Promptly upon its becoming available, each
financial statement, report, notice or proxy statement sent by
EEX to stockholders generally and each regular or periodic report
and any registration statement or prospectus in respect thereof
filed by EEX with or received by EEX in connection therewith from
any securities exchange or the SEC or any successor agency,
including without limitation, Form 10-K's and Form 10-Q's.
EEX will furnish to the Placement Agent, with sufficient copies
for the Holders, at the time it furnishes each set of financial
statements pursuant to paragraph (a) or (b) above, a certificate
substantially in the form of Exhibit 1 to this Guaranty Agreement
executed by a Responsible Officer (i) certifying as to the
matters set forth therein and stating that no Default has
occurred and is continuing (or, if any Default has occurred and
is continuing, describing the same in reasonable detail), (ii)
setting forth in reasonable detail the computations necessary to
determine whether EEX is in compliance with Section 4.01 as of
the end of the respective fiscal quarter or fiscal year and (iii)
certifying that EEX is in compliance with Section 3.08 or will be
in compliance within the next 30 days and listing the
Subsidiaries and Special Entities, if any, that will be executing
Guaranty Agreements.
Section 3.02 Litigation. Contemporaneously with any
securities law disclosure of same, EEX shall give to the
Placement Agent, with sufficient copies for the Holders, notice
of all legal or arbitral proceedings, and of all proceedings
before any Governmental Authority affecting EEX, any Subsidiary,
EEX Capital or MIStS Issuer except proceedings which, if
adversely determined, would not have a Material Adverse Effect.
Section 3.03 Maintenance, Etc.
(a) EEX shall, and shall cause each Subsidiary
Guarantor to, preserve and maintain EEX's corporate existence,
the limited liability company existence and single purpose status
of EEX Capital and MIStS Issuer, and all of the respective
material rights, privileges and franchises of EEX, EEX Capital
and MIStS Issuer; keep books of record and account in which full,
true and correct entries will be made of all dealings or
transactions in relation to its business and activities; comply
with all Governmental Requirements if failure to comply with such
requirements will have a Material Adverse Effect; pay and
discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being
maintained; during the continuance of an Event of Default and
upon reasonable notice, permit representatives of the Placement
Agent, during normal business hours, to examine its books and
records, to inspect its Properties, and to discuss its business
and affairs with its financial officers, all to the extent
reasonably requested by the Placement Agent and to the extent
requested by the Placement Agent, copy and make extracts of its
books and records; and keep, or cause to be kept, insured by
financially sound and reputable insurers all Property of a
character usually insured by Persons engaged in the same or
similar business similarly situated against loss or damage of the
kinds and in the amounts customarily insured against by such
Persons and carry such other insurance as is usually carried by
such Persons including, without limitation, pollution liability
insurance to the extent reasonably available.
(b) Contemporaneously with the delivery of the
financial statements required by Section 3.01(a) to be delivered
for each year, EEX will furnish or cause to be furnished to the
Placement Agent a certificate of insurance coverage from insurers
in substantially the form provided at the closing of this
Guaranty Agreement and, if requested, will furnish the Placement
Agent copies of the applicable policies.
Section 3.04 Environmental Matters.
(a) EEX will, and will cause each Subsidiary to,
establish and implement such procedures as may be reasonably
necessary to continuously determine and assure that any failure
of the following does not have a Material Adverse Effect: (i) all
Property of EEX and its Subsidiaries and the operations conducted
thereon and other activities of EEX and its Subsidiaries are in
compliance with and do not violate the requirements of any
Environmental Laws, (ii) no oil, hazardous substances or solid
wastes are disposed of or otherwise released on or to any
Property owned by any such party except in compliance with
Environmental Laws, (iii) no hazardous substance will be released
on or to any such Property in a quantity equal to or exceeding
that quantity which requires reporting pursuant to Section 103 of
CERCLA, and (iv) no oil, oil and gas exploration and production
wastes or hazardous substance is released on or to any such
Property so as to pose an imminent and substantial endangerment
to public health or welfare or the environment.
(b) EEX will promptly notify the Placement Agent and
the Holders in writing of any threatened action, investigation or
inquiry by any Governmental Authority of which EEX has knowledge
in connection with any Environmental Laws which may have a
Material Adverse Effect.
Section 3.05 Further Assurances. EEX will, and will
cause each Subsidiary, EEX Capital and MIStS Issuer to, cure
promptly any defects in the creation and issuance of the
Subordinated Promissory Note, the Preferred Securities and the
execution and delivery of the other Operative Documents. EEX at
its expense will and will cause each Subsidiary, EEX Capital and
MIStS Issuer to promptly execute and deliver to the Placement
Agent upon request all such other documents, agreements and
instruments to comply with or accomplish the covenants and
agreements of EEX, any Subsidiary, EEX Capital or MIStS Issuer,
as the case may be, in the other Operative Documents and this
Guaranty Agreement, or to correct any omissions in the Operative
Documents, or to make any recordings, to file any notices or
obtain any consents, all as may be necessary or appropriate in
connection therewith.
Section 3.06 ERISA Information and Compliance. EEX
will promptly furnish and will cause the Subsidiaries and any
ERISA Affiliate to promptly furnish to the Placement Agent (i)
immediately upon becoming aware of the occurrence of any ERISA
Event which could result in a liability of EEX, any Subsidiary or
any ERISA Affiliate having a Material Adverse Effect
(individually or in the aggregate with respect to all ERISA
Events), a written notice signed by the President or the
principal financial officer of EEX, the Subsidiary or the ERISA
Affiliate, as the case may be, specifying the nature thereof,
what action EEX, the Subsidiary or the ERISA Affiliate is taking
or proposes to take with respect thereto, and, when known, any
action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, (ii)
promptly after request by the Placement Agent, a true and correct
copy of each actuarial report for any Plan and each annual report
for any Multiemployer Plan, (iii) immediately upon receipt of a
notice from a Multiemployer Plan regarding the imposition of
Withdrawal Liability having a Material Adverse Effect, a true and
complete copy of such notice, (iv) immediately upon becoming
aware that a Multiemployer Plan has been terminated, that the
administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or that the PBGC has instituted
or intends to institute proceedings under section 4042 of ERISA
to terminate a Multiemployer Plan which occurrence would have a
Material Adverse Effect, a written notice signed by the President
or the principal financial officer of EEX, the Subsidiary or the
ERISA Affiliate, as the case may be, specifying the nature of
such occurrence and any other information relating thereto
requested by the Placement Agent, and (v) immediately upon
receipt thereof, copies of any notice of the PBGC's intention to
terminate or to have a trustee appointed to administer any
Benefit Plan which occurrence would have a Material Adverse
Effect.
Section 3.07 Lease Payments. EEX, at its option, may
cause its obligations to Enserch Exploration Holdings, Inc. to be
subordinated to the Indebtedness on terms substantially similar
to the terms set forth on Exhibit M to the EEX Credit Agreement
or on terms and subject to documentation satisfactory to the
Administrative Agent.
Section 3.08 Subsidiary Guaranty Agreements. EEX will
cause each of its Subsidiaries and Special Entities to execute a
Subsidiary Guaranty Agreement, except for such Subsidiaries and
Special Entities that in the aggregate do not have assets at book
value in excess of 25% of the total consolidated assets at book
value of EEX. EEX shall have 30 days from the date of delivery
of each Compliance Certificate to comply with this covenant. At
the time that a Subsidiary or Special Entity executes and
delivers a Subsidiary Guaranty Agreement to the Placement Agent
it shall also deliver to the Placement Agent the following in
form and substance acceptable to the Placement Agent:
(a) A certificate of the Secretary or an Assistant
Secretary of each Subsidiary Guarantor setting forth (i)
resolutions of its board of directors or appropriate Persons with
respect to the authorization of such Subsidiary Guarantor to
execute and deliver the Operative Documents to which it is a
party and to enter into the transactions contemplated in those
documents, (ii) the officers of such Subsidiary Guarantor (y) who
are authorized to sign the Loan Documents to which such
Subsidiary Guarantor is a party and (z) who will, until replaced
by another officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing documents
and giving notices and other communications in connection with
this Guaranty Agreement and the transactions contemplated hereby,
(iii) specimen signatures of the authorized officers, and (iv)
the articles or certificate of incorporation and bylaws or
appropriate document of governance of such Subsidiary Guarantor,
certified as being true and complete. MIStS Issuer, the
Placement Agent and the Holders may conclusively rely on such
certificate until they receive notice in writing from EEX to the
contrary.
(b) An opinion of counsel to the Subsidiary Guarantor,
substantially in the form of Exhibit N to the EEX Credit
Agreement.
ARTICLE IV
Negative Covenants
EEX covenants and agrees that, until payment in full of the
Liabilities and all interest thereon, without the prior written
consent of the Majority Holders:
Section 4.01 Debt to EEX Capital Ratio. EEX will not
permit its ratio ("Debt to EEX Capital Ratio") expressed as a
percentage of (i) Debt of EEX and its Consolidated Subsidiaries
on a consolidated basis ("Consolidated Debt") to (ii) the sum of
Consolidated Debt plus Net Worth to exceed 60% at any time;
provided that in no event will Consolidated Debt ever exceed
$1,000,000,000."
Section 4.02 Liens. Except as expressly permitted in
this Section 4.02, EEX will not at any time, directly or
indirectly, create, assume or suffer to exist, and will not
cause, suffer or permit any Subsidiary Guarantor as long as it
remains a Subsidiary Guarantor, directly or indirectly, to
create, assume or suffer to exist, except in favor of EEX, any
Lien upon any of its Properties (now owned or hereafter
acquired), without making effective provision (and EEX covenants
that in any such case it will make or cause to be made effective
provision) whereby the Indebtedness and any other Debt of EEX or
any Subsidiary Guarantor then entitled thereto shall be secured
by such Lien equally and ratably with any and all other
obligations and indebtedness thereby secured, so long as any such
other obligations or indebtedness shall be so secured. Nothing
in this Guaranty Agreement shall be construed to prevent EEX or
any Subsidiary Guarantor without so securing the amounts
outstanding hereunder, from creating, assuming or suffering to
exist the following Liens, to which the provisions of this
paragraph shall not be applicable:
(a) Liens upon any Property presently owned or
hereafter acquired, created at the time of acquisition to secure
a portion of the purchase price thereof, or existing thereon at
the date of acquisition, whether or not assumed by EEX or one of
its Subsidiary Guarantors, provided that every such Lien shall
apply only to the Property so acquired and fixed improvements
thereon;
(b) any extension, renewal or refunding of any Lien
permitted by Section 4.02(a), if limited to the same Property
subject to, and securing not more than the amount secured by, the
Lien extended, renewed or refunded;
(c) the pledge of current assets in the ordinary
course of business, to secure current liabilities;
(d) Liens upon (i) Property, to secure obligations to
pay all or a part of the purchase price of such Property only out
of or measured by the production, or the proceeds of such
production, from such Property of oil or gas or products or by-products
thereof, or (ii) the production from Property of oil or
gas or products or by-products thereof, or the proceeds of such
production, to secure obligations to pay all or a part of the
expenses of exploration, drilling or development of such Property
only out of such production or the proceeds of such production;
(e) mechanics' or materialmen's liens, good faith
deposits in connection with tenders, leases of real estate, bids
or contracts (other than contracts for the payment of money),
deposits to secure public or statutory obligations, deposits to
secure, or in lieu of, surety, stay or appeal bonds, and deposits
as security for the payment of taxes or assessments or similar
charges, Liens given in connection with bid or completion bonds;
provided that such obligations secured are not yet due or are
being contested in good faith by appropriate action and against
which an adequate reserve has been established;
(f) any Lien arising by reason of deposits with, or
the giving of any form of security to, any governmental agency or
any body created or approved by law or governmental regulation
for any purposes at any time as required by law or governmental
regulation as a condition to the transaction of any business or
the exercise of any privilege or license, or to enable EEX or a
Subsidiary to maintain self-insurance or to participate in any
funds established to cover any insurance risks or in connection
with workmen's compensation, unemployment insurance, old age
pensions or other social security, or to share in the privileges
or benefits required for companies participating in such
arrangements; provided that such obligations secured are not yet
due or are being contested in good faith by appropriate action
and against which an adequate reserve has been established;
(g) the pledge or assignment of accounts receivable,
including customers' installment paper, to banks or others made
in the ordinary course of business (including to or by a
Subsidiary which is principally engaged in the business of
financing the business of EEX and its Subsidiaries);
(h) the Liens of taxes or assessments for the then
current year or not at the time due, or the Liens of taxes or
assessments already due but the validity of which is being
contested in good faith by appropriate action and against which
an adequate reserve has been established;
(i) any judgment or Lien against EEX or a Subsidiary
Guarantor, so long as the finality of such judgment is being
contested in good faith by appropriate action and the execution
thereon is stayed;
(j) assessments or similar encumbrances, the existence
of which does not impair the value or the use of the Property
subject thereto for the purposes for which it was acquired;
(k) landlords' liens on fixtures and movable Property
located on premises leased by EEX or a Subsidiary Guarantor in
the ordinary course of business so long as the rent secured
thereby is not in default;
(l) Liens on the assets of any limited liability
company organized under a limited liability company act of any
state in which a limited liability company is treated as a
partnership for federal income tax purposes; provided that
neither EEX nor any Subsidiary Guarantor is liable for the Debt
of such limited liability company; and
(m) other Liens on any Properties of EEX or any
Subsidiary with an aggregate value not exceeding 1% of the book
value of the total assets of EEX on a consolidated basis.
Section 4.03 Investments, Loans and Advances. Neither
EEX nor any of its Subsidiaries will make any loan or advance to
any Person except as expressly permitted by the Operative
Documents.
Section 4.04 Dividends, Distributions and Redemptions.
EEX will not 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 stockholders or make any
distribution of its assets to its stockholders after the
occurrence and during the continuance of an Event of Default.
Section 4.05 Nature of Business. EEX will not allow
any material change to be made in the character of its business
as an independent oil and gas exploration and production company.
Section 4.06 Mergers, Etc. Neither EEX nor any
Subsidiary will merge into or with or consolidate with any other
Person, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially
all of its Property or assets to any other Person ("Disposition")
unless (i) no Default exists or would result from such merger or
Disposition and (ii) for any merger of which EEX is the survivor,
or for any merger or Disposition, if the surviving Person or
acquiring Person is not EEX, such surviving Person or acquiring
Person assumes the Indebtedness and all other obligations of EEX
under the Loan Documents and the Operative Documents and is
approved by the Majority Holders; provided that MIStS Issuer may
merge with and into EEX Capital.
Section 4.07 Proceeds. EEX will not permit the
proceeds of the Preferred Securities to be used for any purpose
other than those permitted by Section 2.07. Neither EEX nor any
Person acting on behalf of EEX has taken or will take any action
which might cause any of the Operative Documents to violate
Regulation G, U or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate Section 7
of the Securities Exchange Act of 1934, as amended, or any rule
or regulation thereunder, in each case as now in effect or as the
same may hereafter be in effect.
Section 4.08 ERISA Compliance. EEX and the
Subsidiaries will not at any time:
(a) Engage in, or permit any ERISA Affiliate to engage
in, any transaction in connection with which EEX, a Subsidiary or
any ERISA Affiliate could be subjected to either a civil penalty
assessed pursuant to subsections (c), (i) or (l) of section 502
of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code;
(b) Terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan in a manner, or take any other action
with respect to any Benefit Plan, which could result in any
liability of EEX, a Subsidiary or any ERISA Affiliate to the
PBGC;
(c) Fail to make, or permit any ERISA Affiliate to
fail to make, full payment when due of all amounts which, under
the provisions of any Plan, agreement relating thereto or
applicable law, EEX, a Subsidiary or any ERISA Affiliate is
required to pay as contributions thereto;
(d) Permit to exist, or allow any ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the
meaning of section 302 of ERISA or section 412 of the Code,
whether or not waived, with respect to any Benefit Plan;
(e) Permit, or allow any ERISA Affiliate to permit,
the actuarial present value of the benefit liabilities under any
Benefit Plan maintained by EEX, a Subsidiary or any ERISA
Affiliate which is regulated under Title IV of ERISA to exceed
the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Benefit Plan
allocable to such benefit liabilities. The term "actuarial
present value of the benefit liabilities" shall have the meaning
specified in section 4041 of ERISA;
(f) Incur, or permit any ERISA Affiliate to incur, a
liability to or on account of a Plan under sections 4062, 4063,
or 4064 of ERISA;
(g) Amend, or permit any ERISA Affiliate to amend, a
Plan resulting in an increase in current liability such that EEX,
a Subsidiary or any ERISA Affiliate is required to provide
security to such Plan under section 401(a)(29) of the Code; or
(h) Incur or permit Withdrawal Liability and liability
in connection with a reorganization or termination of a
Multiemployer Plan of EEX, the Subsidiaries and the ERISA
Affiliates;
provided, however, that the transactions, events and occurrences
described in this Section 4.08 shall be permitted so long as such
transactions, events and occurrences (individually and in the
aggregate) will not result in a Material Adverse Effect.
Section 4.09 Environmental Matters. Neither EEX nor
any Subsidiary will cause or permit any of its Property to be in
violation of, or do anything or permit anything to be done which
will subject any such Property to any remedial obligations under,
any Environmental Laws, assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such
violations or remedial obligations would have a Material Adverse
Effect.
Section 4.10 Transactions with Affiliates. Neither
EEX nor any Subsidiary Guarantor will enter into any material
transaction, including, without limitation, any purchase, sale,
lease or exchange of Property including the purchase or sale of
oil and gas properties and hydrocarbons or the rendering of any
service, with any Affiliate unless such transactions are in the
ordinary course of its business and are upon fair and reasonable
terms no less favorable to it than it would obtain in a compara-
ble arm's length transaction with a Person not an Affiliate.
Section 4.11 Restrictive Dividend Agreements. Neither
EEX nor any Subsidiary Guarantor will create, incur, assume or
suffer to exist any financing agreement (other than this Guaranty
Agreement and the other Operative Documents) which in any way
restricts any Subsidiary Guarantor from paying dividends to EEX.
Section 4.12 MIStS Issuer. EEX will not allow MIStS
Issuer to engage in any activity prohibited by Section 4.03 of
the Subordinated Promissory Note.
SCHEDULE 2.14
To the Guaranty Agreement
SUBSIDIARIES AND SPECIAL ENTITIES AS OF THE CLOSING DATE;
LOCATIONS OF THEIR RESPECTIVE CHIEF EXECUTIVE OFFICES
[to be provided by EEX]
EXHIBIT 1
To the Guaranty Agreement
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the
_________________ of ENSERCH EXPLORATION, INC., a Texas
corporation ("EEX"), and that as such, he is a Responsible
Officer authorized to execute this certificate on behalf of EEX.
With reference to the Amended and Restated Guaranty Agreement
dated as of September 29, 1997 (together with all permitted
amendments or supplements thereto being the "Guaranty Agreement")
between EEX and MIStS Issuer L.L.C., the undersigned represents
and warrants as follows (each capitalized term used herein having
the same meaning given to it in the Guaranty Agreement unless
otherwise specified):
(a) The representations and warranties of EEX
contained in Article II of the Guaranty Agreement and
in the other Operative Documents and otherwise made in
writing by or on behalf of EEX pursuant to the Guaranty
Agreement or other Operative Documents were true and
correct when made, are repeated at and as of the time
of delivery hereof and are true and correct at and as
of the time of delivery hereof, except to the extent
such representations and warranties are expressly
limited to an earlier date or the Majority Holders have
expressly consent in writing to the contrary.
(b) Each of EEX, EEX Capital and MIStS Issuer has
performed and complied with all agreements and
conditions contained in the Guaranty Agreement and in
the other Operative Documents required to be performed
or complied with by it prior to or at the time of
delivery hereof.
(c) Attached hereto are the detailed computations
necessary to determine whether EEX is in compliance
with Section 4.01 of Schedule 1 to the Guaranty
Agreement as of the end of the fiscal quarter ending
________________.
(d) EEX is in compliance with Section 3.08 of
Schedule 1 to the guaranty Agreement. [The following
is a list of the Subsidiaries and Special Entities that
must execute a Subsidiary Guarantee Agreement within
the next 30 days pursuant to Section 3.08 of Schedule 1
to the Guaranty Agreement: ___________________]
EXECUTED AND DELIVERED THIS ____ day of _______________, _______.
ENSERCH EXPLORATION, INC.
By:
Name:
Title:
