CLASS B UNITS MEMBERSHIP SUBSCRIPTION AGREEMENT
THIS CLASS B UNITS MEMBERSHIP SUBSCRIPTION AGREEMENT (this "Agreement")
dated as of December 18, 1995 is made and entered into by and between
TEJAS-MAGNOLIA ENERGY, L.L.C., a Delaware limited liability company (the
"Company"), and MAGNOLIA ENERGY VENTURE TRUST, a trust organized under the laws
of Massachusetts ("Purchaser"), and evidences the arrangements concerning the
purchase by Purchaser of TEN THOUSAND (10,000) units of Class B Units issued by
the Company.
W I T N E S S E T H:
WHEREAS, the Company desires to issue all of its authorized Class B Units
(the "Units") to Purchaser, and Purchaser desires to subscribe to and purchase
all of the Units from the Company, each upon the terms, provisions and
conditions hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements set forth herein, the
Company and Purchaser do hereby agree as follows:
1. SALE AND PURCHASE OF THE UNITS. On the Tranche B Financing Funding Date
(as defined in the Amended and Restated Participation dated as of December 18,
1995, among the Company, Pontchartrain Natural Gas System, for itself and as
Servicer, State Street Bank and Trust Company as Trustee of the Purchaser, the
financial institutions named on Schedule 1 thereto, as Purchasers, and Citibank,
N.A., as Agent (the "Participation Agreement")) and subject to the terms and
conditions set forth in this Agreement, the Company will transfer, assign and
convey the Units to Purchaser, and Purchaser will acquire the Units from
Company.
2. PURCHASE PRICE. As payment for the transfer of the Units by the Company
to Purchaser, Purchaser shall pay to the Company the aggregate purchase price of
FIFTY-FIVE MILLION AND NO/100 DOLLARS ($55,000,000.00) in immediately available
funds on the Tranche B Financing Funding Date.
3. DELIVERY AT CLOSING. On the Tranche B Financing Funding Date and upon
receipt of evidence of the capital contribution of Purchaser as set forth in
Section 2, the Company shall deliver to Purchaser the following:
a. Certificates representing the Units duly executed by the Company;
b. Certificates from the Secretary of State of Delaware as to the
legal existence and good standing of the Company under the laws of the
State Delaware; and
c. Certified resolutions of the Managers of the Company that the
execution and delivery of this Agreement by the Company, and the
performance of the covenants and obligations under it, have been duly
authorized by all necessary Company action.
4. CLOSING. The delivery of and payment for the Units shall take place at a
closing held at the offices of Xxxxxxxxx & Xxxxxxxxx, L.L.P., 000 Xxxxxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx, xx the Tranche B Financing Funding Date or such
other place or time as the parties may agree.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchaser as follows:
a. ORGANIZATION. The Company is a limited liability company duly
organized, validly existing, and in good standing under the laws of the
State of Delaware, has all necessary power to own its properties and to
carry on its business as now owned and operated by it, and is qualified to
do business and is in good standing in such other states and jurisdictions
as may be required by its business, except for any states wherein the
failure to be so qualified will not have a material adverse effect on its
financial condition. True and correct copies of the Certificate of
Formation and the Formation Agreement and the minutes of all meetings of
the managers of the Company have been delivered to Purchaser.
b. AUTHORITY AND CONSENT. The Company has all requisite right, power,
and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by the Company has
been duly authorized by its managers in accordance with all applicable laws
to which the Company is subject. All consents and approvals required for
the Company to consummate the transactions contemplated by this Agreement
have been obtained. Assuming the due authorization, execution and delivery
hereof by Purchaser, this Agreement constitutes the valid and legally
binding obligation of the Company and is enforceable against the Company in
accordance with its terms. The execution and delivery of this Agreement,
the consummation by the Company of the transactions contemplated hereby and
the compliance by the Company with the provisions hereof will not (i)
conflict with or result in a breach or default under any of the terms,
conditions or provisions of any agreement or other material instrument or
obligation to which the Company is a party or by which the Company's
properties or assets are bound or under any provision of its Certificate of
Formation or Limited Liability Company Agreement, or (ii) violate any
order, writ, injunction, decree or statute or any rule or regulation
applicable to the Company or any of the properties or assets of the
Company.
c. VALID ISSUANCE. When the Units are issued, all of the Units will be
duly and validly authorized and issued and fully paid and non-assessable.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
and warrants to the Company as follows:
a. ORGANIZATION. Purchaser is a duly organized, validly existing trust
in good standing under the laws of the State of Massachusetts, has all
necessary power to own its properties and to carry on its business as now
owned and operated by it, and is qualified to do business and is in good
standing in such other states and jurisdictions as may be required by its
business, except for any states wherein the failure to be so qualified will
not have a material adverse effect on its financial condition.
b. AUTHORITY AND CONSENT. Purchaser has all requisite right, power,
and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Purchaser has
been duly authorized by its trustees in accordance with all applicable laws
to which Purchaser is subject. All consents and approvals required for
Purchaser to consummate the transactions contemplated by this Agreement
have been obtained. Assuming the due authorization, execution and delivery
hereof by the Company, this Agreement constitutes the valid and legally
binding obligation of Purchaser and is enforceable against Purchaser in
accordance with its terms. The execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby and the compliance
by Purchaser with the provisions hereof will not (i) conflict with or
result in a breach or default under any of the terms, conditions or
provisions of any agreement or material instrument or obligation to which
Purchaser is a party or by which Purchaser's properties or assets are bound
or under any provision of its Trust Agreement, or (ii) violate any order,
writ, injunction, decree or statute or any rule or regulation applicable to
Purchaser or any of the properties or assets of Purchaser.
c. INVESTMENT INTENT. The Units are being acquired by Purchaser for
its own account and not with a view to distribution within the meaning of
the Securities Act of 1933, as amended (the "Act"). Purchaser acknowledges
that there is no existing public market for the Units and that no
registration statement relating to the Units has been filed under the Act
or any applicable state securities laws and that the Units must be held by
it for an indefinite period of time unless the Units are subsequently
registered under the Act and applicable state securities laws or unless an
exemption from any such applicable registration requirement becomes
available. Purchaser further acknowledges that there is no assurance or
obligation as to any such registration or exemption. Purchaser agrees that
the Units will not be sold or otherwise transferred for value unless
registered under the Act and applicable state securities laws or an
exemption from such registration is available. The certificate or
certificates representing the Units may be marked with a suitable legend
referring to the absence of registration under the Act or applicable state
securities laws and to the need for exemption from or registration under
the Act and applicable state securities laws in connection with any
disposition of the Units.
7. COVENANTS OF THE COMPANY.
a. The Company shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect and in good standing its
existence and its rights and franchises necessary to conduct its business.
b. Except as specifically provided herein or in the Limited Liability
Company Act, the Company shall not sell, transfer or otherwise dispose of
or reduce its Tranche B Economic Interest for so long as any of the Units
remain outstanding unless Purchaser shall otherwise agree pursuant to the
Limited Liability Company Agreement or otherwise.
c. The Company shall promptly give notice to Purchaser of the
occurrence of any event of default of the Company under any agreements to
which both the Company and Purchaser are parties.
d. The Company shall make demand under the $55,000,000 Intercompany
Note to the extent provided therein to the extent necessary to pay Class B
Obligations (as defined in the Formation Agreement) then due as provided in
the Formation Agreement. The Company shall make demand under the
$20,000,000 Intercompany Note (as defined in the Formation Agreement) to
the extent a loan is made pursuant to Section 6.8(a) of the Formation
Agreement and if necessary to pay Class B Obligations then due as provided
in the Formation Agreement.
8. COVENANTS OF THE PURCHASER. The Trust agrees it will not disclose
without the consent of the Company (other than to its employees, auditors,
counsel or other professional advisors, or to its Affiliates) any information
concerning the Company or any of its Affiliates; provided, that the Trust may
disclose any such information (a) that has become generally available to the
public, (b) if required or appropriate in any report, statement or testimony
submitted to any federal or state regulatory body having or claiming to have
jurisdiction over the Trust, (c) if required or appropriate in response to any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to the Trust, and (e) to
any prospective or actual permitted transferee in connection with any
contemplated or actual permitted transfer of the Instruments; provided, that
such actual or prospective transferee executes an agreement with the Trust
containing provisions substantially identical to those contained herein prior to
such transferee's receipt of any such information. To the extent any information
is disclosed pursuant to the provisions of (b), (c) or (d) hereof, the Trust
shall accompany such disclosure with a request to the recipients, to keep such
information confidential.
9. MISCELLANEOUS.
a. RIGHTS OF PARTIES. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation or action over against any party to
this Agreement. Without limiting the generality of the foregoing, it is
expressly understood that this Agreement is not intended to convey to any
third party with any pre-existing contractual or legal relationship with a
party any rights as a third party beneficiary or create any obligation to
any such party not in privity with the other party.
b. BINDING EFFECT. This Agreement shall be binding on, and shall inure
to the benefit of, the parties and their respective successors and assigns.
This Agreement may not be assigned without the written consent of the other
party hereto.
c. SURVIVAL. All representations, warranties, covenants and agreements
of the parties contained in this Agreement shall survive the Closing.
d. NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing (including cable or telecopy) and
shall be deemed to have been duly given at its address, telecopier number
or telex numbers set forth below or such other address, telecopier number
or telex as such party may hereafter specify by notice to the party to whom
notice is to be given, given by courier, United States certified or
registered mail, by telegram or other telecommunication device capable of
creating a written record of such notice and its receipt:
The Company: Tejas-Magnolia Energy, L.L.C.
0000 XxXxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Vice President - Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Purchaser: Magnolia Energy Venture Trust
c/o State Street Bank and Trust Company, Trustee
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the
telecopier notice specified in this subsection and a confirmation of
receipt of such telecopy has been received by sender, (ii) if given by
courier, when delivered, (iii) if given by mail, three (3) days after such
communication is deposited in the mail, registered with return receipt
requested, addressed as aforesaid or (iv) if given by any other means, when
delivered at the addresses specified herein.
e. DEFINED TERMS. Unless otherwise provided for herein, all
capitalized terms shall have the meaning given such terms in the
Participation Agreement.
f. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE.
g. TIME OF ESSENCE. Due to the business requirements of the parties
and other matters, time is of the essence in the performance of this
Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it to
be effective as of the date first above written.
TEJAS-MAGNOLIA ENERGY, L.L.C.,
a Delaware limited liability company
By: /S/ XXXXX XXXX
Name: Xxxxx Xxxx
Title: Vice President - Finance
MAGNOLIA ENERGY VENTURE TRUST,
a Massachusetts trust
By: State Street Bank and Trust Company,
not in its individual capacity,
but solely as Trustee
By: /S/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title: Assistant Vice President
