File No. 70-8505
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 7
(Post-Effective No. 4)
to
APPLICATION OR DECLARATION on FORM U-1
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY MOBILE ENERGY SERVICES HOLDINGS, INC.
64 Perimeter Center East 900 Ashwood Parkway - Suite 500
Atlanta, Georgia 30346 Atlanta, Georgia 30338
SOUTHERN ELECTRIC INTERNATIONAL, INC.
900 Ashwood Parkway - Suite 500
Atlanta, Georgia 30338
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent of
each applicant or declarant)
Tommy Chisholm, Secretary Thomas G. Boren, President
The Southern Company Southern Electric International,
64 Perimeter Center East Inc.
Atlanta, Georgia 30346 900 Ashwood Parkway - Suite 500
Atlanta, Georgia 30338
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders,
notices and communications to:
W.L. Westbrook Thomas G. Boren, President
Financial Vice-President Southern Electric International,
The Southern Company Inc.
64 Perimeter Center East 900 Ashwood Parkway - Suite 500
Atlanta, Georgia 30346 Atlanta, Georgia 30338
John D. McLanahan, Esq.
Troutman Sanders
600 Peachtree Street, N.E.
Suite 5200
Atlanta, Georgia 30308-2216
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The Post-Effective Amendment to the Application or
Declaration, as heretofore amended, is hereby further amended as
follows:
Item 6, Exhibits and Financial Statements (Partially
Revised), is completed with filing of the following exhibits:
(a) Exhibits. (Supplemental List).
A-1(a) - Amended and Restated Articles of
Incorporation of Mobile Energy Services
Holdings, Inc. (formerly Mobile Energy
Services Company, Inc.)
A-4 - Articles of Organization of Mobile
Energy Services Company, L.L.C.
A-5 - Operating Agreement of Project Company
between Mobile Energy and Southern
Electric, as its members.
B-4 - First Mortgage Bond Documents.
(a) Underwriting Agreement.
(b) Indenture among Mobile Energy, Project
Company and First Union National Bank of
Georgia, as Trustee.
(c) First Supplemental Indenture among
Mobile Energy, Project Company and the
Trustee with Form of First Mortgage
Bond.
(d) Appendix A - Defined Terms.
B-5 - Security Documents.
(a) Leasehold Mortgage between Project
Company and Bankers Trust Company, as
Collateral Agent.
(b) Assignment and Security Agreement
between Project Company and Bankers
Trust Company, as Collateral Agent.
(c) Intercreditor and Collateral Agency
Agreement among the Collateral Agent,
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the Senior Secured Parties, the Board,
Project Company and Mobile Energy.
B-8 - Revolving Credit Facility among Project
Company, Mobile Energy and Banque
Paribas.
B-9 - Loan and Reimbursement Agreement between
Southern and Banque Paribas.
C - Registration Statement on Form S-1 filed
pursuant to the Securities Act.
(Incorporated herein by reference to
Securities Act File No. 33-92776)
(Previously filed).
F-1 - Opinion of Troutman Sanders.
G-1 - Form of Federal Register Notice.
(Previously filed).
(b) Financial Statements. (Supplemental List).
(v) Illustration of Effect on Project
Capitalization and Debt Coverage Ratios of
Terminating Interest Rate Hedging Agreements.
(Filed separately pursuant to Rule 104).
("P") (17 CFR section 232.101(c)(1)(i)).
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this Post-Effective Amendment to be signed on their behalf by the
undersigned thereunto duly authorized.
Dated: July 7, 1995
THE SOUTHERN COMPANY
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
(Signatures continued on next page)
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MOBILE ENERGY SERVICES HOLDINGS,
INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Vice President
SOUTHERN ELECTRIC INTERNATIONAL,
INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
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Exhibit A-1(a)
AMENDMENTS TO AND RESTATEMENT OF THE
ARTICLES OF INCORPORATION
OF
MOBILE ENERGY SERVICES HOLDINGS, INC.
I.
The name of the corporation is MOBILE ENERGY SERVICES
HOLDINGS, INC. (the "Corporation").
II.
The Corporation shall have perpetual duration.
III.
The nature of the business of the Corporation and its
objects, purposes and powers shall be limited to the following
activities:
(a) to acquire, finance, own, expand, improve and operate
or contract for the operation of the cogeneration power
production and recovery complex located on the grounds of
Scott Paper Company's pulp and tissue mill in Mobile,
Alabama (the "Energy Complex");
(b) to serve as a member of and to own a majority of the
outstanding membership interests of Mobile Energy Services
Company, L.L.C., an Alabama limited liability company (the
"Company"), and to act as the sole manager thereof, provided
that the foregoing shall not be construed as restraining the
Corporation from transferring interests in the Company (i)
in an amount not to exceed one percent (1%) of the total
interests in the Company to The Southern Company, a Delaware
corporation ("Southern"), prior to the issuance of the
"Offered Securities" (as hereinafter defined) by the
Company; (ii) on commercially reasonable terms to third
parties that are not "Southern Affiliated Entities" (as
hereinafter defined), and permitting such third parties to
participate in the management of the Company, even if the
effect thereof would be to cause (A) the Corporation's
ownership interests in the Company to be reduced below a
majority of the ownership interests in the Company or (B)
such third parties to acquire or share managerial control of
the Company; or (iii) to a Southern Affiliated Entity whose
Articles of Incorporation (or other organizational
documents) contain the same operative provisions as these
Articles of Incorporation and which undertakes, for the
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benefit of the "Bondholders" (as herein defined), each of
the covenants and restrictions of the Corporation set forth
in the indenture relating to the initial series of first
mortgage bonds (the "First Mortgage Bonds") relating to
compliance with and amendment of these Articles of
Incorporation. For purposes of these Articles, the term
"Southern Affiliated Entities" shall mean the Corporation,
Southern, Southern Electric International, Inc., a Delaware
corporation ("SEI"), the Company and any other corporation,
partnership, limited liability company or other business
entity with respect to which the Corporation, Southern, SEI,
or the Company, through ownership of voting securities, by
contract or otherwise, has the power to direct (or cause the
direction of) the management and policies of such
corporation, partnership, limited liability company or other
business entity;
(c) to enter into and perform any agreement providing for
or relating to the issuance or guaranty of the First
Mortgage Bonds or the $85,000,000 aggregate principal amount
of tax-exempt bonds due _______, 2___ (the "Tax-Exempt
Bonds") (and to receive and dispose of proceeds in exchange
therefor), or relating to the incurrence or guaranty of
obligations under the $15,000,000 principal amount of
working capital to be provided to the Company by Banque
Paribas (the "Working Capital Facility") (the First Mortgage
Bonds, the Tax-Exempt Bonds and the Working Capital Facility
are sometimes collectively referred to as the "Offered
Securities");
(d) to take all actions necessary to offer the First
Mortgage Bonds and the Tax-Exempt Bonds to the purchasers
thereof (the "Bondholders");
(e) to enter into and perform any agreement for or relating
to the management and administration of the activities of
the Corporation or the Company;
(f) to enter into and perform any agreements to accomplish
the purposes set forth in paragraphs (a), (b), (c), (d) or
(e) above; and
(g) to engage in any lawful act or activity, and to
exercise any powers permitted to corporations organized
under the laws of the State of Alabama, that are incidental
to and necessary, suitable or convenient for the
accomplishment of the purposes set forth in (a), (b), (c),
(d), (e) or (f) above.
IV.
The Corporation shall be authorized to issue One Thousand
(1,000) shares of One Dollar ($1.00) par value capital stock, all
of which shall be designated "Common Stock." The shares of
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Common Stock shall have unlimited voting rights and shall be
entitled to receive all of the net assets of the Corporation upon
dissolution or liquidation.
V.
The Board of Directors of the Corporation shall have the
power to adopt, amend and repeal the By-Laws of the Corporation.
VI.
To the fullest extent that the General Corporation Law of
Alabama, as it exists on the date hereof or as it may hereafter
be amended, permits the limitation or elimination of the
liability of directors, no director of the Corporation shall be
personally liable to the Corporation or its stockholders for
monetary damages for breach of duty of care or other duty as a
director. No amendment to or repeal of this Article shall apply
to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts
or omissions of such director occurring prior to such amendment
or repeal.
VII.
The initial registered office of the Corporation in the
State of Alabama shall be located at 60 Commerce Street,
Montgomery, Montgomery Co., Alabama 36104. The initial
registered agent of the Corporation at such address shall be The
Corporation Company.
VIII.
The affairs of the Corporation shall be managed by a Board
of Directors and as otherwise provided in the By-Laws of the
Corporation. The unanimous approval of the Board of Directors of
the Corporation is required: (a) to file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings
under Section 301 of the Bankruptcy Code, 11 U.S.C. section 301, or
any successor thereto, or any similar statute, seeking protection of
the Corporation as a debtor in such proceedings; (b) to consent
to the filing of a bankruptcy or insolvency petition or to the
institution of an insolvency proceeding under Section 301 of the
Bankruptcy Code, 11 U.S.C. section 301, or any successor thereto, or
any similar statute, or (c) to amend, repeal or supersede any
provision of Articles III, VIII, IX, X, or XI hereof;
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The Board of Directors of the corporation shall consist of a
number as determined by the By-Laws of the Corporation, provided
one director at all times shall constitute an "Independent
Director" (as hereinafter defined). For purposes of the
foregoing, the term "Independent Director" shall mean an
individual who, at all times during such individual's service as
a director of the Corporation, is not any of the following:
(a) a person who received more than eight percent (8%) of
his or her gross income (as defined for Federal income tax
purposes) during either of the preceding two calendar years
ended December 31 from wages, dividends, distributions or
other payments received directly from the Southern
Affiliated Entities;
(b) a director, general partner, member, trustee,
beneficiary or the holder of ten percent (10%) or more of
the equity interests of any corporation, partnership,
limited liability company, trust or other entity which
received more than eight (8%) of its gross revenues during
either of the preceding two calendar years ended December 31
from wages, dividends, distributions or other payments
received from the Southern Affiliated Entities;
(c) a person who possesses equity or other interests in the
Southern Affiliated Entities, or debt of any of the Southern
Affiliated Entities, which, in the aggregate, have a fair
market value in excess of eight percent (8%) of the net
worth of such person;
(d) a person who, on such date or at any time during the
two years preceding such date, was a director of any of the
Southern Affiliated Entities (other than the Corporation) or
was an officer or employee of any of the Southern Affiliated
Entities (including the Corporation); or
(e) a parent, child, sibling or spouse of any person
described in clauses (a), (b), (c) or (d) above.
IX.
Neither the Corporation's funds nor any other assets thereof
shall be commingled with those of any other person or entity, and
the Corporation's funds shall be clearly traceable at all times
and in all transactions. The Corporation's assets shall remain
identifiably separate from those of all other entities such that
there shall be no material difficulty in segregating and
ascertaining the assets of the Corporation as distinct from those
of the other Southern Affiliated Entities or any other person or
entity. Notwithstanding the foregoing: (a) equity or other
contributions from any shareholder of the Corporation may be
received by the Corporation, deposited to the account of the
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<PAGE>
Corporation and treated as funds of the Corporation, and
(b) revenues of the Corporation or the Company may be collected
by affiliates of the Corporation and such affiliates may pay
liabilities of the Corporation or the Company, as applicable,
therewith pursuant to the "Relevant Documents" (as hereinafter
defined), so long as appropriate records are maintained by the
Corporation to identify at all times funds belonging to the
Corporation or the Company, respectively. For purposes of these
Articles, the "Relevant Documents" shall mean: (1) the
Registration Statement filed on Form S-1 under the Securities Act
of 1933, as amended, and the Prospectus dated _______, 1995, each
relating to the issuance of the First Mortgage Bonds, and the
Official Statement dated _______, 1995, issued in connection with
the sale of the Tax-Exempt Bonds; (2) the Articles of
Incorporation of SEI and Southern, the Articles of Organization
of the Company, and these Articles of Organization; (3) the By-
Laws of the Corporation, SEI and Southern; (4) the indenture
dated as of ______, 1995, (the "Indenture") among the Company,
the Corporation, as guarantor, and First Union National Bank of
Georgia, as trustee, entered into in connection with the issuance
of the First Mortgage Bonds, the indenture dated as of _______,
1995 (the "Tax-Exempt Indenture") among the IDB and First Union
National Bank of Georgia, as tax-exempt trustee, entered into in
connection with the issuance of the Tax-Exempt Bonds, and Tax-
Exempt Lease Agreement; (5) the Working Capital Facility and the
Corporation's guaranty in respect thereof; (6) the guaranty from
Southern or the appropriate letter of credit necessary to cover
the Company's reserve requirements under the Indenture, the Tax-
Exempt Indenture, and the "Intercreditor Agreement"(as
hereinafter defined); (7) the Intercreditor Agreement entered
into between and among the Corporation, the Company, First Union
National Bank of Georgia, as trustee with respect to the First
Mortgage Bonds, First Union National Bank of Georgia, as trustee
with respect to the Tax-Exempt Bonds, the IDB, and Banque Paribas
(the "Intercreditor Agreement"); (8) the Asset Purchase Agreement
dated as of December 12, 1994, between Scott Paper Company, a
Pennsylvania corporation ("Scott") and the Corporation; (9) the
Pulp Mill Environmental Indemnity Agreement, dated as December
12, 1994, between Scott and the Corporation, the Tissue Mill
Environmental Indemnity Agreement, dated as December 12, 1994,
between Scott and the Corporation, the Paper Mill Environmental
Indemnity Agreement, dated as December 12, 1994, between S.D.
Warren Company, a Pennsylvania corporation and the Corporation,
and the Environmental Guaranty dated as of December 12, 1994,
made by Southern in favor of the owners of the pulp mill, the
tissue mill, and the paper mill located in Mobile, Alabama; (10)
the Administrative Services Agreement (the "SCS Agreement"),
pursuant to which Southern Company Services, Inc. ("SCS") will
provide certain administrative services to the Corporation and
the Company, and the Operations and Maintenance Agreement, dated
as of December 12, 1994 between the Corporation and SEI; and
(iii) the Southern Master Tax Sharing Agreement.
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<PAGE>
X.
The Corporation:
(a) shall maintain corporate records and books of account
which at all times shall be separate from those of any other
person or entity and shall be materially correct and
complete;
(b) shall conduct its own business solely in its own name
or through its authorized agents, and not in the name of any
of the other Southern Affiliated Entities, in a manner which
is not likely to mislead others as to the identity of the
legal entity with which such others are dealing, shall not
permit any person or entity to conduct any business of such
person or entity in the Corporation's name, and without
limiting the generality of the foregoing: (i) shall ensure
that all oral and written communications, including without
limitation, letters, invoices, purchase orders, contracts,
statements and applications, are and will be made solely in
the name of the entity to which they relate or in the name
of such entity's authorized agents, and (ii) shall not
refer, and shall ensure that the other Southern Affiliated
Entities do not refer, to the Corporation or the Company as
a division or department of any other entity;
(c) shall prepare financial statements separate from any
other person or entity, which shall disclose its separate
existence and the transactions contemplated by the Relevant
Documents in accordance with generally accepted accounting
principles, and shall disclose that the assets of the
Corporation are not available to any creditor of any
affiliate of the Corporation (other than as contemplated by
the Relevant Documents);
(d) except to the extent set forth in the Relevant
Documents, shall pay its liabilities out of its own funds,
and, except as set forth in the Relevant Documents, shall
not permit any of the other Southern Affiliated Entities to
pay such liabilities;
(e) shall not hold out employees or officers of any of the
other Southern Affiliated Entities as employees or officers
of the Corporation, nor permit employees or officers of the
Corporation to be held out as employees or officers of any
of the other Southern Affiliated Entities; provided that
said restrictions shall not preclude a particular employee
or officer of any of the other Southern Affiliated Entities
from also holding a position as an employee or officer of
the Corporation, so long as the Corporation takes reasonably
appropriate steps to assure that unaffiliated parties
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<PAGE>
dealing with such employee or officer are able to
distinguish the particular entity which such person is
representing at any particular time;
(f) shall not guarantee or become obligated for the debts
of any of the other Southern Affiliated Entities or hold out
its credit as being available to satisfy the obligations of
any of the other Southern Affiliated Entities, other than
(i) obligations to reimburse SEI for expenses paid by SEI on
behalf of the Corporation in connection with the operation
and maintenance of the Energy Complex in accordance with the
Relevant Documents, (ii) obligations of the Company related
to the First Mortgage Bonds, the Tax-Exempt Bonds or the
Working Capital Facility, and (iii) obligations to indemnify
SEI for certain claims and losses relating to SEI's
operation and maintenance of the Energy Complex in
accordance with the Relevant Documents;
(g) shall allocate fairly and equitably any overhead for
office space shared with any of the other Southern
Affiliated Entities;
(h) shall use stationery, invoices, checks and other
business forms identifiably separate and distinct from those
of any of the other Southern Affiliated Entities. Such
items shall bear a mailing address and telephone number for
the Corporation which is different from that used by any of
the other Southern Affiliated Entities. The Corporation
further shall maintain, as its principal address and
telephone number for receipt of notices and other
communications under the Relevant Documents, a mailing
address and telephone number separate from those of any of
the other Southern Affiliated Entities;
(i) shall not pledge its funds or assets for the benefit of
any of the other Southern Affiliated Entities, except as set
forth in the Relevant Documents; and
(j) at all times shall hold itself out to the public as an
entity legally separate and distinct from any of the other
Southern Affiliated Entities.
XI.
The Corporation shall at all times maintain and observe all
corporate formalities in the conduct of its affairs and with
respect to the acquisition, ownership, encumbrance or transfer of
any material assets or the incurrence of any material
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indebtedness. Such formalities shall include without limitation
the holding of appropriate periodic meetings of its Board of
Directors and shareholders in accordance with Alabama law, the
recording of minutes of such meetings and any other proceedings
of its shareholders and Board of Directors, the adoption by the
Board of Directors (and, as appropriate, the shareholders) of
resolutions to approve material actions of the Corporation and
the execution and maintenance of appropriate documentation with
respect to and in order to evidence the acquisition, ownership,
encumbrance or transfer of any material assets or the incurrence
of any material indebtedness.
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Exhibit A-4
TS DRAFT NO. 1
June 30, 1995
ARTICLES OF ORGANIZATION
OF
MOBILE ENERGY SERVICES COMPANY, L.L.C.
I.
The name of the limited liability company is Mobile Energy
Services Company, L.L.C. (the "Company").
II.
The Company shall have perpetual duration.
III.
The nature of business to be conducted or promoted by the
Company shall be limited to the following activities:
(a) to acquire, finance, refinance, own, expand,
improve and operate or contract for the operation of
the cogeneration power production and recovery complex
located on the grounds of Scott Paper Company's pulp
and tissue mill in Mobile, Alabama (the "Energy
Complex");
(b) to enter into and perform any agreement providing
for or relating to the issuance by the Company of the
initial series of first mortgage bonds (the "First
Mortgage Bonds"), the issuance by the Industrial
Development Board of the City of Mobile, Alabama (the
"IDB"), for the benefit of the Company of $85,000,000
aggregate principal amount of tax-exempt bonds due
_______, 2___ (the "Tax-Exempt Bonds"), or the
$15,000,000 principal amount of working capital to be
provided to the Company by Banque Paribas (the "Working
Capital Facility"), and in each case to receive and
dispose of proceeds thereunder or in exchange therefor
(the First Mortgage Bonds, the Tax-Exempt Bonds and the
Working Capital Facility are sometimes collectively
referred to as the "Offered Securities");
(c) to take all actions necessary to offer the First
Mortgage Bonds and the Tax-Exempt Bonds to the
purchasers thereof;
<PAGE>
(d) to enter into and perform any agreement providing
for or relating to the management and administration of
the activities of the Company;
(e) to enter into and perform any agreements to
accomplish the purposes set forth in paragraphs (a),
(b), (c) and (d) of this Article III; and
(f) to engage in any lawful act or activity, and to
exercise any powers permitted to limited liability
companies organized under the laws of the State of
Alabama, that are incidental to and necessary, suitable
or convenient for the purposes set forth in paragraphs
(a), (b), (c), (d) and (e) of this Article III.
IV.
The initial registered office of the Company in the State of
Alabama shall be located at 60 Commerce Street, Montgomery,
Montgomery County, Alabama 36104. The initial registered agent
of the Company at such address shall be _____________________.
V.
The names and addresses of the initial members of the
Company are:
Members Address
Mobile Energy Services Holdings, Inc. ___________________________
___________________________
___________________________
Southern Electric International, Inc. 900 Ashwood Parkway
Suite 500
Atlanta, Georgia 30338
VI.
The Company may admit additional members with the prior
written consent of all the members.
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VII.
The business of the Company may be continued in accordance
with the terms of Section 10-12-37 of the Alabama Code following
the dissociation of a member.
VIII.
The sole manager of the Company shall be Mobile Energy
Services Holdings, Inc. ("Mobile Energy"), an Alabama
corporation, which shall be responsible for all day-to-day
operations of the Company. The foregoing shall not be construed
as restraining Mobile Energy from transferring interests in the
Company (i) in an amount not to exceed one percent (1 o/o) of the
total interests in the Company to The Southern Company, a
Delaware corporation ("Southern") prior to the issuance of the
Offered Securities; (ii) on commercially reasonable terms to
third parties that are not "Southern Affiliated Entities" (as
hereinafter defined), and permitting such third parties to
participate in the management of the Company, even if the effect
thereof would be to cause: (A) Mobile Energy's ownership
interest in the Company to be reduced below a majority of the
ownership interests in the Company; or (B) such third parties to
acquire control of the Company; or (iii) to a Southern Affiliated
Entity whose Articles of Incorporation (or other organizational
documents) contain the same operative provisions as the Articles
of Incorporation of Mobile Energy and which undertakes each of
the covenants and restrictions of Mobile Energy set forth in the
indenture (the "Indenture") dated as of ______, 1995, among the
Company, Mobile Energy, as guarantor, and First Union National
Bank of Georgia, as trustee, entered into in connection with the
issuance of the First Mortgage Bonds, and the lease agreement
(the "Tax-Exempt Lease") dated as of ____, 1995, among the
Company, Mobile Energy, as guarantor, and the IDB entered into in
connection with the issuance of the Tax-Exempt Bonds. For
purposes of these Articles the term "Southern Affiliated
Entities" shall mean the Company, Southern, Southern Electric
International, Inc., a Delaware corporation ("SEI"), or Mobile
Energy and any other corporation, partnership, limited liability
company or other business entity with respect to which the
Company, Southern, SEI, or Mobile Energy, through ownership of
voting securities, by contract or otherwise, has the power to
direct (or cause the direction of) the management and policies of
such corporation, partnership, limited liability company or other
business entity. The mailing address of Mobile Energy is
_______________________________________________________.
IX.
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The unanimous approval of all members of the Company is
required: (a) to file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings under Section 301 of
the Bankruptcy Code, 11 U.S.C. section 301, or any successor thereto,
or any similar statute, or (b) to amend, repeal or supersede any
provision of Articles III, VIII, IX, X, XI and XII hereof.
X.
Neither the Company's funds nor any other assets thereof
shall be commingled with those of any other person or entity, and
the Company's funds shall be clearly traceable at all times and
in all transactions. The Company's assets shall remain
identifiably separate from those of all other entities such that
there shall be no material difficulty in segregating and
ascertaining the assets of the Company as distinct from those of
its affiliates or any other person or entity. Notwithstanding
the foregoing, (a) equity or other contributions from any member
of the Company may be received by the Company, deposited to the
account of the Company and treated as funds of the Company and
(b) revenues of Mobile Energy or the Company may be collected by
affiliates of Mobile Energy and such affiliates may pay
liabilities of Mobile Energy or the Company, as applicable,
therewith pursuant to the "Relevant Documents" (as hereinafter
defined) so long as appropriate records are maintained by Mobile
Energy or the Company to identify at all times funds belonging to
Mobile Energy and the Company. For purposes of these Articles,
the "Relevant Documents" shall mean: (1) the Registration
Statement filed on Form S-1 under the Securities Act of 1933, as
amended, and the Prospectus dated _______, 1995, each relating to
the issuance of the First Mortgage Bonds, and the Official
Statement dated _______, 1995, issued in connection with the sale
of the Tax-Exempt Bonds; (2) the Articles of Incorporation of
Mobile Energy, SEI and Southern, and these Articles of
Organization; (3) the By-Laws of Mobile Energy, SEI and Southern;
(4) the Indenture, the indenture dated as of _______, 1995 (the
"Tax-Exempt Indenture") among the IDB and First Union National
Bank of Georgia, as tax-exempt trustee, entered into in
connection with the issuance of the Tax-Exempt Bonds, and Tax-
Exempt Lease Agreement; (5) the Working Capital Facility and
Mobile Energy's guaranty in respect thereof; (6) the guaranty
from Southern or the appropriate letter of credit necessary to
cover the Company's reserve requirements under the Indenture, the
Tax-Exempt Indenture, and the "Intercreditor Agreement"(as
hereinafter defined); (7) the Intercreditor Agreement entered
into between and among the Company, Mobile Energy, First Union
National Bank of Georgia, as trustee with respect to the First
Mortgage Bonds, First Union National Bank of Georgia, as trustee
with respect to the Tax-Exempt Bonds, the IDB, and Banque Paribas
(the "Intercreditor Agreement"); (8) the Asset Purchase Agreement
dated as of December 12, 1994, between Scott Paper Company, a
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Pennsylvania corporation ("Scott") and Mobile Energy; (9) the
Pulp Mill Environmental Indemnity Agreement, dated as December
12, 1994, between Scott and Mobile Energy, the Tissue Mill
Environmental Indemnity Agreement, dated as December 12, 1994,
between Scott and Mobile Energy, the Paper Mill Environmental
Indemnity Agreement, dated as December 12, 1994, between S.D.
Warren Company, a Pennsylvania corporation and Mobile Energy, and
the Environmental Guaranty dated as of December 12, 1994, made by
Southern in favor of the owners of the pulp mill, the tissue
mill, and the paper mill located in Mobile, Alabama; and (10) the
Administrative Services Agreement (the "SCS Agreement"), pursuant
to which Southern Company Services, Inc. ("SCS") will provide
certain administrative services to Mobile Energy, and the Company
and the Operations and Maintenance Agreement, dated as of
December 12, 1994 between Mobile Energy and SEI.
XI.
The Company:
(a) shall maintain complete records and books of account
which at all times shall be separate from those of any
other person or entity and shall be materially correct
and complete;
(b) shall conduct its own business solely in its own name
or through its authorized agents, and not in the name
of any affiliate of the Company, in a manner which is
not likely to mislead others as to the identity of the
legal entity with which such others are dealing, and
the Company does not and shall not permit any person or
entity to conduct any business of such person or entity
in the Company's name, and without limiting the
generality of the foregoing: (i) shall ensure that all
oral and written communications, including without
limitation, letters, invoices, purchase orders,
contracts, statements and applications, are and will be
made solely in the name of the entity to which they
relate or in the name of such entity's authorized
agents, and (ii) shall not refer, and shall ensure that
its affiliates do not refer, to Mobile Energy or the
Company as a division or department of any other entity
(including any affiliate thereof);
(c) shall prepare financial statements separate from any
other person or entity, which shall disclose its
separate existence and the transactions contemplated by
the Relevant Documents in accordance with generally
accepted accounting principles, and shall disclose that
the assets of the Company are not available to any
creditor of the other Southern Affiliated Entities;
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(d) except to the extent set forth in the Relevant
Documents, shall pay its liabilities out of its own
funds, and, except as set forth in the Relevant
Documents, shall not permit any other Southern
Affiliated Entities to pay such liabilities;
(e) shall not hold out employees or officers of the other
Southern Affiliated Entities as employees or officers
of the Company, nor permit employees or officers of the
Company to be held out as employees or officers of any
of the other Southern Affiliated Entities; provided
that such restrictions shall not preclude a particular
employee or officer of the Company from also holding a
position as an employee or officer of any of the other
Southern Affiliated Entities, so long as the Company
takes reasonably appropriate steps to assure that
unaffiliated parties dealing with such employee or
officer are able to distinguish the particular entity
which such person is representing at any particular
time;
(f) shall not guarantee or become obligated for the debts
of any of the other Southern Affiliated Entities or
hold out its credit as being available to satisfy the
obligations of any of the other Southern Affiliated
Entities, other than (i) obligations to reimburse SEI
or SCS for expenses paid by SEI or SCS on behalf of the
Company in connection with the operation and
maintenance of the Energy Complex in accordance with
the Relevant Documents and (ii) obligations to
indemnify SEI for certain claims and losses relating to
SEI's operation and maintenance of the Energy Complex,
in accordance with the Relevant Documents and SCS for
certain claims and losses relating to SCS's performance
of its obligations under the SCS Agreement;
(g) shall allocate fairly and equitably any overhead for
office space shared with any of the other Southern
Affiliated Entities;
(h) shall use stationery, invoices, checks and other
business forms identifiably separate and distinct from
those of any of the other Southern Affiliated Entities.
Such items shall bear a mailing address and telephone
number of the Company which is different from that used
by any of the other Southern Affiliated Entities. The
Company further shall maintain, as its principal
address and telephone number for receipt of notices and
other communications under the Relevant Documents, a
mailing address and telephone number separate from
those of any of the other Southern Affiliated Entities;
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(i) shall not pledge its funds or assets for the benefit of
any of the other Southern Affiliated Entities, except
as set forth in the Relevant Documents; and
(j) at all times shall hold itself out to the public as an
entity legally separate and distinct from any of the
other Southern Affiliated Entities.
XII.
The Company shall at all times maintain and observe all
corporate formalities in the conduct of its affairs and with
respect to the acquisition, ownership, encumbrance or transfer of
any material assets or the incurrence of any material
indebtedness. Such formalities shall include, without
limitation, the recording of any proceedings of its members and
the approval by its members, to the extent appropriate under
Alabama law, of material actions of the Company and the execution
and maintenance of appropriate documentation with respect to and
in order to evidence the acquisition, ownership, encumbrance or
transfer of any material assets or the incurrence of any material
indebtedness.
IN WITNESS WHEREOF, the undersigned members have caused
these Articles of Organization to be executed as of the ___ day
of July, 1995.
MOBILE ENERGY SERVICES HOLDINGS, INC.
By:
Its:
SOUTHERN ELECTRIC INTERNATIONAL, INC.
By:
Its:
7
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Exhibit A-5
OPERATING AGREEMENT
OF
MOBILE ENERGY SERVICES COMPANY, L.L.C.
Dated as of July __, 1995
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I . . . . . . . . . . . . 1
OFFICES . . . . . . . . . . . . 1
Section 1.1 Principal Office . . . . . . . . . . 1
Section 1.2 Registered Office . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . 1
DEFINITIONS . . . . . . . . . . . 1
ARTICLE III . . . . . . . . . . . 3
CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . 3
Section 3.1 Names, Addresses and Capital
Contributions of Members . . . . . . 3
Section 3.2 Additional Capital Contributions . . 3
Section 3.3 Summary of Capital Contributions . . 3
Section 3.4 Capital Accounts . . . . . . . . . . 4
Section 3.5 Capital Account of Assignee . . . . 4
ARTICLE IV . . . . . . . . . . . 4
PROFITS, LOSSES AND DISTRIBUTIONS . . . . . . 4
Section 4.1 Profits and Losses . . . . . . . . . 4
Section 4.2 Special Allocations . . . . . . . . 5
Section 4.3 Other Allocation Rules . . . . . . . 6
Section 4.4 Tax Allocations; Code Section
704(c) . . . . . . . . . . . . . . . 7
Section 4.5 Property Distributions . . . . . . . 7
ARTICLE V . . . . . . . . . . . . 7
ACCOUNTING AND RECORDS . . . . . . . . 7
Section 5.1 Accountant . . . . . . . . . . . . . 7
Section 5.2 Legal Counsel . . . . . . . . . . . 7
Section 5.3 Books and Records . . . . . . . . . 7
Section 5.4 Right of Inspection . . . . . . . . 8
Section 5.5 Reports . . . . . . . . . . . . . . 8
Section 5.6 Tax Returns . . . . . . . . . . . . 8
Section 5.7 Special Basis Adjustment . . . . . . 8
Section 5.8 Tax Matters Partner . . . . . . . . 8
Section 5.9 Fiscal Year . . . . . . . . . . . . 9
Section 5.10 Bank Accounts . . . . . . . . . . . 9
Section 5.11 Loans . . . . . . . . . . . . . . . 9
Section 5.12 Contracts . . . . . . . . . . . . . 9
ARTICLE VI . . . . . . . . . . . 9
MANAGEMENT, OFFICERS, ELECTIONS AND APPROVALS . . . 9
Section 6.1 Voting . . . . . . . . . . . . . . . 9
Section 6.2 Management . . . . . . . . . . . . . 9
Section 6.3 Officers . . . . . . . . . . . . . . 9
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Section 6.5 Independent Activities . . . . . . . 11
ARTICLE VII . . . . . . . . . . . 12
ADMISSION OF ADDITIONAL MEMBERS, DEATH OF A MEMBER,
AND TRANSFER OF INTERESTS . . . . . . . . 12
Section 7.1 Addition of Additional Members . . . 12
Section 7.2 Death of an Individual Member . . . 12
Section 7.3 Restrictions on Transfer . . . . . . 12
Section 7.4 Right of First Refusal . . . . . . . 12
Section 7.5 General Transfer Provision . . . . . 14
Section 7.6 Compliance . . . . . . . . . . . . . 14
Section 7.7 Waiver of Partition . . . . . . . . 14
ARTICLE VIII . . . . . . . . . . . 15
DISSOLUTION AND WINDING UP . . . . . . . 15
Section 8.1 Dissolution . . . . . . . . . . . . 15
Section 8.2 Winding Up . . . . . . . . . . . . . 15
Section 8.3 Compliance with Timing Requirements
of Regulations . . . . . . . . . . . 15
Section 8.4 Rights of Members . . . . . . . . . 16
ARTICLE IX . . . . . . . . . . . 16
MISCELLANEOUS . . . . . . . . . . . 16
Section 9.1 Notices . . . . . . . . . . . . . . 16
Section 9.2 Waiver of Notice . . . . . . . . . . 16
Section 9.3 Indemnification by the Company . . . 16
Section 9.4 Governing Law . . . . . . . . . . . 18
Section 9.5 Construction . . . . . . . . . . . . 18
Section 9.6 Reimbursement of Members . . . . . . 18
Section 9.7 Binding Effect . . . . . . . . . . . 18
Section 9.8 Headings . . . . . . . . . . . . . . 18
Section 9.9 Severability . . . . . . . . . . . . 19
Section 9.10 Additional Documents . . . . . . . . 19
Section 9.11 Variation of Pronouns . . . . . . . 19
Section 9.12 Counterpart Execution . . . . . . . 19
Section 9.13 Amendments . . . . . . . . . . . . . 19
ii
<PAGE>
OPERATING AGREEMENT
OF
MOBILE ENERGY SERVICES COMPANY, L.L.C.
THIS OPERATING AGREEMENT (the "Agreement") of Mobile Energy
Services Company, L.L.C. (the "Company") is entered into and
shall be effective as of the ____ day of July, 1995, by and
between Mobile Energy Services Holdings, Inc., an Alabama
corporation ("MESH"), and Southern Electric International, Inc.,
a Delaware corporation ("SEI") and all additional and substitute
Members, pursuant to the provisions of the Alabama Limited
Liability Company Act, Code of Alabama of 1975, Section 10-2-1,
et. seq. (the "Act"), on the following terms and conditions:
ARTICLE I
OFFICES
Section 1.1 Principal Office. The principal office of
the Company in the State of Alabama shall be located at
_____________________________________________________. The
Company may have such other offices, either within or without the
State of Alabama as the Members may designate or as the business
of the Company may from time to time require.
Section 1.2 Registered Office. The registered office of
the Company, required by the Act to be maintained in the State of
Alabama, may, but need not, be identical with the principal
office in the State of Alabama. The address of the initial
registered office of the Company is
_______________________________________________________, and the
initial registered agent at such address is
_________________________________. The registered office and
the registered agent may be changed from time to time by action
of the Members and by filing a statement of such change with the
Alabama Secretary of State.
ARTICLE II
DEFINITIONS
Defined terms used in this Agreement shall, unless the
context otherwise requires, have the meanings specified below.
Certain additional defined terms are set forth elsewhere in this
Agreement.
(a) "Assignee" means a person reflected in the records of
the Company as the owner of financial rights in the Company. An
Assignee does not have governance or management rights.
<PAGE>
(b) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, any successor thereto and applicable
regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.
(c) "Company Interest" means the interest of a Member or an
Assignee in the Company as represented by such Member's or
Assignee's Percentage Interest.
(d) "Company Minimum Gain" shall have the meaning of
"Partnership Minimum Gain", set forth in Regulations sections
1.704-2(b)(2) and 1.704-2(d).
(e) "Manager" shall mean MESH together with any substitute
or replacement Manager selected by the Members from time to time.
(f) "Member" means a person reflected in the records of the
Company as the owner of all rights and benefits of a membership
interest in the Company specified in this Agreement, including
governance or management rights.
(g) "Member Nonrecourse Debt" shall have the meaning of
"Partner Nonrecourse Debt" set forth in Regulation section 1.704-
2(b)(4).
(h) "Member Nonrecourse Debt Minimum Gain" means an amount,
with respect to each Member Nonrecourse Debt, equal to the
Company Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in
accordance with section 1.704-2(i)(3) of the Regulations.
(i) "Member Nonrecourse Deductions" shall have the meaning
of "Partner Nonrecourse Deductions" set forth in Regulation
section 1.704-2(i)(2).
(j) "Nonrecourse Deductions" shall have the meaning set
forth in Regulation section 1.704-2(b)(1).
(k) "Nonrecourse Liability" shall have the meaning set out
in sections 1.704-2(b)(3) and 1.752-1(a)(2) of the Regulations.
(l) "Percentage Interest" means the percentage interest of
a Member in the Company including, without limitation, such
Member's right (i) to a distributive share of the profits or
losses and distributions of cash and/or other Company property
and (ii) to a distributive share of the Company's assets.
(m) "Person" means any individual, corporation,
association, partnership, limited liability company, joint
venture, trust, estate or other entity, or organization.
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<PAGE>
(n) "Regulations" means the permanent, temporary, proposed
or proposed and temporary regulations of Department of the
Treasury under the Code as such regulations may be lawfully
changed from time to time.
(o) "Transfer" means to sell, convey, transfer, assign,
mortgage, pledge, hypothecate, or otherwise encumber in any way
all or any portion of a Company Interest.
ARTICLE III
CAPITAL CONTRIBUTIONS
Section 3.1 Names, Addresses and Capital Contributions of
Members. The following is a listing of the names, mailing
addresses, initial contributions to the capital of the Company
and Percentage Interest of each of the Members:
Capital Percentage
Name Address Contribution Interest
Mobile Energy ______________
Services ______________ _____________ 99%
Holdings, Inc. ______________
Southern 900 Ashwood
Electric Parkway, Suite ______________ 1%
International, 500
Inc. Atlanta, GA
30338
Total ______________ ______________
Section 3.2 Additional Capital Contributions. Any Member
may make additional capital contributions to the Company. Such
contributions (if other than in cash) shall be valued at their
net fair market value on the date of such contribution. Such
value (the "Agreed Value") shall be agreed upon by the non-
contributing Members owning a majority of the Percentage
Interests of the Company, exclusive of the Percentage Interest
owned by the contributing Member.
Section 3.3 Summary of Capital Contributions. For the
purposes of this Agreement, the capital contributions to the
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<PAGE>
Company shall be deemed to include the initial capital
contributions to the Company made by the Members, plus any
amounts subsequently contributed to the capital of the Company by
the Members. No Member shall be entitled to interest on its
capital account.
Section 3.4 Capital Accounts. An individual capital
account shall be established and maintained for each Member. The
capital account of each Member shall consist of such Member's
original cash contribution and any additional cash contributions
of capital, increased by (1) cash and the net fair market value
of property other than cash contributed to capital by such Member
(net of liabilities assumed by the Company or subject to which
the Company takes such property within the meaning of section 752
of the Code), and (2) such Member's distributive share of income
and gains of the Company, including items of income and gain
specifically allocated to such Member or Assignee pursuant to
Article IV and the Code, and decreased by (a) distributions of
cash or other property to such Member (net of liabilities of the
Company assumed by the Member or subject to which the Member
takes such property within the meaning of section 752 of the
Code), and (b) such Member's distributive share of losses of the
Company, including items of expense, loss, and deduction
specifically allocated to such Member pursuant to Article IV and
the Code. Notwithstanding anything to the contrary contained
herein, the capital account of a Member shall maintained in all
events in accordance with the rules set forth in Regulation
section 1.704-1(b)(2)(iv).
Section 3.5 Capital Account of Assignee. In the event of
a Transfer of some or all of a Member's Company Interest, the
capital account of the transferor shall become the capital
account of the transferee, to the extent it relates to the
portion of the Company Interest transferred.
ARTICLE IV
PROFITS, LOSSES AND DISTRIBUTIONS
Section 4.1 Profits and Losses. After giving effect to
the special allocations in Sections 4.2 and 4.3, all profits and
losses derived from the Company, and each item of income, gain,
loss, deduction and credit entering into the computation thereof,
shall be allocated among the Members in accordance with their
respective Percentage Interests. A separate account shall be
maintained for each Member. Company profits and losses shall be
charged or credited to the separate capital account of each
Member as provided.
4
<PAGE>
Section 4.2 Special Allocations. The following special
allocations shall be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise
provided in section 1.704-2(f) of the Regulations,
notwithstanding any other provision of this Article IV, if there
is a net decrease in Company Minimum Gain during any Company
fiscal year, each Member shall be specially allocated items of
Company income and gain for such fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to such Member's
share of the net decrease in Company Minimum Gain, determined in
accordance with Regulation section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be
determined in accordance with sections 1.704-(f)(6) and
1.704-2(j)(2) of the Regulations. This Section 4.2(a) is
intended to comply with the minimum gain chargeback requirement
in such section of the Regulations and shall be interpreted
consistently therewith.
(b) Member Minimum Gain Chargeback. Except as
otherwise provided in section 1.704-2(i)(4) of the Regulations,
notwithstanding any other provision of this Article IV, if there
is a net decrease in Member Nonrecourse Debt Minimum Gain
attributable to a Member Nonrecourse Debt during any Company
fiscal year, each Member who has a share of the Member
Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt (determined in accordance with Regulation
section 1.704-2(i)(5)) as of the beginning of such fiscal year,
shall be specially allocated items of Company income and gain for
such fiscal year (and, if necessary, subsequent fiscal years) in
an amount equal to such Member's share of the net decrease in
Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulation
section 1.704-2(i)(4). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with
sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations.
This Section 4.2(b) is intended to comply with the minimum gain
chargeback requirement in such section of the Regulations and
shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event that any
Member unexpectedly receives any adjustments, allocations, or
distributions described in sections 1.704-1(b)(2)(ii)(d)(4)-(6)
of the Regulations, items of Company income and gain shall be
specially allocated to each such Member in an amount and manner
sufficient to eliminate, to the extent required by the
Regulations, the deficit capital account at the end of any fiscal
year of such Member as quickly as possible, provided that an
5
<PAGE>
allocation pursuant to this Section 4.2 (c) shall be made if and
only if and to the extent that such Member would have a deficit
capital account at the end of any fiscal year after all other
allocations provided for in this Agreement have been tentatively
made as if this Section 4.2(c) were not in the Agreement.
(d) Code Section 754 Adjustment. To the extent an
adjustment to the adjusted tax basis of any Company asset
pursuant to Code section 734(b) or Code section 743(b) is
required, pursuant to Regulation section 1.704-1(b)(2)(iv)(m)(2)
or Regulation section 1.704-l(b)(2)(iv)(m)(4), to be taken into
account in determining capital accounts as a result of a
distribution to a Member in complete liquidation of its interest,
the amount of such adjustment to the capital accounts shall be
treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis)
and such gain or loss shall be specifically allocated to the
Members in accordance with their Percentage Interests in the
event Regulation section 1.704-1(b)(2)(iv)(m)(2) applies or to
the Members to whom such distribution was made in the event that
Regulation section 1.704-1(b)(2)(iv)(m)(4) applies.
(e) Nonrecourse Deductions. Nonrecourse Deductions
for any fiscal year or other period shall be specially allocated
among the Members in proportion to their Percentage Interests.
(f) Member Nonrecourse Deductions. Any Member
Nonrecourse Deductions for any fiscal year or other period shall
be specially allocated to the Member who bears the economic risk
of loss with respect to the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable in accordance with
Regulation section 1.704-2(i)(2).
Section 4.3 Other Allocation Rules.
(a) The Members are aware of the income tax
consequences of the allocations made by this Article IV and
hereby agree to be bound by the provisions of this Article IV in
reporting their shares of Company income and loss for income tax
purposes.
(b) For purposes of determining the profits, losses,
or any other items allocable to any period, profits, losses, and
any such other items shall be determined on a daily, monthly, or
other basis, as determined by the Members using any permissible
method under Code section 706 and the Regulations thereunder.
(c) Solely for purposes of determining a Member's
proportionate share of the "excess nonrecourse liabilities" of
the Company within the meaning of Regulation
section 1.752-3(a)(3), the Members' interests in Company profits
are in proportion to their Percentage Interests.
6
<PAGE>
Section 4.4 Tax Allocations; Code Section 704(c). In
accordance with Code section 704(c) and the Regulations
thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Company shall, solely
for tax purposes, be allocated among the Members so as to take
account of any variation between the adjusted basis of such
property to the Company for federal income tax purposes and its
initial fair market value.
In the event that the Agreed Value of any Company asset is
adjusted pursuant to Regulation section 1.704-1(b)(2)(iv)(f),
subsequent allocations of income, gain, loss and deduction with
respect to such asset shall take account of any variation between
the adjusted basis to the Company at the time of the contribution
for federal income tax purposes and the Agreed Value of such
property.
Any elections or other decisions relating to such
allocations shall be made by the Manager in any manner that
reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 4.4 are solely for purposes
of federal, state, and local taxes and shall not affect, or in
any way be taken into account in computing, any Member's capital
account or share of profits, losses, other items, or
distributions pursuant to any provisions of this Agreement.
Section 4.5 Property Distributions. The Company shall
not make any distributions of property (including cash) unless
the Members unanimously vote for the Company to make such
distributions.
ARTICLE V
ACCOUNTING AND RECORDS
Section 5.1 Accountant. An accountant may be selected
from time to time by the Manager to perform such tax and
accounting services as may from time to time be required. The
accountant may be removed by the Manager without assigning any
cause.
Section 5.2 Legal Counsel. One or more attorney(s) at
law may be selected from time to time by the Manager to review
the legal affairs of the Company and to perform such other
services as may be required and to report to the Manager with
respect thereto. Such attorney(s) may be removed by the Manager
without assigning any cause.
Section 5.3 Books and Records. The Company's books and
records shall be kept at the principal place of business of the
7
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Company. The Company's books of account shall show a true and
accurate record of all costs and expenses incurred, all charges
made, all credits made and received and all income derived in
connection with the operation of the Company business in
accordance with generally accepted accounting principles
consistently applied. The Company shall use the [cash] method of
accounting in preparation of its annual reports and for tax
purposes and shall keep its books accordingly. The expenses
chargeable to the Company shall include only those which are
reasonable and necessary for the ordinary and efficient operation
of the Company business.
Section 5.4 Right of Inspection. Each Member shall, at
its sole expense, have the right, at any time without notice to
the other Members, to examine, copy and audit the Company's books
and records during normal business hours. Such inspections may
be made by any agent or attorney of a Member.
Section 5.5 Reports. Unless otherwise agreed by the
Members, annual statements showing the Company's profits and
losses for the fiscal year and indicating the share of profit or
loss of each Member for income tax purposes shall be prepared by
the accountants of the Company and distributed to all Members
within a reasonable time after the close of each fiscal year.
Section 5.6 Tax Returns. The Company's accountants shall
prepare all income and other tax returns of the Company and shall
cause the same to be filed in a timely manner. The Company shall
furnish to each Member a copy of each such return, together with
any schedules or other information which each Member may require
in connection with its own tax affairs.
Section 5.7 Special Basis Adjustment. In connection with
any Transfer of a Company Interest permitted by the terms of this
Agreement and a subsequent admission of a "Transferee" (as
hereinafter defined) as a Member of the Company, the Company, at
the written request of the "Selling Owner" (as hereinafter
defined) or Transferee, and at the time and in the manner
provided in Regulation section 1.754-1(b), shall make an election
to adjust the basis of the Company's property in the manner
provided in sections 734(b) and 743(b) of the Code, and such
Transferee shall pay all costs incurred by the Company in
connection therewith, including, without limitation, reasonable
attorneys' and accountants' fees.
Section 5.8 Tax Matters Partner. MESH shall be the "Tax
Matters Partner" pursuant to the Code, and shall be the party
designated to receive all notices from the Internal Revenue
Service which pertain to the tax affairs of the Company. The Tax
Matters Partner must be a Member and shall not take any action in
its capacity as such without the prior approval of the other
Members.
8
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Section 5.9 Fiscal Year. The fiscal year of the Company
shall be the calendar year, unless otherwise approved by the
Members. As used in this Agreement, a fiscal year shall include
any partial fiscal year at the beginning and end of the Company
term.
Section 5.10 Bank Accounts. The bank accounts of the
Company shall be maintained in such banking institutions as shall
be determined by the Manager. Withdrawals shall be made only in
the regular course of Company business and as otherwise
authorized in this Agreement on such signature or signatures as
the Manager may determine. The funds of the Company shall not be
commingled with the funds of any other person or employee in any
manner except for the benefit of the Company.
Section 5.11 Loans. No loans shall be contracted on
behalf of the Company and no evidences of indebtedness shall be
issued in its name unless authorized by the Manager. Such
authority may be general or confined to specific instances.
Section 5.12 Contracts. The Manager may authorize any
Member or agent of the Company to enter into any contract or
execute any instrument in the name of and on behalf of the
Company, and such authority may be general or confined to
specific instances.
ARTICLE VI
MANAGEMENT, OFFICERS, ELECTIONS AND APPROVALS
Section 6.1 Voting. Each Member shall have management
participation rights equal to its Percentage Interest in the
Company.
Section 6.2 Management. Except as otherwise set forth in
this Agreement, whenever any determination is required to be made
hereunder concerning the conduct of the Company business, such
determination shall be made by the officers of the Company as
authorized by the Manager.
Section 6.3 Officers. (a) The officers of the Company
shall be chosen by the Manager and shall be at a minimum a
president, secretary and controller. The Manager may also choose
one or more vice-presidents, assistant secretaries and assistant
controllers. Any number of offices may be held by the same
person, unless this Agreement otherwise provides. The Manager
may appoint such other officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be
determined from time to time by the Manager. The salaries of all
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officers and agents of the Company shall be fixed by the Manager.
The officers of the Company shall hold office until their
successors are chosen and qualified. Any officer appointed by
the Manager may be removed at any time by the Manager. Any
vacancy occurring in any office of the Company shall be filled by
the Manager. Each officer of the Company shall have the
authority to execute and deliver any and all applications and
filings as are necessary to be filed with federal, state and
local regulatory agencies on behalf of the Company.
(b) The following officers shall have the following
powers and duties:
(i) President. The president shall be the chief
executive officer of the Company, shall preside at all meetings
of the Members, shall have general and active management of the
business of the Company and shall see that all orders and
resolutions of the Manager are carried into effect. The
president shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the Company, except where
required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be
expressly delegated by the Manager to some other officer or agent
of the Company.
(ii) Vice-Presidents. In the absence of the
president or in the event of its inability or refusal to act, the
vice-president (or in the event there be more than one
vice-president, the vice-presidents in the order designated by
the Manager, or in the absence of any designation, then in the
order of their election) shall perform the duties of the
president, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the president. The
vice-presidents shall perform such other duties and have such
other powers as the Manager may from time to time prescribe.
(iii) Secretary. The secretary shall attend
all meetings of the Members and record all the proceedings of the
meetings of the Company and of the Members in a book to be kept
for that purpose and shall perform like duties for the standing
committees when required. It shall give, or cause to be given,
notice of all special meetings of the Members, and shall perform
such other duties as may be prescribed by the Manager or
president, under whose supervision it shall be. It shall have
custody of the seal of the Company and he, or an assistant
secretary, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested
by its signature or by the signature of such assistant secretary.
The Manager may give general authority to any other officer to
affix the seal of the Company and to attest the affixing by its
signature.
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(iv) Assistant Secretary. The assistant
secretary, or if there be more than one, the assistant
secretaries in the order determined by the Manager (or if there
be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of its
inability or refusal to act, perform the duties and exercise the
powers of the secretary and shall perform such other duties and
have such other powers as the Manager may from time to time
prescribe.
(v) Controller. The controller shall have the
custody of the Company funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books
belonging to the Company and shall deposit all moneys and other
valuable effects in the name and to the credit of the Company in
such depositories as may be designated by the Manager. The
controller shall disburse the funds of the Company as may be
ordered by the Manager, taking proper vouchers for such
disbursements, and shall render to the president and the Members,
at their regular meetings, or when the Manager so requires, an
account of all its transactions as controller and of the
financial condition of the Company. If required by the Manager,
the controller shall give the Company a bond (which shall be
renewed every six years) in such sum and with such surety or
sureties as shall be satisfactory to the Manager for the faithful
performance of the duties of its office and for the restoration
to the Company, in case of its death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and
other property of whatever kind in its possession or under its
control belonging to the Company.
(vi) Assistant Controller. The assistant
controller, or if there shall be more than one, the assistant
controllers in the order determined by the Manager (or if there
be no such determination, then in the order of their election)
shall, in the absence of the controller or in the event of its
inability or refusal to act, perform the duties and exercise the
powers of the controller and shall perform such other duties and
have such other powers as the Manager may from time to time
prescribe.
Section 6.4 Elections and Approvals. Except as otherwise
set forth in this Agreement, any election or any matter that is
subject to approval by the Members shall require the simple
majority vote of the Members.
Section 6.5 Independent Activities. The Manager and each
Member may, notwithstanding this Agreement, engage in whatever
activities it may choose, whether the same are competitive with
the Company or otherwise, without having or incurring any
obligation to offer any interest in such activities to the
Company or any other Member. Neither this Agreement nor any
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activity undertaken pursuant hereto shall prevent the Manager or
any Member from engaging in such activities, or require the
Manager or any Member to permit the Company or any other Member
to participate in any such activities, and as a material part of
the consideration for the execution of this Agreement by each
Member, each Member hereby waives, relinquishes and renounces any
such right or claim of participation against the Manager and any
other Member.
ARTICLE VII
ADMISSION OF ADDITIONAL MEMBERS, DEATH OF A MEMBER,
AND TRANSFER OF INTERESTS
Section 7.1 Addition of Additional Members. No
additional Members shall be admitted to the Company without the
unanimous consent of the Members.
Section 7.2 Death of an Individual Member.
(a) If any of the Members who is a natural person
should die during the term of the Company, the Company shall be
automatically continued between the surviving Members and the
estate of the deceased Member; and the personal representative of
the deceased Member shall immediately succeed to the Company
Interest of the deceased Member and shall be deemed to be an
Assignee but shall have no management rights in the Company.
(b) Similarly, upon distribution of the deceased
Member's Company Interest to such Member's devisees, legatees,
heirs, or trustees, such devisees, legatees, heirs or trustees,
shall become an Assignee and shall have a Company Interest
proportionate to their respective distributive interests in the
deceased Member's Company Interest. Such devisees, legatees,
heirs or trustees shall become Members of the Company only upon
unanimous consent of the remaining Members.
Section 7.3 Restrictions on Transfer. Except as
expressly provided for in this Agreement, no Member or Assignee
may, without the unanimous consent of the other Members, Transfer
all or any portion of its Company Interest or withdraw or retire
from the Company. Any such attempted Transfer, withdrawal or
retirement not permitted hereunder shall be null and void.
Section 7.4 Right of First Refusal. If the Members
approve a proposed Transfer or the prohibitions contained in
Section 7.3 are determined by a court of competent jurisdiction
to be unenforceable, then the Member or Assignee desiring to
Transfer all or a portion of its Company Interest (the "Selling
Owner") shall deliver a written notice ("Offering Notice") to the
other Members (the "Offeree Members") of its intention to do so.
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The Offering Notice shall specify the nature of the Transfer, the
consideration to be received therefor, the identity of the
proposed purchaser, and the terms upon which it intends to
undertake such Transfer. Each Offeree Member shall have the
right to elect to purchase from the Selling Owner a part of the
Company Interest of the Selling Owner in the proportion that such
Offeree Member's Percentage Interest bears to the total
Percentage Interests of all of the Offeree Members who wish to
participate in the purchase of all of the Company Interest
referred to in the Offering Notice, at the same price and on the
same terms as specified in the Offering Notice, for a period of
60 days after the giving of the Offering Notice, by delivering in
writing to the Selling Owner an offer to purchase that portion of
the Company Interest of the Selling Owner covered by the Offering
Notice; provided, however, that the Offeree Members may not, in
the aggregate, purchase less than the entire Company Interest of
the Selling Owner. Within 45 days, after notice to purchase is
provided by the Offeree Members to the Selling Owner, the
purchase by the Offeree Members of said Company Interest shall be
consummated on the terms and conditions set forth in the Offering
Notice of the Selling Owner. If within the 60-day period during
which the Offeree Members have the right to elect to purchase the
Selling Owner's Company Interest, they do not make such election,
then the Selling Owner, within 30 days after the expiration of
said 60-day period, may undertake and complete the Transfer to
any person the identity of which was disclosed in the Offering
Notice. The Transfer shall not be undertaken at a lower price or
upon more favorable terms to the purchaser than specified in the
Offering Notice. If the Selling Owner does not consummate such
Transfer within 90 days after the date of the Offering Notice, or
within the time scheduled for closing pursuant to the Offering
Notice, whichever is later, then all restrictions of this
Section 7.4 shall apply as though no Offering Notice had been
given. The purchaser of the Selling Owner's Company Interest
(the "Transferee") shall become a substitute Member upon
satisfaction of the following requirements:
(a) the Transferee signs and accepts the terms and
conditions of this Agreement;
(b) the Transferee satisfies the Members that such
Transfer does not violate any federal or state securities laws,
or might cause the termination of the Company under the Code;
(c) the Transferee pays all related expenses,
including legal fees and recording costs as may be incurred by
the Company in connection with such Transfer; and
(d) the Offeree Members unanimously agree to admit the
Transferee as a substitute Member.
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If the Offeree Members do not agree to admit the Transferee as a
substitute Member, the Transferee is merely an Assignee and the
Selling Owner, if a Member, remains a Member of the Company
pursuant to sections 10-12-32 and 10-12-33 of the Act. As an
Assignee, the Transferee is reflected in the records of the
Company as the owner of financial rights in the Company, but does
not have governance or management rights.
Section 7.5 General Transfer Provision. All Transfers
shall be by instrument in form and substance satisfactory to
counsel for the Company and shall contain an expression by the
Transferee of its intention to accept the Transfer and to accept
and adopt all of the terms and provisions of this Agreement, as
the same may have been amended, and shall provide for the payment
by the Transferee of all reasonable expenses incurred by the
Company in connection with such Transfer, including, without
limitation, the necessary amendments to this Agreement to reflect
such Transfer. The Selling Owner shall execute and acknowledge
all such instruments, in form and substance reasonably
satisfactory to the Company's counsel, as may be necessary or
desirable to effectuate such Transfer. In no event shall the
Company dissolve, liquidate or terminate upon the admission of
any Member to the Company or upon any permitted Transfer of an
interest in the Company by any Member or Assignee. Each Member
hereby waives its right to dissolve, liquidate or terminate the
Company in such event. Upon completion of a Transfer in
compliance with this Agreement, the Selling Owner shall be
released from all future obligations arising to third parties
after the date of such Transfer, provided the Transferee assumes
all such obligations of the Selling Owner. However, the Selling
Owner shall remain liable for liabilities to third parties
occurring on or prior to the date of such Transfer and for its
obligations under this Agreement when arising.
Section 7.6 Compliance. Notwithstanding anything to the
contrary in this Agreement, at law or in equity, no Member shall
Transfer or otherwise deal with any Company Interest in a way
that would cause a default under any material agreement to which
the Company is a party or by which it is bound.
Section 7.7 Waiver of Partition. No Member shall either
directly or indirectly take any action to require partition or
appraisal of the Company or of any of its assets or properties or
cause the sale of any Company property, and notwithstanding any
provisions of applicable law to the contrary, each Member (and
its legal representatives, successors or assigns) hereby
irrevocably waives any and all right to maintain any action for
partition or to compel any sale with respect to its Company
Interest, or with respect to any assets or properties of the
Company, except as expressly provided in this Agreement, and each
Assignee shall have no such right.
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ARTICLE VIII
DISSOLUTION AND WINDING UP
Section 8.1 Dissolution. The Company shall dissolve upon
the first to occur of any of the following events:
(a) The election of all of the Members to dissolve the
Company; and
(b) An event of dissociation of a Member, as defined
in section 10-12-36 of the Act, unless both of the following apply:
(1) there are at least two remaining Members
or at least one remaining Member and a new Member is
admitted; and
(2) the legal existence and business of the
Company is continued by the written consent of all of the
remaining Members within 90 days after the occurrence of the
event of dissociation.
Section 8.2 Winding Up. Upon a dissolution of the
Company, the Members shall take full account of the Company's
assets and liabilities, the Company's assets shall be liquidated
as promptly as is consistent with obtaining the fair value
thereof, and the proceeds therefrom, to the extent sufficient
therefor, shall be applied and distributed in the following
order:
(a) To the payment and discharge of all of the
Company's liabilities, including the establishment of any necessary
reserves; and
(b) The balance, if any, to the Members in accordance
with their capital accounts.
Section 8.3 Compliance with Timing Requirements of
Regulations. In the event the Company is "liquidated" within the
meaning of Regulation section 1.704-1(b)(2)(ii)(g), distributions
shall be made pursuant to this Article VIII (if such liquidation
constitutes a dissolution of the Company) or Article IV hereof
(if it does not) to the Members who have positive capital
accounts in compliance with Regulation
section 1.704-1(b)(2)(ii)(b)(2).
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Section 8.4 Rights of Members. Except as otherwise
provided in this Agreement, each Member shall look solely to the
assets of the Company for the return of its capital contributions
and shall have no right or power to demand or receive property
other than cash from the Company. No Member shall have priority
over the other Members as to the return of its capital
contributions, distributions or allocations unless otherwise
provided in this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notice, payment, demand, or
communication required or permitted to be given by any provision
of this Agreement shall be in writing and shall be deemed to have
been delivered, given and received for all purposes (i) if
delivered personally to the Member or to an officer of the Member
to whom the same is directed, or (ii) whether or not the same is
actually received, if sent by registered or certified mail,
postage and charges prepaid, addressed as follows: if to the
Company, to the Company at the address set forth in Section 1.2
hereof; if to any Member, to the address set forth in Section 3.1
hereof; or to such other address as the Company or any Member may
from time to time specify by notice to the Company and the
Members. Any such notice shall be deemed to be delivered, given
and received as of the date so delivered, if delivered
personally, or as of the date on which the same was deposited in
a regularly maintained receptacle for the deposit of United
States mail, addressed and sent as aforesaid.
Section 9.2 Waiver of Notice. Whenever any notice is
required to be given pursuant to the provisions of the Act, the
Articles of Organization of the Company or this Agreement, a
waiver thereof, in writing, signed by the persons entitled to
such notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
Section 9.3 Indemnification by the Company. The Company
shall indemnify persons who may be indemnified by the Company as
follows:
(a) Each person who is or was a Member, Manager,
officer, employee or agent of the Company and who was or is a
party or was or is threatened to be made a party to any
threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that it is or was a Member,
Manager, officer, employee or agent of the Company, or is or was
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serving at the request of the Company as a director, alternate
director, officer, employee, agent or trustee of another company,
partnership, joint venture, trust, employee benefit plan or other
enterprise, shall be indemnified by the Company as a matter of
right against any and all expenses (including attorneys' fees)
actually and reasonably incurred by him and against any and all
claims, judgments, fines, penalties, liabilities and amounts paid
in settlement actually incurred by him in defense of such claim,
action, suit or proceeding, including appeals, to the full extent
permitted by applicable law. The indemnification provided by
this section shall inure to the benefit of the heirs, executors
and administrators of such person.
(b) Expenses (including attorneys' fees) incurred by a
Member, Manager, officer, employee or agent of the Company with
respect to the defense of any such claim, action, suit or
proceeding may be advanced by the Company prior to the final
disposition of such claim, action, suit or proceeding, as
authorized by the Manager in the specific case, upon receipt of
an undertaking by or on behalf of such person to repay such
amount unless it shall ultimately be determined that such person
is entitled to be indemnified by the Company under this Agreement
or otherwise; provided, however, that the advancement of such
expenses shall not be deemed to be indemnification unless and
until it shall ultimately be determined that such person is
entitled to be indemnified by the Company.
(c) The Company may purchase and maintain insurance at
the expense of the Company on behalf of any person who is or was
a Member, Manager, officer, employee or agent of the Company, or
any person who is or was serving at the request of the Company as
a director (or the equivalent), alternate director, officer,
employee, agent or trustee of another company, partnership, joint
venture, trust, employee benefit plan or other enterprise,
against any liability or expense (including attorneys' fees)
asserted against him and incurred by him in any such capacity, or
arising out of its status as such, whether or not the Company
would have the power to indemnify him against such liability or
expense under this Agreement or otherwise.
(d) Without limiting the generality of the foregoing
provisions, no present or future Member, Manager, officer,
employee or agent of the Company, or its heirs, executors, or
administrators, shall be liable for any act, omission, step, or
conduct taken or had in good faith, which is required,
authorized, or approved by any order or orders issued pursuant to
the Public Utility Holding Company Act of 1935, the Federal Power
Act, or any federal or state statute or municipal ordinance
regulating the Company or its parent by reason of their being
holding or investment companies, public utility companies, public
utility holding companies, or subsidiaries of public utility
holding companies. In any action, suit, or proceeding based on
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any act, omission, step, or conduct, as described in this
paragraph, the provisions hereof shall be brought to the
attention of the court. In the event that the foregoing
provisions of this paragraph are found by the court not to
constitute a valid defense on the grounds of not being applicable
to the particular class of plaintiff, each such Member, Manager
and officer, and its heirs, executors, and administrators, shall
be reimbursed for, or indemnified against, all expenses and
liabilities incurred by him or imposed on him, in connection
with, or arising out of, any such action, suit, or proceeding
based on any act, omission, step, or conduct taken or had in good
faith as in this paragraph described. Such expenses and
liabilities shall include, but shall not be limited to,
judgments, court costs, and attorneys' fees.
(e) The foregoing rights shall not be exclusive of any
other rights to which any such Member, Manager, officer, employee
or agent may otherwise be entitled and shall be available whether
or not the Member, Manager, officer, employee or agent continues
to be a Member, Manager, officer, employee or agent at the time
of incurring any such expenses and liabilities.
(f) If any word, clause or provision of the Agreement
or any indemnification made under this Section 9.3 hereof shall
for any reason be determined to be invalid, the provisions of the
Agreement shall not otherwise be affected thereby but shall
remain in full force and effect.
Section 9.4 Governing Law. This Agreement shall be
construed under the substantive laws of the State of Alabama as
now adopted or as may hereafter be amended, and such laws shall
govern the limited liability company aspects of this Agreement.
Section 9.5 Construction. Every covenant, term and
provision of this Agreement shall be construed simply according
to its fair meaning and not strictly for or against any Member.
Section 9.6 Reimbursement of Members. Members shall
receive reimbursement for expenses reasonably incurred in the
performance of their duties.
Section 9.7 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the Members and their
legal representatives, heirs, administrators, executors,
successors and permitted assigns.
Section 9.8 Headings. Section and other headings
contained in this Agreement are for reference purposes only and
are not intended to describe, interpret, define or limit the
scope, extent or intent of this Agreement or any provision
hereof.
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Section 9.9 Severability. Every provision of this
Agreement is intended to be severable. If any term or provision
hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.
Section 9.10 Additional Documents. Each member agrees to
perform all further acts and execute, acknowledge and deliver any
documents which may be reasonably necessary, appropriate or
desirable to carry out the provisions of this Agreement.
Section 9.11 Variation of Pronouns. All pronouns and any
variations thereof shall be deemed to refer to masculine,
feminine or neuter, singular or plural, as the identity of the
person or persons may require.
Section 9.12 Counterpart Execution. This Agreement may be
executed in one or more counterparts each of which shall be
deemed an original and all of which shall constitute one and the
same instrument.
Section 9.13 Amendments. This Agreement may be altered,
amended, restated, or repealed and a new Agreement may be adopted
by a unanimous vote of the Members, after notice and opportunity
for discussion of the proposed alteration, amendment,
restatement, or repeal.
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CERTIFICATION
THE UNDERSIGNED, being all of the Members of Mobile Energy
Services Company, L.L.C., hereby evidence their adoption and
ratification of the foregoing Agreement of the Company.
EXECUTED by each Member on the ____ day of July, 1995.
"MESH"
Mobile Energy Services Holdings, Inc.
________________________________
By:_______________________________
Witness
Title:__________________________
"SEI"
Southern Electric International, Inc.
________________________________
By:_______________________________
Witness
Title:__________________________
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Exhibit B-4(a)
DRAFT
6/1/95
MOBILE ENERGY SERVICES COMPANY, L.L.C.
___% Series ____ First Mortgage Bonds due _____
___% Series ____ First Mortgage Bonds due 2017
unconditionally guaranteed by
MOBILE ENERGY SERVICES HOLDINGS, INC.
Underwriting Agreement
_____, 1995
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Mobile Energy Services Company, L.L.C., an Alabama limited
liability company (the "Company"), proposes, subject to the terms
and conditions stated herein, to issue and sell to you severally
(the "Underwriters") an aggregate of $(260,000,000) principal
amount of its First Mortgage Bonds set forth above (the
"Securities") to be issued pursuant to the provisions of the
Trust Indenture dated as of _____, 1995 (the "Indenture") among
the Company, Mobile Energy Services Holdings, Inc., an Alabama
corporation ("Mobile Energy"), and First Union National Bank of
Georgia ("First Union"), as trustee (the "Trustee"). The
Company's obligations with respect to the Securities will be
guaranteed by Mobile Energy. Capitalized terms used but not
otherwise defined herein shall have the respective meanings
assigned to them in the Indenture.
#20103025.5
<PAGE>
1. Each of the Company and Mobile Energy jointly and
severally represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-1 (File No. 33-
_____) in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to the
Underwriters, have been declared effective by the Commission
in such form; no other document with respect to such
registration statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness
of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened
by the Commission; any preliminary prospectus included in
such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the
"Act"), is hereinafter called a "Preliminary Prospectus";
the various parts of such registration statement, including
all exhibits (other than Form T-1) thereto and including the
information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of
Rule 430A under the Act to be part of such registration
statement at the time it was declared effective, each as
amended at the time such part of such registration statement
became effective, are hereinafter collectively called the
"Registration Statement"; and such form of final prospectus,
in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus."
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission,
and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information
furnished in writing to the Company and Mobile Energy by the
Underwriters expressly for use therein.
(c) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in
all material respects to the requirements of the Act and the
#20103025.5 -2-
<PAGE>
Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to the Company and Mobile Energy by the
Underwriters expressly for use therein.
(d) None of the Company, Mobile Energy, The Southern
Company, a Georgia corporation ("Southern"), Southern
Electric International, Inc., a Delaware corporation
("Southern Electric"), Scott Paper Company, a Pennsylvania
corporation ("Scott"), S.D. Warren Company, a Pennsylvania
corporation ("S.D. Warren"), and the other parties to the
Project Contracts (each, a "Project Participant" and,
collectively, the "Project Participants") has sustained,
since the date of the latest audited financial statements
included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood,
hurricane or other calamity, whether or not covered by
insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of
the Company or Mobile Energy or any material adverse change,
or any development involving a prospective material adverse
change, in or affecting the general affairs, management,
properties, financial position, business prospects,
shareholders' or other equity, results of operations or
otherwise of the Company, Mobile Energy, Southern, Southern
Electric, Scott, S.D. Warren or the other Project
Participants otherwise than as set forth or contemplated in
the Prospectus.
(e) The Company and Mobile Energy have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or
such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be
made of such property by the Company and Mobile Energy; any
real property and buildings held under lease by the Company
are held by the Company under valid, subsisting and
enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be
#20103025.5 -3-
<PAGE>
made of such property and buildings by the Company; the
easements, licenses and other rights granted or to be
granted to the Company and Mobile Energy pursuant to the
terms of the Project Contracts provide or will provide the
Company with all rights and property interests required to
enable the Company to obtain all services, materials or
rights (including access) required for the operation and
maintenance of the Energy Complex, as contemplated by the
Prospectus, other than those services, materials or rights
that reasonably can be expected to be obtainable in the
ordinary course of business; and Mobile Energy's sole assets
consist of its ownership interest in the Company and its
rights in respect of the Southern Master Tax Sharing
Agreement.
(f) The Company has been duly formed and is validly
existing as a limited liability company in good standing
under the laws of the State of Alabama, with power and
authority (limited liability company and other) to own its
properties and conduct its business as described in the
Prospectus and to execute, deliver and perform its
obligations under this Agreement and each other Project
Document to which it is a party or will be a party as of the
Time of Delivery (as defined in Section 4(a) hereof), and to
consummate the transactions contemplated hereby and thereby,
including the issuance and sale of the Securities as
provided herein, and has been duly qualified as a foreign
limited liability company for the transaction of business
and is in good standing under the laws of each other
jurisdiction in which it owns or leases property or conducts
any business so as to require such qualification, or is
subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction.
(g) Mobile Energy has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Alabama, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus, and to execute,
deliver and perform its obligations under this Agreement and
each other Project Document to which it is a party or will
be a party as of the Time of Delivery, and to consummate the
transactions contemplated hereby and thereby, including the
issuance of the Guaranty as provided in the Indenture, and
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in
any such jurisdiction.
(h) The Company is, and as of the Time of Delivery
will be, wholly-owned by Mobile Energy and Southern
#20103025.5 -4-
<PAGE>
Electric; each of Mobile Energy and Southern Electric is,
and as of the Time of Delivery will be, wholly-owned by
Southern; each of the Company and Mobile Energy has an
authorized capitalization as set forth in the Prospectus,
and all of the outstanding equity interests of the Company
and Mobile Energy have been duly and validly authorized and
issued, are fully paid, nonassessable and not subject to any
preemptive or similar rights and have been issued in
accordance with applicable federal and state securities
laws; as of the Time of Delivery, the equity interests of
the Company and Mobile Energy will be free and clear of any
security interest, mortgage, pledge, lien, encumbrance,
claim or adverse interest of any nature; and the Company and
Mobile Energy do not have outstanding any securities
convertible into or exchangeable for any of its equity
interests or any rights to subscribe for or to purchase, or
any warrants or options for the purchase of, or any
agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any
character relating to, any such equity interests.
(i) Neither the Company nor Mobile Energy has engaged
in any business or activity other than in connection with
the acquisition, development, ownership, operation and
financing of the Energy Complex as contemplated by the
Project Documents to which either the Company or Mobile
Energy is a party.
(j) The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have
been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture,
which will be substantially in the form filed as an exhibit
to the Registration Statement; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act
and, when executed and delivered by the Company, Mobile
Energy and the Trustee, will constitute a valid and legally
binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the
IndenturewillconformtothedescriptionsthereofintheProspectus.
(k) This Agreement has been duly authorized, executed
and delivered by each of the Company and Mobile Energy and
constitutes a valid and legally binding obligation of the
Company and Mobile Energy, enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles and to public policy or federal
#20103025.5 -5-
<PAGE>
or state securities law that may limit rights to
indemnification.
(l) Each of the Intercreditor and Collateral Agency
Agreement dated as of _____, 1995 among Bankers Trust
Company ("Bankers Trust"), as collateral agent (the
"Collateral Agent"), the Trustee, the Tax-Exempt Trustee,
the Working Capital Facility Provider, the IDB, the Company
and Mobile Energy (the "Intercreditor Agreement") and the
other Financing Documents (other than the Securities, the
Indenture and this Agreement), which will be substantially
in the form filed as exhibits to the Registration Statement,
to which either the Company or Mobile Energy is, or as of
the Time of Delivery will be, a party has been duly
authorized and, when executed and delivered by the parties
thereto, will constitute a valid and legally binding
obligation of the parties thereto, enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Financing Documents
will conform to the descriptions thereof in the Prospectus.
(m) Each of the Project Contracts to which the Company
or Mobile Energy is a party has been duly authorized,
executed and delivered by the parties thereto, and
constitutes a valid and legally binding obligation of each
party thereto, enforceable against each party thereto in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, and other similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the
Project Contracts conform to the descriptions thereof in the
Prospectus; and none of the Company, Mobile Energy or any
other party to any Project Contract is in default (and no
event has occurred that with lapse of time or notice or
action by a third party could result in a default) in any
material respect in the performance of or compliance with
any term or provision in any Project Contract and no force
majeure event has occurred under any Project Contract.
(n) The issue and sale of the Securities by the
Company, the issue of the Guaranty by Mobile Energy, the
execution, delivery and performance by the Company and
Mobile Energy of the Securities, the Indenture, this
Agreement and the other Project Documents to which the
Company or Mobile Energy is, or as of the Time of Delivery
will be, a party and the consummation of the transactions
contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other similar financing agreement or instrument
or other agreement or instrument to which the Company or
#20103025.5 -6-
<PAGE>
Mobile Energy is a party or by which the Company or Mobile
Energy is bound or to which any of the property or assets of
the Company or Mobile Energy is subject, nor will such
action result in any violation of the provisions of the
Articles of Organization (or Operating Agreement) of the
Company or the Certificate of Incorporation or By-laws of
Mobile Energy or any law or statute or any order, rule or
regulation, judgment or decree of any Governmental Authority
having jurisdiction over the Company or Mobile Energy or any
of their properties; and no Governmental Approval (including
any Environmental Requirement) of any Governmental Authority
having jurisdiction over the Company or Mobile Energy or any
of their properties is required for the issue and sale of
the Securities by the Company, the issue of the Guaranty by
Mobile Energy, the execution, delivery and performance by
the Company and Mobile Energy of the Securities, the
Indenture, this Agreement and the other Project Documents to
which the Company or Mobile Energy is, or as of the Time of
Delivery will be, a party, or the consummation by the
Company or Mobile Energy of the transactions contemplated
hereby and thereby, except for the registration of the
Securities and the Guaranty under the Act, the qualification
of the Indenture under the Trust Indenture Act and the
approval of the Commission under the Public Utility Holding
Company Act of 1935, as amended (the "PUHCA"), and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
blue sky laws in connection with the purchase and
distribution of the Securities by the Underwriters.
(o) The issue and sale of the Securities by the
Company, the issue of the Guaranty by Mobile Energy, the
execution, delivery and performance by the Company and
Mobile Energy of the Securities, the Indenture, this
Agreement and the other Project Documents to which the
Company or Mobile Energy is, or as of the Time of Delivery
will be, a party, and the consummation of any of the other
transactions contemplated hereby or thereby, do not and will
not result in the creation or imposition of any Liens (other
than Permitted Liens) on any of the Collateral.
(p) When the Securities are issued and delivered
pursuant to this Agreement, (i) the Securities will rank
pari passu without any preference among themselves, (ii) the
Security Documents will, in the aggregate, constitute a
valid, direct first Lien to the extent provided in the
Security Documents on the Indenture Accounts and the monies
on deposit therein and, subject to the Working Capital
Facility Provider's prior Lien on Receivables and Fuel
Inventory Proceeds, the other First Mortgage Bond
Collateral, (iii) the Security Documents will constitute the
only Lien on the Collateral except for Permitted Liens, (iv)
the Security Documents will, in the aggregate, constitute a
valid, direct first Lien on all assets hereafter acquired by
#20103025.5 -7-
<PAGE>
the Company, to the extent contemplated by the Security
Documents, (v) the Indenture Accounts and the monies on
deposit therein and, subject to Liens of the Working Capital
Facility Provider and the Tax-Exempt Trustee, the other
First Mortgage Bond Collateral are not, and as of the Time
of Delivery will not be, subject to any Lien ranking on a
parity with the Lien of the Security Documents and (vi) the
Underwriters will have good and marketable title to the
Securities, subject to no defenses by the Company or Mobile
Energy (all of which are hereby waived).
(q) The Company is not in violation of its Articles of
Organization (or Operating Agreement) and Mobile Energy is
not in violation of its Certificate of Incorporation or By-
laws; and neither the Company nor Mobile Energy is in
default in the performance or observance of any material
obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by
which it or any of its properties may be bound.
(r) The statements set forth in the Prospectus,
insofar as they purport to (i) constitute a summary of the
terms of the Securities, (ii) describe the provisions of the
Project Documents and Debt of the Company referred to
therein and (iii) describe the provisions of the laws and
the other regulatory and environmental matters referred to
therein, are accurate, complete and fair.
(s) There are no legal or governmental proceedings
pending to which the Company or Mobile Energy is a party or
to which any of the properties of the Company or Mobile
Energy is subject that (i) if determined adversely to the
Company or Mobile Energy would individually or in the
aggregate have a material adverse effect on the business
(financial or otherwise), properties or business prospects
of the Company or Mobile Energy or materially and adversely
affect the ability of either the Company or Mobile Energy to
perform its obligations hereunder or under any other Project
Document or materially and adversely affect the ownership,
use, possession, operations or maintenance of the Energy
Complex or any part thereof or the transactions contemplated
hereunder or under any other Project Document or (ii)
questions the validity, enforceability or performance of
this Agreement or any other Project Document to which the
Company or Mobile Energy is, or as of the Time of Delivery
will be, a party and to the best of the Company's and Mobile
Energy's knowledge, no such proceedings are threatened or
contemplated by any Governmental Authority or threatened by
others.
(t) The assumptions described as part of (i) the
financial projections for the Company and Mobile Energy (the
"Projections") contained in the report with respect to
#20103025.5 -8-
<PAGE>
certain technical, environmental and economic aspects of the
Energy Complex prepared by Stone & Webster Engineering
Corporation (the "Independent Engineer"), which is included
in the Prospectus as Appendix B thereto (the "Independent
Engineer's Report"), and (ii) the assessment of the long-
term business viability of and the risk of production
curtailment at the Mills (the "Mill Assessment") contained
in the report with respect to the Mills prepared by Jaakko
Poyry Consulting, Inc. (the "Paper Consultant"), which is
included in the Prospectus as Appendix C thereto (the "Paper
Consultant's Report"), are, in the opinion of the Company
and Mobile Energy, reasonable; the information provided by
the Company and Mobile Energy to the Independent Engineer
and the Paper Consultant as the basis for the Projections
and in connection with the Mill Assessment, respectively,
has been prepared in good faith by the Company and Mobile
Energy (as the case may be); neither the Company nor Mobile
Energy knows of any facts or circumstances relating to its
present or proposed business that should be set forth in the
Prospectus as assumptions for purposes of consideration of
the Projections or the Mill Assessment, taken as a whole,
and are not so set forth; the Projections and the Mill
Assessment have been reviewed by, and accepted as having a
reasonable basis and included in the Prospectus in good
faith by, each of the Company and Mobile Energy; and the
statements made in the Prospectus (other than the
Projections and the Mill Assessment) within the coverage of
Rule 175(b) under the Act were made by the Company and
Mobile Energy with a reasonable basis and in good faith.
(u) Except as disclosed in the Prospectus, the
Company, Mobile Energy, Southern, Southern Electric, Scott,
S.D. Warren and the other Project Participants have complied
and are complying in all material respects with all
environmental laws pertaining to the Energy Complex, the
Site and the site of the Mobile Facility; there are no
circumstances that may prevent or interfere with the
abilities of the Company, Mobile Energy and Southern
Electric to operate and maintain the Energy Complex or the
abilities of Scott and S.D. Warren to operate and maintain
the Mills as contemplated by the Project Documents in
compliance with all environmental laws; all governmental
actions required under environmental laws to operate the
Energy Complex and the Mills are identified in the
Prospectus; except as disclosed in the Prospectus, there is
no governmental claim or environmental law pending or
threatened against the Company, Mobile Energy, Southern,
Southern Electric, Scott, S.D. Warren or any other Project
Participant or their respective properties that would be
material to the business (financial or otherwise),
properties or business prospects of the Company or Mobile
Energy; none of such environmental matters so disclosed,
either individually or in the aggregate, has resulted in or
will result in a material adverse change in the business
#20103025.5 -9-
<PAGE>
(financial or otherwise) of the Company, Mobile Energy,
Southern, Southern Electric, Scott, S.D. Warren or any other
Project Participant; except as disclosed in the Prospectus,
the Site and the site of the Mobile Facility do not contain
or have deposited thereon any hazardous material in excess
of permitted levels or other concentrations, standards or
limitations under environmental laws; except for such
disclosed environmental items, there are no present or past
actions, activities, circumstances and conditions, events or
incidents, including the release, emission, discharge,
presence or disposal of hazardous materials, for which
environmental laws could provide the basis to incur any
material obligation, liability, loss, claim, judgment,
discharge, penalty, fee or other cost arising from (i) the
presence or release into the environment of any hazardous
material or (ii) any violation of any environmental law; and
except as disclosed in the Prospectus, (A) no underground
storage tanks are located on the Site and the site of the
Mobile Facility, (B) there is no asbestos contained in,
forming part of or contaminating any part of the Site or the
site of the Mobile Facility, (C) no poly chlorinated
biphenyls are used or stored at or contaminate any part of
the Site or the site of the Mobile Facility and (D) no
nuclear material has been brought onto the Site or the site
of the Mobile Facility that, in each case, would be material
to the business (financial or otherwise), properties or
business prospects of the Company, Mobile Energy, Southern,
Southern Electric, Scott, S.D. Warren or any other Project
Participant.
(v) Neither the Company nor Mobile Energy is and,
after giving effect to the offering and sale of the
Securities, neither the Company nor Mobile Energy will be,
an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment
Company Act").
(w) Neither First Union, in its capacity as the
Trustee and the Tax-Exempt Trustee, or Bankers Trust, in its
capacity as the Collateral Agent, nor any holder of the
Securities will be (under applicable law as of the date
hereof and solely as a result of the ownership, maintenance
and operation of the Energy Complex by the Company or Mobile
Energy as described in the Prospectus, the purchase and
ownership of the Securities or any other transaction
contemplated by the Financing Documents) subject to
regulation under the Federal Power Act of 1920, as amended
(the "FPA"), or by the State of Alabama Public Service
Commission or otherwise be subject to rate regulation under
federal, state or local law; neither the Company nor Mobile
Energy is and, after giving effect to the offering and sale
of the Securities, will be subject to rate regulation under
federal, state or local law; and neither the execution,
#20103025.5 -10-
<PAGE>
delivery and performance by each of the Company and Mobile
Energy of all the provisions of the Project Documents to
which the Company or Mobile Energy is, as of the date hereof
or at the Time of Delivery, a party nor the consummation of
the transactions contemplated thereby will violate Chapter
14 of Title 37 of the Code of Alabama (1975): Service
Territories for Electric Suppliers (the "Alabama Territorial
Law").
(x) Each of the Company and Mobile Energy has filed,
or caused to be filed, all tax and information returns that
are required to have been filed by it in any jurisdiction
and has paid (prior to their delinquency dates) all taxes
shown to be due and payable on such returns and all other
taxes and assessments payable by it, to the extent the same
have become due and payable, except to the extent there is a
Good Faith Contest thereof by the Company or Mobile Energy.
(y) Neither the Company or Mobile Energy nor any other
Person who is a member of a controlled group of corporations
or a group of trades or businesses under common control with
the Company, within the meaning of Section 414 of the Code,
has (i) failed to fulfill its obligations under or to comply
in any material respect with the requirements of ERISA or
the Code with respect to any employee benefit plans, (ii)
sought a waiver of the minimum funding standard of Section
412 of the Code, (iii) failed to make any contribution or
payment to or in respect of any employee benefit plan
required to be made by law or by the terms of such plan,
(iv) made any amendment to any employee benefit plan that
has resulted or could result in the imposition of a lien or
the posting of a bond or other security under ERISA or the
Code or (v) incurred any liability under Title IV of ERISA
other than a liability to the Pension Benefit Guaranty
Corporation for premiums under Section 4007 of ERISA, if as
a result of such events or conditions, together with all
such other events or conditions, the Company or any other
member of such controlled group has incurred or is
reasonably likely to incur a liability that is material in
relation to the financial position of the Company.
(z) There are no statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so
described or filed.
(aa) None of the Company, Mobile Energy or their
respective affiliates does business with the government of
Cuba within the meaning of Section 517.075, Florida
Statutes.
(ab) Arthur Andersen L.L.P., who have certified
certain consolidated financial statements of Mobile Energy,
#20103025.5 -11-
<PAGE>
are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to each of the Underwriters,
and the Underwriters agree, severally and not jointly, to
purchase from the Company, at a purchase price of ___% of the
principal amount thereof, (plus accrued interest, if any, from
_____, 1995 to the Time of Delivery,) the principal amount of
Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
3. Upon the authorization by the Underwriters of the
release of the Securities, the several Underwriters propose to
offer the Securities for sale upon the terms and conditions set
forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global
Securities in book-entry form that will be deposited by or on
behalf of the Company with The Depository Trust Company ("DTC")
or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each
Underwriter, against payment by or on behalf of such Underwriters
of the purchase price therefor by certified official bank check
or checks, payable to the order of the Company in federal (same
day) funds, by causing DTC to credit the Securities to the
account of Goldman, Sachs & Co. at DTC. The Company will cause
the certificates representing the Securities to be made available
to Goldman, Sachs & Co. for checking at least twenty-four hours
prior to the Time of Delivery at the office of DTC or its
designated custodian (the "Designated Office"). The time and
date of such delivery and payment shall be 9:30 a.m., New York
City time, on _____, 1995 or such other time and date as the
Underwriters and the Company may agree upon in writing. Such
time and date are herein called the "Time of Delivery."
(b) The documents to be delivered at the Time of
Delivery by or on behalf of the parties hereto pursuant to
Section 7 hereof, including the cross-receipt for the Securities
and any additional documents requested by the Underwriters
pursuant to Section 7(aa) hereof, will be delivered at the
offices of Winthrop, Stimson, Putnam & Roberts, One Battery Park
Plaza, New York, New York (the "Closing Location"), and the
Securities will be delivered at the Designated Office, all at the
Time of Delivery. A meeting will be held at the Closing Location
at 9:30 a.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For
the purposes of this Section 4, "New York Business Day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a day on which banking institutions in New York City are
#20103025.5 -12-
<PAGE>
generally authorized or obligated by law or executive order to
close.
5. Each of the Company and Mobile Energy agrees with each
of the Underwriters:
(a) To prepare the Prospectus in a form approved by
the Underwriters and to file such Prospectus pursuant to
Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the
execution and delivery of this Agreement or, if applicable,
such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any
supplement to the Registration Statement or the Prospectus
that shall be disapproved by the Underwriters promptly after
reasonable notice thereof; to advise the Underwriters,
promptly after it receives notice thereof, of the time when
the Registration Statement, or any amendment thereto, has
been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish the Underwriters with copies thereof; to advise the
Underwriters, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary
Prospectus or other prospectus relating to the Securities,
of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose or of any
request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or other prospectus
relating to the Securities or suspending any such
qualification, to promptly use its best efforts to obtain
the withdrawal of such order.
(b) Promptly from time to time to take such action as
the Underwriters may reasonably request to qualify the
Securities for offering and sale under the securities laws
of such jurisdictions as the Underwriters may request and to
comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the
Securities, provided that in connection therewith the
Company and Mobile Energy shall not be required to qualify
as a foreign corporation or to file a general consent to
service of process in any jurisdiction.
(c) To furnish the Underwriters with copies of the
Prospectus in such quantities as the Underwriters may from
time to time reasonably request, and, if the delivery of a
prospectus relating to the Securities is required at any
time prior to the expiration of nine months after the time
#20103025.5 -13-
<PAGE>
of issue of the Prospectus in connection with the offering
or sale of the Securities and if at such time any event
shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus in order to
comply with the Act or the Trust Indenture Act, to notify
the Underwriters and upon the request of the Underwriters to
prepare and furnish without charge to the Underwriters and
to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus that
will correct such statement or omission or effect such
compliance; and, in case the Underwriters are required to
deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of
issue of the Prospectus, upon request of the Underwriters
but at the expense of the Underwriters, to prepare and
deliver to the Underwriters as many copies as the
Underwriters may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act.
(d) To make generally available to its securityholders
as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act), an
earning statement of the Company and Mobile Energy (which
need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder
(including, at the option of the Company and Mobile Energy,
Rule 158 under the Act).
(e) During the period beginning from the date hereof
and continuing to and including the Time of Delivery, not to
offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities of the Company
or Mobile Energy (other than the Tax-Exempt Bonds) that are
substantially similar to the Securities.
(f) To furnish to the Trustee and the holders of the
Securities (or any beneficial interest therein requesting
the same in writing) the documents specified in, and
otherwise in accordance with the provisions of, Section 5.3
of the Indenture as in effect at the Time of Delivery.
(g) During a period of five years from the effective
date of the Registration Statement, to furnish to the
Underwriters copies of all reports or other communications
(financial or other) furnished to securityholders of the
Company or Mobile Energy; and to deliver to the Underwriters
#20103025.5 -14-
<PAGE>
(i) as soon as they are available, (A) copies of any reports
and financial statements furnished to or filed with the
Commission or any national securities exchange on which the
Securities or any class of securities of the Company or
Mobile Energy may be listed and (B) the documents specified
in Sections 5.3 and 10.4 of the Indenture as in effect at
the Time of Delivery and (ii) such additional information
concerning the business and financial condition of the
Company or Mobile Energy as the Underwriters may from time
to time reasonably request (such financial statements to be
on a consolidated basis to the extent the accounts of the
Company and Mobile Energy are consolidated in reports
furnished to securityholders generally or to the
Commission).
(h) To use the net proceeds received by it from the
sale of the Securities pursuant to this Agreement in the
manner specified in the Prospectus under the caption "Use of
Proceeds."
(i) To file with the Commission such reports on Form
SR as may be required by Rule 463 under the Act.
6. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the
Company and Mobile Energy covenant and agree with the several
Underwriters that they will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of counsel
and accountants for the Company and Mobile Energy in connection
with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing this Agreement,
the other Financing Documents, the blue sky survey and any legal
investment memoranda relating to the qualification of the
Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, closing documents (including any
compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the blue sky survey and
any legal investment memoranda relating thereto; (iv) any fees
charged by securities rating services for rating the Securities;
(v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees, disbursements and
expenses of each of the Trustee, the Tax-Exempt Trustee and the
#20103025.5 -15-
<PAGE>
Collateral Agent and any agents thereof (or any agent of the
Company or Mobile Energy appointed under the Financing Documents)
and the fees and disbursements of their respective counsel;
(viii) the fees, disbursements and expenses of counsel for the
Underwriters and all other expenses incurred by or on behalf of
the Underwriters in connection with the offering of the
Securities, including, without limitation, advertising, marketing
and other out-of-pocket expenses; (ix) the fees, disbursements
and expenses of the Independent Engineer, the Paper Consultant,
the Environmental Consultant (as defined in Section 7(s) hereof),
the Independent Insurance Consultant (as defined in Section 7(t)
hereof) and the Engineering Consultant (as defined in Section
7(u) hereof); (x) the fees and expenses relating to the issuance
of the Title Policy (as defined in Section 7(n) hereof), the
preparation of any surveys relating to the Site or the site of
the Mobile Facility and the filing and/or recordation of certain
of the Financing Documents; and (xi) all other costs and expenses
incident to the performance of its obligations hereunder that are
not otherwise specifically provided for in this Section 6.
7. The obligations of the Underwriters hereunder shall be
subject, in the sole discretion of the Underwriters, to the
condition that all representations and warranties and other
statements of the Company and Mobile Energy herein are, at and as
of the Time of Delivery, true and correct, to the condition that
the Company and Mobile Energy shall have performed all of their
respective obligations hereunder theretofore to be performed and
to the following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable
time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all
requests for additional information on the part of the
Commission shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) Winthrop, Stimson, Putnam & Roberts, counsel for
the Underwriters, shall have furnished to the Underwriters
their written opinion, dated the Time of Delivery, with
respect to such matters as the Underwriters may reasonably
request, and such counsel shall have received such papers
and information as they may reasonably request to enable
them to pass upon such matters.
(c) Counsel for the Company and Mobile Energy shall
have furnished to the Underwriters their written opinion or
opinions, dated the Time of Delivery and in form and
substance satisfactory to the Underwriters, to the effect
that:
#20103025.5 -16-
<PAGE>
(i) The Company has been duly formed and is
validly existing as a limited liability company in
good standing under the laws of the State of Alabama,
with power and authority (limited liability company
and other) to own its properties and conduct its
business as described in the Prospectus, to execute,
deliver and perform its obligations under this
Agreement and each other Project Document to which it
is a party as of the Time of Delivery and to
consummate the transactions contemplated hereby and
thereby, including the issuance and sale of the
Securities as provided herein;
(ii) Mobile Energy has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Alabama, with power and
authority (corporate and other) to own its properties
and conduct its business as described in the
Prospectus, to execute, deliver and perform its
obligations under this Agreement and each other
Project Document to which it is a party as of the Time
of Delivery and to consummate the transactions
contemplated hereby and thereby, including the
issuance of the Guaranty as provided in the Indenture;
(iii) Each of the Company and Mobile Energy has been
duly qualified as a foreign corporation for the
transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to
require such qualification, or is subject to no
material liability or disability by reason of the
failure to be so qualified in any such jurisdiction;
(iv) The Company is wholly-owned by Mobile Energy
and Southern Electric, and Mobile Energy is wholly-
owned by Southern; each of the Company and Mobile
Energy has an authorized capitalization as set forth
in the Prospectus, and all of the outstanding equity
interests of the Company and Mobile Energy have been
duly and validly authorized and issued, are fully paid
and non-assessable and are not subject to any
preemptive or similar rights and have been issued in
accordance with applicable federal and state
securities law; the outstanding equity interests of
the Company and Mobile Energy are free and clear of
any security interest, mortgage, pledge, lien,
encumbrance, claim or adverse interest of any nature;
and the Company and Mobile Energy do not have
outstanding any securities convertible into or
exchangeable for any of its equity interests or any
rights to subscribe for or to purchase, or any
warrants or options for the purchase of, or any
#20103025.5 -17-
<PAGE>
agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of
any character relating to, any such equity interests;
(v) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending or
threatened to which the Company or Mobile Energy is a
party, or of which any property of the Company or
Mobile Energy is the subject, that (A) if determined
adversely to the Company or Mobile Energy would
individually or in the aggregate have a material
adverse effect on the business (financial or
otherwise), properties or business prospects of the
Company or Mobile Energy or materially and adversely
affect the ability of the Company or Mobile Energy to
perform the obligations hereunder or under any other
Project Document or materially and adversely affect
the ownership, use, possession, operation or
maintenance of the Energy Complex in any part thereof
or the transactions contemplated hereunder or under
any other Project Document or (B) questions the
validity, enforceability or performance of this
Agreement or any other Project Document to which the
Company or Mobile Energy is, as of the Time of
Delivery, a party; and, to the best of such counsel's
knowledge, no such proceedings are threatened or
contemplated by any Governmental Authority or
threatened by others;
(vi) This Agreement has been duly authorized,
executed and delivered by each of the Company and
Mobile Energy;
(vii) The Securities have been duly authorized,
executed, authenticated, issued and delivered,
constitute valid and legally binding obligations of
the Company, enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of
general applicability relating to or affecting
creditors' rights and to general equity principles,
and are entitled to the benefits provided by the
Indenture; and the Securities conform to the
description thereof in the Prospectus;
(viii) The Indenture has been duly authorized,
executed and delivered by the parties thereto and
constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency,
reorganization and other similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles; the Indenture
#20103025.5 -18-
<PAGE>
has been duly qualified under the Trust Indenture Act;
and the Indenture conforms to the description thereof
in the Prospectus;
(ix) Each of the Financing Documents (other than
the Securities, this Agreement and the Indenture) to
which either the Company or Mobile Energy is a party
has been duly authorized, executed and delivered by
the parties thereto and constitutes a valid and
legally binding obligation of the parties thereto,
enforceable in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency,
reorganization, and other similar laws of general
applicability relating to or affecting creditor's
rights and to general equitable principles; and such
Financing Documents conform to the descriptions
thereof in the Prospectus;
(x) Each of the Project Contracts to which either
the Company or Mobile Energy is a party has been duly
authorized, executed and delivered by Mobile Energy or
the Company and is in full force and effect and
constitutes a valid and legally binding obligation of
the parties thereto, enforceable in accordance with
their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or
affecting creditors' rights and to general equitable
principles; and the Project Contracts conform to the
descriptions thereof in the Prospectus;
(xi) The Company is not in violation of its
Articles of Organization (or Operating Agreement) and
Mobile Energy is not in violation of its Certificate
of Incorporation or By-laws; and neither the Company
nor Mobile Energy is in default in the performance or
observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or
any of its properties may be bound;
(xii) The issue and sale of the Securities by the
Company, the issue of the Guaranty by Mobile Energy
and the execution, delivery and performance by each of
the Company and Mobile Energy of, all the provisions
of the Securities, the Indenture, this Agreement and
the other Project Documents to which the Company or
Mobile Energy is, as of the Time of Delivery, a party
and the consummation of the transactions contemplated
hereby and thereby, do not and will not conflict with
or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, sale/leaseback
#20103025.5 -19-
<PAGE>
agreement, loan agreement or other similar financing
agreement or instrument or other agreement to which
the Company or Mobile Energy is bound or to which any
of the property or assets of the Company or Mobile
Energy is subject, nor does or will any such action
result in any violation of the provisions of the
Articles of Organization (or Operating Agreement) of
the Company or the Certificate of Incorporation or By-
laws of Mobile Energy or any law or statute or any
order, rule or regulation, judgment or decree of any
Governmental Authority having jurisdiction over the
Company or Mobile Energy or any of their properties;
and no Governmental Approval (including any
Environmental Requirement) of any Governmental
Authority having jurisdiction over the Company or
Mobile Energy or any of their properties is required
for the issue and sale of the Securities by the
Company, the issue of the Guaranty by Mobile Energy,
the execution, delivery and performance by the Company
and Mobile Energy of the Securities, the Indenture,
this Agreement and the other Project Documents to
which the Company or Mobile Energy is, as of the Time
of Delivery, a party, or the consummation of the
transactions contemplated hereby and thereby, except
for the registration of the Securities and the
Guaranty under the Act, the qualification of the
Indenture under the Trust Indenture Act and the
approval of the Commission under the PUHCA and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state
securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the
Underwriters;
(xiii) The issue and sale of the Securities by the
Company, the issue of the Guaranty by Mobile Energy,
the execution, delivery and performance by the Company
and Mobile Energy of the Securities, the Indenture,
this Agreement and the other Project Documents to
which either the Company or Mobile Energy is a party,
and the consummation of any of the other transactions
contemplated hereby or thereby, do not and will not
result in the creation or imposition of any Liens
(other than Permitted Liens) on any of the Collateral;
(xiv) Neither First Union, in its capacity as the
Trustee and the Tax-Exempt Trustee, or Bankers Trust,
in its capacity as the Collateral Agent, nor any
holder of the Securities will be (under applicable law
as of the date hereof and solely as a result of the
ownership, maintenance and operation of the Energy
Complex by the Company or Mobile Energy as described
in the Prospectus, the purchase and ownership of the
Securities or any other transaction contemplated by
#20103025.5 -20-
<PAGE>
the Financing Documents) subject to regulation under
the FPA or by the State of Alabama Public Service
Commission; neither the Company nor Mobile Energy is
and, after giving effect to the offering and sale of
the Securities, will be subject to rate regulation
under federal law or the laws of the State of Alabama;
and neither the execution, delivery and performance by
each of the Company and Mobile Energy of all the
provisions of the Project Documents to which the
Company or Mobile Energy is, as of the date hereof or
at the Time of Delivery, a party nor the consummation
of the transactions contemplated thereby will violate
the Alabama Territorial Law.
(xv) When the Securities are issued and delivered
pursuant to this Agreement, (A) the Securities will
rank pari passu without any preference among
themselves, (B) the Security Documents will, in the
aggregate, constitute a valid, direct first Lien to
the extent provided in the Security Documents on the
Indenture Accounts and the monies on deposit therein
and, subject to the Working Capital Facility
Provider's prior Lien on Receivables and Fuel
Inventory Proceeds, the other First Mortgage Bond
Collateral, (C) the Security Documents will constitute
the only Liens on the Collateral except for Permitted
Liens, (D) the Security Documents will, in the
aggregate, constitute a valid, direct first Lien on
all assets hereafter acquired by the Company, to the
extent contemplated by the Security Documents, (E) the
Indenture Accounts and the monies on deposit therein
and, subject to the Liens of the Working Capital
Facility Provider and the Tax-Exempt Trustee, the
other First Mortgage Bond Collateral will not be
subject to any Lien ranking on a parity with the Lien
of the Security Documents and (F) the Underwriters
will have good and marketable title to the Securities,
subject to no defenses by the Company or Mobile Energy
(all of which are hereby waived);
(xvi) The Security Documents to be recorded with the
appropriate filing offices in the State of Alabama and
the counties of Mobile and DeKalb, Alabama, and in any
other jurisdiction necessary for the perfection of the
Lien of the Security Documents described in paragraph
(xv) above, are in appropriate form for filing under
the laws of the State of Alabama and, other than fees
specified in such opinion, no taxes or recording or
filing fees will be incurred by any party as a result
of the execution, recordation or filing of any of the
Security Documents or any financing statements in
respect thereof; and the priority of the Lien of the
Security Documents described in paragraph (xv) above
will not be affected by any repayment, amortization or
#20103025.5 -21-
<PAGE>
other reduction of all or, from time to time, any part
of the outstanding principal amount of the Securities;
(xvii) The Company and Mobile Energy have good and
marketable title in fee simple to all real property
and good and marketable title to all personal property
owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are
described in the Prospectus or such as do not
materially affect the value of such property and do
not interfere with the use made and proposed to be
made of such property by the Company and Mobile
Energy; and any real property and buildings held under
lease by the Company are held by the Company under
valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere
with the use made and proposed to be made of such
properties and buildings by the Company;
(xviii) Provided that the net proceeds received by the
Company from the sale of the Securities pursuant to
this Agreement are used in the manner specified in the
Prospectus under "Use of Proceeds," the consummation
of the transactions contemplated by the Project
Documents will not violate or result in a violation of
Regulation U or X of the Board of Governors of the
Federal Reserve System;
(xix) The Company will be treated as a partnership
for federal income tax purposes and will not be liable
for any federal, state or local income tax;
(xx) Neither the Company nor Mobile Energy is an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act;
(xxi) The statements set forth in the Prospectus,
insofar as they purport to (A) constitute a summary of
the terms of the Securities, (B) describe the
provisions of the Project Documents and Debt of the
Company referred to therein and (C) describe the
provisions of the laws and the other regulatory and
environmental matters referred to therein, are
accurate, complete and fair; and
(xxii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto
made by the Company and Mobile Energy prior to the
Time of Delivery (other than the financial statements
and related schedules therein, as to which such
counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act
and the Trust Indenture Act and the rules and
#20103025.5 -22-
<PAGE>
regulations thereunder; although they do not assume
any responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement or the Prospectus, except for
those referred to in the opinion in paragraphs (vii)
through (xi) and paragraph (xxi) of this Section 7(c),
they have no reason to believe that, as of its
effective date, the Registration Statement or any
further amendment thereto made by the Company and
Mobile Energy prior to the Time of Delivery (other
than the financial statements and related schedules
therein, as to which such counsel need express no
opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement
thereto made by the Company and Mobile Energy prior to
the Time of Delivery (other than the financial
statements and related schedules therein, as to which
such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading or that, as of the Time
of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement
thereto made by the Company and Mobile Energy prior to
the Time of Delivery (other than the financial
statements and related schedules therein, as to which
such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state
a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and they do not know
of any amendment to the Registration Statement
required to be filed or of any contracts or other
documents of a character required to be filed as an
exhibit to the Registration Statement or required to
be described in the Registration Statement or the
Prospectus that are not so filed or described.
With respect to paragraph (xxii) of this Section 7(c),
counsel for the Company and Mobile Energy may state that
their opinion and belief are based upon their participation
in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto and
their review and discussion of the contents thereof, but are
without independent check or verification except as
specified. If in rendering any such opinion opinions, such
counsel or counsels rely upon the report, certificate or
opinion of any third party, such third party and its report,
certificate or opinion must be satisfactory to the
Underwriters, and such report, certificate or opinion must
#20103025.5 -23-
<PAGE>
be addressed and delivered to the Underwriters at or prior
to the Time of Delivery. Such opinion or opinions shall be
rendered to the Underwriters at the request of the Company
and Mobile Energy and shall so state therein. Any legal
opinion delivered to any party other than the Underwriters
by counsel for the Company or Mobile Energy in connection
with the satisfaction of the conditions precedent to the
effectiveness of any of the Financing Documents shall be
accompanied by a letter from such counsel stating that the
Underwriters may rely on such opinion as if it were also
addressed to them.
(d) Troutman Sanders, counsel for Southern, and,
insofar as such opinion or opinions relate to matters
governed by the laws of the State of New York, Latham &
Watkins, special New York counsel for Southern, shall have
furnished to the Underwriters their written opinion or
opinions, dated the Time of Delivery and in form and
substance satisfactory to the Underwriters, to the effect
that:
(i) Southern has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Georgia, with power and
authority (corporate and other) to own its properties
and conduct its business, to execute, deliver and
perform its obligations under each of the Southern
Guaranties and the capital infusion arrangements
provided with respect to the Mill Owner Maintenance
Reserve Account and to consummate the transactions
contemplated thereby;
(ii) Each of the Southern Guaranties and the
capital infusion arrangements provided with respect to
the Mill Owner Maintenance Reserve Account has been
duly authorized, executed and delivered by Southern and
constitutes a valid and legally binding obligation of
Southern, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other similar laws of general
applicability relating to or affecting creditors'
rights as such laws would apply in the event of the
bankruptcy, insolvency or reorganization of, or other
similar occurrence with respect to, Southern and to
general equity principles;
(iii) The execution, delivery and performance by
Southern of each of the Southern Guaranties and the
capital infusion arrangements provided with respect to
the Mill Owner Maintenance Reserve Account and the
consummation of the transactions contemplated thereby
do not and will not conflict with or result in a breach
or violation of any of the terms of provisions of, or
constitute a default under, any indenture, mortgage,
#20103025.5 -24-
<PAGE>
deed of trust, sale/leaseback agreement, loan agreement
or other similar financing agreement or instrument or
other agreement or instrument to which Southern or any
of its subsidiaries is bound or to which any of the
property or assets of Southern or any of its
subsidiaries is subject, nor does or will any such
action result in any violation of the provisions of the
organizational documents of Southern or any law or
statute or any order, rule or regulation, judgment or
decree of any Governmental Authority having
jurisdiction over Southern or any of its subsidiaries
or any of their respective properties; and no consent,
approval, authorization, order, registration or
qualification or with any such Governmental Authority
is required for the consummation by Southern of the
transactions contemplated by any of the Southern
Guaranties and the capital infusion arrangements
provided with respect to the Mill Owner Maintenance
Reserve Account; and
(iv) There are no legal or governmental
proceedings pending to which Southern or any of its
subsidiaries is a party, or to which any of their
respective properties is subject, that (A) if
determined adversely to Southern or such subsidiary
would individually or in the aggregate have a material
adverse effect on the business (financial or
otherwise), properties or business prospects of
Southern or materially and adversely affect the ability
of Southern to perform its obligations under any of the
Southern Guaranties and the capital infusion
arrangements provided with respect to the Mill Owner
Maintenance Reserve Account, or any part thereof, or
the transactions contemplated by any of the Southern
Guaranties and the capital infusion arrangements
provided with respect to the Mill Owner Maintenance
Reserve Account or (B) questions the validity,
enforceability or performance of any Project Contract
to which it is party.
Such opinion or opinions shall be rendered to the
Underwriters at the request of the Company and Mobile Energy
and shall so state therein.
(e) Counsel for each of Southern Electric, Scott, S.D.
Warren and the other Project Participants (other than the
Company, Mobile Energy and Southern), which shall be
acceptable to the Underwriters, shall have furnished to the
Underwriters their written opinion or opinions, dated the
Time of Delivery and in form and substance satisfactory to
the Underwriters, to the effect that:
(i) Such Project Participant has been duly formed
and is validly existing and in good standing under the
#20103025.5 -25-
<PAGE>
laws of its jurisdiction of organization, with power
and authority (corporate and other) to own its
properties and conduct its business, to execute,
deliver and perform its obligations under its Consent
to Assignment and each of the Project Contracts to
which it is a party and to consummate the transactions
contemplated thereby;
(ii) Each of the Project Contracts to which such
Project Participant is a party and such Project
Participant's Consent to Assignment has been duly
authorized, executed and delivered by such Project
Participant and constitutes a valid and legally binding
obligation of such Project Participant, enforceable in
accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or
affecting creditors' rights and to general equity
principles;
(iii) The execution, delivery and performance by
such Project Participant of the Project Contracts to
which it is a party and its Consent to Assignment and
the consummation of the transactions contemplated
thereby do not and will not conflict with or result in
a breach or violation of any of the terms of provisions
of, or constitute a default under, any indenture,
mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other similar financing agreement or
instrument or other agreement or instrument to which
such Project Participant or any of its subsidiaries is
bound or to which any of the property or assets of the
Project Participant or any of its subsidiaries is
subject, nor did or will such action result in any
violation of the provisions of the organizational
documents of such Project Participant or any law or
statute or any order, rule or regulation, judgment or
decree of any Governmental Authority having
jurisdiction over such Project Participant or any of
its subsidiaries; and no consent, approval,
authorization, order, registration or qualification of
any such Governmental Authority is required for the
consummation by such Project Participant of the
transactions contemplated by the Project Contracts to
which it is a party and its Consent to Assignment;
(iv) There are no legal or governmental
proceedings pending to which such Project Participant
or any of its subsidiaries is a party, or to which any
of its properties is subject, that (i) if determined
adversely to such Project Participant or such
subsidiary would individually or in the aggregate, have
a material adverse effect on the business (financial or
otherwise), properties or business prospects of such
#20103025.5 -26-
<PAGE>
Project Participant or materially and adversely affect
the ability of such Project Participant to perform its
obligations under the Project Contracts to which it is
a party or its Consent to Assignment (or, in the case
of a Mill Owner, such Mill Owner's Mill), or any part
thereof, or the transactions contemplated under such
Project Contracts and Consent to Assignment or (ii)
questions the validity, enforceability or performance
of any Project Contract to which it is a party or its
Consent to Assignment; and
(v) No Governmental Approval (including any
Environmental Requirement) of any Governmental
Authority having jurisdiction over such Project
Participant or any of its properties is required for
the execution, delivery and performance by such Project
Participant of the Project Contracts to which it is a
party or the consummation of the transactions
contemplated thereby.
Such opinion or opinions shall be rendered to the
Underwriters at the request of the Company and Mobile Energy
and shall so state therein.
(f) Counsel for First Union, which shall be acceptable
to the Underwriters, shall have furnished to the
Underwriters their written opinion or opinions, dated the
Time of Delivery and in form and substance satisfactory to
the Underwriters, to the effect that:
(i) First Union has been duly formed and is
validly existing as a national banking association and
in good standing under the laws of its jurisdiction of
organization, with power and authority (corporate and
other) to own its properties and conduct its business,
to execute, deliver and perform its obligations under
the Financing Documents to which it is a party and to
consummate the transactions contemplated thereby;
(ii) Each of the Financing Documents to which
First Union is a party has been duly authorized,
executed and delivered by First Union, in its capacity
as the Trustee or the Tax-Exempt Trustee, as the case
may be, and constitutes a valid and legally binding
obligation of First Union, in such capacity,
enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency,
reorganization and other similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles;
(iii) The execution, delivery and performance by
First Union, in its capacity as the Trustee and the
Tax-Exempt Trustee, as the case may be, of the
#20103025.5 -27-
<PAGE>
Financing Documents to which it is a party and the
consummation of the transactions contemplated thereby
do not and will not result in any violation of the
provisions of the organizational documents of First
Union or any law or statute or any order, rule or
regulation, judgment or decree of any Governmental
Authority having jurisdiction over First Union; and no
consent, approval, authorization, order, registration
or qualification of any such Governmental Authority is
required for the consummation by First Union, in such
capacity, of the transactions contemplated by the
Financing Documents to which it is a party; and
(iv) First Union has authorized the acceptance of
the trusts contemplated by the Indenture and the Tax-
Exempt Indenture to be accepted by the Trustee and the
Tax-Exempt Trustee, respectively, thereunder and by the
Intercreditor Agreement to be accepted by the Trustee
and the Tax-Exempt Trustee thereunder; and all
requirements of the Indenture in respect of the
authentication and delivery by the Trustee of the
Securities have been complied with.
Such opinion or opinions shall be rendered to the
Underwriters at the request of the Company and Mobile Energy
and shall so state therein.
(g) Counsel for Bankers Trust, which shall be
acceptable to the Underwriters, shall have furnished to the
Underwriters their written opinion or opinions, dated the
Time of Delivery and in form and substance satisfactory to
the Underwriters, to the effect that:
(i) Bankers Trust has been duly formed and is
validly existing and in good standing under the laws of
its jurisdiction of organization, with power and
authority (corporate and other) to own its properties
and conduct its business, to execute, deliver and
perform its obligations under the Financing Documents
to which it is a party and to consummate the
transactions contemplated thereby;
(ii) Each of the Financing Documents to which
Bankers Trust is a party has been duly authorized,
executed and delivered by Bankers Trust, in its
capacity as the Collateral Agent, and constitutes a
valid and legally binding obligation of Bankers Trust,
in such capacity, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of
general applicability relating to or affecting
creditors' rights and to general equity principles;
#20103025.5 -28-
<PAGE>
(iii) The execution, delivery and performance by
Bankers Trust, in its capacity as the Collateral Agent,
of the Financing Documents to which it is a party and
the consummation of the transactions contemplated
thereby do not and will not result in any violation of
the provisions of the organizational documents of
Bankers Trust or any law or statute or any order, rule
or regulation, judgment or decree of any Governmental
Authority having jurisdiction over Bankers Trust; and
no consent, approval, authorization, order,
registration or qualification of any such Governmental
Authority is required for the consummation by Bankers
Trust, in such capacity, of the transactions
contemplated by the Financing Documents to which it is
a party; and
(iv) Bankers Trust has authorized the acceptance
of the trusts contemplated by the Intercreditor
Agreement to be accepted by the Collateral Agent
thereunder.
Such opinion or opinions shall be rendered to the
Underwriters at the request of the Company and Mobile Energy
and shall so state therein.
(h) Counsel for the Working Capital Facility Provider,
which shall be acceptable to the Underwriters, shall have
furnished to the Underwriters their written opinion or
opinions, dated the Time of Delivery and in form and
substance satisfactoryto theUnderwriters, to theeffect that:
(i) The Working Capital Facility Provider has
been duly formed and is validly existing and in good
standing under the laws of its jurisdiction of
organization, with power and authority (corporate and
other) to own its properties and conduct its business,
to execute, deliver and perform its obligations under
the Financing Documents to which it is a party and to
consummate the transactions contemplated thereby;
(ii) Each of the Financing Documents to which the
Working Capital Facility Provider is a party has been
duly authorized, executed and delivered by the Working
Capital Facility Provider and constitutes a valid and
legally binding obligation of the Working Capital
Facility Provider, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of
general applicability relating to or affecting
creditors' rights and to general equity principles; and
(iii) The execution, delivery and performance by
the Working Capital Facility Provider of the Financing
Documents to which it is a party and the consummation
#20103025.5 -29-
<PAGE>
of the transactions contemplated thereby do not and
will not result in any violation of the provisions of
the organizational documents of the Working Capital
Facility Provider or any law or statute or any order,
rule or regulation, judgment or decree of any
Governmental Authority having jurisdiction over the
Working Capital Facility Provider; and no consent,
approval, authorization, order, registration or
qualification of any such Governmental Authority is
required for the consummation by the Working Capital
Facility Provider of the transactions contemplated by
the Financing Documents to which it is a party.
Such opinion or opinions shall be rendered to the
Underwriters at the request of the Company and Mobile Energy
and shall so state therein.
(i) The Underwriters shall have received, on each of
the date hereof and at the Time of Delivery, a letter dated
the date hereof or the Time of Delivery, as the case may be,
and in form and substance satisfactory to the Underwriters,
from Arthur Andersen L.L.P., independent public accountants
for the Company and Mobile Energy, substantially in the form
attached hereto as Exhibit A.
(j) (i) None of the Company, Mobile Energy,
Southern, Southern Electric, Scott, S.D. Warren or any other
Project Participant shall have sustained, since the date of
the latest audited financial statements included in the
Prospectus, any loss or interference with its business from
fire, explosion, flood, hurricane or other calamity, whether
or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus and (ii)
since the respective dates as of which information is given
in the Prospectus, there shall not have been any change in
the capital stock or long-term debt of the Company or Mobile
Energy or any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial position, shareholders' or other
equity or results of operations of the Company, Mobile
Energy, Southern, Southern Electric, Scott, S.D. Warren or
any other Project Participant, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in
any such case described in clause (i) or (ii) above, is in
the judgment of the Underwriters so material and adverse as
to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the
terms and in the manner contemplated in the Prospectus.
(k) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New
York Stock Exchange or other national securities exchange;
#20103025.5 -30-
<PAGE>
or (ii) a suspension or material limitation in trading in
Southern's or any of its subsidiaries' securities on the New
York Stock Exchange or other national securities exchange;
or (iii) a general moratorium on commercial banking
activities declared by federal authorities or authorities of
the State of Alabama, Georgia or New York; or (iv) the
outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of the Underwriters
makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the
terms and in the manner contemplated in the Prospectus; or
(v) the occurrence of any material adverse change in the
existing financial, political or economic conditions in the
United States or elsewhere that, in the judgment of the
Underwriters, would materially and adversely affect the
financial markets or the market for the Securities and other
debt securities; or (vi) the enactment or active
consideration for enactment by any governmental body,
department or agency of the United States or the State of
Alabama or Georgia, or the rendering of a decision by any
federal court or any court within the State of Alabama or
Georgia, that in the judgment of the Underwriters would
materially and adversely affect the financial markets or the
market for the Securities or other debt securities.
(l) Each of the Company and Mobile Energy shall have
furnished, or caused to be furnished, to the Underwriters a
certificate of an officer of the Company and Mobile Energy,
respectively, dated the Time of Delivery and in form and
substance satisfactory to the Underwriters, as to the
accuracy of the respective representations and warranties of
the Company and Mobile Energy herein at and as of the Time
of Delivery, as to the performance by the Company and Mobile
Energy of all of their respective obligations hereunder to
be performed at or prior to the Time of Delivery, as to the
matters set forth in Sections 7(a), 7(j) and 7(m) hereof and
as to such other matters as the Underwriters may reasonably
request; and Southern shall have furnished, or caused to be
furnished, to the Underwriters a certificate of an officer
of Southern, dated the Time of Delivery and in form and
substance satisfactory to the Underwriters, as to the due
incorporation and valid existence of Southern at the Time of
Delivery and the due authorization, execution and delivery
by Southern of, and the valid, binding and enforceable
nature at the Time of Delivery of, each of the Southern
Guaranties and the capital infusion arrangements with
respect to the Mill Owner Maintenance Reserve Account.
(m) On or prior to the Time of Delivery, the
Underwriters shall have received executed copies, in the
form previously approved by the Underwriters, of the Project
Documents and, to the best knowledge of the Company and
#20103025.5 -31-
<PAGE>
Mobile Energy after due inquiry, no default shall have
occurred thereunder.
(n) On or prior to the Time of Delivery, the Company
or Mobile Energy shall have delivered to the Underwriters
evidence reasonably satisfactory to the Underwriters and
their counsel that a title policy or title policies in favor
of the Collateral Agent, in an aggregate amount equal to or
greater than the maximum aggregate principal amount of
Senior Debt to be outstanding immediately after the Time of
Delivery, insuring the validity of the Mortgage and the
priority of the Lien of the Mortgage have been obtained (the
"Title Policy"); and the Title Policy shall be satisfactory
in form and substance to the Underwriters and their counsel.
(o) On or prior to the Closing Date, the Mortgage
shall have been delivered to a title company for due
recordation as a mortgage of real estate, and any required
filings with respect to personal property and fixtures
subject to the Lien of the Mortgage or any other Security
Document shall have been delivered to a title company for
filing, in each place in which such recording or filing is
required to protect, preserve and perfect the Lien of the
Mortgage as a valid, direct first Lien on the real estate
and as a valid, first Lien on the personal property and
fixtures covered or purported to be covered by the Mortgage,
in each case subject only to Permitted Liens, and except for
such recordation or filing no further action shall be
required to create, preserve or protect such Liens and
security interests; all financing statements shall have been
delivered for filing, recordation and/or registration in
each office and in each jurisdiction where required to
create and perfect a valid, direct first Lien on the
Collateral; and all taxes and recording and filing fees
required to be paid with respect to the execution, recording
or filing of the Mortgage and such financing statements
shall have been paid or provided for.
(p) The Underwriters shall have received (i) a
certified copy of, or binder for, each of the insurance
policies required by Section 5.2 of the Indenture, together
with evidence satisfactory to the Underwriters that such
insurance complies with the provisions thereof and the
provisions of each of the other Project Documents and that
all premiums then due with respect to such insurance have
been paid, and (ii) a written report of the Independent
Insurance Consultant describing the insurance obtained by
the Company as of the Time of Delivery with respect to the
Energy Complex and stating that the insurance required to be
obtained as of the Time of Delivery pursuant to the Project
Documents is in full force and effect and provides
reasonable and adequate coverage for the Energy Complex.
#20103025.5 -32-
<PAGE>
(q) The Underwriters shall have received a certificate
of the Independent Engineer, signed by an authorized officer
thereof, dated the Time of Delivery and in form and
substance satisfactory to the Underwriters, confirming that
(i) the Independent Engineer's Report was prepared in
accordance with generally accepted engineering and
consulting services practices; (ii) the conclusions and
opinions of the Independent Engineer contained in the
Independent Engineer's Report are true and correct in all
material respects as of the date of the Prospectus and as of
the Time of Delivery; (iii) the Independent Engineer
consents to the references in the Prospectus to its
authority as an expert in the design, development and
operation of power projects and other industrial facilities
and the use of the Independent Engineer's Report prepared by
the Independent Engineer in and included as Appendix B to
the Prospectus; (iv) the descriptions of the Independent
Engineer's Report contained in the Prospectus (other than
Appendix B thereto) conforms to, and constitutes a fair and
accurate summary of, the material provisions thereof;
(v) nothing has come to the attention of the Independent
Engineer in relation to the preparation of the Independent
Engineer's Report that causes it to believe that the
Independent Engineer's Report, as of the date of the
Prospectus or as of the Time of Delivery, or any of the
statements in the Prospectus specifically attributed to the
Independent Engineer, as of the date of the Prospectus or as
of the Time of Delivery, contained or contains any untrue
statement of a material fact or omitted or omits a material
fact necessary in order to make the statements made therein
with respect to any of such matters, in the light of the
circumstances under which they were made, not misleading;
and (vi) attached to such certificate is a complete and
executed copy of the Independent Engineer's Report.
(r) The Underwriters shall have received a certificate
of the Paper Consultant, signed by an authorized officer
thereof, dated the Time of Delivery and in form and
substance satisfactory to the Underwriters, confirming that
(i) the Paper Consultant's Report was prepared in accordance
with generally accepted economics research and consulting
services practices; (ii) the conclusions and opinions of the
Paper Consultant contained in the Paper Consultant's Report
are true and correct in all material respects as of the date
of the Prospectus and as of the Time of Delivery; (iii) the
Paper Consultant consents to the references in the
Prospectus to its authority as an expert in the review of
the pulp, paper and tissue industries and its experience in
the design, development and undertaking of studies similar
to the Paper Consultant's Report and knowledge of the United
States and international paper industry and the use of the
Paper Consultant's Report prepared by the Paper Consultant
in and included as Appendix C to the Prospectus; (iv) the
assumptions attributed to the Paper Consultant's Report
#20103025.5 -33-
<PAGE>
contained in the Independent Engineer's Report are
reasonable; (v) the descriptions of the Paper Consultant's
Report contained in the Prospectus (other than Appendix C
thereto) conforms to, and constitutes a fair and accurate
summary of, the material provisions thereof; (vi) nothing
has come to the attention of the Paper Consultant in
relation to the preparation of the Paper Consultant's Report
that causes it to believe that the Paper Consultant's
Report, as of the date of the Prospectus or as of the Time
of Delivery, or any of the statements in the Prospectus
specifically attributed to the Paper Consultant, as of the
date of the Prospectus or as of the Time of Delivery,
contained or contains any untrue statement of a material
fact or omitted or omits a material fact necessary in order
to make the statements made therein with respect to any of
such matters, in the light of the circumstances under which
they were made, not misleading; and (vii) attached to such
certificate is a complete and executed copy of the Paper
Consultant's Report.
(s) The Underwriters shall have received a certificate
of Dames & Moore (the "Environmental Consultant"), signed by
an authorized officer thereof, dated the Time of Delivery
and in form and substance satisfactory to the Underwriters,
confirming that (i) the report prepared by the Environmental
Consultant with respect to the environmental site assessment
of the Energy Complex (the "Environmental Consultant's
Report") was prepared in accordance with generally accepted
engineering and consulting services practices; (ii) the
conclusions and opinions of the Environmental Consultant
contained in the Environmental Consultant's Reports are true
and correct in all material respects as of the date of the
Prospectus and as of the Time of Delivery; (iii) the
Environmental Consultant consents to the references in the
Prospectus to its experience in the design, development and
undertaking of studies similar to the Environmental
Consultant's Reports; (iv) the assumptions attributed to the
Environmental Consultant's Reports contained in the
Independent Engineer's Report are reasonable; (v) the
description of the Environmental Consultant's Reports
contained in the Prospectus conforms to, and constitutes a
fair and accurate summary of, the material provisions
thereof; (vi) nothing has come to the attention of the
Environmental Consultant in relation to the preparation of
the Environmental Consultant's Reports that causes it to
believe that the Environmental Consultant's Reports, as of
the date of the Prospectus or as of the Time of Delivery, or
any of the statements in the Prospectus specifically
attributed to the Environmental Consultant, as of the date
of the Prospectus or as of the Time of Delivery, contained
or contain any untrue statement of a material fact or
omitted or omit a material fact necessary in order to make
the statements made therein with respect to any of such
matters, in the light of the circumstances under which they
#20103025.5 -34-
<PAGE>
were made, not misleading; and (vii) attached to such
certificate are complete and executed copies of the
Environmental Consultant's Reports.
(t) The Underwriters shall have received a certificate
of Sedgwick James (the "Independent Insurance Consultant"),
signed by an authorized officer thereof, dated the Time of
Delivery and in form and substance satisfactory to the
Underwriters, confirming that (i) the report prepared by the
Independent Insurance Consultant with respect to the
adequacy of insurance coverage of the Energy Complex (the
"Independent Insurance Consultant's Report") was prepared in
accordance with generally accepted insurance and consulting
services practices; (ii) the conclusions and opinions of the
Independent Insurance Consultant contained in the
Independent Insurance Consultant's Report are true and
correct in all material respects as of the date of the
Prospectus and as of the Time of Delivery; and
(iii) attached to such certificate is a complete and
executed copy of the Independent Insurance Consultant's
Report.
(u) The Underwriters shall have received a certificate
of Rust Engineering Company (the "Engineering Consultant"),
signed by an authorized officer thereof, dated the Time of
Delivery and in form and substance satisfactory to the
Underwriters, confirming that (i) the report prepared by the
Engineering Consultant with respect to the assessment of the
Energy Complex (the "Engineering Consultant's Report") was
prepared in accordance with generally accepted engineering
and consulting services practices; (ii) the conclusions and
opinions of the Engineering Consultant contained in the
Engineering Consultant's Report are true and correct in all
material respects as of the date of the Prospectus and as of
the Time of Delivery; and (vii) attached to such certificate
is a complete and executed copy of the Engineering
Consultant's Report.
(v) In accordance with the Indenture and the
Intercreditor Agreement, the Company shall have endorsed
monies over to the Trustee and the Collateral Agent for the
deposits of such monies contemplated to have been made on or
before the Time of Delivery.
(w) The Company or Mobile Energy shall have entered
into each of the Project Documents, including the Consents
to Assignment from each Project Participant (other than the
Company, Mobile Energy and Southern), in such forms as shall
be reasonably satisfactory to the Underwriters and their
counsel, each of which shall have been fully executed and
shall be in full force and effect at the Time of Delivery.
(x) The Tax-Exempt Bonds shall have been issued; and
the conditions precedent to the effectiveness of the Working
#20103025.5 -35-
<PAGE>
Capital Facility, as specified in Section __ thereof, shall
have been satisfied or waived with the consent of the
Underwriters; and the Underwriters shall have received a
certificate of the Working Capital Facility Provider, dated
the Time of Delivery, to such effect.
(y) The Underwriters shall have received evidence of
the appointment of an Independent Engineer, and the
acceptance by the Independent Engineer of such appointment,
pursuant to the Intercreditor Agreement.
(z) The Underwriters shall have received evidence that
there are in effect ratings on the Securities of "BBB-" by
Standard & Poor's Ratings Group and "BBB-" by Fitch
Investors Service, Inc., and no notice shall have been given
of (i) any intended or potential downgrading of any of such
ratings or (ii) any review or possible change that does not
indicate the direction of a possible change in any of such
ratings.
(aa) The Underwriters shall have received such
additional legal opinions, certificates, instruments and
other documents as the Underwriters may reasonably request.
8. (a) The Company and Mobile Energy, jointly and
severally, will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided,
however, that the Company and Mobile Energy shall not be liable
in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by any Underwriter through Goldman, Sachs & Co. expressly
for use therein.
(b) Each Underwriter will indemnify and hold harmless
the Company and Mobile Energy against any losses, claims, damages
or liabilities to which the Company or Mobile Energy may become
subject, under the Act or otherwise, insofar as such losses,
#20103025.5 -36-
<PAGE>
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by such Underwriter through Goldman, Sachs & Co.
expressly for use therein, and will reimburse the Company or
Mobile Energy (as the case may be) for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party
under Section 8(a) or 8(b) hereof of notice of the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under such Section 8(a) or 8(b), notify the indemnifying party in
writing of the commencement thereof, but the omission so to
notify the indemnifying party shall not relieve it from any
liability that it may have to any indemnified party otherwise
than under such Section 8(a) or 8(b). In case any such action
shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party under such Section 8(a) or
8(b) for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as
#20103025.5 -37-
<PAGE>
to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) The obligations of the Company and Mobile Energy
under this Section 8 shall be in addition to any liability that
the Company and Mobile Energy may otherwise have and shall
extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act;
and the obligations of the Underwriters under this Section 8
shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company
and Mobile Energy (including any person who, with his or her
consent, is named in the Registration Statement as about to
become a director of the Company or Mobile Energy) and to each
person, if any, who controls the Company or Mobile Energy within
the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation
to purchase the Securities that it has agreed to purchase
hereunder, the non-defaulting Underwriters may in their
discretion arrange for such non-defaulting Underwriters or
another party or other parties to purchase such Securities on the
terms contained herein. If within thirty-six hours after such
default by any Underwriter such non-defaulting Underwriters do
not arrange for the purchase of such Securities, then the Company
shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to
such non-defaulting Underwriters to purchase such Securities on
such terms. In the event that, within the respective periods
prescribed above, such non-defaulting Underwriters notify the
Company that they have so arranged for the purchase of such
Securities, or the Company notifies the Representatives that it
has so arranged for the purchase of such Securities, the such
non-defaulting Underwriters or the Company shall have the right
to postpone the Time of Delivery, for a period of not more than
seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees
to file promptly any amendments to the Registration Statement or
the Prospectus that in the opinion of such non-defaulting
Underwriters may thereby be made necessary. The term
"Underwriters" as used in this Agreement shall include any party
substituted under this Section 9(a) with like effect as if such
party had originally been a party to this Agreement with respect
to such Securities.
(b) If, after giving effect to any arrangements for
the purchase of the Securities of a defaulting Underwriter or
Underwriters by the non-defaulting Underwriter or Underwriters
and the Company as provided in Section 9(a) hereof, the aggregate
principal amount of such Securities that remains unpurchased does
not exceed one-eleventh of the aggregate principal amount of all
the Securities, then the Company shall have the right to require
#20103025.5 -38-
<PAGE>
each non-defaulting Underwriter to purchase the principal amount
of Securities that such Underwriter agreed to purchase hereunder
and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of
Securities that such Underwriter agreed to purchase) of the
Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made, but nothing herein
shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for
the purchase of the Securities of a defaulting Underwriter or
Underwriters by the non-defaulting Underwriter or Underwriters
and the Company as provided in Section 9(a) hereof, the aggregate
principal amount of Securities that remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right
provided in Section 9(b) hereof to require such non-defaulting
Underwriters to purchase Securities of such a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any such non-
defaulting Underwriter or the Company or Mobile Energy, except
for the expenses to be borne by the Company and Mobile Energy as
provided in Section 6 hereof and the indemnity agreements in
Section 8 hereof, but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of the Company,
Mobile Energy and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of the Underwriters or any
controlling person of any Underwriter, the Company or Mobile
Energy, or any officer or director or controlling person of the
Company or Mobile Energy, and shall survive delivery of and
payment for the Securities.
11. If this Agreement shall be terminated (whether pursuant
to Section 9 hereof or for any other reason), neither the Company
nor Mobile Energy shall then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof.
12. All statements, requests, notices, and agreements
hereunder shall be in writing, and if to the Underwriters shall
be delivered or sent by mail, telex or facsimile transmission to
the Underwriters in care of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration
Department; and if to the Company or Mobile Energy shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company and Mobile Energy set forth in the
Registration Statement, Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof
#20103025.5 -39-
<PAGE>
shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address, which will be
supplied to the Company by Goldman, Sachs & Co. Any such
statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company, Mobile Energy
and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Company and Mobile Energy and each
person who controls the Company and Mobile Energy or any
Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement.
No purchaser of any of the Securities from any Underwriter shall
be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As
used herein, the term "business day" shall mean any day when the
Commission s office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same
instrument.
#20103025.5 -40-
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us the counterpart hereof, and upon the
acceptance hereof by the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between
the Underwriters and the Company and Mobile Energy.
Very truly yours,
Mobile Energy Services
Company, L.L.C.
By:_______________________________
Name:
Title:
Mobile Energy Services
Holdings, Inc.
By:_______________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
By:_____________________________
(Goldman, Sachs & Co.)
#20103025.5 -41-
<PAGE>
SCHEDULE I
Principal Amount
of Securities to be
Purchased
Underwriters
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Total $(260,000,000)
#20103025.5
<PAGE>
Annex I
Pursuant to Section 7(i) of the Underwriting Agreement,
Arthur Andersen L.L.C., independent public accountants for Mobile
Energy and its subsidiary, shall furnish letters to the
Underwriters to the effect that:
(i) they are independent certified public accountants
with respect to Mobile Energy and its subsidiary within the
meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) in their opinion, the financial statements and
any supplementary financial information and schedules (and,
if applicable, financial forecasts and/or pro forma
financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the
American Institute of Certified Public Accountants of the
unaudited consolidated interim financial statements,
selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements
derived from audited financial statements of Mobile Energy
for the periods specified in such letter, as indicated in
their reports thereon, copies of which have been furnished
to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon, copies of
which are attached hereto, and on the basis of specified
procedures including inquiries of officials of Mobile Energy
and its subsidiary who have responsibility for financial and
accounting matters regarding whether or not the unaudited
condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published rules and regulations, nothing
came to their attention that cause them to believe that the
unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the
applicable accounting requirements of the Act and the
related published rules and regulations;
#20103025.5
<PAGE>
(iv) the unaudited selected financial information with
respect to the consolidated results of operations and
financial position of Mobile Energy for the period from
inception to December 31, 1994 included in the Prospectus
agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial
statements for such period that are included in the
Prospectus;
(v) they have compared the information in the
Prospectus under selected captions with the disclosure
requirements of Regulation S-K and on the basis of limited
procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that
caused them to believe that this information does not
conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) on the basis of limited procedures, not
constituting an examination in accordance with generally
accepted auditing standards, consisting of a reading of the
unaudited financial statements and other information
referred to below, a reading of the latest available interim
financial statements of Mobile Energy and its subsidiary,
inspection of the minute books of Mobile Energy and its
subsidiary since the date of the latest audited financial
statements included in the Prospectus, inquiries of
officials of Mobile Energy and its subsidiary responsible
for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe
that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Act and the
related published rules and regulations or (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income,
consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus for them to be
in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not
agree with the corresponding items in the unaudited
consolidated financial statements from which such data
and items were derived, and any such unaudited data and
items were not determined on a basis substantially
consistent with the basis for the corresponding amounts
#20103025.5 -2-
<PAGE>
in the audited consolidated financial statements
included in the Prospectus;
(C) the unaudited financial statements that were
not included in the Prospectus but from which were
derived any unaudited condensed financial statements
referred to in clause (A) above and any unaudited
income statement data and balance sheet items included
in the Prospectus and referred to in clause (B) above
were not determined on a basis substantially consistent
with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma consolidated
condensed financial statements included in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of
the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five
days prior to the date of such letter, there have been
any changes in the consolidated capital stock (other
than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs
of performance shares and upon conversions of
convertible securities, in each case that were
outstanding on the date of the latest financial
statements included in the Prospectus) or any increase
in the consolidated long-term debt of Mobile Energy and
its subsidiary, or any decreases in consolidated net
current assets or stockholders' equity of Mobile Energy
and its subsidiary or other items specified by the
Underwriters, or any increases in any items specified
by the Underwriters, in each case as compared with
amounts shown in the most recent balance sheet included
in the Prospectus, except in each case for changes,
increases or decreases that the Prospectus discloses
have occurred or may occur or that are described in
such letter; and
(F) for the period from the date of the most
recent financial statements included in the Prospectus
to the specified date referred to in clause (E) above,
there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts
of consolidated net income of Mobile Energy and its
subsidiary or other items specified by the
Underwriters, or any increases in any items specified
by the Underwriters, in each case as compared with any
other period of corresponding length specified by the
Underwriters, except in each case for decreases or
#20103025.5 -3-
<PAGE>
increases that the Prospectus discloses have occurred
or may occur or that are described in such letter; and
(vii) In addition to the examination referred to in
their report included in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above,
they have carried out certain specified procedures, not
constituting an examination in accordance with generally
accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by
the Underwriters, that are derived from the general
accounting records of Mobile Energy and its subsidiary or
that appear in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement
specified by the Underwriters, and have compared certain of
such amounts, percentages and financial information with the
accounting records of Mobile Energy and its subsidiary and
have found them to be in agreement.
#20103025.5 -4-
<PAGE>
Exhibit B-4(b)
WSP&R
DRAFT
6/29/95
TRUST INDENTURE
dated as of ( ), 1995
among
MOBILE ENERGY SERVICES COMPANY, L.L.C.,
MOBILE ENERGY SERVICES HOLDINGS, INC.
and
FIRST UNION NATIONAL BANK OF GEORGIA, as Trustee
Providing for the Issuance from Time to Time of
Securities in One or More Series
<PAGE>
CROSS-REFERENCE TABLE */
TIA Section Indenture Section
310(a)(1) 9.9
(a)(2) 9.9
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 9.8
(b) 9.8
(c) N.A.
311(a) 9.13
(b) 9.13
(c) N.A.
312(a) 10.1; 10.2
(b) 10.2
(c) 10.2
313(a) 10.3
(b)(1) 10.3
(b)(2) 10.3
(c) 10.3
(d) 10.3
314(a) 5.3; 10.4
(b) N.A.
(c)(1) 1.2
(c)(2) 1.2
(c)(3) N.A.
(d) 1.7
(e) 1.2
(f) N.A.
315(a) 9.1(a)
(b) 9.2
(c) 9.1(b)
(d) 9.1(c)
(e) 8.9
316(a)(1)(A) 8.6
(a)(1)(B) 8.7
(a)(2) N.A.
(a) 1.1
(b) 8.10
316(c) N.A.
317(a)(1) 8.4
(a)(2) 8.4
(b) 9.14
318(a) 1.7
N.A. means not applicable.
___________________
*/ Note: This Cross-Reference Table shall not, for any
purpose, be deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definitions; Construction . . . . . . . . 2
SECTION 1.2. Compliance Certificates and Opinions . . 2
SECTION 1.3. Form of Documents Delivered to Trustee . 3
SECTION 1.4. Acts of Holders . . . . . . . . . . . . . 4
SECTION 1.5. Notices, etc. to Trustee and Mobile
Energy Parties. . . . . . . . . . . . . . 5
SECTION 1.6. Notices to Holders; Waiver . . . . . . . 6
SECTION 1.7. Conflict with Trust Indenture Act . . . . 6
SECTION 1.8. Effect of Headings and Table of
Contents. . . . . . . . . . . . . . . . . 6
SECTION 1.9. Successors and Assigns . . . . . . . . . 6
SECTION 1.10. Severability Clause . . . . . . . . . . . 6
SECTION 1.11. Benefits of Indenture . . . . . . . . . . 6
SECTION 1.12. Governing Law . . . . . . . . . . . . . . 6
SECTION 1.13. Legal Holidays . . . . . . . . . . . . . 7
SECTION 1.14. Execution in Counterparts . . . . . . . . 7
SECTION 1.15. Projections . . . . . . . . . . . . . . . 7
ARTICLE II.
THE SECURITIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.1. Form of Security to be Established by
Series Supplemental Indenture . . . . . . 7
SECTION 2.2. Form of Trustee's Authentication . . . . 8
SECTION 2.3. Amount Unlimited; Issuable in Series;
Limitations on Issuance . . . . . . . . . 8
SECTION 2.4. Authentication and Delivery of
Securities. . . . . . . . . . . . . . . . 9
SECTION 2.5. Form and Denominations . . . . . . . . . 11
SECTION 2.6. Execution of Securities . . . . . . . . . 11
SECTION 2.7. Temporary Securities . . . . . . . . . . 12
SECTION 2.8. Registration, Transfer and Exchange . . . 12
SECTION 2.9. Mutilated, Destroyed, Lost and Stolen
Securities. . . . . . . . . . . . . . . . 13
SECTION 2.10. Payment of Principal and Interest;
Principal and Interest Rights Preserved . 14
SECTION 2.11. Persons Deemed Owners . . . . . . . . . . 15
SECTION 2.12. Cancellation . . . . . . . . . . . . . . 16
SECTION 2.13. Dating of Securities; Computation of
Interest. . . . . . . . . . . . . . . . . 16
SECTION 2.14. Source of Payments Limited; Rights and
Liabilities of the Mobile Energy Parties. 16
SECTION 2.15. Parity of Securities . . . . . . . . . . 16
i
<PAGE>
SECTION 2.16. Allocation of Principal and Interest . . 17
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.1. Organization, Power and Status of Mobile
Energy Parties. . . . . . . . . . . . . . 17
SECTION 3.2. Authorization; Enforceability; Execution
and Delivery. . . . . . . . . . . . . . . 17
SECTION 3.3. No Conflicts; Laws and Contracts; No
Default . . . . . . . . . . . . . . . . . 18
SECTION 3.4. Governmental Approvals . . . . . . . . . 19
SECTION 3.5. Litigation . . . . . . . . . . . . . . . 19
SECTION 3.6. Utility Regulation . . . . . . . . . . . 19
SECTION 3.7. Collateral . . . . . . . . . . . . . . . 20
SECTION 3.8. Taxes . . . . . . . . . . . . . . . . . . 20
SECTION 3.9. Environmental Matters . . . . . . . . . . 20
SECTION 3.10. Business; Mobile Energy Assets . . . . . 21
SECTION 3.11. Employee Benefit Plans. . . . . . . . . . 21
ARTICLE IV.
INDENTURE ACCOUNTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.1. Establishment of Indenture Securities
Account . . . . . . . . . . . . . . . . . 21
SECTION 4.2. Payments into Indenture Securities
Account . . . . . . . . . . . . . . . . . 21
SECTION 4.3. Application of Funds in Indenture
Securities Account. . . . . . . . . . . . 22
SECTION 4.4. Payments into Debt Service Reserve
Accounts. . . . . . . . . . . . . . . . . 22
SECTION 4.5. Application of Funds in Debt Service
Reserve Accounts. . . . . . . . . . . . . 23
SECTION 4.6. Reserve Account Security . . . . . . . . 23
SECTION 4.7. Investment of Monies in the Indenture
Accounts. . . . . . . . . . . . . . . . . 24
SECTION 4.8. Monies to be Held in Trust . . . . . . . 25
SECTION 4.9. Dominion and Control . . . . . . . . . . 25
ARTICLE V.
COVENANTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.1. Payment of Principal, Premium, if any,
and Interest; Mobile Energy as Guarantor. 26
SECTION 5.2. Maintenance of Insurance . . . . . . . . 26
SECTION 5.3. Reporting Requirements . . . . . . . . . 26
SECTION 5.4. Maintenance of Existence and
Governmental Approvals; Rate Regulation . 28
SECTION 5.5. Nature of Business . . . . . . . . . . . 29
SECTION 5.6. Operation and Maintenance . . . . . . . . 29
SECTION 5.7. Compliance with Law and Organizational
Documents . . . . . . . . . . . . . . . . 30
ii
<PAGE>
SECTION 5.8. Prohibition on Fundamental Changes and
Disposition of Assets . . . . . . . . . . 30
SECTION 5.9. Transactions with Affiliates . . . . . . 30
SECTION 5.10. Amendments to Project Documents . . . . . 31
SECTION 5.11. Performance Under Project Contracts . . . 32
SECTION 5.12. Annual Budget . . . . . . . . . . . . . . 32
SECTION 5.13. Insurance Reports . . . . . . . . . . . . 33
SECTION 5.14. Liens . . . . . . . . . . . . . . . . . . 33
SECTION 5.15. Permitted Investments . . . . . . . . . . 33
SECTION 5.16. Indebtedness . . . . . . . . . . . . . . 33
SECTION 5.17. Debt for Modifications; Replacement
Debt; Refunding Debt. . . . . . . . . . . 33
SECTION 5.18. Application of Proceeds from Sale of
Securities. . . . . . . . . . . . . . . . 35
SECTION 5.19. Restricted Payments . . . . . . . . . . . 36
SECTION 5.20. Casualty Proceeds; Eminent Domain
Proceeds. . . . . . . . . . . . . . . . . 37
SECTION 5.21. Benefit Plan Liabilities . . . . . . . . 37
ARTICLE VI.
REDEMPTION AND PREPAYMENT OF SECURITIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.1. Applicability of Article . . . . . . . . 38
SECTION 6.2. Election to Redeem or Prepay; Notice to
Trustee . . . . . . . . . . . . . . . . . 38
SECTION 6.3. Optional Redemption; Mandatory
Redemption; Prepayment; Selection of
Securities to Be Redeemed or Prepaid. . . 38
SECTION 6.4. Notice of Redemption or Prepayment . . . 40
SECTION 6.5. Securities Payable on Redemption Date or
Prepayment Date . . . . . . . . . . . . . 41
SECTION 6.6. Securities Redeemed or Prepaid in Part . 42
ARTICLE VII.
SINKING FUNDS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.1. Applicability of Article . . . . . . . . 42
SECTION 7.2. Sinking Funds for Securities . . . . . . 42
ARTICLE VIII.
EVENTS OF DEFAULT; REMEDIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.1. Events of Default . . . . . . . . . . . . 42
SECTION 8.2. Enforcement of Remedies . . . . . . . . . 46
SECTION 8.3. Specific Remedies . . . . . . . . . . . . 47
SECTION 8.4. Judicial Proceedings Instituted by
Trustee . . . . . . . . . . . . . . . . . 47
SECTION 8.5. Holders May Demand Enforcement of Rights
by Trustee. . . . . . . . . . . . . . . . 49
SECTION 8.6. Control by Holders . . . . . . . . . . . 50
SECTION 8.7. Waiver of Past Events of Defaults . . . . 50
SECTION 8.8. Holder May Not Bring Suit Except Under
iii
<PAGE>
Certain Conditions. . . . . . . . . . . . 50
SECTION 8.9. Undertaking to Pay Court Costs . . . . . 51
SECTION 8.10. Right of Holders to Receive Payment Not
to Be Impaired. . . . . . . . . . . . . . 51
SECTION 8.11. Application of Monies Collected by
Trustee . . . . . . . . . . . . . . . . . 52
SECTION 8.12. Securities Held by Certain Persons Not
to Share in Distribution. . . . . . . . . 53
SECTION 8.13. Waiver of Appraisement, Valuation, Stay,
Right to Marshalling. . . . . . . . . . . 53
SECTION 8.14. Remedies Cumulative; Delay or Omission
Not a Waiver. . . . . . . . . . . . . . . 53
SECTION 8.15. Intercreditor Agreement . . . . . . . . . 54
ARTICLE IX.
THE TRUSTEE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.1. Certain Duties and Responsibilities . . . 54
SECTION 9.2. Notice of Events of Defaults . . . . . . 55
SECTION 9.3. Certain Rights of Trustee . . . . . . . . 56
SECTION 9.4. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . 57
SECTION 9.5. May Hold Securities . . . . . . . . . . . 57
SECTION 9.6. Funds May Be Held by Trustee or Paying
Agent . . . . . . . . . . . . . . . . . . 57
SECTION 9.7. Compensation, Reimbursement and
Indemnification . . . . . . . . . . . . . 57
SECTION 9.8. Disqualification; Conflicting Interests . 58
SECTION 9.9. Corporate Trustee Required; Eligibility . 64
SECTION 9.10. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . 64
SECTION 9.11. Acceptance of Appointment by Successor . 65
SECTION 9.12. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . 66
SECTION 9.13. Preferential Collection of Claims
Against any Obligor . . . . . . . . . . . 66
SECTION 9.14. Maintenance of Offices and Agencies . . . 69
SECTION 9.15. Co-Trustee or Separate Trustee . . . . . 72
SECTION 9.16. Taxes . . . . . . . . . . . . . . . . . . 73
ARTICLE X.
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND MOBILE ENERGY PARTIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.1. Company to Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . 73
SECTION 10.2. Preservation of Information;
Communications to Holders . . . . . . . . 73
SECTION 10.3. Reports by Trustee . . . . . . . . . . . 75
SECTION 10.4. Reports by Mobile Energy Parties . . . . 76
ARTICLE XI.
iv
<PAGE>
SUPPLEMENTAL INDENTURES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.1. Supplemental Indentures Without Consent
of Holders. . . . . . . . . . . . . . . . 77
SECTION 11.2. Supplemental Indenture with Consent of
Holders . . . . . . . . . . . . . . . . . 78
SECTION 11.3. Documents Affecting Immunity or
Indemnity . . . . . . . . . . . . . . . . 79
SECTION 11.4. Execution of Supplemental Indentures . . 80
SECTION 11.5. Effect of Supplemental Indentures . . . . 80
SECTION 11.6. Conformity with Trust Indenture Act . . . 80
SECTION 11.7. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . 80
ARTICLE XII.
SATISFACTION AND DISCHARGE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.1. Satisfaction and Discharge of
Securities. . . . . . . . . . . . . . . . 80
SECTION 12.2. Satisfaction and Discharge of Indenture . 84
SECTION 12.3. Application of Trust Money . . . . . . . 85
ARTICLE XIII.
MEETINGS OF HOLDERS OF SECURITIES;
ACTION WITHOUT MEETING
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 13.1. Purposes for Which Meetings May Be
Called. . . . . . . . . . . . . . . . . . 86
SECTION 13.2. Call, Notice and Place of Meetings . . . 86
SECTION 13.3. Persons Entitled to Vote at Meetings . . 86
SECTION 13.4. Quorum; Action . . . . . . . . . . . . . 87
SECTION 13.5. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of
Meetings. . . . . . . . . . . . . . . . . 87
SECTION 13.6. Counting Votes and Recording Action of
Meetings. . . . . . . . . . . . . . . . . 88
SECTION 13.7. Action Without Meeting . . . . . . . . . 89
ARTICLE XIV.
GUARANTY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 14.1. Guaranty of Payment and Performance . . . 89
SECTION 14.2. Continuance and Acceleration of
Guaranteed Obligations upon Certain
Events. . . . . . . . . . . . . . . . . . 89
SECTION 14.3. Recovered Payments . . . . . . . . . . . 90
SECTION 14.4. Evidence of Guaranteed Obligations . . . 90
SECTION 14.5. Binding Nature of Certain Adjudications . 90
SECTION 14.6. Nature of Mobile Energy's Obligations . . 90
SECTION 14.7. No Release of Mobile Energy . . . . . . . 90
SECTION 14.8. Certain Waivers . . . . . . . . . . . . . 91
SECTION 14.9. Independent Credit Evaluation . . . . . . 92
SECTION 14.10. Subordination of Rights Against Company,
v
<PAGE>
Other Guarantors and Collateral . . . . . 92
SECTION 14.11. Payments by Mobile Energy . . . . . . . . 92
SECTION 14.12. Continuance of Guaranty; Survival . . . . 94
SECTION 14.13. Assignments and Participations . . . . . 94
SECTION 14.14. Benefit and Enforcement . . . . . . . . . 94
ARTICLE XV.
NONRECOURSE LIABILITY OF MOBILE ENERGY PARTIES . . 94
Appendix A Definitions
Schedule 5.2 Insurance Policies
Exhibit A Form of Southern Guaranty . . . . . . . S(5.2)-4
vi
<PAGE>
TRUST INDENTURE, dated as of ( ), 1995, among MOBILE
ENERGY SERVICES COMPANY, L.L.C., an Alabama limited liability
company (the "Company"), its principal office and mailing address
being at ( ), MOBILE ENERGY SERVICES HOLDINGS, INC., an
Alabama corporation ("Mobile Energy"), its principal office and
mailing address being at ( ), and FIRST UNION NATIONAL BANK
OF GEORGIA, as trustee (the "Trustee"), its corporate trust
office and mailing address being at ( ).
W I T N E S S E T H :
WHEREAS, the Company has duly authorized the creation
of an issue of bonds, debentures, promissory notes or other
evidences of indebtedness to be issued in one or more series
(the "Securities") up to such principal amount or amounts as
may from time to time be authorized in accordance with the
terms of this Indenture; the Company has duly authorized the
execution, delivery and performance by it of this Indenture
to secure the Securities and to provide for the
authentication and delivery thereof by the Trustee;
WHEREAS, the Company wishes to secure the payment of
the principal of and premium, if any, and interest on all
the Securities authenticated and delivered hereunder by the
Trustee and issued hereunder by the Company and the
covenants therein and herein contained and to mortgage,
pledge and assign substantially all of its assets, including
certain of the proceeds of the sale of the Securities;
WHEREAS, Mobile Energy will benefit from the sale of
the Securities of the Company and the use of the net
proceeds therefrom as contemplated herein and has duly
authorized the execution, delivery and performance by it of
this Indenture;
WHEREAS, Mobile Energy wishes to provide its guaranty
to secure the Guaranteed Obligations (as defined below),
including the payment of the principal of and premium, if
any, and interest on all the Securities authenticated and
delivered hereunder and issued by the Company and the
covenants therein and herein contained; and
WHEREAS, all acts necessary to make this Indenture a
valid instrument for the security of the Securities, in
accordance with its and their terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and of the purchase of the
Securities by the Holders (as defined below) thereof, and in
order to secure the payment of the principal of and premium, if
any, and interest on all Securities from time to time outstanding
and the performance of the covenants therein and herein contained
and to declare the terms and conditions on which such Securities
<PAGE>
are secured, the Company hereby grants, bargains, mortgages,
sells, releases, conveys, assigns, transfers, pledges, sets over
and confirms to the Trustee, and grants to the Trustee a security
interest in, all right, title and interest of the Company in and
to the Indenture Accounts (as defined below), including any and
all monies contained therein or hereafter delivered to the
Trustee for deposit therein and, in each case, all monies
received and the right to receive monies thereunder;
TO HAVE AND TO HOLD all the same with all privileges and
appurtenances hereby given, granted, pledged and assigned or
agreed or intended so to be, unto the Trustee and its successors
in said trust and to it and its assigns forever;
IN TRUST, NEVERTHELESS, for the equal and proportionate
benefit and security of the Holders from time to time of all
Outstanding (as defined below) Securities without any priority of
any such Security over any other such Security;
PROVIDED, HOWEVER, that the right, title and interest of the
Company in and to any Debt Service Reserve Account (as defined
below), including any and all monies contained therein or
hereafter delivered to the Trustee for deposit therein and, in
each case, all monies received and the right to receive monies
thereunder, shall be held in trust solely for the equal and
proportionate benefit and security of the Holders from time to
time of the Outstanding Securities for the benefit of whom such
Debt Service Reserve Account was established; and
PROVIDED FURTHER, HOWEVER, that if, after the right, title
and interest of the Trustee in and to the Indenture Accounts
shall have ceased, terminated and become void in accordance with
Article XII, and the principal of and premium, if any, and
interest on the Securities shall have been paid to the Holders
thereof, then and in that case this Indenture and the estate and
rights hereby granted shall cease, terminate and be void, and the
Trustee shall cancel and discharge this Indenture and execute and
deliver to the Company such instruments as the Company shall
require to evidence the discharge hereof; otherwise this
Indenture shall be and remain in full force and effect; and
THE PARTIES HEREBY COVENANT AND AGREE AS FOLLOWS:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions; Construction. (a) For all
purposes of this Indenture, except as otherwise expressly
provided in this Indenture or unless the context otherwise
requires, all terms used herein shall have the meanings set forth
2
<PAGE>
in Appendix A.
SECTION 1.2. Compliance Certificates and Opinions. Except
as otherwise expressly provided by this Indenture, upon any
application or request by either of the Mobile Energy Parties to
the Trustee to take any action under any provision of this
Indenture, either of the Mobile Energy Parties shall furnish to
the Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the
case of any such application or request as to which the
furnishing of documents is specifically required by any provision
of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(c) a statement that, in the opinion of each such
individual, such individual has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with;
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with; and
(e) in the case of an Officer's Certificate, a
statement as to whether or not any Event of Default under
this Indenture has occurred and is continuing.
SECTION 1.3. Form of Documents Delivered to Trustee. In
any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
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Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company or
of Mobile Energy may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel or a certificate of counsel
unless such officer knows or has reason to believe that such
Opinion of Counsel or certificate with respect to the matters
upon which such officer's certificate or opinion is based are
erroneous. Any such Opinion of Counsel or certificate may be
based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an Authorized
Officer of either of the Mobile Energy Parties stating that the
information with respect to such factual matters is in the
possession of such Mobile Energy Party, unless such counsel knows
that the certificate or opinion or representations with respect
to such matters are erroneous.
Any Opinion of Counsel stated to be based on the opinion of
other counsel shall be accompanied by a copy of such other
opinion.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
SECTION 1.4. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders of Securities
voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities
duly called and held in accordance with the provisions of Article
XIII, or a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record,
or both are delivered to the Trustee and, when it is specifically
required herein, to either of the Mobile Energy Parties. Such
instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument
or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 9.1) conclusive in favor of the Trustee
and the Mobile Energy Parties, if made in the manner provided in
this Section 1.4. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section
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13.6.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of
any notary public or other officer of any jurisdiction authorized
to take acknowledgments of deeds or administer oaths that the
Person executing such instrument acknowledged to such officer the
execution thereof, or by an affidavit of a witness to such
execution sworn to before any such notary or other such officer,
and where such execution is by an officer of a corporation or
association or a member of a partnership or limited liability
company, on behalf of such corporation, association, partnership
or limited liability company, such certificate or affidavit shall
also constitute sufficient proof of such Person's authority. The
fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be
proved in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities
held by any Person, and the date or dates of holding the same,
shall be proven by the Security Register and the Trustee shall
not be affected by notice to the contrary.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security
shall bind every future Holder of the same Security, the Holder
of every Security issued upon the transfer thereof or in exchange
therefor or in lieu thereof, whether or not notation of such
action is made upon such Security.
(e) Until such time as written instruments shall have been
delivered with respect to the requisite percentage of principal
amount of Securities for the action contemplated by such
instruments, any such instrument executed and delivered by or on
behalf of a Holder of Securities may be revoked with respect to
any or all of such Securities by written notice by such Holder or
any subsequent Holder, proven in the manner in which such
instrument was proven.
(f) Securities of any series authenticated and delivered
after any Act of Holders may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to
any action taken by such Act of Holders. If the Company shall so
determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to such
action may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
(g) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the
purpose of determining the Holders entitled to give or take any
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request, demand, authorization, direction, notice, consent,
waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the
Company prior to the first solicitation of a Holder made by any
Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or
vote shall be the thirtieth (30th) day (or, if later, the date of
the most recent list of Holders required to be provided pursuant
to Section 10.1) prior to such first solicitation or vote, as the
case may be. With regard to any record date, only the Holders on
such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.
SECTION 1.5. Notices, etc. to Trustee and Mobile Energy
Parties. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished
to, or filed with,
(a) the Trustee by any Holder, by the Company, by
Mobile Energy or by an Authorized Agent shall be sufficient
for every purpose hereunder if made, given, furnished or
filed in writing to the Trustee at its Corporate Trust
Office, or
(b) the Company by the Trustee, by any Holder, by
Mobile Energy or by an Authorized Agent shall be sufficient
for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the
first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee, each Holder
and Mobile Energy by the Company for such purpose, or
(c) Mobile Energy by the Trustee, by any Holder, by
the Company or by an Authorized Agent shall be sufficient
for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to Mobile Energy addressed to
it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee, each Holder
and the Company by Mobile Energy for such purpose.
SECTION 1.6. Notices to Holders; Waiver. Where this
Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder, at its address as it appears in the
Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such
notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to
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receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice
by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken
in reliance upon such waiver. In any case where notice to
Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect
to other Holders, and any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly
given.
SECTION 1.7. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act,
such required provision shall control.
SECTION 1.8. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction
hereof.
SECTION 1.9. Successors and Assigns. All covenants,
agreements, representations and warranties in this Indenture by
the Trustee and the Mobile Energy Parties shall bind and, to the
extent permitted hereby, shall inure to the benefit of and be
enforceable by their respective successors and assigns, whether
so expressed or not.
SECTION 1.10. Severability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this
Indenture or in the Securities, expressed or implied, shall give
to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. THIS INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK EXCEPT THAT SUCH
LAWS SHALL NOT APPLY WITH RESPECT TO ANY COLLATERAL WHERE IT IS
NECESSARY TO APPLY THE LAWS OF ANOTHER JURISDICTION TO PERFECT
LIENS RELATING TO DEBT ISSUED HEREUNDER.
SECTION 1.13. Legal Holidays. In any case where any
Redemption Date or Prepayment Date or the date of any Stated
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Maturity of any Security or of any installment of principal
thereof or payment of interest thereon shall not be a Business
Day, then (notwithstanding any other provision of this Indenture
or such Security) payment of interest or principal, or premium,
if any, need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if
made on such Redemption Date or Prepayment Date or the date of
such Stated Maturity and, except as provided in the Series
Supplemental Indenture establishing the terms of such Security,
if such payment is timely made, no interest shall accrue for the
period from and after such Redemption Date or Prepayment Date or
the date of such Stated Maturity (as the case may be) to the date
of such payment.
SECTION 1.14. Execution in Counterparts. This instrument
may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same
instrument.
SECTION 1.15. Projections. All projections contemplated
herein (including projections prepared in connection with the
determination of any Revenue Sufficiency Certification, Senior
Debt Service Coverage Ratio, Senior Debt Service Requirement or
Total Debt Service Coverage Ratio for a period that includes, or
consists entirely of, future periods) shall be prepared by the
Company in good faith based upon assumptions reasonably believed
by the Company to be consistent with the Project Documents and
the historical operating results of the Energy Complex as
adjusted by reasonable assumptions as to future operating
results; provided, however, that all projections prepared by the
Company in connection with the determination of Senior Debt
Service Coverage Ratios pursuant to Section 5.19(b) shall assume
that (a) the Company shall receive no revenues under the Tissue
Mill Energy Services Agreement upon the occurrence and during the
continuation of an ESA Blockage Event with respect to the Tissue
Mill Owner, the Tissue Mill Energy Services Agreement or the
Tissue Mill and (b) the Company shall receive no revenues under
the Paper Mill Energy Services Agreement upon the occurrence and
during the continuation of an ESA Blockage Event with respect to
the Paper Mill Owner, the Paper Mill Energy Services Agreement or
the Paper Mill.
ARTICLE II.
THE SECURITIES
SECTION 2.1. Form of Security to be Established by Series
Supplemental Indenture. The Securities of each series shall be
substantially in the form (not inconsistent with this Indenture,
including Section 2.5 hereof) established in the Series
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Supplemental Indenture relating to the Securities of such series.
SECTION 2.2. Form of Trustee's Authentication. The
Trustee's certificate of authentication on all Securities shall
be in substantially the following form:
This Security is one of the Securities referred to
in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK
OF GEORGIA, as Trustee
By________________________
Authorized Trust Officer
SECTION 2.3. Amount Unlimited; Issuable in Series;
Limitations on Issuance. The aggregate principal amount of
Securities that may be authenticated and delivered under this
Indenture is unlimited. The provisions of this Section 2.3 shall
not be deemed in any way to supersede the restrictions contained
in Sections 5.16 and 5.17.
The Securities may be issued in one or more series. There
shall be established in one or more Series Supplemental
Indentures, prior to the issuance of Securities of any series:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from all
other Securities) and the form or forms of Securities of
such series;
(b) any limit upon the aggregate principal amount of
the Securities of such series that may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
such series pursuant to Section 2.7, 2.8, 2.9, 6.6 or 11.7
and except for Securities that, pursuant to Section 2.4, are
deemed never to have been authenticated and delivered
hereunder);
(c) the date or dates on which the principal of the
Securities of such series is payable, the amounts of
principal payable on such date or dates and the Regular
Record Dates for the determination of Holders to whom
principal is payable; and the date or dates on or as of
which the Securities of such series shall be dated, if other
than as provided in Section 2.13;
(d) the rate or rates at which the Securities of such
series shall bear interest, or the method by which such rate
or rates shall be determined, the date or dates from which
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such interest shall accrue, the Regular Record Dates for the
determination of Holders to whom interest is payable and the
basis of computation of interest, if other than as provided
in Section 2.13(b);
(e) if other than as provided in Section 9.14(a), the
place or places where (i) the principal of and premium, if
any, and interest on Securities of such series shall be
payable, (ii) Securities of such series may be surrendered
for registration of transfer or exchange and (iii) notices
and demands to or upon the Mobile Energy Parties in respect
of the Securities of such series and this Indenture may be
served;
(f) the price or prices at which, the period or
periods within which and the terms and conditions upon which
Securities of such series may be redeemed, in whole or in
part, at the option of the Company;
(g) the obligation, if any, of the Company to redeem,
purchase or repay Securities of such series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof and the price or prices at which and the
period or periods within which and the terms and conditions
upon which Securities of such series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such
obligations;
(h) if other than denominations of $100,000 and
integral multiples of $5,000 in excess thereof, the
denominations in which Securities of such series shall be
issuable;
(i) if the Securities are to be issued in whole or in
part in the form of one or more global securities registered
in the name of a clearing corporation or clearing agency
registered under the Exchange Act, as depositary for such
Securities, or a nominee of such clearing corporation or
clearing agency, (i) the name of such depositary and any
such nominee, (ii) any limitations on the rights of
beneficial holders thereof to transfer or exchange the same
or to obtain the registration of transfer thereof, (iii) any
limitations on the rights of beneficial holders thereof to
obtain certificates therefor in definitive form and (iv) any
and all other matters incidental to such Securities;
(j) any other terms of such series (which terms shall
not be inconsistent with the provisions of this Indenture);
and
(k) any trustees, authenticating or paying agents,
warrant agents, transfer agents or registrars with respect
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to the Securities of such series.
SECTION 2.4. Authentication and Delivery of Securities.
Subject to Section 2.3, at any time and from time to time after
the execution and delivery of this Indenture, the Company may
deliver Securities of any series executed by the Mobile Energy
Parties to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such
Securities, and the Trustee shall thereupon authenticate and make
available for delivery such Securities in accordance with such
Company Order, without any further action by the Company. No
Security shall be secured by or entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication,
in the form provided for herein, executed by the Trustee by the
manual signature of any Authorized Trust Officer, and such
certificate upon any Security shall be conclusive evidence, and
the only evidence, that such Security has been duly authenticated
and delivered hereunder. In authenticating such Securities and
accepting the additional responsibilities under this Indenture in
relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 9.1) shall be fully protected in
relying upon:
(a) an executed Series Supplemental Indenture with
respect to the Securities of such series;
(b) an Officer's Certificate of the Company certifying
(i) as to resolutions of the Manager or Managers of the
Company by or pursuant to which the terms of the Securities
of such series were established, (ii) that all conditions
precedent under this Indenture to the Trustee's
authentication and delivery of such Securities have been
complied with and (iii) as to the incumbency of the persons
named in such Officer's Certificate;
(c) an Officer's Certificate of Mobile Energy to the
effect set forth in clause (b) above;
(d) an Opinion of Counsel to the effect that (i) the
form or forms and the terms of such Securities have been
established by a Series Supplemental Indenture as permitted
by Sections 2.1 and 2.3 in accordance with the provisions of
this Indenture, (ii) the Securities of such series, when
authenticated and made available for delivery by the Trustee
and issued by the Company and guaranteed by Mobile Energy in
the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute legal, valid and binding
obligations of each of the Mobile Energy Parties,
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enforceable against such Mobile Energy Party in accordance
with their terms, except as such enforceability (A) may be
limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other
similar laws relating to or affecting the enforcement of
creditors' rights and remedies generally and (B) is subject
to general principles of equity (regardless of whether
considered in a proceeding in equity or at law) and the
discretion of the court before which proceedings may be
brought and (iii) all laws of the State of Alabama and New
York and the requirements of this Indenture, in each case in
respect of the execution and delivery by the Mobile Energy
Parties of such Securities, have been complied with; and
(e) such other documents and evidence with respect to
the Mobile Energy Parties as the Trustee may reasonably
request.
Prior to the authentication and delivery of a series of
Securities, the Trustee shall also receive such other funds,
accounts, documents, certificates, instruments or opinions as may
be required by the related Series Supplemental Indenture.
Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and
sold by the Company, and the Company shall deliver such Security
to the Trustee for cancellation as provided in Section 2.12
together with a written statement (which need not comply with
Section 1.2 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered
hereunder and shall never have been or be entitled to the
benefits hereof.
SECTION 2.5. Form and Denominations. The Securities of
each series shall be in registered form and may have such
letters, numbers or other marks of identification and such
legends or endorsements printed, lithographed, engraved,
typewritten or photocopied thereon, as may be required to comply
with any applicable law and the rules of any securities exchange
(if any) upon which the Securities are to be listed or of any
clearing corporation or clearing agency that is a Holder of such
Securities in accordance with Section 2.3(i) or to conform to any
usage in respect thereof, or as may, consistently herewith, be
prescribed by the Manager or Managers of the Company or by the
officers executing such Securities, such determination by said
officers to be evidenced by their signing the Securities.
The definitive Securities shall be printed, lithographed,
engraved, typewritten, photocopied or produced by any combination
of these methods or may be produced in any other manner permitted
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by the rules of any securities exchange upon which the Securities
of such series are to be listed (if any) or of any clearing
corporation or clearing agency that is a Holder of such
Securities in accordance with Section 2.3(i), all as determined
by the officers executing such Securities, as evidenced by their
execution of such Securities.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise
be provided herein or in the Series Supplemental Indenture
setting forth the terms of the Securities of such series.
All Securities in whole or in part in the form of one or
more global securities in accordance with Section 2.3(i) shall
comply with the requirements of the clearing corporation or
clearing agency with whom the registered form of such Security
will be deposited.
SECTION 2.6. Execution of Securities. The Securities shall
be executed on behalf of the Company by its president or any of
its vice presidents and its secretary under its limited liability
company seal reproduced thereon and on behalf of Mobile Energy by
its president or any of its vice presidents and its secretary
under its corporate seal reproduced thereon. The signature of
any such officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time such signatures were affixed the
proper officers of either of the Mobile Energy Parties shall bind
such Mobile Energy Party notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold
such offices at the date of such Securities.
SECTION 2.7. Temporary Securities. Pending the preparation
of definitive Securities of any series, the Mobile Energy Parties
may execute, and upon receipt of a Company Order the Trustee
shall authenticate and make available for delivery, temporary
Securities of such series that are printed, lithographed,
typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the
Company will cause definitive Securities of such series to be
prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such
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series at the Corporate Trust Office or at the Place of Payment,
without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Mobile
Energy Parties shall execute and the Trustee shall authenticate
and make available for delivery, in exchange therefor, definitive
Securities of such series of authorized denominations and of like
tenor and aggregate principal amount. Until so exchanged such
temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive
Securities of such series.
SECTION 2.8. Registration, Transfer and Exchange. The
Company shall cause to be kept a register that, subject to such
reasonable regulations as the Company may prescribe, shall
provide for the registration of Securities and for the
registration of transfers and exchanges of Securities. This
register and, if there shall be more than one Security Registrar,
the combined registers maintained by all such Security
Registrars, are herein sometimes referred to as the "Security
Register." The Trustee is hereby appointed as the initial
"Security Registrar" for the purpose of registering Securities.
If a Person other than the Trustee is appointed by the
Company as Security Registrar, the Company will give the Trustee
prompt notice of the appointment of the Security Registrar, and
the Trustee shall have the right to inspect the Security Register
at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon an Officer's
Certificate executed on behalf of the Security Registrar as to
the names and addresses of the Holders of the Securities and the
principal amounts and numbers of such Securities.
At the option of any Holder, Securities of any series may be
exchanged for other Securities of the same series to be
registered in the name of such Holder, of authorized
denominations and of like tenor, maturity and aggregate principal
amount, upon surrender of the Securities to be exchanged at any
office or agency maintained for such purpose pursuant to Section
9.14(a). Whenever any Securities are so surrendered for
exchange, the Mobile Energy Parties shall execute, and the
Trustee shall authenticate and make available for delivery, the
Securities that the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of each of
the Mobile Energy Parties, evidencing the same debt, and entitled
to the same security and benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
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transfer or exchange shall be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the
Company and the Security Registrar or any transfer agent, duly
executed by the Holder thereof or such Holder's attorney duly
authorized in writing.
No service charge shall be required of any Holders
participating in any transfer or exchange of Securities in
respect of such transfer or exchange, but the Security Registrar
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
transfer or exchange of Securities, other than exchanges pursuant
to Section 2.7, 6.6 or 11.7 not involving any transfer.
The Security Registrar shall not be required (a) to issue,
register the transfer of or exchange any Security of any series
during a period (i) beginning at the opening of business fifteen
(15) days before the day of the mailing of a notice of redemption
of Securities of such series selected for redemption under
Section 6.2 or 7.2 and ending at the close of business on the day
of such mailing and (ii) beginning on the Regular Record Date for
the Stated Maturity of any installment of principal of or payment
of interest on the Securities of such series and ending on the
Stated Maturity of such installment of principal or payment of
interest or (b) to issue, register the transfer of or exchange
any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security selected for
redemption in part.
Notwithstanding anything herein to the contrary, any
transfer of the Securities of any series may be subject to
restrictions, if any, set forth in the Series Supplemental
Indenture relating to such series.
SECTION 2.9. Mutilated, Destroyed, Lost and Stolen
Securities. If (a) any mutilated Security is surrendered to the
Trustee or either of the Mobile Energy Parties, or the Company,
the Security Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security,
and (b) there is delivered to the Company, the Security Registrar
and the Trustee evidence to their satisfaction of the ownership
and authenticity thereof, and such security or indemnity as may
be required by them to save each of them harmless, the Company
shall execute and upon the Company's request the Trustee shall
authenticate and make available for delivery, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and
principal amount, bearing a number not then outstanding.
Notwithstanding the foregoing, in case any such mutilated,
destroyed, lost or stolen Security has become or is about to
become due and payable, the Company, upon satisfaction of the
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conditions set forth in clauses (a) and (b) of the immediately
preceding paragraph, may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section
2.9, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith.
Every new Security issued pursuant to this Section 2.9 in
lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all the
security and benefits of this Indenture equally and
proportionately with any and all other Securities duly issued
hereunder (except as otherwise specifically provided in this
Indenture and in the other Security Documents).
The provisions of this Section 2.9 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 2.10. Payment of Principal and Interest; Principal
and Interest Rights Preserved. Principal of or interest on any
Security that is payable, and is punctually paid or duly provided
for, at any Stated Maturity shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date
for such principal or interest. Payment of principal of and
interest on the Securities of any series shall be made at the
Corporate Trust Office or at the Place of Payment (or, if such
office is not in the Borough of Manhattan, the City of New York,
at either such office or an office to be maintained in such
Borough), or by check or in another manner or manners if so
provided in the Series Supplemental Indenture creating the
Securities of such series.
Any principal of or interest on any Security of any series
that is payable, but is not punctually paid or duly provided for,
at any Stated Maturity of an installment of principal or payment
of interest shall forthwith cease to be payable to the Holder on
the relevant Regular Record Date by virtue of having been such
Holder to the extent that such defaulted principal or interest
may be paid by the Company, at its election in each case, as
provided in paragraph (a) or paragraph (b) below:
(a) The Company may elect to make payment of all or
any portion of such defaulted principal or interest to the
Persons in whose names the Securities of such series (or
their respective Predecessor Securities) in respect of which
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principal or interest is in default are registered at the
close of business on a Special Record Date for the payment
of such defaulted principal or interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee and the Paying Agent in writing of the amount of
defaulted principal or interest proposed to be paid on each
Security of such series and the date of the proposed
payment, and concurrently there shall be deposited with the
Trustee or the Paying Agent an amount of money equal to the
aggregate amount proposed to be paid in respect of such
defaulted principal or interest or there shall be made
arrangements satisfactory to the Trustee or the Paying Agent
for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the
benefit of the Persons entitled to such defaulted principal
or interest as provided in this paragraph. Thereupon, the
Trustee shall fix a Special Record Date for the payment of
such defaulted principal or interest (together with other
amounts payable with respect to such defaulted principal or
interest) that shall not be more than fifteen (15) nor less
than ten (10) days prior to the date of the proposed payment
and not less than ten (10) days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company and the Security Registrar
of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed
payment of such defaulted principal or interest and the
Special Record Date therefor to be mailed, first class
postage prepaid, to each Holder of a Security of such series
at such Holder's address as it appears in the Security
Register, not less than ten (10) days prior to such Special
Record Date. Notice of the proposed payment of such
defaulted principal or interest and the Special Record Date
therefor having been mailed as aforesaid, such defaulted
principal or interest shall be paid to the Persons in whose
names the Securities of such series (or their respective
Predecessor Securities) are registered on such Special
Record Date.
(b) The Company may make, or cause to be made, payment
of any defaulted principal or interest (together with other
amounts payable with respect to such defaulted interest) in
any other lawful manner not inconsistent with the
requirements of any securities exchange (if any) on which
the Securities in respect of which principal or interest is
in default may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to
this paragraph, such payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section 2.10,
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each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security, and each such
Security shall bear interest from whatever date shall be
necessary so that neither gain nor loss in interest shall result
from such registration of transfer, exchange or replacement.
SECTION 2.11. Persons Deemed Owners. Prior to due
presentment of a Security for registration of transfer, the
Person in whose name any Security is registered shall be deemed
to be the owner of such Security for the purpose of receiving
payment of principal of and premium, if any, and (subject to
Section 2.10) interest on such Security and (subject to Section
5.3) for all other purposes whatsoever, whether or not such
Security be overdue, regardless of any notice to anyone to the
contrary.
SECTION 2.12. Cancellation. All Securities surrendered for
payment, redemption, credit against any Sinking Fund payment or
registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee for
cancellation. The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and
delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the
Trustee shall be destroyed and certification of their destruction
delivered to the Company unless, by Company Request, the Company
otherwise directs.
SECTION 2.13. Dating of Securities; Computation of Interest.
(a) Except as otherwise provided in the Series Supplemental
Indenture relating to the Securities of a series, each Security
of such series shall be dated the date of its authentication.
(b) Except as otherwise provided in the Series Supplemental
Indenture relating to the Securities of a series, interest on the
Securities of such series shall be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any
period shorter than a full calendar month, on the basis of the
actual number of days elapsed in such period.
SECTION 2.14. Source of Payments Limited; Rights and
Liabilities of the Mobile Energy Parties. Except as otherwise
specifically provided in this Indenture and in the Guaranty, all
payments of principal and premium, if any, and interest to be
made in respect of the Securities and this Indenture shall be
made only from, the Indenture Securities Collateral, the payments
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therefrom and the income and proceeds received by the Trustee or
the Collateral Agent and allocable to the Trustee therefrom.
Each Holder, by its acceptance of a Security, agrees that (a) it
will look solely to the Indenture Securities Collateral, the
payments therefrom and the income and proceeds received by the
Trustee or the Collateral Agent and allocable to the Trustee
therefrom to the extent available for distribution to such Holder
as herein provided or provided in the Security Documents and the
Guaranty and (b) recourse shall be limited in accordance with
Article XV.
SECTION 2.15. Parity of Securities. (a) Except as
otherwise specifically provided in this Indenture and the other
Security Documents, all Securities of a series issued and
Outstanding hereunder rank on a parity with each other Security
of the same series and with all Securities of each other series
and each Security of a series shall be secured equally and
ratably by this Indenture and the Security Documents with each
other Security of the same series and with all Securities of each
other series, without preference, priority or distinction of any
one thereof over any other by reason of difference in time of
issuance or otherwise, and each Security of a series shall be
entitled to the same benefits and security in this Indenture and
the Security Documents as each other Security of the same series
and with all Securities of each other series.
(b) Notwithstanding anything herein to the contrary, the
right, title and interest of the Company in and to any Debt
Service Reserve Account, including all monies contained therein
or hereafter delivered to the Trustee for deposit therein and, in
each case, all monies received and the right to receive monies
thereunder, shall be held in a separate account in trust solely
for the equal and proportionate benefit and security of the
Holders from time to time of the Outstanding Securities for the
benefit of whom such Debt Service Reserve Account was
established.
SECTION 2.16. Allocation of Principal and Interest. Each
payment of principal of and premium, if any, and interest on each
Security shall be applied, first, to the payment of accrued but
unpaid interest on such Security (as well as any interest on
overdue principal or, to the extent permitted by applicable Law,
overdue interest) to the date of such payment, second, to the
payment of the principal amount of and premium, if any, on such
Security then due (including any overdue installment of
principal) thereunder and, third, the balance, if any, to the
payment of the principal amount of and premium, if any, on such
Security remaining unpaid.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Each of the Mobile Energy Parties represents and warrants,
as of the Closing Date, to the Trustee as follows:
SECTION 3.1. Organization, Power and Status of Mobile
Energy Parties. The Company (a) is a limited liability company
duly formed, validly existing and in good standing under the laws
of the State of Alabama and (b) is duly authorized to do business
and is in good standing in each jurisdiction where the character
of its properties or the nature of its activities makes such
qualification necessary. Mobile Energy (i) is a corporation duly
formed, validly existing and in good standing under the laws of
the State of Alabama and (ii) is duly authorized to do business
and is in good standing in each jurisdiction where the character
of its properties or the nature of its activities makes such
qualification necessary. Each of the Mobile Energy Parties has
all requisite limited liability company or corporate (as the case
may be) power and authority to own and operate the property it
purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the
Energy Complex.
SECTION 3.2. Authorization; Enforceability; Execution and
Delivery. (a) Each of the Mobile Energy Parties has all
necessary limited liability company or corporate (as the case may
be) power and authority to execute, deliver and perform its
obligations under this Indenture, the Securities and each other
Project Document to which it is a party.
(b) All action on the part of each of the Mobile Energy
Parties that is required for the authorization, execution,
delivery and performance of this Indenture, the Securities and
each other Project Document to which such Mobile Energy Party is
a party has been duly and effectively taken, except (in the case
of the Project Contracts) such actions the failure to take would
not reasonably be expected to have a Material Adverse Effect; and
the execution, delivery and performance by each of the Mobile
Energy Parties of this Indenture, the Securities and each such
other Project Document does not require the approval or consent
of any holder or trustee of any Debt or other obligations of such
Mobile Energy Party that has not been obtained.
(c) This Indenture and each other Project Document to which
either of the Mobile Energy Parties is a party has been duly
executed and delivered by such Mobile Energy Party. Each of this
Indenture, the Securities and each other Project Document to
which either of the Mobile Energy Parties is a party constitutes
a legal, valid and binding obligation of such Mobile Energy
Party, enforceable against it in accordance with the terms
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thereof (other than with respect to step-in rights or arbitration
provisions, as to which no representation or warranty is made),
except as such enforceability (i) may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws relating to or affecting the
enforcement of creditors' rights and remedies generally and (ii)
is subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law)
and the discretion of the court before which any proceeding
therefor may be brought and to public policy or Federal or state
laws that may limit rights to indemnification.
SECTION 3.3. No Conflicts; Laws and Contracts; No Default.
(a) Neither the execution and delivery of this Indenture, the
Securities and each other Project Document to which either of the
Mobile Energy Parties is a party nor the consummation of any of
the transactions contemplated hereby or thereby nor performance
of or compliance with the terms and conditions hereof or thereof
(i) contravenes any Governmental Approvals or any provision of
Law applicable to either of the Mobile Energy Parties or to any
of the Collateral, (ii) conflicts or is inconsistent with or
constitutes a default under or results in the violation of the
provisions of the Articles of Organization or (Operating
Agreement) of the Company or certificate of incorporation or by-
laws of Mobile Energy or, unless such conflict, inconsistency,
default or violation would not reasonably be expected to have a
Material Adverse Effect, of any other Project Documents or any
indenture, mortgage, deed of trust, sale/leaseback agreement,
loan agreement or other similar financing agreement or instrument
or other agreement or instrument to which either of the Mobile
Energy Parties is a party or by which either of the Mobile Energy
Parties or any of its property or assets is bound or to which
either may be subject or (iii) results in the creation or
imposition of any Liens (other than Permitted Liens) on any of
the property or assets of either of the Mobile Energy Parties, or
results in the acceleration of any obligation of either of the
Mobile Energy Parties, that would reasonably be expected to have
a Material Adverse Effect.
(b) Each of the Mobile Energy Parties and the Energy
Complex is in compliance with all Laws applicable to the Mobile
Energy Parties or the Energy Complex (as the case may be), unless
such non-compliance would not reasonably be expected to have a
Material Adverse Effect.
(c) Neither of the Mobile Energy Parties nor (to the
knowledge of the Mobile Energy Parties) any other party to a
Project Document is in material default in the performance of any
term, covenant or obligation under any Project Document; no event
has occurred that with lapse of time, notice or both could result
in a default under a Project Document by either of the Mobile
Energy Parties or (to the knowledge of the Mobile Energy Parties)
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any other party thereto that would reasonably be expected to have
a Material Adverse Effect; no material force majeure event has
occurred and is continuing under any Project Document; and (to
the knowledge of the Mobile Energy Parties) each Project Document
is in full force and effect.
SECTION 3.4. Governmental Approvals. All material
Governmental Approvals that are required to be obtained as of the
date hereof by or on behalf of either of the Mobile Energy
Parties in connection with (a) the capital improvements
contemplated by the Capital Budget, and operation and maintenance
of the Energy Complex (including the provision of Processing
Services pursuant to the Energy Services Agreements and the
Master Operating Agreement) and (b) the issuance of the
Securities and the Guaranty and the execution, delivery and
performance by the Mobile Energy Parties of the Project Documents
are in effect on the date hereof. Each of the material
Governmental Approvals required to be obtained as of the date
hereof by either of the Mobile Energy Parties has been duly
obtained, was (to the knowledge of the Mobile Energy Parties)
validly issued and is in full force and effect. The Mobile
Energy Parties are in compliance with all material Governmental
Approvals required to be obtained as of the Closing Date unless
such noncompliance would not reasonably be expected to result in
a Material Adverse Effect. Neither of the Mobile Energy Parties
have any reason to believe that it will be unable to obtain the
Governmental Approvals that are not required to be obtained prior
to the Closing Date in the ordinary course of business, without
substantial expense, and at such time or times as may be
necessary to avoid any delay in, or material impairment to, the
consummation and performance of the transactions as contemplated
by this Indenture and the other Project Documents.
SECTION 3.5. Litigation. There are no claims, actions,
suits, investigations or proceedings at law or in equity by or
before any arbitrator or any Governmental Authority now pending
or (to the knowledge of the Mobile Energy Parties) threatened
against either of the Mobile Energy Parties or (to the knowledge
of the Mobile Energy Parties) now pending or threatened against
any Affiliate thereof, or any property or other assets or rights
of either of the Mobile Energy Parties or any Affiliate thereof
with respect to this Indenture, any other Project Document or the
Energy Complex, that would reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.6. Utility Regulation. (a) Neither the Trustee
or the Collateral Agent nor any Holder will be (under applicable
Law as of the date hereof and solely as a result of the
ownership, operation and maintenance of the Energy Complex by
either of the Mobile Energy Parties, the purchase and ownership
of the Securities or any other transaction contemplated by the
Financing Documents) subject to regulation under the Federal
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Power Act of 1920 or by the State of Alabama Public Service
Commission or otherwise be subject to rate regulation under
Federal, state or local Law as of the Closing Date; neither of
the Mobile Energy Parties is, nor as of the Closing Date will be,
subject to rate regulation under Federal, state or local Law; and
neither the execution, delivery and performance by each of the
Mobile Energy Parties of all the provisions of the Project
Documents to which such Mobile Energy Party is a party or the
consummation of the transactions contemplated thereby will
violate Chapter 14 of Title 37 of the Code of Alabama (1975):
Service Territories for Electric Suppliers.
SECTION 3.7. Collateral. (a) The Company has, or has
valid and enforceable rights to acquire, good, valid title or
valid leasehold rights in and to all of the Collateral purported
to be covered by the Security Documents to which it is a party
and is the owner and holder of a valid and subsisting leasehold
estate to the interests in the Site and the tangible personal
property forming a part of the Collateral purported to be covered
by the Security Documents to which it is a party, subject only to
Permitted Liens, and is lawfully possessed of, or has valid and
enforceable rights to acquire, a valid and subsisting grant for a
term in and of the Easements, subject only to Permitted Liens.
(b) With respect to the personal property forming a part of
the Collateral, all filings, recordings, registrations and other
actions have been made, obtained and taken in all relevant
jurisdictions that are necessary to create and perfect the Liens
in all right, title, estate and interest of the Company in the
Collateral covered thereby subject to no Liens other than
Permitted Liens.
(c) The Mobile Energy Parties have obtained and hold in
full force and effect, or have the right to obtain (or are in the
process of obtaining and expect to obtain in the ordinary course
of business), all patents, trademarks, copyrights and other such
rights or adequate licenses therein, free from restrictions that
could reasonably be expected to result in a Material Adverse
Effect, that are necessary for the ownership, construction,
operation and maintenance of the Energy Complex.
SECTION 3.8. Taxes. Each of the Mobile Energy Parties has
filed, or caused to be filed, all tax and information returns
that are required to have been filed by it in any jurisdiction
and has paid (prior to their delinquency dates) all taxes shown
to be due and payable on such returns and all other taxes and
assessments payable by it, to the extent the same have become due
and payable, except to the extent there is a Good Faith Contest
thereof by either of the Mobile Energy Parties.
SECTION 3.9. Environmental Matters. (a) To the knowledge
of the Mobile Energy Parties, neither the Site nor the Energy
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Complex has been contaminated with Hazardous Materials that
requires remediation under any applicable Environmental
Requirement, except where such remediation would not have a
Material Adverse Effect.
(b) The Company, the Energy Complex and the Site are in
compliance with all applicable Environmental Requirements
affecting the Site and the Energy Complex, except where
noncompliance would not reasonably be expected to have a Material
Adverse Effect; and (to the knowledge of the Mobile Energy
Parties) there are no environmental conditions that could
reasonably be expected to materially interfere with the
commercial operation of the Energy Complex.
SECTION 3.10. Business; Mobile Energy Assets. (a) Neither
of the Mobile Energy Parties has engaged in any business or
activity other than in connection with the acquisition,
development, ownership, operation and financing of the Energy
Complex as contemplated by the Project Documents to which such
Mobile Energy Party is a party (or, in the case of Mobile Energy,
the ownership of the Company).
(b) Mobile Energy's sole material non-cash assets consist
of its ownership interest in the Company and its rights in
respect of the Southern Master Tax Sharing Agreement.
SECTION 3.11. Employee Benefit Plans. Neither of the Mobile
Energy Parties, nor any other Person who is a member of a
controlled group of corporations or a group of trades or
businesses under common control with the Mobile Energy Parties
(within the meaning of Section 414 of the Code), has (a) failed
to fulfill its obligations under or to comply in any material
respect with the requirements of ERISA or the Code with respect
to any employee benefit plans, (b) sought a waiver of the minimum
funding standard of Section 412 of the Code, (c) failed to make
any contribution or payment to or in respect of any employee
benefit plan required to be made by law or by the terms of such
plan, (d) made any amendment to any employee benefit plan that
has resulted or should result in the imposition of a lien or the
posting of a bond or other security under ERISA or the Code or
(e) incurred any liability under Title IV of ERISA other than a
liability to the Pension Benefit Guaranty Corporation for
premiums under Section 4007 of ERISA, and has caused, as a result
of such events or conditions, together with all such other events
or conditions, either of the Mobile Energy Parties to incur or be
reasonably likely to incur a liability that is material in
relation to the financial position of such Mobile Energy Party.
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ARTICLE IV.
INDENTURE ACCOUNTS
SECTION 4.1. Establishment of Indenture Securities Account.
An account designated the "Indenture Securities Account" is
hereby established and created with the Trustee. The following
subaccounts of the Indenture Securities Account are hereby
established and created with the Trustee: (a) "Indenture
Securities Interest Subaccount"; (b) "Indenture Securities
Principal Subaccount"; and (c) "Indenture Securities Redemption
Subaccount."
SECTION 4.2. Payments into Indenture Securities Account.
The Indenture Securities Account shall be funded with (a) monies
transferred by the Collateral Agent from the Revenue Account
pursuant to Sections 3.11(a)(v) and 3.11(a)(vi) of the
Intercreditor Agreement, (b) monies transferred by the Collateral
Agent from the Maintenance Reserve Account pursuant to Section
3.5(b) of the Intercreditor Agreement, (c) monies transferred by
the Collateral Agent from the Distribution Account pursuant to
Section 3.8(b) of the Intercreditor Agreement, (d) monies
transferred by the Collateral Agent from the Subordinated Fee
Account pursuant to Section 3.7(b) of the Intercreditor
Agreement, (e) monies transferred by the Collateral Agent from
the Subordinated Debt Account pursuant to Section 3.6(b) of the
Intercreditor Agreement and (f) Eminent Domain Proceeds and
Casualty Proceeds transferred by the Collateral Agent from the
Loss Proceeds Account pursuant to Section 3.10 of the
Intercreditor Agreement. The Trustee shall deposit all monies
received by it for (i) payment of interest on the Securities at
Stated Maturity into the Indenture Securities Interest
Subaccount, (ii) payment of principal of the Securities at Stated
Maturity into the Indenture Securities Principal Subaccount and
(iii) redemption of Securities other than at Stated Maturity into
the Indenture Securities Redemption Subaccount, in each case for
disbursement in accordance with Section 4.3.
SECTION 4.3. Application of Funds in Indenture Securities
Account. (a) The Trustee is hereby authorized and directed to
disburse from (i) the Indenture Securities Interest Subaccount,
the amount required to pay interest on Securities when due
(whether on an Interest Payment Date or at any other Stated
Maturity, but not upon acceleration or on any Redemption Date or
Prepayment Date), (ii) the Indenture Securities Principal
Subaccount, the amount required to pay principal of the
Securities when due (whether on a Principal Payment Date or at
any other Stated Maturity, but not upon acceleration or on any
Redemption Date or Prepayment Date) and (iii) the Indenture
Securities Redemption Subaccount, the amount required to pay
principal of and premium, if any, and interest on the Securities
when due (whether upon acceleration or on a Redempton Date or
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Prepayment Date in accordance with Section 6.3 or otherwise);
provided, however, that if there are insufficient monies in (A)
the Indenture Securities Interest Subaccount to pay the interest
then due on the Securities, then the Trustee shall, in the
following order of priority: first, transfer monies on deposit
in the Indenture Securities Redemption Subaccount and, second,
transfer monies on deposit in the Indenture Securities Principal
Account to the Indenture Securities Interest Subaccount to be
applied to make such payment, (B) the Indenture Securities
Principal Subaccount to pay the principal then due on the
Securities, then the Trustee shall transfer monies on deposit in
the Indenture Securities Redemption Subaccount to the Indenture
Securities Principal Subaccount to be applied to make such
payment and (C) the Indenture Securities Redemption Subaccount to
pay the principal, premium, if any, and interest then due on the
Securities, then the Trustee shall transfer monies on deposit in
the Indenture Securities Principal Subaccount and the Indenture
Securities Interest Subaccount to be applied to make such
payment.
SECTION 4.4. Payments into Debt Service Reserve Accounts.
Subject to Section 4.6, each Debt Service Reserve Account (if
any) shall be funded (a) with monies to be deposited therein on
the date of original issuance of any Securities for whose benefit
any such Debt Service Reserve Account was established and
created, in accordance with the Series Supplemental Indenture
establishing such Securities, and (b) with monies to be
transferred thereto by the Collateral Agent pursuant to Section
3.11(a)(viii) of the Intercreditor Agreement, in the case of
clauses (a) and (b) above, to the extent necessary so that the
amount of monies, together with the Available Amount under any
Reserve Account Security, then on deposit in such Debt Service
Reserve Account shall be equal to the Debt Service Reserve
Account Required Balance in respect of such Debt Service Reserve
Account.
SECTION 4.5. Application of Funds in Debt Service Reserve
Accounts. If, following the application of monies on deposit in
the Indenture Securities Account in accordance with Section 4.3,
amounts are due and owing in respect of principal of or premium,
if any, or interest on any Securities for whose benefit a Debt
Service Reserve Account was established and created, in
accordance with the Series Supplemental Indenture establishing
such Securities, the Trustee shall, in the following order of
priority: first, apply monies then on deposit in such Debt
Service Reserve Account; second, draw upon any Reserve Account
Letter of Credit on deposit in such Debt Service Reserve Account
pursuant to Section 4.6(d) in an amount up to the Available
Amount thereunder and apply the monies in respect thereof; and
third, call upon any Southern Guaranty on deposit in such Debt
Service Reserve Account pursuant to Section 4.6(d) in an amount
up to the Available Amount thereunder and apply the monies in
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respect thereof, in each case, directly to the payment (to the
extent necessary) of such amounts due and owing in respect of
such Securities; provided, however, that if an Event of Default
has occurred and is then continuing, the Trustee shall provide
notice thereof to the Collateral Agent, and the Collateral Agent
shall, in the following order of priority, transfer monies on
deposit in the Distribution Account, the Subordinated Fee Account
and the Subordinated Debt Account (including then Available
Amounts under any Reserve Account Security on deposit therein)
pursuant to Sections 3.8, 3.7 and 3.6, respectively, of the
Intercreditor Agreement, to the Trustee for application to the
payment (to the extent necessary) of such amounts due and payable
in respect of such Securities, prior to the application of monies
pursuant to clauses first, second and third above.
SECTION 4.6. Reserve Account Security. (a) Subject to
Section 4.6(c), the Company shall not be required at any time to
deposit any monies in any Debt Service Reserve Account, and the
Company shall be entitled from time to time to withdraw monies on
deposit in such Debt Service Reserve Account, provided that and
for so long as Reserve Account Security having an Available
Amount thereunder equal to the amount of such monies otherwise
required to be and not so deposited or the amount of such monies
so withdrawn (as the case may be) shall have been delivered to
the Trustee, at or prior to such time, for deposit into such Debt
Service Reserve Account. At the time of any such deposit, the
Trustee shall be entitled to receive, and (subject to Section
9.1) shall be fully protected in relying upon, an Opinion of
Counsel to the effect that (i) such Reserve Account Security is
permitted by this Section 4.6 and has been delivered in
accordance with the provisions hereof, (ii) such Reserve Account
Security has been duly authorized, executed and delivered by the
provider thereof and constitutes a legal, valid and binding
obligation of such provider, enforceable against such provider in
accordance with its terms, except as such enforceability (A) may
be limited by applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other similar laws relating
to or affecting the enforcement of creditors' rights and remedies
generally as such laws would apply in the event of a bankruptcy,
insolvency or reorganization of, or other similar occurrence with
respect to, such provider and (B) is subject to general
principles of equity (regardless of whether considered in a
proceeding in equity or at law) or other customary qualifications
and limitations and (iii) payments under such Reserve Account
Security would not constitute avoidable preferences under Section
547 of the Bankruptcy Code or similar state laws by or against
the provider thereof (or any other account party thereunder).
The Company may from time to time, at its discretion, replace or
reduce the Available Amount (in whole or in part) under any
Reserve Account Security on deposit in any Debt Service Reserve
Account with other Reserve Account Security having an Available
Amount thereunder, or with monies in an amount, equal to the
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Available Amount so replaced or reduced.
(b) Each Reserve Account Security on deposit in any Debt
Service Reserve Account shall provide that not less than forty-
five (45) days prior to the occurrence of a Termination Event
with respect to such Reserve Account Security, the provider
thereof shall deliver written notice to the Trustee and the
Company of such occurrence. The Company shall provide notice to
the Trustee of the occurrence of any Credit Standard Event or
Default Event within three (3) Business Days of its actual or
constructive knowledge of the event giving rise to such
occurrence.
(c) If (in lieu of any monies required to be deposited
into, or in replacement of monies or other Reserve Account
Security on deposit in, any Debt Service Reserve Account) any
Reserve Account Security is on deposit in such Debt Service
Reserve Account pursuant to Section 4.6(a), then, immediately
upon the occurrence of a Required Deposit Event with respect to
such Reserve Account Security, the Company agrees to deposit into
such Debt Service Reserve Account an amount of monies equal to
the Required Deposit with respect to such Required Deposit Event.
(d) If the Company fails to make any Required Deposit
pursuant to Section 4.6(c) as and when due, then the Trustee
shall, and is hereby authorized to, draw or call upon such
Reserve Account Security in an amount equal to the amount of such
Required Deposit that the Company so failed to deposit; provided,
however, that, if a Required Deposit Event occurs at a time when
more than one Reserve Account Letter of Credit or Southern
Guaranty is on deposit in such Debt Service Reserve Account, the
Trustee may elect, in its sole discretion but subject to Section
4.5, the order in which the Trustee shall draw upon such Reserve
Account Letters of Credit or call upon such Southern Guaranties
(as the case may be). Any amounts drawn or called upon by the
Trustee under any Reserve Account Security on deposit in any Debt
Serve Reserve Account shall be deposited into such Debt Service
Reserve Account. The Company's obligations under Section 4.6(c)
shall be satisfied to the extent of any such deposit.
SECTION 4.7. Investment of Monies in the Indenture
Accounts. (a) Amounts deposited in the Indenture Accounts, at
the written request and direction of the Company, shall be
invested by the Trustee in Permitted Investments. Such
investments shall mature in such amounts and not later than such
times as may be necessary to provide monies when needed to make
payments from such monies as provided in this Indenture. Net
interest or gain received from such investments shall remain in
the respective subaccounts of the Indenture Securities Account
and in each Debt Service Reserve Account (if any) pending
application as provided in this Indenture, provided that (i) to
the extent that monies on deposit in any Debt Service Reserve
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Account (together with then Available Amounts under any Reserve
Account Security deposited therein) exceed the Debt Service
Reserve Account Required Balance therefor, such monies shall be
transferred to the Collateral Agent for deposit into the Revenue
Account and (ii) net interest on monies deposited into the
Indenture Securities Account Principal Subaccount shall be
transferred monthly to the Indenture Securities Account Interest
Subaccount. In the event monies are required for payment of any
amounts to be paid by the Trustee pursuant to Article VI in
respect of any series of Securities and for any payment of the
principal of or premium, if any, or interest on any series of
Securities, the Trustee shall, at the written request and
direction of the Company, sell such Permitted Investments as
required to restore to cash such amounts as are needed for any
such payments. Absent written instructions from the Company, the
Trustee shall invest the amounts held in the Indenture Securities
Account and each Debt Service Reserve Account (if any) in
Permitted Investments described in clause (a) of the definition
thereof.
(b) Each month (including on the Business Day prior to each
Interest Payment Date) and immediately following any withdrawal
of monies on deposit in each Indenture Account, the Trustee shall
"mark-to-market" each Permitted Investment on deposit in such
Indenture Account (including accrued interest) and shall promptly
thereafter notify the Company, the Collateral Agent and the
Independent Engineer as to the amount of any deficiency or
surplus in such Indenture Account as of such date based on such
revaluation. Any deficiency shall be funded from the Revenue
Account, as specified in Section 3.11(a)(v) of the Intercreditor
Agreement.
(c) In computing the amount in any Indenture Account (or
any other separate account or fund created under the provisions
of, and for any purpose provided in, this Indenture), obligations
purchased as an investment of monies therein shall be valued at
the market value of, including interest on, such obligations.
SECTION 4.8. Monies to be Held in Trust. All monies
required to be deposited with or paid to the Trustee for the
account of any Indenture Account under any provision of this
Indenture and all investments made therewith, and all monies of
this Indenture and all investments made therewith, and all monies
withdrawn from any Indenture Account and held by the Trustee or
any Paying Agent, shall be held by the Trustee or the Paying
Agent in trust, and while so held shall be held in trust for the
Holders of the Securities.
SECTION 4.9. Dominion and Control. The Company hereby
transfers, assigns and sets over all of its right, title and
interest in and to all amounts deposited or held in any Indenture
Account and grants the Trustee (acting on behalf of the Holders
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of the Securities) sole dominion and control over such amounts.
Neither of the Mobile Energy Parties shall have the right to
withdraw monies from any Indenture Account hereunder.
ARTICLE V.
COVENANTS
Each of the Mobile Energy hereby covenants and agrees that
so long as this Indenture is in effect and any Securities remain
Outstanding:
SECTION 5.1. Payment of Principal, Premium, if any, and
Interest; Mobile Energy as Guarantor. (a) The Company shall
duly and punctually pay, or cause to be paid, the principal of
and premium, if any, and interest on, and all other amounts
payable in respect of, the Securities of each series in
accordance with their terms and the terms of this Indenture and
of the related Series Supplemental Indenture.
(b) Mobile Energy agrees to act as guarantor on the
Securities, and agrees that the Trustee on behalf of the Holders
of the Securities may enforce payment of the principal of and
premium, if any, and interest on, and all other amounts payable
in respect of, the Securities against Mobile Energy to the same
extent as the Trustee may against the Company.
SECTION 5.2. Maintenance of Insurance. The Company shall
maintain or cause to be maintained on its behalf the required
insurance policies in accordance with Schedule 5.2. All property
and liability insurance policies shall name the Collateral Agent
as an additional insured and as loss payee. If at any time any
of the required insurance (other than lenders' policy title
insurance) shall no longer be available on commercially
reasonable terms and premiums, the Company shall procure
substitute insurance coverage that is the most equivalent to the
required coverage and that is available on commercially
reasonable terms and premiums.
SECTION 5.3. Reporting Requirements. The Mobile Energy
Parties shall furnish to the Trustee, and to any Holder of a
Security or an owner of a beneficial interest therein requesting
the same in writing (whether or not either of the Mobile Energy
Parties is then required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act):
(a) As soon as practicable and in any event within
sixty (60) days after the end of the first, second and third
Fiscal Quarters of each Fiscal Year of Mobile Energy
(commencing with the Fiscal Quarter ending September 30,
1995) or, in the case of any such request made after such
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sixty (60) day period, promptly thereafter, an unaudited
consolidated balance sheet of Mobile Energy as of the last
day of such Fiscal Quarter and the related consolidated
statements of income, cash flows and stockholders' capital
of Mobile Energy and (in the case of such second and third
Fiscal Quarters) for the portion of the Fiscal Year ending
with the last day of such Fiscal Quarter, setting forth
(except in the case of any such Fiscal Quarter ending prior
to September 30, 1996) in each case in comparative form
corresponding unaudited figures from the preceding Fiscal
Year, all in accordance with GAAP, and accompanied by a
written statement of an Authorized Officer of each of the
Mobile Energy Parties to the effect that such financial
statements fairly represent such Mobile Energy Party's
financial condition and results of operations at and as of
their date in accordance with GAAP.
(b) As soon as practicable and in any event within 120
days after the end of each Fiscal Year of Mobile Energy
(commencing with the Fiscal Year ending December 31, 1995)
or, in the case of any such request made after such period,
promptly thereafter, (i) a consolidated balance sheet of
Mobile Energy as of the end of such Fiscal Year and the
related consolidated statements of income, cash flow and
stockholders' capital of Mobile Energy during such Fiscal
Year setting forth (except in the case of the Fiscal Year
ending December 31, 1995) in each case in comparative form
corresponding figures from the preceding Fiscal Year, all in
accordance with GAAP, accompanied by an audit report thereon
of a firm of independent public accountants of recognized
national standing, which opinion shall state that such
financial statements fairly represent Mobile Energy's
consolidated financial condition and results of operations
at and as of their date in accordance with GAAP, (ii) a
certification of such accountants stating that, in the
course of making the examinations necessary for their
opinion, they obtained no knowledge, except as specifically
stated, of any event or condition that constitutes (or that,
upon notice or lapse of time or both, would constitute) an
Event of Default, (iii) management's discussion and analysis
of financial condition and results of operations prepared in
accordance with Item 303 of Regulation S-K under the
Securities Act and (iv) such other matters as determined by
the Mobile Energy Parties.
(c) With each annual or quarterly consolidated
financial statement furnished pursuant to Section 5.3(a) or
5.3(b), an Officer's Certificate of the Company certifying
as to (i) the aggregate amount of all Restricted Payments
made by the Company and (ii) the entering into by the
Company of any additional Project Documents or of any
amendments, replacements or modifications of, or any notices
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of termination received by either of the Mobile Energy
Parties with respect to, any of the Project Documents
(together with copies of any such additional Project
Documents or amendments, replacements, modifications or
notices attached to such Officer's Certificate), in the case
of clauses (i) and (ii) above, during the period covered by
such financial statement.
(d) Not less often than annually, a brief certificate
(complying with the provisions of Section 314(a)(4) of the
Trust Indenture Act) from the principal executive officer,
principal financial officer or principal accounting officer
of each of the Mobile Energy Parties as to such officer's
knowledge of such Mobile Energy Party's compliance with all
conditions and covenants under this Indenture (or, if either
of the Mobile Energy Parties is not so in compliance, a
description of any such non-compliance). For purposes of
this paragraph, such compliance shall be determined without
regard to any period of grace or requirement of notice
provided under this Indenture.
(e) Each of the following items:
(i) promptly after any Authorized Officer of
either of the Mobile Energy Parties learns or shall
become aware of the occurrence thereof, written notice
of the occurrence of any event or condition that
constitutes (or that, upon notice or lapse of time or
both, would constitute) an Event of Default,
specifically stating that such event or condition has
occurred and describing it and the action being or
proposed to be taken with respect thereto;
(ii) written notice of the occurrence of any
Event of Eminent Domain or any Event of Loss and an
Officer's Certificate of the Company setting forth the
details thereof and the action being or proposed to be
taken with respect thereto;
(iii) written notice of the occurrence of any
event giving rise, or reasonably expected to give rise,
to a claim under any insurance policy maintained in
respect of the Energy Complex in an amount greater than
$5,000,000;
(iv) promptly after any Authorized Officer of
either of the Mobile Energy Parties learns or shall
become aware of the occurrence thereof, written notice
of the occurrence of any event or condition that
constitutes a material violation by either of the
Mobile Energy Parties of any Environmental Requirement;
and
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(v) any other information required to be furnished
by the Mobile Energy Parties to the Tax-Exempt Trustee
pursuant to the Tax-Exempt Security Documents.
(f) If and for so long as the Company has deposited a
Southern Guaranty into any Reserve Account Security Account
pursuant to the terms of this Indenture or the other
Security Documents, the Company shall cause Southern to
provide to the Collateral Agent or the Trustee (as the case
may be) no later than forty-five (45) days after the end of
each fiscal quarter of Southern, an Officer's Certificate of
Southern certifying as to the determination of whether or
not the Southern Credit Standard has been satisfied as of
the end of such fiscal quarter.
SECTION 5.4. Maintenance of Existence and Governmental
Approvals; Rate Regulation. (a) Each of the Mobile Energy
Parties shall at all times preserve and maintain in full force
and effect (i) its existence and form as a limited liability
company or corporation (as the case may be) and its good
standing under the laws of its state of organization or
incorporation (as the case may be) and (ii) its qualification to
do business in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of
its business as conducted or proposed to be conducted makes such
qualification necessary.
(b) Each of the Mobile Energy Parties shall obtain and
maintain in full force and effect all Governmental Approvals
(including maintaining compliance with Environmental
Requirements) except where the failure to obtain and maintain in
full force and effect such Governmental Approvals or the
noncompliance with such Environmental Requirements would not have
a Material Adverse Effect.
(c) Each of the Mobile Energy Parties shall preserve and
maintain good and marketable title to its properties and assets
(subject to no liens other than Permitted Liens).
(d) Each of the Mobile Energy Parties shall pay all taxes
and other governmental charges except where such taxes or charges
are being contested in a Good Faith Contest and where the failure
to pay such taxes or charges does not affect the enforceability
of the Project Documents.
(e) Neither of the Mobile Energy Parties shall be subject
to regulation as to rates with respect to the provision of
Processing Services, nor shall the revenues or other amounts
received or receivable by the Company for the use of Processing
Services or other services and facilities of the Energy Complex
be subject to regulation, in either case by any Governmental
Authority having jurisdiction over either of the Mobile Energy
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Parties under Federal, state or local law, unless the Company
shall (i) be contesting such regulation in a Good Faith Contest
and (ii) have provided a Revenue Sufficiency Certification (based
upon and after giving effect to such regulation) to the Trustee
(A) within fifteen (15) days following the issuance of a binding
order (which shall be final and not be subject to review on
appeal) of such Governmental Authority to the effect that either
of the Mobile Energy Parties, or such revenues or other amounts,
shall be subject to such regulation and (B) within fifteen (15)
days following any amendment or other modification of such order
by, or the issuance of another binding order (which shall be
final and not be subject to review on appeal) of, or the taking
of other action relating to any such order that would reasonably
be expected to have a Material Adverse Effect by, such
Governmental Authority (or another Governmental Authority having
jurisdiction over either of the Mobile Energy Parties under
Federal, state or local law) affecting such regulation.
SECTION 5.5. Nature of Business. Neither of the Mobile
Energy Parties shall engage in any business other than the
ownership, financing, operation, maintenance and improvement of
the Energy Complex as contemplated by the Project Documents. If
Mobile Energy acquires more than nominal assets (excluding its
ownership of equity interests in the Company and its rights under
the Southern Master Tax Sharing Agreement), Mobile Energy shall
immediately grant a first priority security interest therein to
the Collateral Agent on behalf of the Senior Secured Parties on
the same conditions as set forth in the Mortgage and the other
Security Documents.
SECTION 5.6. Operation and Maintenance. The Company shall,
and shall cause the Operator to, use, maintain and operate the
Energy Complex and the Site in compliance with Prudent Plant
Operating Standards and the material provisions of all relevant
Project Documents, except where noncompliance would not have a
Material Adverse Effect.
SECTION 5.7. Compliance with Law and Organizational
Documents. (a) Each of the Mobile Energy Parties shall comply
with, and the Company shall ensure that the Energy Complex is
maintained and operated in compliance with, and shall make such
alterations to the Energy Complex and the Site as may be required
for compliance with, all applicable Governmental Approvals and
all material applicable Laws, except where noncompliance would
not have a Material Adverse Effect.
(b) Each of the Mobile Energy Parties shall comply with all
material provisions of its Articles of Organization or Articles
of Incorporation (as the case may be).
SECTION 5.8. Prohibition on Fundamental Changes and
Disposition of Assets. (a) Neither of the Mobile Energy Parties
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shall enter into any transaction of merger or consolidation,
change its form of organization, liquidate or dissolve itself (or
suffer any liquidation or dissolution). Neither of the Mobile
Energy Parties shall purchase or otherwise acquire all or
substantially all of the assets of any other Person.
(b) Neither of the Mobile Energy Parties shall amend,
modify or otherwise change its Articles of Organization or its
Articles of Incorporation (as the case may be) in any manner that
would reasonably be expected to have a Material Adverse Effect or
that alters or supersedes any of the provisions of such
organizational documents concerning (i) nature of business, (ii)
the requirement of an independent director (with respect to
Mobile Energy), (iii) the Manager of the Company, (iv) unanimous
votes for certain matters, (v) commingling of funds and (vi)
maintaining separateness and observing corporate or other entity
formalities.
(c) Except as contemplated by the Financing Documents,
neither of the Mobile Energy Parties shall sell, lease (as
lessor) or transfer (as transferor) any property or assets
material to the operation of the Energy Complex except in the
ordinary course of business to the extent that such property is
worn out or is no longer useful or necessary in connection with
the operation of the Energy Complex; provided, however, that to
the extent the aggregate fair market value of all sales, leases
and transfers in any Fiscal Year exceeds $2,000,000 (multiplied
by the GDPIPD Factor), neither of the Mobile Energy Parties shall
be permitted to sell, lease or transfer any of such property or
assets during the remainder of such Fiscal Year unless the
Company delivers an Officer's Certificate to the Trustee and the
Collateral Agent (together with an Independent Engineer
Confirmation) to the effect that such property or assets is worn
out or is no longer useful or necessary in connection with the
operation of the Energy Complex; provided further, however, that
notwithstanding anything in this Section 5.8 to the contrary,
Mobile Energy shall be permitted to transfer its ownership
interests in the Company, subject only to Section 8.1(k).
SECTION 5.9. Transactions with Affiliates. Neither of the
Mobile Energy Parties shall enter into or permit the Operator to
enter into any Contract related to the Energy Complex with any of
its Affiliates, other than (a) the Project Documents entered into
as of the Closing Date and, in the case of Mobile Energy, the
Southern Master Tax Sharing Agreement, (b) transactions in the
ordinary course of business on fair and reasonable terms no less
favorable to either of the Mobile Energy Parties or to the
Operator (as the case may be) than either of the Mobile Energy
Parties or the Operator (as the case may be) would obtain in an
arm's length transaction with a Person that is not an Affiliate
thereof (it being understood that transactions involving the
provision of goods or services to either of the Mobile Energy
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Parties or the Operator in exchange for reimbursement of costs
and expenses (including reasonably allocated overhead expenses)
shall be deemed to be in compliance with this Section 5.9), (c)
transactions or Contracts involving Affiliate Subordinated Debt
(to the extent such Affiliate Subordinated Debt constitutes
Permitted Indebtedness) and (d) transactions or Contracts
involving the provision of goods or services to either of the
Mobile Energy Parties in exchange for Subordinated Fees.
SECTION 5.10. Amendments to Project Documents. (a) The
Company shall not terminate, amend, replace or otherwise modify
(other than any such amendments or modifications that are
immaterial or any such replacement entered into in satisfaction
of the Event of Default Alternative Agreement Requirements) any
of the Project Contracts to which it is a party (other than any
such Project Contracts that are immaterial), unless the Company
delivers to the Trustee an Officer's Certificate, together with
an Independent Engineer Confirmation, certifying that (i) such
termination, amendment, replacement, modification or addition
would not reasonably be expected to have a Material Adverse
Effect or (ii) such termination, amendment, replacement,
modification or addition is reasonably required to comply with
Law or any Governmental Approval and would not have a Material
Adverse Effect in light of the consequences of not terminating,
amending, replacing, modifying or adding such Project Contract.
Promptly upon the execution of any replacement or additional
Project Contract, the Company shall take all actions necessary to
grant the Collateral Agent (A) an assignment of the Company's
rights under such Project Contract (including causing each
Project Participant (other than the Mobile Energy Parties) party
thereto to execute and deliver to the Collateral Agent a Consent
to Assignment having terms no less favorable to the Collateral
Agent and the Holders than (1) in the case of a replacement
Project Contract, the Consent to Assignment delivered to the
Collateral Agent in respect of the Project Contract being
replaced and (2) in the case of an additional Project Contract,
the form of Consent to Assignment attached as Exhibit ( ) to the
Intercreditor Agreement) and (B) a Lien on all property interests
acquired by the Company in connection therewith (perfected to the
extent such Lien can be perfected by filing a mortgage or fixture
filing under local law or a financing statement under the Uniform
Commercial Code, provided that no such assignment or Lien shall
be required with respect to equipment financed with purchase
money obligations permitted under this Indenture if prohibited by
the terms of such purchase money obligations).
(b) Without the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Securities, the
Mobile Energy Parties shall not terminate, amend, replace or
otherwise modify any of the Financing Documents to which neither
the Collateral Agent nor the Trustee is a party (other than the
Working Capital Facility) unless the Company delivers to the
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Trustee an Officer's Certificate, together with an Independent
Engineer Confirmation, certifying that such termination,
amendment, replacement or modification would not reasonably be
expected to reduce the likelihood of payment on the Outstanding
Securities or otherwise materially and adversely affect the
Holders of the Outstanding Securities.
SECTION 5.11. Performance Under Project Contracts. The
Company shall perform all covenants, undertakings, stipulations
and provisions contained in each Project Contract to which
neither the Trustee nor the Collateral Agent is a party, except
to the extent that the failure to so perform would not reasonably
be expected to have a Material Adverse Effect.
SECTION 5.12. Annual Budget. The Company shall submit to
the Independent Engineer, in draft form and detailed by month, an
operating plan and budget with respect to the Energy Complex (a)
on or prior to the Closing Date covering the period from the
Closing Date through the end of the Fiscal Year in which the
Closing Date occurs (unless such period consists of less than
five (5) months, in which case through the end of the immediately
succeeding Fiscal Year) and (b) sixty (60) days prior to the
commencement of each Fiscal Year commencing after the Closing
Date covering such Fiscal Year (each such budget, an "Annual
Budget"). Each Annual Budget shall specify the estimated project
revenues, the estimated rates and revenues for each category of
Processing Services, all Operation and Maintenance Costs and a
maintenance plan covering all projected Maintenance Expenditures
required during a period of seventeen (17) Fiscal Quarters
commencing with the first Fiscal Quarter covered by such Annual
Budget (the "Maintenance Plan"). Each Annual Budget shall also
include, solely for informational purposes and based upon
projections prepared by the Company in accordance with Section
1.15, the projected Senior Debt Service Coverage Ratio for the
Fiscal Year then ending and the immediately succeeding Fiscal
Year. The Independent Engineer shall provide its comments, if
any, to the Company within thirty (30) days of its receipt of the
proposed Annual Budget and the Company shall incorporate the
Independent Engineer's reasonable suggestions into a final Annual
Budget, which shall then be provided to the Collateral Agent.
If, after reasonable efforts, the Company and the Independent
Engineer cannot agree on a final Annual Budget, the Company may
invoke the Third Party Engineer Dispute Resolution as set forth
in Section 11.2 of the Intercreditor Agreement. If a final
Annual Budget for a given Fiscal Year is not established by the
process described above by the end of the prior Fiscal Year, the
Annual Budget for such Fiscal Year shall, until a final Annual
Budget is so established, be deemed to consist of the previous
year's Annual Budget, escalated at the GDPIPD for the previous
Fiscal Year; provided, however, that with respect to any Fiscal
Year that a final Annual Budget has not been established, the
Company may, with the Independent Engineer's reasonable approval,
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amend the prior Fiscal Year's Annual Budget to make reasonable
and adequate provision for scheduled Maintenance Expenditures.
The Company shall operate and maintain the Energy Complex, or
cause the Energy Complex to be operated and maintained, in
accordance with such final Annual Budget as approved by the
Independent Engineer, other than deviations resulting from
dispatch and other operating requirements, provided that any
deviations that would reasonably be expected to result in a
Material Adverse Effect shall be approved by the Independent
Engineer as being reasonably necessary to comply with Project
Contracts or for operation of the Energy Complex in compliance
with Prudent Plant Operating Standards, and provided further that
withdrawals from the Operating Account in any Fiscal Year not in
excess of one hundred ten percent (110%) of the aggregate amount
of Operation and Maintenance Costs (other than Maintenance
Expenditures) set forth in the Annual Budget for such Fiscal Year
shall be deemed not to reasonably be expected to have a Material
Adverse Effect. Each Annual Budget and the Maintenance Plan may
be amended, restated, supplemented or otherwise modified from
time to time, at the request of the Company with the approval of
the Independent Engineer.
SECTION 5.13. Insurance Reports. Not later than thirty (30)
days prior to the expiration of any insurance required to be
maintained by the Company pursuant to the Project Documents, the
Company shall submit to the Trustee an Officer's Certificate
certifying that such insurance (a) has been renewed or replaced
and will continue in full force and effect and all premiums for
such renewal or replacement term have been fully paid, together
with evidence of such renewal or replacement, or (b) will not be
required to be maintained pursuant to the Project Documents
following its expiration. Within thirty (30) days after the end
of each Fiscal Year, the Company shall submit to the Trustee an
Officer's Certificate (accompanied by a certificate signed by the
Independent Insurance Advisor) (i) listing all insurance being
carried by, or on behalf of, the Company pursuant to the Project
Documents and (ii) certifying that all insurance required to be
maintained pursuant to the Project Documents is in full force and
effect and all premiums therefor have been fully paid.
SECTION 5.14. Liens. Neither of the Mobile Energy Parties
shall create or suffer to exist or permit any Lien upon or with
respect to any of its properties other than Permitted Liens.
SECTION 5.15. Permitted Investments. Neither of the Mobile
Energy Parties shall make any investment other than Permitted
Investments.
SECTION 5.16. Indebtedness. Neither of the Mobile Energy
Parties shall create or incur or suffer to exist any Debt or
lease obligations other than Permitted Indebtedness.
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SECTION 5.17. Debt for Modifications; Replacement Debt;
Refunding Debt. The Company may incur Permitted Indebtedness to
be used for Required Modifications, Optional Modifications,
Replacement Debt and Refunding Debt provided that:
(a) the Company shall not issue Senior Debt for
Required Modifications or Optional Modifications unless (i)
such Senior Debt is issued under the Indenture or the Tax-
Exempt Indenture, (ii) the Company delivers to the Trustee
an Officer's Certificate (together with an Independent
Engineer Confirmation) certifying that (A) based upon
projections prepared by the Company in accordance with
Section 1.15, the average annual Senior Debt Service
Coverage Ratio (after giving effect to the proposed issuance
of such Senior Debt) through the final maturity date of the
Outstanding Securities is projected to be equal to or
greater than the lesser of (1) the then projected average
annual Senior Debt Service Coverage Ratio (without giving
effect to such proposed issuance) and (2) 1.25 to 1.0 (in
the case of Required Modifications) and 1.5 to 1.0 (in the
case of Optional Modifications), (B) in the case of Optional
Modifications, based upon projections prepared by the
Company in accordance with Section 1.15, the minimum annual
Senior Debt Service Coverage Ratio (after giving effect to
such proposed issuance) in each year through the final
maturity date of the Outstanding Securities is projected to
be equal to or greater than the lesser of (1) the then
projected minimum annual Senior Debt Service Coverage Ratio
(without giving effect to such proposed issuance) and (2)
1.35 to 1.0 and (C) (1) there will be no fundamental change
in the use of the Energy Complex as a result of such
proposed issuance, (2) the proceeds of such proposed
issuance, together with proceeds of additional equity funds
provided by the Company or of Subordinated Debt, will be
sufficient for the proposed purpose of such proposed
issuance and (3) in the case of Optional Modifications, the
proposed purpose of such proposed issuance will not impair
the operations or reliability of the Energy Complex, (iii)
the assets to be financed with such proposed issuance (and
all tangible and intangible rights related to the
construction, operation or ownership of such assets) will be
subject to the Lien of the Security Documents and (iv) in
the case of Optional Modifications, the Company provides to
the Trustee a letter from two of the Rating Agencies (then
currently rating the Outstanding Securities) confirming that
the issuance of such Senior Debt and the obligations to be
undertaken by the Company in connection with the facilities
to be constructed with the proceeds of such proposed
issuance will not, solely as a result thereof, result in
any downgrading of the rating on the Outstanding Securities.
(b) the Company shall not issue Senior Debt for
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Replacement Debt or Refunding Debt unless (i) such Senior
Debt is issued under the Indenture or the Tax-Exempt
Indenture, (ii) (A) monies in an amount sufficient to effect
payment of the principal of and premium, if any, and
interest on the Senior Debt to be redeemed are held in trust
or (B) U.S. Government Obligations in an amount sufficient
and having such terms and qualifications so as to defease
the Senior Debt to be redeemed in accordance with the
Indenture or the Tax-Exempt Indenture (as the case may be)
are held in trust, (iii) in the case of Replacement Debt,
the Company provides an Officer's Certificate to the Trustee
stating that (A) based upon projections prepared by the
Company in accordance with Section 1.15, the average annual
Senior Debt Coverage Ratio (after giving effect to the
proposed issuance of such Senior Debt and the repayment or
defeasance of any Tax-Exempt Indenture Securities occasioned
thereby) through the final maturity date of the Outstanding
Securities is projected to be equal to or greater than the
lesser of (1) the then projected average annual Senior Debt
Service Coverage Ratio (without giving effect to such
proposed issuance) and (2) 1.25 to 1.0 and (iv) in the case
of Refunding Debt, the Company delivers to the Trustee an
Officer's Certificate (together with an Independent Engineer
Confirmation) certifying that, based upon projections
prepared by the Company in accordance with Section 1.15, (A)
the projected Senior Debt Service Requirement (after giving
effect to the proposed issuance of such Senior Debt) will
not exceed the projected Senior Debt Service Requirement
immediately prior to such proposed issuance by more than ten
percent (10%) for any Fiscal Year through the final maturity
of the Outstanding Securities and (B) either (1) the
projected average Senior Debt Service Requirement (after
giving effect to the proposed issuance of such Senior Debt)
will not exceed the average Senior Debt Service Requirement
(without giving effect to such proposed issuance) or (2) the
minimum annual Senior Debt Service Coverage Ratio (after
giving effect to the proposed issuance of such Senior Debt)
in each year through the final maturity date of the
Outstanding Securities is projected to be equal to or
greater than 1.35 to 1.0 and the projected average annual
Senior Debt Service Coverage Ratio (after giving effect to
the proposed issuance of such Senior Debt) through the final
maturity date of the Outstanding Securities is projected to
be equal to or greater than 1.5 to 1.0.
(c) the Company shall not issue Subordinated Debt for
Required Modifications unless the Company delivers to the
Trustee an Officer's Certificate (together with an
Independent Engineer Confirmation) certifying that, based
upon projections prepared by the Company in accordance with
Section 1.15, the average Total Debt Service Coverage Ratio
(after giving effect to the proposed issuance of such
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Subordinated Debt) through the final maturity of the
Outstanding Securities is projected to be (i) equal to or
greater than 1.15 to 1.0 or (ii) equal to or greater than
1.0 to 1.0 if the Trustee does not, within sixty (60) days
of notice to the holders of the Senior Debt setting forth a
description of the Required Modification to be made with the
proceeds of such Subordinated Debt and such projected
average Total Debt Service Coverage Ratio, receive a written
notice from the Collateral Agent attaching Senior Creditor
Certificates representing a majority in principal amount of
the Combined Exposure not to permit such proposed issuance;
provided, however, that if the Company proposes to issue
Subordinated Debt for Required Modifications other than as
described in clause (ii) above, and such projected average
Total Debt Service Coverage Ratio (after giving effect to
such proposed issuance) is less than 1.25 to 1.0, such
additional Subordinated Debt shall not be issued unless the
Company provides proceeds of additional equity funds or of
Affiliate Subordinated Debt such that the ratio of such
additional equity (including the Affiliate Subordinated
Debt) to total funds used for the Required Modifications is
equal to or greater than the ratio of the Company's equity
to total capitalization on the Closing Date.
(d) the Company shall not issue Subordinated Debt for
Optional Modifications unless (i) the Company delivers to
the Trustee an Officer's Certificate (together with an
Independent Engineer Confirmation) certifying that such
proposed Optional Modifications (A) are not reasonably
likely to result in a Material Adverse Effect, (B) are
technically feasible and (C) are not reasonably expected to
materially and adversely affect the operation or reliability
of the Energy Complex and (ii) the Company provides to the
Trustee a letter from two Rating Agencies (then currently
rating the Outstanding Securities) confirming that the
proposed issuance of such Subordinated Debt and the
obligations to be undertaken by the Company in connection
with the facilities to be constructed with the proceeds of
such Subordinated Debt will not, solely as a result thereof,
result in any downgrading on the Outstanding Securities.
SECTION 5.18. Application of Proceeds from Sale of
Securities. (a) Promptly upon receipt by the Company of the
proceeds from the sale of the First Mortgage Bonds, the Company
shall (i) apply $190,000,000 to repay to Southern a bridge loan
in the principal amount of $190,000,000, (ii) apply $( ) to
return to Southern certain paid-in capital, (iii) apply $( )
to repay to Southern Electric amounts advanced to pay certain
costs associated with the acquisition of the Energy Complex from
Scott and certain Project Costs incurred in accordance with the
Capital Budget, (iv) transfer $( ) to the Collateral Agent
for deposit into the Completion Account to finance Project Costs
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in accordance with the Capital Budget, (v) apply $( ) for the
payment of certain development and start-up costs, (vi) apply $(
) to pay certain financing costs incurred in connection with
the transactions contemplated by the Financing Documents,
including certain financing costs incurred in connection with the
offering of the Tax-Exempt Bonds, and (vi) apply $( ) to pay
breakage costs in connection with the termination of the interest
hedging arrangements entered into in connection with the
acquisition of the Energy Complex from Scott.
(b) Promptly upon receipt by the Company of the proceeds
from any sale of Securities (other than the First Mortgage Bonds)
of any series (net of any underwriting commission) for purposes
of (i) financing Optional Modifications or Required
Modifications, the Company shall deposit all such proceeds into
the Optional Modifications Subaccount or the Required
Modifications Subaccount (as the case may be) for application in
accordance with the Intercreditor Agreement or (ii) Replacement
Debt or Refunding Debt (as the case may be), the Company shall
apply such proceeds for such purposes.
SECTION 5.19. Restricted Payments. (a) The Company shall
not make any Restricted Payments unless, in the case of any
Restricted Payment proposed to be made on a Distribution Date,
the Company delivers an Officer's Certificate to the Collateral
Agent certifying that as of such Distribution Date (i) no Event
of Default has occurred and is continuing, and no breach of this
Section 5.19 then exists (whether or not such breach is a matured
Event of Default), (ii) the Company is not insolvent and would
not be rendered insolvent by the making of such proposed
Restricted Payment and no Bankruptcy Event has occurred and is
continuing in respect of either of the Mobile Energy Parties,
(iii) no ESA Blockage Event with respect to the Pulp Mill Owner
or its Energy Services Agreement or its Mill has occurred and is
continuing, (iv) the provisions of the Indenture, the
Intercreditor Agreement and the Tax-Exempt Indenture relating to
the funding of the Accounts established thereunder have been
complied with as of such Distribution Date, and amounts on
deposit in the Debt Service Reserve Account are equal to the Debt
Service Reserve Account Required Balance, amounts on deposit in
the Tax-Exempt Debt Service Reserve Account are equal to the Tax-
Exempt Debt Service Reserve Account Required Balance and amounts
on deposit in each of the other Accounts are equal to the then
required balances, (v) no Mill Owner is then exercising Mill
Owners Step-In Rights and (vi) neither of the Mobile Energy
Parties shall be subject to regulation as to rates, nor shall the
revenues or other amounts received or receivable by the Company
for the use of Processing Services or other services and
facilities of the Energy Complex be subject to regulation, in
either case by any Governmental Authority having jurisdiction
over either of the Mobile Energy Parties under Federal, state or
local law, unless the Company has provided a Revenue Sufficiency
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Certification (based upon and after giving effect to such
regulation) to the Trustee upon the earlier of (A) the issuance
of a binding order (which shall be final and not subject to
review on appeal) of such Governmental Authority to the effect
that either of the Mobile Energy Parties, or such revenues or
other amounts, shall be subject to such regulation and (B) the
application of regulation as to the rates, or revenues or other
amounts, received or receivable by the Company, including the
imposition of any order or other action by a Governmental
Authority to the effect that revenues and other amounts received
or receivable by the Company shall be subject to refund.
(b) The Company shall not make any Restricted Payments
permitted pursuant to Section 5.19(a) on any Distribution Date
unless the Company provides an Officer's Certificate to the
Collateral Agent certifying that as of such Distribution Date (i)
the average Senior Debt Service Coverage Ratio for the two semi-
annual payment periods immediately preceding such Distribution
Date was equal to at least 1.25 to 1 and (ii) based upon
projections prepared by the Company in accordance with Section
1.15 (which projections shall, at the request of the Collateral
Agent be reviewed by the Independent Engineer if the Senior Debt
Service Coverage Ratio referred to below is less than 1.30 to 1),
the average Senior Debt Service Coverage Ratio for the current
semi-annual payment period and the next succeeding semi-annual
payment period is projected to be at least 1.25 to 1; provided,
however, that notwithstanding the requirements of this Section
5.19(b), the Company shall be permitted to make Restricted
Payments solely to fund an Income Tax Deficiency if the Company
provides an Officer's Certificate to the Collateral Agent stating
that (A) the average Senior Debt Service Coverage Ratio for the
two semi-annual payment periods immediately prior to the
Distribution Date was equal to at least 1.10 to 1 and (B) based
upon projections prepared by the Company in accordance with
Section 1.15, the average Senior Debt Service Coverage Ratio for
the current semi-annual payment period and the next succeeding
semi-annual payment period is projected to be at least 1.10 to 1;
provided further, however, that the historical tests set forth in
clause (i) of this Section 5.19(b) and in clause (A) of the
immediately preceding proviso (1) are not required to be
satisfied on the first Distribution Date following the Closing
Date and (2) are required to be satisfied only for the semi-
annual payment immediately preceding such Distribution Date on
the second Distribution Date following the Closing Date.
SECTION 5.20. Casualty Proceeds; Eminent Domain Proceeds.
The Company shall cause all Casualty Proceeds and Eminent Domain
Proceeds to be deposited into the Loss Proceeds Account and
applied in accordance with the provisions of this Indenture and
the Intercreditor Agreement.
SECTION 5.21. Benefit Plan Liabilities. Neither of the
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Mobile Energy Parties shall, nor shall they permit any Person who
is a member of a controlled group of corporations, or a group of
trades or businesses under common control with the Company
(within the meaning of Section 414 of the Code) to, (a) fail to
fulfill its obligations under or to comply in any material
respect with the requirements of ERISA or the Code with respect
to any employee benefit plans, (b) seek a waiver of the minimum
funding standard of Section 412 of the Code, (c) fail to make any
contribution or payment to or in respect of any employee benefit
plan required to be made by Law or by the terms of such plan, (d)
make any amendment to any employee benefit plan that has resulted
or could result in the imposition of a lien or the posting of a
bond or other security under ERISA or the Code or (e) incur any
liability under Title IV of ERISA other than a liability to the
Pension Benefit Guaranty Corporation for premiums under Section
4007 of ERISA, if as a result of such event or conditions set
forth in clauses (a) through (e) above, together with all such
other events and conditions, either of the Mobile Energy Parties
or any other member of such controlled group shall incur or be
reasonably likely to incur a liability that is material in
relation to the financial position of such Mobile Energy Party.
ARTICLE VI.
REDEMPTION AND PREPAYMENT OF SECURITIES
SECTION 6.1. Applicability of Article. Securities of any
series that are subject to redemption or prepayment before their
Stated Maturity (or, if the principal of the Securities of any
series is payable in installments, the Stated Maturity of the
final installment of the principal thereof) shall be redeemed or
prepaid in accordance with their terms and (except as otherwise
specified in the Series Supplemental Indenture creating such
series) in accordance with this Article VI.
SECTION 6.2. Election to Redeem or Prepay; Notice to
Trustee. The election or requirement of the Company to redeem or
prepay any Securities otherwise than through a Sinking Fund shall
be evidenced by a Company Order. If the Company determines or is
required to redeem or prepay any Securities, the Company shall,
at least fifteen (15) days prior to the date upon which notice of
redemption or prepayment is required to be given to the Holders
pursuant to Section 6.4 hereof (unless a shorter notice period
shall be satisfactory to the Trustee), deliver to the Trustee a
Company Order specifying the date on which such redemption or
prepayment shall occur (a "Redemption Date" or "Prepayment Date,"
as the case may be) and the series and principal amount of
Securities to be redeemed or prepaid. In the case of any
redemption or prepayment of Securities (a) prior to the
expiration of any restriction on such redemption or prepayment
provided in the terms of such Securities, the Series Supplemental
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Indenture relating thereto or elsewhere in this Indenture or (b)
pursuant to an election of the Company that is subject to a
condition specified in the terms of such Securities or in the
Series Supplemental Indenture relating thereto, the Company shall
furnish the Trustee with an Officer's Certificate and Opinion of
Counsel evidencing compliance with such restriction or condition.
SECTION 6.3. Optional Redemption; Mandatory Redemption;
Prepayment; Selection of Securities to Be Redeemed or Prepaid.
(a) The Securities of any series shall be subject to redemption
from time to time at the option of the Company only as provided
in the Series Supplemental Indenture relating thereto.
(b) Unless otherwise provided in a Series Supplemental
Indenture, all Outstanding Securities shall be redeemed prior to
maturity, as a whole, at a redemption price equal to the
principal amount thereof, together with any interest on the
principal amount of the Securities accrued to the Redemption
Date, upon an Event of Loss or an Event of Eminent Domain if (i)
the determination is made in accordance with Section 3.10(c) of
the Intercreditor Agreement that neither the Energy Complex nor
any portion thereof can be rebuilt, repaired, restored or
replaced with a Replacement Facility (subject to the conditions
specified in the Intercreditor Agreement) or that the Casualty
Proceeds or the Eminent Domain Proceeds (as the case may be) in
respect thereof, together with other monies that are available to
the Company for such rebuilding, repair, restoration or
replacement, are not sufficient to permit such rebuilding,
repair, restoration or replacement or (ii) if (A) the monies on
deposit in the Loss Proceeds Account, together with all other
monies available to the Company, are sufficient to redeem all
Senior Debt, (B) all or substantially all of the Energy Complex
is destroyed or taken, (C) the Company elects not to rebuild,
repair, restore or replace the Energy Complex and (D) the Company
provides an Officer's Certificate to the Trustee and the
Collateral Agent certifying that the Company is not otherwise
required under the Master Operating Agreement or the Lease to
rebuild, repair, restore or replace the Energy Complex, or to
apply Loss Proceeds to the rebuilding, repairing, restoration or
replacement or the Energy Complex (which certification shall be
confirmed by an Opinion of Counsel to such effect). All Casualty
Proceeds or Eminent Domain Proceeds (as the case may be) received
by the Trustee from the Collateral Agent pursuant to Section
6.2(a) of the Intercreditor Agreement with respect to such Event
of Loss or Event of Eminent Domain (as the case may be) shall be
deposited into the Indenture Securities Redemption Subaccount and
applied by the Trustee to the redemption of all Outstanding
Securities pursuant to this Section 6.3(b).
Any redemption pursuant to this Section 6.3(b) shall be made
within ninety (90) days after the receipt by the Trustee of the
Casualty Proceeds or Eminent Domain Proceeds (as the case may be)
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from the Collateral Agent.
(c) The Outstanding Securities shall be partially redeemed,
ratably among all outstanding series and maturities, prior to
maturity at a redemption price equal to the principal amount
thereof, together with any interest on the principal amount of
the Outstanding Securities accrued to the Redemption Date, upon
completion of the rebuilding, repair, restoration or replacement
of the Energy Complex following an Event of Loss or an Event of
Eminent Domain where a determination is made that the Energy
Complex or any portion thereof can be rebuilt, repaired, restored
or replaced with a Replacement Facility and that the Company has
sufficient monies available for such rebuilding, repair,
restoration or replacement. The foregoing provisions of this
Section 6.3(c) may be altered in a Series Supplemental Indenture,
but such altered provisions shall not be effective while any
Securities Outstanding as of the date of such Series Supplemental
Indenture remain outstanding.
The aggregate amount of Securities to be redeemed shall be
equal to the amount made available to the Trustee for such
purpose pursuant to Section 6.2(b) of the Intercreditor
Agreement, which (subject to certain exceptions specified
therein) shall be equal to the ratable share of the Securities
(based upon the principal amount of then Outstanding Senior
Securities plus, if the committed availability under the Working
Capital Facility was reduced in connection with such Event of
Loss or Event of Eminent Domain (as the case may be), the lesser
of (i) the principal amount of Working Capital Loans payable as a
result of such reduction and (ii) the principal amount of Working
Capital Loans then outstanding thereunder) of the amount by which
all of the Casualty Proceeds or Eminent Domain Proceeds (as the
case may be) received in respect of such Event of Loss or Event
of Eminent Domain exceeds the total cost of such rebuilding,
repair, restoration or replacement. All Casualty Proceeds or
Eminent Domain Proceeds so made available to the Trustee shall be
deposited into the Indenture Securities Redemption Subaccount and
applied by the Trustee to the redemption of such Securities
pursuant to this Section 6(c); provided, however, that if the
amount by which all of the Casualty Proceeds or Eminent Domain
Proceeds (as the case may be) in respect of such Event of Loss or
Event of Eminent Domain exceeds the total cost of such
rebuilding, repair, restoration or replacement is less than
$3,000,000, then the amount of such excess shall be transferred
pursuant to the last sentence of Section 6.2(b) of the
Intercreditor Agreement and, to the extent that any amounts are
made available to the Trustee pursuant to clause (ii) of such
last sentence, the Trustee shall deposit such amounts into the
Indenture Securities Principal Subaccount to be applied to the
payment or redemption of Securities at the earliest date
permitted by the terms thereof.
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Any redemption pursuant to this Section 6.3(c) shall be made
within ninety (90) days after the receipt by the Trustee of such
Casualty Proceeds or Eminent Domain Proceeds (other than such
proceeds transferred to the Indenture Securities Redemption
Subaccount) (as the case may be).
(d) Except as otherwise specified herein or in the Series
Supplemental Indenture relating to the Securities of a series, if
less than all the Securities of such series are to be redeemed or
prepaid pursuant to Section 6.3(a), the particular Securities of
such series to be redeemed or prepaid shall be selected by the
Trustee from the Outstanding Securities of such series not
previously called for redemption or prepayment in whole, by such
method (including by lot) as the Trustee shall deem fair and
appropriate, which may provide for the solicitation of portions
(equal to the minimum authorized denomination for Securities of
that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that
series.
(e) The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption or prepayment
and, in the case of any Securities to be redeemed or prepaid in
part, the principal amount thereof to be redeemed or prepaid.
(f) For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption or
prepayment of Securities shall relate, in the case of any
Securities redeemed or prepaid or to be redeemed or prepaid only
in part, to the portion of the principal amount of such
Securities that has been or is to be redeemed or prepaid.
SECTION 6.4. Notice of Redemption or Prepayment. Except as
otherwise specified in the Series Supplemental Indenture relating
to the Securities of a series to be redeemed or prepaid, notice
of redemption or prepayment (including any Sinking Fund
redemption pursuant to Article VII hereof) shall be given in the
manner provided in Section 1.6 to the Holders of Securities of
such series to be redeemed or prepaid at least thirty (30) days
but not more than sixty (60) days prior to the Redemption Date or
Prepayment Date (as the case may be). All notices of redemption
or prepayment shall state:
(a) the Redemption Date or Prepayment Date (as the
case may be);
(b) the premium payable on redemption or prepayment,
if any;
(c) if less than all the Outstanding Securities of any
series are to be redeemed or prepaid in whole, (i) the
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particular Securities of such series to be redeemed or
prepaid in whole, (ii) the portion of the principal amount
of each Security of such series to be redeemed or prepaid in
part and (iii) that, on and after the Redemption Date or
Prepayment Date (as the case may be), upon surrender of such
Security, a new Security or Securities of such series in
principal amount equal to the remaining unpaid principal
amount thereof will be issued;
(d) that on the Redemption Date or Prepayment Date (as
the case may be), interest thereon will cease to accrue on
and after such date;
(e) the Place or Places of Payment where such
Securities are to be surrendered for payment of the amount
in respect of such redemption or prepayment; and
(f) that such redemption is for a Sinking Fund, if
such is the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense
of the Company. The Company shall provide the Trustee with a
copy of the form of notice of redemption or prepayment of the
Securities at the time the Company delivers to the Trustee the
Company Order relating to such redemption or prepayment pursuant
to Section 6.2 hereof.
SECTION 6.5. Securities Payable on Redemption Date or
Prepayment Date. Notice of redemption or prepayment (as the case
may be) having been given as aforesaid, and the conditions, if
any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed or prepaid
shall, on the Redemption Date or Prepayment Date (as the case may
be), become due and payable, and from and after such date such
Securities or portions thereof shall cease to bear interest.
Upon surrender of any such Security for redemption or prepayment
in accordance with such notice, an amount in respect of such
Security or portion thereof shall be paid as provided therein;
provided, however, that any payment of interest on any Security
the Stated Maturity of which payment is on or prior to the
Redemption Date or Prepayment Date (as the case may be) shall be
payable to the Holder of such Security, or one or more
Predecessor Securities, registered as such at the close of
business on the related Regular Record Date according to the
terms of such Security and subject to the provisions of Section
2.10. If any Security called for redemption or prepayment shall
not be so paid upon surrender thereof for redemption or repayment
(as the case may be), the principal of and premium, if any, and
interest on such Security shall, until paid, bear interest from
the Redemption Date or the Prepayment Date (as the case may be)
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at the rate prescribed in the Security.
SECTION 6.6. Securities Redeemed or Prepaid in Part. Any
Security that is to be redeemed or prepaid only in part shall be
surrendered at a Place of Payment therefor (with, if the Company
or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Mobile Energy
Parties shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security
without service charge, a new Security or Securities of the same
series, of any authorized denomination requested by such Holder
and of like tenor and in aggregate principal amount equal to and
in exchange for the remaining unpaid principal amount of the
Security so surrendered.
ARTICLE VII.
SINKING FUNDS
SECTION 7.1. Applicability of Article. The provisions of
this Article VII shall be applicable to any sinking fund for the
retirement of the Securities of any series except as otherwise
specified in the Series Supplemental Indenture creating the
Securities of such series.
SECTION 7.2. Sinking Funds for Securities. Any Series
Supplemental Indenture may provide for a sinking fund for the
retirement of the Securities of the series created thereby
(hereinafter called a "Sinking Fund") in accordance with which
the Company will be required to redeem on the dates set forth
therein (hereinafter called "Sinking Fund Redemption Dates")
Securities of principal amounts set forth therein (hereinafter
called "Sinking Fund Requirements").
Except as otherwise specified in the Series Supplemental
Indenture relating to the Securities of a series, the particular
Securities of such series, if any, to be redeemed through a
Sinking Fund shall be selected in the manner provided in Section
6.3(d), and notice of such redemption shall be given in the
manner provided in Section 6.4.
ARTICLE VIII.
EVENTS OF DEFAULT; REMEDIES
SECTION 8.1. Events of Default. The term "Event of
Default," whenever used herein, shall mean any of the following
events (whatever the reason for such event and whether it shall
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be voluntary or involuntary or come about or be affected by
operation of law, or be pursuant to or in compliance with any
applicable Law), and such event shall continue to be an Event of
Default if and for so long as it shall not have been remedied:
(a) either of the Mobile Energy Parties shall fail to
pay any principal of or premium, if any, or interest on any
Security when the same becomes due and payable, whether by
scheduled maturity or required prepayment or by acceleration
or otherwise, for fifteen (15) or more days; or
(b) either of the Mobile Energy Parties shall fail to
perform or observe any covenant or agreement contained in:
(i) Section 5.4(e); (ii) Section 5.7(b) (insofar as such
failure relates to matters specified in Section 5.8(b)(iv));
(iii) Section 5.8(b) (other than clause (v) thereof); (iv)
Section 5.10; or (v) Section 5.19; or
(c) either of the Mobile Energy Parties shall fail to
perform or observe any covenant or agreement contained in:
(i) Section 5.2; (ii) Section 5.4(a); (iii) Section 5.5;
(iv) Section 5.7(a); (v) Section 5.7(b) (insofar as such
failure would reasonably be expected to have a Material
Adverse Effect or relates to matters specified in Section
5.8(b)(v)); (vi) Section 5.8; (vii) Section 5.13; (viii)
Section 5.14; (ix) Section 5.15; (x) Section 5.16; (xi)
Section 3(e), 3(f), 3(g), 3(h), 3(i) or 3(j) of the Security
Agreement; or (xii) Section 8, 10, 13, 14 or 15 of the
Mortgage; and, in the case of clauses (i) through (xii)
above, such failure shall continue uncured for thirty (30)
or more days after the Company has knowledge of such
failure; or
(d) either of the Mobile Energy Parties shall fail to
perform or observe any covenant or agreement contained in:
(i) Section 5.4(b); or (ii) Section 5.7(b) (insofar as such
failure relates to matters specified in Section 5.8(b)(i) or
5.8(b)(iii)); and, in the case of clauses (i) and (ii)
above, such failure continues for more than thirty (30) days
after either of the Mobile Energy Parties has knowledge of
such failure; provided, however, that if (and for so long as
an Authorized Officer of either of the Mobile Energy Parties
provides an Officer's Certificate certifying that) (A) such
failure is capable of being remedied and either of the
Mobile Energy Parties is diligently attempting to remedy
such failure, (B) no other Event of Default has occurred and
is continuing and (C) such failure would not have a Material
Adverse Effect, then either of the Mobile Energy Parties may
continue to effect such cure of the default for an
additional sixty (60) days; or
(e) either of the Mobile Energy Parties shall fail to
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perform or observe any material covenant or agreement to be
performed or observed by it under the provisions of this
Indenture, the Security Agreement or the Mortgage (other
than those referred to in Sections 8.1(a), (b), (c) and (d))
and such failure shall continue uncured for thirty (30) or
more days after either of the Mobile Energy Parties has
knowledge of such failure; provided, however, that if (and
for so long as an Authorized Officer of either of the Mobile
Energy Parties provides an Officer's Certificate certifying
that) (i) such failure is capable of being remedied and
either of the Mobile Energy Parties is diligently attempting
to remedy such failure and (ii) no other Event of Default
has occurred and is continuing, then either of the Mobile
Energy Parties may continue to effect such cure of the
default for an additional one hundred twenty (120) days; or
(f) any representation or warranty made by either of
the Mobile Energy Parties herein or in any other Financing
Document or in any certificate, financial statement or other
document furnished to the Trustee or the Collateral Agent
hereunder or thereunder shall prove to have been false or
misleading in any respect as of the time made, confirmed or
furnished and the inaccuracy has resulted or would
reasonably be expected to result in a Material Adverse
Effect and (if capable of being cured) such
misrepresentation shall continue uncured for thirty (30) or
more days from the discovery thereof; provided, however,
that if (and for so long as an Authorized Officer of either
of the Mobile Energy Parties provides an Officer's
Certificate certifying that) (i) such failure is capable of
being remedied and either of the Mobile Energy Parties is
diligently attempting to remedy such misrepresentation and
(ii) no other Event of Default has occurred and is
continuing, either of the Mobile Energy Parties may continue
to effect such cure of the misrepresentation, and such
misrepresentation shall not be deemed an Event of Default,
for an additional sixty (60) days; provided further,
however, that if (and for so long as) (A) an Authorized
Officer of either of the Mobile Energy Parties provides an
Officer's Certificate certifying that such misrepresentation
will not have a Material Adverse Effect and (B) the Trustee
consents thereto, then the either of the Mobile Energy
Parties may continue to effect such cure of the
misrepresentation beyond such additional sixty (60) days; or
(g) either of the Mobile Energy Parties shall fail to
perform any obligation in respect of any Debt in an amount
exceeding $5,000,000 and acceleration shall be declared with
respect to such Debt; or
(h) with respect to any Project Contract to which the
Company is a party: (i) such Project Contract is declared
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unenforceable by a Governmental Authority; (ii) any other
party thereto terminates such Project Contract prior to its
stated expiration or denies it has an obligation and
substantially ceases performance thereunder (other than, in
either case, in connection with a Mill Closure with respect
to the Tissue Mill or the Paper Mill, if the Company has
provided the Revenue Sufficiency Certification to the
Collateral Agent); or (iii) any other party thereto defaults
in respect of its obligations under such Project Contract;
and, in the case of any event described in clauses (i), (ii)
and (iii) above (other than with respect to the Pulp Mill
Energy Services Agreement), such event would result in a
Material Adverse Effect; provided, however, that none of
such events shall be an Event of Default hereunder if within
one hundred eighty (180) days from the occurrence of such an
event, the Company shall have provided an Officer's
Certificate certifying, together with an Independent
Engineer Confirmation, to the Trustee that (A) such Project
Contract and (if such Project Contract is an Energy Service
Agreement) the applicable Mill Owner's obligations under the
Master Operating Agreement have been reinstated on identical
terms pursuant to the provisions of the Master Operating
Agreement, provided that if the obligor thereunder is
different from the obligor prior to such reinstatement, such
obligor is reasonably capable of performing its obligations
under such Project Contract or (B) the Company has satisfied
the Event of Default Alternative Agreement Requirements with
respect to such Project Contract; or
(i) (i) an Event of Default under any Working Capital
Facility shall have occurred and be continuing and shall not
have been waived by the Working Capital Facility Provider;
(ii) an Event of Default under the Tax-Exempt Indenture
shall have occurred and be continuing and shall not have
been waived by the Tax-Exempt Trustee; or (iii) an Event of
Default under any Security Document shall have occurred and
be continuing and shall not have been waived; or
(j) a final and non-appealable judgment or judgments
for the payment of money in an aggregate amount in excess of
$5,000,000 shall be rendered against either of the Mobile
Energy Parties, and the same shall not be stayed or
discharged within thirty (30) days from the date of entry
thereof; or
(k) at any time Southern shall fail to (i) continue to
control, directly or indirectly, the management and
operations of the Company (except if necessary to comply
with applicable regulatory restrictions, including (if the
Company elects, or the Members elect, to qualify the Energy
Complex as a Qualifying Facility under PURPA) those imposed
on Qualifying Facilities under PURPA and the rules
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promulgated thereunder) or (ii) maintain ownership, directly
or indirectly, of at least fifty percent (50%) of the
ownership interests in the Company; or
(l) at any time the Company shall fail to maintain
Southern Electric or an Affiliate thereof as Operator,
unless the Company provides a letter from any two Rating
Agencies (then currently rating the Outstanding Securities)
confirming that the rating of such Securities will not be
adversely affected by such failure; or
(m) any grant of a Lien contained in the Security
Documents shall cease to be effective to grant a perfected
Lien to the Collateral Agent, the Trustee or the Tax-Exempt
Trustee (as the case may be) on the Collateral described
therein with the priority purported to be created thereby;
provided, however, that the Company shall have ten (10) days
from actual knowledge or constructive knowledge thereof to
cure any such cessation; or
(n) a Bankruptcy Event in respect of either of the
Mobile Energy Parties shall have occurred and be continuing;
or
(o) if any Southern Guaranty is in effect with respect
to any Reserve Account Security Account, a Bankruptcy Event
in respect of Southern shall have occurred and be
continuing, unless a Reserve Account Letter of Credit or
cash in the amount of the then Available Amount under such
Southern Guaranty is provided within fifteen (15) days of
such Bankruptcy Event; or
(p) the failure by Southern to perform any of the
"Guaranteed Obligations" under any Southern Guaranty and
such failure shall continue for fifteen (15) or more days.
SECTION 8.2. Enforcement of Remedies. If one or more
Events of Default shall have occurred and be continuing, then:
(a) in the case of an Event of Default described in
Section 8.1(n) (an "Automatic Acceleration Default"), the
entire principal amounts of the Securities Outstanding, all
interest accrued and unpaid thereon, and all premium and
other amounts payable under the Securities and this
Indenture, if any, shall automatically become due and
payable without presentment, demand, protest or notice of
any kind, all of which are hereby waived; or
(b) (i) in the case of an Event of Default described
in Section 8.1(a), upon the direction of the Holders of not
less than twenty-five percent (25%) in aggregate principal
amount of the Outstanding Securities or (ii) in the case of
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an Event of Default described in Sections 8.1(b) through
(m), (o) or (p), upon the direction of the Holders of not
less than 33 % in aggregate principal amount of the
Outstanding Securities, the Trustee shall, by notice to the
Company (with a copy to Mobile Energy), declare the entire
principal amounts of the Securities Outstanding, all
interest accrued and unpaid thereon, and all premium and
other amounts payable under the Securities and this
Indenture, if any, to be due and payable, whereupon the
same shall become due and payable without presentment,
demand, protest or further notice of any kind, all of which
are hereby waived.
If an Event of Default occurs and is continuing and is known
to a Responsible Officer of the Trustee, the Trustee shall mail
to each Holder a notice of the Event of Default within thirty
(30) days after the occurrence thereof. Except in the case of an
Event of Default in payment of principal of or interest on any
Security, the Trustee may withhold the notice to the Holders if a
committee of its Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders.
In addition, if the Event of Default described in Section
8.1(a) above shall have occurred and be continuing, the Trustee
may accelerate the maturity of the Securities as provided in
clause (b) of Section 8.2 notwithstanding the absence of
direction from the Holders if in the judgment of the Trustee such
action is necessary to protect the interests of the Holders.
At any time after the principal of the Securities shall have
become due and payable upon an acceleration as provided herein,
and before any judgment or decree for the payment of the money so
due, or any portion thereof, shall be entered, such declaration
and its consequences shall be deemed to be rescinded and annulled
if:
(a) there shall have been paid to or deposited with
the Trustee a sum sufficient to pay
(i) all overdue installments of interest on the
Securities,
(ii) the principal of and premium, if any, on
any Securities that have become due otherwise than by
such declaration of acceleration and interest thereon
at the respective rates provided in the Securities for
late payments of principal or premium,
(iii) to the extent that payment of such
interest is lawful, interest upon overdue installments
of interest at the respective rates provided in the
Securities for late payments of interest, and
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(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel, and
(b) all Events of Default, other than the non-payment
of the principal of the Securities that has become due
solely by such acceleration, have been cured or waived as
provided in Section 8.7.
No such rescission and annulment shall affect any subsequent
default or impair any right consequent thereon.
SECTION 8.3. Specific Remedies. If any Event of Default
shall have occurred and be continuing and an acceleration shall
have occurred pursuant to Section 8.2, subject to the provisions
of Sections 8.2, 8.5, 8.6 and 8.15, the Trustee, by such officer
or agent as it may appoint, may deliver notice to the Collateral
Agent in accordance with the Intercreditor Agreement requesting
that the Collateral Agent sell, without recourse, for cash, or
credit or for other property, for immediate or future delivery,
and for such price or prices and on such terms as the Collateral
Agent in its discretion may determine, the Shared Collateral as
an entirety, or in such portions as the Holders of a majority in
aggregate principal amount of the Securities then Outstanding
shall request by an Act of Holders, or, in the absence of such
request, as the Trustee in its discretion shall deem expedient in
the interest of the Holders, at public or private sale.
SECTION 8.4. Judicial Proceedings Instituted by Trustee.
(a) Trustee May Bring Suit. If there shall exist an Event of
Default, then the Trustee, in its own name, and as trustee of an
express trust, subject to the provisions of Sections 2.14 and
8.2, shall be entitled and empowered to institute any suits,
actions or proceedings at law, in equity or otherwise, for the
collection of the sums so due and unpaid on the Securities, and
may prosecute any such claim or proceeding to judgment or final
decree, and may enforce any such judgment or final decree and
collect the monies adjudged or decreed to be payable in any
manner provided by law, whether before or after or during the
pendency of any proceedings for the enforcement of the Lien of
this Indenture, or of any of the Trustee's rights or the rights
of the Holders under this Indenture, and such power of the
Trustee shall not be affected by any sale hereunder or by the
exercise of any other right, power or remedy for the enforcement
of the provisions of this Indenture or for the foreclosure of the
Lien hereof.
(b) Trustee May Recover Unpaid Indebtedness after Sale of
Collateral. Subject to Section 2.14, in the case of a sale of
the Indenture Securities Collateral and of the application of the
proceeds of such sale to the payment of the indebtedness secured
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by this Indenture, the Trustee, in its own name, and as trustee
of an express trust, shall be entitled and empowered, by any
appropriate means, legal, equitable or otherwise, to enforce
payment of, and to receive all amounts then remaining due and
unpaid upon, all or any of the Securities, for the benefit of the
Holders thereof, and upon any other portion of the indebtedness
remaining unpaid, with interest at the rates specified in the
respective Securities on the overdue principal of and premium, if
any, and (to the extent that payment of such interest is legally
enforceable) on the overdue installments of interest.
(c) Recovery of Judgment Does Not Affect Lien of this
Indenture or Other Rights. No recovery of any such judgment or
final decree by the Trustee and no levy of any execution under
any such judgment upon any of the Indenture Securities
Collateral, or upon any other property, shall in any manner or to
any extent affect the Lien of this Indenture upon any of the
Indenture Securities Collateral, or any rights, powers or
remedies of the Trustee, or any liens, rights, powers or remedies
of the Holders, but all such liens, rights, powers or remedies
shall continue unimpaired as before.
(d) Trustee May File Proofs of Claim; Appointment of
Trustee as Attorney-in-Fact in Judicial Proceedings. The Trustee
in its own name, or as trustee of an express trust, or as
attorney-in-fact for the Holders, or in any one or more of such
capacities (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand for the payment of overdue
principal, premium, if any, or interest), shall be entitled and
empowered to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee and of the Holders (whether such claims be
based upon the provisions of the Securities or of this Indenture)
allowed in any equity, receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or any other judicial
proceedings relating to either of the Mobile Energy Parties or
any obligor on the Securities (within the meaning of the Trust
Indenture Act), the creditors of either of the Mobile Energy
Parties or any such obligor, the Indenture Securities Collateral
or any other property of either of the Mobile Energy Parties or
any such obligor and any receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel. The Trustee is hereby
irrevocably appointed (and the successive respective Holders of
the Securities, by taking and holding the same, shall be
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conclusively deemed to have so appointed the Trustee) the true
and lawful attorney-in-fact of the respective Holders, with
authority to (i) make and file in the respective names of the
Holders (subject to deduction from any such claims of the amounts
of any claims filed by any of the Holders themselves), any claim,
proof of claim or amendment thereof, debt, proof of debt or
amendment thereof, petition or other document in any such
proceedings and to receive payment of any amounts distributable
on account thereof, (ii) execute any such other papers and
documents and to do and perform any and all such acts and things
for and on behalf of such Holders, as may be necessary or
advisable in order to have the respective claims of the Trustee
and of the Holders against either of the Mobile Energy Parties or
any such obligor, the Indenture Securities Collateral or any
other property of the Mobile Energy Parties or any such obligor
allowed in any such proceeding and (iii) receive payment of or on
account of such claims and debt; provided, however, that nothing
contained in this Indenture shall be deemed to give to the
Trustee any right to accept or consent to any plan or
reorganization or otherwise by action of any character in any
such proceeding to waive or change in any way any right of any
Holder. Any monies collected by the Trustee under this Section
8.4 shall be applied as provided in Section 8.11.
(e) Trustee Need Not have Possession of Securities. All
proofs of claim, rights of action and rights to assert claims
under this Indenture or under any of the Securities may be
enforced by the Trustee without the possession of the Securities
or the production thereof at any trial or other proceedings
instituted by the Trustee. In any proceedings brought by the
Trustee (and also any proceedings involving the interpretation of
any provision of this Indenture to which the Trustee shall be a
party) the Trustee shall be held to represent all the Holders of
the Securities and it shall not be necessary to make any such
Holders parties to such proceedings.
(f) Suit to Be Brought for Ratable Benefit of Holders. Any
suit, action or other proceeding at law, in equity or otherwise
that shall be instituted by the Trustee under any of the
provisions of this Indenture shall be for the equal, ratable and
common benefit of all the Holders, subject to the provisions of
this Indenture.
(g) Trustee May Be Restored to Former Position and Rights
in Certain Circumstances. In case the Trustee shall have
instituted any proceeding to enforce any right, power or remedy
under this Indenture by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Trustee,
then and in every such case the Mobile Energy Parties and the
Trustee shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of the Trustee
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shall continue as if no such proceedings had been taken.
SECTION 8.5. Holders May Demand Enforcement of Rights by
Trustee. If an Event of Default shall have occurred and shall be
continuing, the Trustee shall, upon the written request of the
Holders of a majority in aggregate principal amount of the
Securities then Outstanding and upon the offering of indemnity as
provided in Section 9.3(e), but subject in all cases to the
provisions of Section 8.3, proceed to institute one or more
suits, actions or proceedings at law, in equity or otherwise, or
take any other appropriate remedy, to enforce payment of the
principal of or premium, if any, or interest on the Securities,
to foreclose the Lien of this Indenture or to deliver notice to
the Collateral Agent in accordance with the Intercreditor
Agreement requesting that the Collateral Agent foreclose the Lien
of the other Security Documents or to sell the Shared Collateral
under a judgment or decree of a court or courts of competent
jurisdiction or under the power of sale herein granted, or take
such other appropriate legal, equitable or other remedy, as the
Trustee, being advised by counsel, shall deem most effectual to
protect and enforce any of the rights or powers of the Trustee or
the Holders, or, in case such Holders shall have requested a
specific method of enforcement permitted hereunder, in the manner
requested, provided that such action shall not be otherwise than
in accordance with law and the provisions of this Indenture, and
the Trustee, subject to such indemnity provisions, shall have the
right to decline to follow any such request if the Trustee in
good faith shall determine that the suit, proceeding or exercise
of the remedy so requested would involve the Trustee in personal
liability or expense.
SECTION 8.6. Control by Holders. Subject to Section ( )
of the Intercreditor Agreement, the Holders of not less than a
majority in aggregate principal amount of the Outstanding
Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the
Trustee, provided that (a) such direction shall not be in
conflict with any Law or with this Indenture, and (b) the Trustee
may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
SECTION 8.7. Waiver of Past Events of Defaults. The
Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may on behalf of the Holders of all
Securities waive any past Event of Default and its consequences,
except that only the Holders of all Securities affected thereby
may waive an Event of Default (a) in the payment of the principal
of or premium, if any, or interest on, or other amounts due
under, any Security then Outstanding or (b) in respect of a
covenant or provision hereof that under Article XI cannot be
modified or amended without the consent of the Holder of each
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Security Outstanding affected. Upon any such waiver such Event
of Default shall cease to exist and shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver
shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.
SECTION 8.8. Holder May Not Bring Suit Except Under Certain
Conditions. A Holder shall not have the right to institute any
suit, action or proceeding at law or in equity or otherwise for
the foreclosure of the Lien of this Indenture, for the
appointment of a receiver or for the enforcement of any other
remedy under or upon this Indenture, unless:
(a) such Holder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(b) the Holders of at least twenty-five percent (25%)
in aggregate principal amount of the Outstanding Securities
shall have requested the Trustee in writing to institute
such action, suit or proceeding and shall have offered to
the Trustee indemnity as provided in Section 9.3(e);
(c) the Trustee shall have refused or neglected to
institute any such action, suit or proceeding for sixty (60)
days after receipt of such notice, request and offer of
indemnity; and
(d) no direction inconsistent with such written
request has been given to the Trustee during such sixty
(60)-day period by the Holders of a majority in principal
amount of Outstanding Securities.
It is understood and intended that no one or more of the
Holders shall have any right in any manner whatever hereunder or
under the Securities to (i) surrender, impair, waive, affect,
disturb or prejudice the Lien of the Security Documents on any
property subject thereto or the rights of the Holders of any
other Securities, (ii) obtain or seek to obtain priority or
preference over any other such Holder or (iii) enforce any right
under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all the Holders
subject to the provisions of this Indenture.
SECTION 8.9. Undertaking to Pay Court Costs. All parties
to this Indenture, and each Holder by such Holder's acceptance of
a Security, shall be deemed to have agreed that any court may in
its discretion require, in any suit, action or proceeding for the
enforcement of any right or remedy under this Indenture, or in
any suit, action or proceeding against the Trustee for any action
taken or omitted by it as Trustee hereunder, the filing by any
party litigant in such suit, action or proceeding of an
undertaking to pay the costs of such suit, action or proceeding,
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and that such court may, in its discretion, assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such suit, action or proceeding, having due regard to
the merits and good faith of the claims or defenses made by such
party litigant; provided, however, that the provisions of this
Section 8.9 regarding such agreement by the parties to this
Indenture and each Holder shall not apply to (a) any suit, action
or proceeding instituted by the Trustee, (b) any suit, action or
proceeding instituted by any Holder or group of Holders holding
in the aggregate more than ten percent (10%) in aggregate
principal amount of the Outstanding Securities or (c) any suit,
action or proceeding instituted by any Holder for the enforcement
of the payment of the principal of or premium, if any, or
interest on any of the Securities, on or after the respective due
dates expressed therein.
SECTION 8.10. Right of Holders to Receive Payment Not to Be
Impaired. Anything in this Indenture or in the Intercreditor
Agreement to the contrary notwithstanding, the right of any
Holder to receive payment of the principal of and premium, if
any, and interest on such Security, on or after the respective
due dates expressed in such Security (or, in case of redemption,
on the Redemption Date fixed for such Security), or to institute
suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 8.11. Application of Monies Collected by Trustee.
Any monies collected or to be applied by the Trustee pursuant to
this Article VIII in respect of the Securities of a series,
together with any other monies that may then be held by the
Trustee under any of the provisions of this Indenture as security
for the Securities of such series (other than as set forth in the
Intercreditor Agreement and other than monies at the time
required to be held for the payment of specific Securities of
such series at their Stated Maturities or at a time fixed for the
redemption thereof) shall be applied in the following order from
time to time, on the date or dates fixed by the Trustee and, in
the case of a distribution of such monies on account of
principal, premium, if any, or interest, upon presentation of the
Outstanding Securities of such series, and stamping thereon of
payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: to the payment of all taxes, assessments or
liens prior to the Lien of the Security Documents, except
those subject to which any sale shall have been made, all
reasonable costs and expenses of collection, including the
reasonable costs and expenses of handling the Indenture
Securities Collateral and of any sale thereof pursuant to
the provisions of the Security Documents, and to the payment
of all amounts due the Trustee or any predecessor Trustee
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under Section 9.7;
SECOND: in case the unpaid principal amount of the
Outstanding Securities of such series or any of them shall
not have become due, to the payment of any interest in
default, in the order of the maturity of the payments
thereof, with interest at the rates specified in the
respective Securities of such series in respect of overdue
payments (to the extent that payment of such interest shall
be legally enforceable) on the payments of interest then
overdue;
THIRD: in case the unpaid principal amount of any of
but not all the Outstanding Securities of such series shall
have become due, first to the payment of accrued interest on
all Outstanding Securities of such series in the order of
the maturity of the payments thereof, with interest at the
respective rates specified in the Securities of such series
for overdue payments of principal, premium, if any, and (to
the extent that payment of such interest shall be legally
enforceable) interest then overdue, and next to the payment
of the unpaid principal amount of all Securities then due;
FOURTH: in case the unpaid principal amount of all the
Outstanding Securities of such series shall have become due,
to the payment of the whole amount then due and unpaid upon
the Outstanding Securities of such series for principal,
premium, if any, and interest, together with interest at the
respective rates specified in the Securities of such series
for overdue payments on principal, premium, if any, and (to
the extent that payment of such interest shall be legally
enforceable) interest then overdue; and
FIFTH: in case the unpaid principal amount of all the
Outstanding Securities of such series shall have become due,
and all of the Outstanding Securities of such series shall
have been fully paid, any surplus then remaining shall be
paid to the Collateral Agent (to be applied pursuant to the
terms and conditions of the Intercreditor Agreement), or to
whomsoever may be lawfully entitled to receive the same, or
as a court of competent jurisdiction may direct;
provided, however, that all payments in respect of the Securities
of a series to be made pursuant to clauses "SECOND" through
"FOURTH" of this Section 8.11 shall be made ratably to the
Holders of Securities of such series entitled thereto, without
discrimination or preference, based upon the ratio of the unpaid
principal amount of the Securities of such series in respect of
which such payments are to be made held by each such Holder to
the unpaid principal amount of all Securities of such series.
SECTION 8.12. Securities Held by Certain Persons Not to
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Share in Distribution. Any Securities known to a Responsible
Officer of the Trustee to be owned or held by, or for the account
or benefit of, either of the Mobile Energy Parties or an
Affiliate thereof, shall not be entitled to share in any payment
or distribution provided for in this Article VIII until all
Securities held by other Persons have been indefeasibly paid in
full.
SECTION 8.13. Waiver of Appraisement, Valuation, Stay, Right
to Marshalling. To the full extent it may lawfully do so, each
of the Mobile Energy Parties, for itself and for any other Person
who may claim through or under it, hereby:
(a) agrees that neither it nor any such Person will
set up, plead, claim or in any manner whatsoever take
advantage of any appraisal, valuation, stay, extension or
redemption laws, now or hereafter in force in any
jurisdiction that may delay, prevent or otherwise hinder (i)
the performance or enforcement or foreclosure of this
Indenture, (ii) the sale of any of the Indenture Securities
Collateral or (iii) the putting of the purchaser or
purchasers thereof into possession of such Indenture
Securities Collateral immediately after the sale thereof;
(b) waives all benefit or advantage of any such laws;
(c) consents and agrees that the Collateral may be
sold by the Collateral Agent as an entirety or in parts; and
(d) waives and releases all rights to have the
Indenture Securities Collateral marshalled upon any
foreclosure, sale or other enforcement of this Indenture.
SECTION 8.14. Remedies Cumulative; Delay or Omission Not a
Waiver. Each and every right, power and remedy herein
specifically given to the Trustee shall be cumulative and shall
be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity
or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed
expedient by the Trustee and the exercise or the beginning of the
exercise of any right, power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy, and no delay or
omission by the Trustee in the exercise of any right, power or
remedy or in the pursuance of any remedy shall impair any such
right, power or remedy or be construed to be a waiver of any
default on the part of either of the Mobile Energy Parties or to
be an acquiescence therein.
SECTION 8.15. Intercreditor Agreement. Simultaneously with
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the execution and delivery of this Indenture, the Trustee shall
enter into the Intercreditor Agreement on behalf of itself and
all Holders of any of the Outstanding Securities and all future
Holders of Securities. Notwithstanding any other provision of
this Indenture to the contrary, all rights, powers and remedies
available to the Holders of any of the Outstanding Securities,
and all future Holders of any of the Securities or the Trustee,
with respect to the Collateral, or otherwise pursuant to the
Security Documents, shall be subject to the Intercreditor
Agreement, including, in all cases, the ability to enforce any
remedy other than remedies specified in Section 8.2 and Section
8.10 of this Indenture. To the extent that the Collateral Agent
has been authorized to exercise any such right under the
Intercreditor Agreement, any right given to the Trustee hereunder
to exercise any remedy with respect to the Shared Collateral
shall, during such time as the Intercreditor Agreement is in
effect, be a right of the Trustee to direct the Collateral Agent
to take such action to the extent set forth in the Intercreditor
Agreement.
ARTICLE IX.
THE TRUSTEE
SECTION 9.1. Certain Duties and Responsibilities. (a)
Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions that by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
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its own negligent failure to act or its own willful misconduct,
except that:
(i) this Section 9.1(c) shall not be construed to
limit the effect of Section 9.1(a);
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders
of not less than a majority in aggregate principal amount of
the Outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(iv) no provision of this Indenture shall
require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not herein expressly so provided, every
provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 9.1 and the
requirements of the Trust Indenture Act.
SECTION 9.2. Notice of Events of Defaults. In addition to
its obligation to give notice to Holders as provided in Section
1.6, as promptly as practicable after, and in any event within
thirty (30) days after, the occurrence of any Event of Default
hereunder, the Trustee shall transmit by mail to all Holders, as
their names and addresses appear in the Security Register, notice
of such Event of Default hereunder known to the Trustee, unless
such Event of Default shall have been cured or waived; provided,
however, that, except in the case of an Event of Default in the
payment of the principal of or premium, if any, or interest on
any Security, or in the payment of any Sinking Fund Requirement,
the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the
Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders.
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SECTION 9.3. Certain Rights of Trustee. Except as
otherwise provided in Section 9.1 and Section 315 of the Trust
Indenture Act:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting in reliance upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the
purported proper party or parties;
(b) any request or direction of either of the Mobile
Energy Parties mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order or a Mobile
Energy Request or Mobile Energy Order (as the case may be),
and any resolution of the Board of Directors of either of
the Mobile Energy Parties may be sufficiently evidenced by a
Board Resolution of such Mobile Energy Party;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate of
either of the Mobile Energy Parties;
(d) the Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine
the books, records and premises of either of the Mobile
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Energy Parties personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(h) the Trustee shall not be charged with knowledge of
any Event of Default unless either (i) a Responsible Officer
of the Trustee shall have actual knowledge of such Event of
Default or (ii) written notice of such Event of Default
shall have been given to the Trustee by either of the Mobile
Energy Parties or by any Holder.
SECTION 9.4. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities,
except the certificates of authentication, shall not be taken as
the statements of the Trustee, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture, the Indenture Securities Collateral or the Securities,
except that the Trustee hereby represents and warrants that this
Indenture has been executed and delivered by one of its officers
who is duly authorized to execute and deliver such document on
its behalf. The Trustee shall not be accountable for the use or
application by either of the Mobile Energy Parties of the
Securities or the proceeds thereof.
SECTION 9.5. May Hold Securities. The Trustee, any Paying
Agent, Security Registrar or Authenticating Agent, or any
Affiliate thereof, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to
Sections 9.8 and 9.13, may otherwise deal with the Mobile Energy
Parties with the same rights it would have if it were not
Trustee, Paying Agent, Security Registrar, Authenticating Agent
or such other agent.
SECTION 9.6. Funds May Be Held by Trustee or Paying Agent.
Any monies received by the Trustee or any Paying Agent shall,
until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law.
Neither the Trustee nor the Paying Agent shall have any liability
for interest upon any such monies. Amounts so received, at the
written request and direction of the Company shall be invested by
the Company in Permitted Investments. Such investments shall
mature in such amounts and not later than such times as may be
necessary to provide monies when needed to make payments from
such monies as provided in the Indenture.
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SECTION 9.7. Compensation, Reimbursement and
Indemnification. Each of the Mobile Energy Parties agrees:
(a) to pay, or cause to be paid, to each of the
Trustee and any Authorized Agent from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee
of an express trust);
(b) to reimburse, or cause to be reimbursed, each of
the Trustee and any Authorized Agent upon its request for
all expenses, disbursements and advances incurred or made by
it in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable of
its own negligence, willful misconduct or bad faith; and
(c) to indemnify, or cause to be indemnified, each of
the Trustee, any predecessor Trustee and any Authorized
Agent for, and to hold it harmless against, any loss,
liability or expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of this
trust or the performance of its duties hereunder, including
the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
As security for the performance of the obligations of the
Mobile Energy Parties under this Section 9.7, the Trustee shall
have a Lien prior to the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in
trust under Section 12.3.
SECTION 9.8. Disqualification; Conflicting Interests. (a)
If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 9.8, then, within ninety (90) days after
ascertaining that it has such conflicting interest, and if the
default (as such term is defined in the Trust Indenture Act) to
which such conflicting interest relates has not been cured or
duly waived or otherwise eliminated before the end of such ninety
(90) day period, it shall either eliminate such conflicting
interest or resign in the manner and with the effect hereinafter
specified in this Article IX; provided, however, that except in
the case of a default in the payment of the principal of, premium
if any or interest on any Security, or in payment of any Sinking
Fund redemption, the Trustee shall not be required to resign as
provided by this Section 9.8 if the Trustee shall have sustained
the burden of proving, on application to the SEC and after
opportunity for hearing thereon, that
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(i) the default under the Indenture may be cured or
waived during a reasonable period and under the procedures
described in such application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of the Holders of the
Securities. The filing of such an application shall
automatically stay the performance of the duty to resign
until the SEC orders otherwise.
(b) In the event that the Trustee shall fail to comply with
the provisions of Section 9.8(a), the Trustee shall, within ten
(10) days after the expiration of such ninety (90)-day period,
transmit by mail to all Holders, as their names and addresses
appear in the Security Register, notice of such failure.
(c) For the purposes of this Section 9.8, the Trustee shall
be deemed to have a conflicting interest if the Securities are in
default (as such term is defined in the Trust Indenture Act) and:
(i) the Trustee is trustee under another indenture
under which any other securities, or certificates of
interest or participation in any other securities, of any
obligor on the Securities are outstanding or is trustee for
more than one outstanding series of Securities, under a
single indenture of any obligor, unless (A) the Securities
are collateral trust notes under which the only collateral
consists of securities issued under such other indenture,
(B) such other indenture is a collateral trust indenture
under which the only collateral consists of Securities
issued under this Indenture or (C) such obligor has no
substantial unmortgaged assets and is engaged primarily in
the business of owning, or of owning and developing or
operating, real estate, and the Indenture and such other
indenture are secured by wholly separate and distinct
parcels of real estate, provided that there shall be
excluded from the operation of this paragraph other series
under this Indenture, and any indenture or indentures under
which other securities, or certificates of interest or
participation in other securities, of such obligor are
outstanding, if such obligor shall have sustained the burden
of proving, on application to the SEC and after opportunity
for hearing thereon, that trusteeship under this Indenture
and such other indenture or indentures or under more than
one outstanding series under a single indenture is not so
likely to involve a material conflict of interest as to make
it necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such
under one of such indentures or with respect to such series;
(ii) the Trustee or any of its directors or
executive officers is an underwriter for an obligor upon the
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Securities;
(iii) the Trustee directly or indirectly
controls or is directly or indirectly controlled by or is
under direct or indirect common control with an underwriter
for an obligor upon the Securities;
(iv) the Trustee or any of its directors or
executive officers is a director, officer, partner,
employee, appointee or representative of any obligor upon
the Securities, or of an underwriter (other than the Trustee
itself) for such obligor who is currently engaged in the
business of underwriting, except that (A) one individual may
be a director or an executive officer, or both, of the
Trustee and a director or an executive officer, or both, of
an obligor on the Securities but may not be at the same time
an executive officer of both the Trustee and such obligor;
(B) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may
be director or an executive officer, or both, of the Trustee
and a director of an obligor on the Securities; and (C) the
Trustee may be designated by an obligor on the Securities or
by any underwriter for such obligor to act in the capacity
of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent, or depositary, or in any other
similar capacity, or subject to the provisions of paragraph
(i) of this Section 9.8(c), to act as trustee, whether under
an indenture or otherwise;
(v) ten percent (10%) or more of the voting
securities of the Trustee is beneficially owned either by
any obligor on the Securities or by any director, partner,
or executive officer thereof, or twenty percent (20%) or
more of such voting securities is beneficially owned,
collectively, by any two or more of such persons; or ten
percent (10%) or more of the voting securities of the
Trustee is beneficially owned either by an underwriter for
any obligor on the Securities or by any director, partner or
executive officer thereof, or is beneficially owned
collectively by any two or more such persons;
(vi) the Trustee is the beneficial owner of,
or holds as collateral security for an obligation which is
in default (as hereinafter in this subsection defined), (A)
five percent (5%) or more of the voting securities, or ten
percent (10%) or more of any other class of security, of any
obligor on the Securities not including the Securities
issued under this Indenture and securities issued under any
other indenture under which the Trustee is also trustee or
(B) ten percent (10%) or more of any class of security of an
underwriter for any obligor on the Securities;
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(vii) the Trustee is the beneficial owner of,
or holds as collateral security for an obligation which is
in default (as hereinafter in this subsection defined), five
percent (5%) or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of
the voting securities of, or controls directly or indirectly
or is under direct or indirect common control with, any
obligor on the Securities;
(viii) the Trustee is the beneficial owner of,
or holds collateral security for an obligation that is in
default (as hereinafter in this subsection defined), ten
percent (10%) or more of any class of security of any person
who, to the knowledge of the Trustee, owns fifty percent
(50%) or more of the voting securities of any obligor on the
Securities;
(ix) the Trustee owns, on the date of default
(as such term is defined in the Trust Indenture Act) upon
the Securities or any anniversary of such default while such
default upon the Securities remains outstanding, in the
capacity of executor, administrator, testamentary or inter
vivos trustee, guardian, committee or conservator, or in any
other similar capacity, an aggregate of twenty-five percent
(25%) or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a
conflicting interest under paragraphs (vi), (vii) or (viii)
of this Section 9.8(c). As to any such securities of which
the Trustee acquired ownership through becoming executor,
administrator or testamentary trustee of an estate that
included them, the provisions of the immediately preceding
sentence shall not apply, for a period of not more than two
(2) years from the date of such acquisition to the extent
that such securities included in such estate do not exceed
twenty-five percent (25%) of such voting securities or
twenty-five percent (25%) of any such class of security.
Promptly after the dates of any such default upon the
Securities and annually in each succeeding year that the
Securities remain in default, the Trustee shall make a check
of its holdings of such securities in any of the above-
mentioned capacities as of such dates. If any obligor upon
the Securities fails to make payment in full of the
principal of or the premium, if any, or interest on any of
the Securities when and as the same becomes due and payable
and such failure continues for thirty (30) days thereafter,
the Trustee shall make a prompt check of its holdings of
such securities in any of the above-mentioned capacities as
of the date of the expiration of such thirty (30)-day
period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by
the Trustee, with sole or joint control over such securities
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vested in it, shall be considered as though beneficially
owned by the Trustee for the purposes of paragraphs (vi),
(vii) and (viii) of this Section 9.8(c); or
(x) except under the circumstances described in
Section 9.13(b) (i), (iii), (iv), (v) or (vi), the Trustee
shall be or shall become a creditor of the obligor.
For the purposes of paragraph (i) of this Section 9.8(c),
the term "series of securities" or "series" means a series, class
or group of Securities issuable under the Indenture pursuant to
whose terms Holders of one such series may vote to direct the
Trustee, or otherwise take action pursuant to a vote of such
Holders, separately from Holders of another such series, provided
that "series of securities" or "series" shall not include any
series of Securities issuable under the Indenture if all such
series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (v) to (ix),
inclusive, of this Section 9.8(c), shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purposes of
paragraph (iii) or (vii) of this Section 9.8(c).
For the purposes of paragraphs (vi), (vii), (viii) and (ix)
of this Section 9.8(c) only, (A) the terms "security" and
"securities" shall include only such securities as are generally
known as corporate securities, but shall not include any note or
other evidence of indebtedness issued to evidence an obligation
to repay monies loaned to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or
participation in any such note or evidence or indebtedness, (B)
an obligation shall be deemed to be "in default" when a default
in payment of principal shall have continued for thirty (30) days
or more and shall not have been cured, and (C) the Trustee shall
not be deemed to be the owner or holder of (1) any security that
it holds as collateral security, as trustee or otherwise, for an
obligation that is not in default as defined in clause (B) above
or (2) any security which it holds as collateral security under
this Indenture, irrespective of any default hereunder or (3) any
security that it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative
capacity.
Except as provided in the next preceding paragraph, the word
"security" or "securities" as used in this Indenture shall mean
any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share,
investment contract, voting trust certificate, certificate of
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deposit for security, fractional undivided interest in oil, gas
or other mineral rights, any put, call, straddle, option or
privilege on any security, certificate of deposit, or group or
index of securities (including, any interest therein or based on
the value thereon) or any put, call, straddle, option or
privilege entered into on a national securities exchange relating
to foreign currency, or, in general, any interest or instrument
commonly known as a "security," or any certificate or interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to purchase,
any of the foregoing.
(d) For the purposes of this Section 9.8:
(i) The term "underwriter" when used with
reference to any obligor on the Securities, means every
person who, within one year prior to the time as of which
the determination is made, has purchased from such obligor
with a view to, or has offered or sold for such obligor in
connection with, the distribution of any security of such
obligor outstanding at such time, or has participated or has
had a direct or indirect participation in any such
undertaking, or has participated or has had a participation
in the direct or indirect underwriting of any such
undertaking; but such term shall not include a person whose
interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary
distributors' or sellers' commission.
(ii) The term "director" means any director
of a corporation, or any individual performing similar
functions with respect to any organization whether
incorporated or unincorporated.
(iii) The term "person" means an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization, or a
government or political subdivision thereof. As used in
this paragraph, the term "trust" shall include only a trust
where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(iv) The term "voting security" means any
security presently entitling the owner or holder thereof to
vote in the direction or management of the affairs of a
person, or any security issued under or pursuant to any
trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such
security are presently entitled to vote in the direction or
management of the affairs of a person.
(v) The term "obligor" means any obligor upon the
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Securities within the meaning of the Trust Indenture Act.
(vi) The term "executive officer" means the
president, every vice president, every trust officer, the
cashier, the secretary and the treasurer of a corporation,
and any individual customarily performing similar functions
with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the
board of directors.
(e) The percentage of the voting securities and other
securities specified in this Section 9.8 shall be calculated in
accordance with the following provisions:
(i) A specified percentage of the voting
securities of the Trustee, any obligor or any other person
referred to in this Section 9.8 (each of whom is referred to
as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the
holder or holders thereof to cast such specified percentage
of the aggregate votes that the holders of all the
outstanding voting securities of such person are entitled to
cast in the direction or management of the affairs of such
person.
(ii) A specified percentage of a class of
securities of a person means such percentage of the
aggregate amount of securities of the class outstanding.
(iii) The term "amount," when used in regard
to securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating
to capital shares and the number of units if relating to any
other kind of security.
(iv) The term "outstanding" as used in this
Section 9.8 means issued and not held by or for the account
of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking
fund relating to securities of the issuer of the same
class;
(B) securities of an issuer held in a sinking
fund relating to another class of securities of the
issuer, if the obligation evidenced by such other class
of securities is not in default as to principal or
interest or otherwise;
(C) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default
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as to principal or interest or otherwise; and
(D) securities held in escrow if placed in escrow
by the issuer thereof;
provided, however, that any voting securities of an issuer shall
be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
(v) A security shall be deemed to be of the same
class as another security if both securities confer upon the
holder or holders substantially the same rights and
privileges; provided, however, that in the case of secured
evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes;
provided further, however, that, in the case of unsecured
evidences of indebtedness, differences in the interest rates
or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or
not they are issued under a single indenture.
SECTION 9.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be a
bank or trust company that complies with the requirements of the
Trust Indenture Act, organized and doing business under the laws
of the United States of America or of any State thereof,
authorized under such laws to exercise corporate trust powers,
having (or whose obligations are unconditionally guaranteed by a
corporation having) a combined capital and surplus of at least
$500,000,000, which bank or trust company is subject to
supervision or examination by Federal or state authority and does
not provide credit or credit enhancement to either of the Mobile
Energy Parties. If such bank or trust company publishes reports
of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 9.9, the combined capital
and surplus of such bank or trust company shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of
this Section 9.9, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article IX.
SECTION 9.10. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article IX
shall become effective until the acceptance of appointment by the
successor Trustee as provided in Section 9.11.
(b) The Trustee may resign at any time by giving written
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notice thereof to the Mobile Energy Parties and to the Holders of
Securities in the manner provided in Section 1.6. If an
instrument of acceptance by a successor Trustee shall not have
been delivered to the Mobile Energy Parties and the Trustee
within thirty (30) days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
Trustee, or any Holder who has been a bona fide holder of a
Security for at least six (6) months may, subject to Section 8.9,
on behalf of such Holder and all others similarly situated,
petition any such court for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of not less than a majority in principal amount of the
Outstanding Securities, delivered to the Trustee and the Mobile
Energy Parties.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
9.8(a) after written request therefor by any Holder who has
been a bona fide holder of a Security for at least six
months, or
(ii) the Trustee shall cease to be eligible
under Section 9.9 and shall fail to resign after written
request therefor by any such Holder or the Company, or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company may remove the Trustee by
Board Resolution or (B) subject to Section 8.9, any Holder who
has been a bona fide holder of a Security for at least six (6)
months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company shall promptly appoint by
Board Resolution a successor Trustee. If no successor Trustee
shall have been so appointed by the Company, or by the Holders,
and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide holder of a Security for at least
six months may, subject to Section 8.9, on behalf of himself and
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all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first-class
mail, postage prepaid, to the Holders of Securities as their
names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address
of its Corporate Trust Office. If the Company fails to give such
notice within ten (10) days after acceptance of appointment by
the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Company.
SECTION 9.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Mobile Energy Parties and to the retiring
Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee but, on request
of either of the Mobile Energy Parties or of the successor
Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument prepared by either of
the Mobile Energy Parties transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee, and
shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder,
subject nevertheless to its Lien, if any, provided for in Section
9.7. Upon request of any such successor Trustee, the Mobile
Energy Parties shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor
Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article IX.
SECTION 9.12. Merger, Conversion, Consolidation or
Succession to Business. Any Person into which the Trustee may be
merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any Person succeeding to
all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder,
provided such successor Trustee shall be otherwise qualified and
eligible under the Trust Indenture Act and under this Article IX,
without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or
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consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 9.13. Preferential Collection of Claims Against any
Obligor. (a) Subject to Section 9.13(b), if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or
unsecured, of any obligor (as defined in Section 9.13(c)) on the
Securities within three (3) months prior to a default (as defined
in Section 9.13(c)) or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set
apart and hold in a special account for the benefit of the
Trustee individually and the Holders of the Securities:
(i) an amount equal to any and all reductions in
the amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the
beginning of such three (3) month period and valid as
against any obligor on the Securities and its other
creditors, except any such reduction resulting from the
receipt or disposition of any property described in
paragraph (ii) of this Section 9.13(a), or from the
exercise of any right of set-off that the Trustee could have
exercised if a petition in bankruptcy had been filed by or
against any such obligor upon the date of such default; and
(ii) all property received by the Trustee in
respect of any claim as such creditor, either as security
therefor, or in satisfaction or composition thereof, or
otherwise, after the beginning of such three (3) month
period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights,
if any, of any obligor on the Securities and its other
creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account (1) payments made on
account of any such claim by any Person (other than an obligor on
the Securities) who is liable thereon, (2) the proceeds of the
bona fide sale of any such claim by the Trustee to a third person
and (3) distributions made in cash, securities or other property
in respect of claims filed against such obligor in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so
held prior to the beginning of such three (3) month period;
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(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it
as security for any such claim, if such claim was created after
the beginning of such three (3) month period and such property
was received as security therefor simultaneously with the
creation thereof, and if the Trustee shall sustain the burden of
proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default (as
defined in Section 9.13(c)) would occur within three (3) months;
or
(D) to receive payment on any claim referred to in
paragraph (B) or (C) above, against the release of any property
held as security for such claim as provided in paragraph (B) or
(C) above (as the case may be), to the extent of the fair value
of such property.
For the purposes of paragraphs (B), (C) and (D) of the
immediately preceding paragraph, property substituted after the
beginning of such three (3) month period for property held as
security at the time of such substitution shall, to the extent of
the fair value of the property released, have the same status as
the property released, and, to the extent that any claim referred
to in any of such clauses is created in renewal of or in
substitution for or for the purpose of repaying or refunding any
pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof
shall be apportioned between the Trustee and the Holders in such
manner that the Trustee and the Holders realize, as a result of
payments from such special account and payments of dividends on
claims filed against the obligor on the Securities in bankruptcy
or receivership or in proceedings for reorganization pursuant to
the Bankruptcy Code or applicable state law, the same percentage
of their respective claims, figured before crediting to the claim
of the Trustee anything on account of the receipt by it from such
obligor of the funds and property in such special account and
before crediting to the respective claims of the Trustee and the
Holders dividends on claims filed against such obligor in
bankruptcy or receivership or in proceedings for reorganization
pursuant to the Bankruptcy Code or applicable state law, but
after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other
than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect
to any claim, the term "dividends" shall include any distribution
with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Bankruptcy Code or
applicable state law, whether such distribution is made in cash,
securities or other property, but shall not include any such
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distribution with respect to the secured portion, if any, of such
claim. The court in which such bankruptcy, receivership or
proceedings for reorganization is pending shall have jurisdiction
(1) to apportion between the Trustee and the Holders in
accordance with the provisions of this paragraph, the funds and
property held in such special account and proceeds thereof, or
(2) in lieu of such apportionment, in whole or in part, to give
to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the
Trustee and the Holders with respect to their respective claims,
in which event it shall not be necessary to liquidate or to
appraise the value of any securities or other property held in
such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the
secured and unsecured portions of such claims, or otherwise to
apply the provisions of this paragraph as a mathematical formula.
Any Trustee that has resigned or been removed after the
beginning of such three (3) month period shall be subject to the
provisions of this subsection as though such resignation or
removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such three (3) month period, it
shall be subject to the provisions of this Section 9(a) if and
only if the following conditions exist: (x) the receipt of
property or reduction of claim, which would have given rise to
the obligation to account if such Trustee had continued as
Trustee, occurred after the beginning of such three (3) month
period; and (y) such receipt of property or reduction of claim
occurred within three (3) months after such resignation or
removal.
(b) There shall be excluded from the operation of Section
9.13(a) a creditor relationship arising from:
(i) the ownership or acquisition of securities
issued under any indenture, or any security or securities
having a maturity of one (1) year or more at the time of
acquisition by the Trustee;
(ii) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this
Indenture, for the purpose of preserving the property that
shall at any time be subject to the Lien of this Indenture
or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Holders at the time and in the manner provided in this
Indenture;
(iii) disbursements made in the ordinary
course of business in the capacity of trustee under an
indenture, transfer agent, registrar, custodian, paying
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agent, fiscal agent or depositary, or other similar
capacity;
(iv) an indebtedness created as a result of
services rendered or premises rented; or an indebtedness
created as a result of goods or securities sold in a cash
transaction (as defined in Section 9.13(c));
(v) the ownership of stock or of other securities
of a corporation organized under the provisions of Section
25(a) of the Federal Reserve Act that is directly or
indirectly a creditor of an obligor upon the securities; or
(vi) the acquisition, ownership, acceptance
or negotiation of any drafts, bills of exchange, acceptances
or obligations that fall within the classification of
self-liquidating paper (as defined in Section 9.13(c)).
(c) For the purposes of this Section 9.13 only:
(i) The term "default" means any failure to make
payment in full of the principal of or interest on any of
the Securities when and as such principal or interest
becomes due and payable;
(ii) The term "cash transaction" means any
transaction in which full payment for goods or securities
sold is made within seven (7) days after delivery of the
goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand;
(iii) The term "self-liquidating paper" means
any draft, bill of exchange, acceptance or obligation that
is made, drawn, negotiated or incurred by any obligor on the
Securities for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of
goods, wares or merchandise and that is secured by documents
evidencing title to, possession of or a lien upon, the
goods, wares or merchandise or the receivables or proceeds
arising from the sale of the goods, wares or merchandise
previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation
of the creditor relationship with such obligor arising from
the making, drawing, negotiating or incurring of the draft,
bill of exchange, acceptance or obligation; and
(iv) The term "obligor" means any obligor
upon the Securities within the meaning of the Trust
Indenture Act.
SECTION 9.14. Maintenance of Offices and Agencies. (a)
There shall at all times be maintained in the Borough of
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Manhattan, the City of New York, and in such other Places of
Payment, if any, as shall be specified for the Securities of any
series in the related Series Supplemental Indenture, an office or
agency where Securities may be presented or surrendered for
registration of transfer or exchange and for payment of
principal, premium, if any, and interest, and where notices and
demands to or upon the Trustee in respect of the Securities or
this Indenture may be served. Such office or agency shall be
initially at ( ). Written notice of the location of each of
such other office or agency and of any change of location thereof
shall be given by the Company to the Trustee and by the Trustee
to the Holders in the manner specified in Section 1.6. In the
event that no such office or agency shall be maintained or no
such notice of location or of change of location shall be given,
presentations, surrenders and demands may be made and notices may
be served at the Corporate Trust Office.
(b) There shall at all times be a Security Registrar and a
Paying Agent (which may be the Trustee) appointed by the Company
hereunder. In addition, at any time when any Securities remain
Outstanding, the Trustee may appoint an Authenticating Agent or
Agents with respect to the Securities of one or more series that
shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original
issuance, exchange, registration of transfer or partial
redemption thereof or pursuant to Section 2.9, and Securities so
authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder (it being understood that
wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent). If an appointment of an Authenticating
Agent with respect to the Securities of one or more series shall
be made pursuant to this Section 9.14(b), the Securities of such
series may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of
authentication in the following form:
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This Security is one of the Securities referred to in the
within-mentioned Indenture.
FIRST UNION NATIONAL BANK OF GEORGIA,
as Trustee
By_____________________________
Authenticating Agent
By_____________________________
Authorized Signatory
Any Authorized Agent shall be a bank or trust company, shall be a
Person organized and doing business under the laws of the United
States or any state thereof, having a combined capital and
surplus of at least $500,000,000, and shall be authorized under
such laws to exercise corporate trust powers, subject to
supervision by Federal or state authorities. If such Authorized
Agent publishes reports of its condition at least annually,
pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section 9.14, the combined capital and surplus of such Authorized
Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
If at any time an Authorized Agent shall cease to be eligible in
accordance with the provisions of this Section 9.14, such
Authorized Agent shall resign immediately in the manner and with
the effect specified in this Section 9.14. The Trustee at its
office specified in the first paragraph of this Indenture, is
hereby appointed as Paying Agent and Security Registrar
hereunder.
(c) Any Paying Agent (other than the Trustee) from time to
time appointed hereunder shall execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section 9.14, that
such Paying Agent will:
(i) hold all sums held by it for the payment of
principal of and premium, if any, and interest on the
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Trustee within five (5) days
thereafter notice of any default by any obligor upon the
Securities in the making of any such payment of principal,
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premium, if any, or interest; and
(iii) at any time during the continuance of
any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by
such Paying Agent.
Notwithstanding any other provision of this Indenture, any
payment required to be made to or received or held by the Trustee
may, to the extent authorized by written instructions of the
Trustee, be made to or received or held by a Paying Agent in the
Borough of Manhattan, the City of New York, for the account of
the Trustee.
(d) Any Person into which any Authorized Agent may be
merged or converted or with which it may be consolidated, or any
Person resulting from any merger, consolidation or conversion to
which any Authorized Agent shall be a party, or any Person
succeeding to the corporate trust business of any Authorized
Agent, shall be the successor of such Authorized Agent hereunder,
if such successor corporation is otherwise eligible under this
Section 9.14, without the execution or filing of any paper or any
further act on the part of the parties hereto or such Authorized
Agent or such successor Person.
(e) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee and the Mobile
Energy Parties. The Mobile Energy Parties may, and at the
request of the Trustee shall, at any time, terminate the agency
of any Authorized Agent by giving written notice of termination
to such Authorized Agent and to the Trustee. Upon the
resignation or termination of an Authorized Agent or in case at
any time any such Authorized Agent shall cease to be eligible
under this Section 9.14 (when, in either case, no other
Authorized Agent performing the functions of such Authorized
Agent shall have been appointed), the Company shall promptly
appoint one or more qualified successor Authorized Agents
approved by the Trustee to perform the functions of the
Authorized Agent that has resigned or whose agency has been
terminated or that shall have ceased to be eligible under this
Section 9.14. The Company shall give written notice of any such
appointment to all Holders as their names and addresses appear on
the Security Register.
SECTION 9.15. Co-Trustee or Separate Trustee. (a) If at
any time or times it shall be necessary or prudent in order to
conform to any law or any jurisdiction in which property shall be
held subject to the Lien of this Indenture or the other Security
Documents, or the Trustee shall be advised by counsel
satisfactory to it that it is so necessary or prudent in the
interest of the Holders, or the Holders of a majority in
principal amount of Outstanding Securities shall in writing so
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request, the Trustee and the Mobile Energy Parties shall execute
and deliver all instruments and agreements necessary or proper to
constitute another bank or trust company or one or more Persons
approved by the Trustee either to act as co-trustee or
co-trustees of all or any part of the Indenture Securities
Collateral jointly with the Trustee originally named herein or
any successor or successors, or to act as separate trustee or
trustees of all or any such property. In the event the Mobile
Energy Parties shall have not joined in the execution of such
instruments and agreements within ten (10) days after the receipt
of a written request from the Trustee so to do, or in case an
Event of Default with respect to the Securities of a series shall
have occurred and be continuing, the Trustee may act under the
foregoing provisions of this Section 9.15 without the concurrence
of either of the Mobile Energy Parties; and the Mobile Energy
Parties hereby appoint the Trustee as agent and attorney to act
under the foregoing provisions of this Section 9.15 in either of
such contingencies.
(b) Every additional trustee hereunder shall, to the extent
permitted by law, be appointed and act, and such additional
trustee and its successors shall act, subject to the following
provisions and conditions, namely:
(i) the Securities shall be authenticated and
delivered, and all powers, duties, obligations and rights
conferred upon the Trustee in respect of the custody,
control and management of monies, papers or securities,
shall be exercised, solely by the Trustee (or, in the case
of authentication and delivery of Securities, by any
Authenticating Agent);
(ii) all rights, powers, duties and
obligations conferred or imposed upon the Trustee or the
additional trustee or trustees shall be conferred or imposed
upon and exercised or performed by the Trustee or the
Trustee and such additional trustee or trustees jointly,
except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed, the
Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such
additional trustee or trustees;
(iii) no power given hereby to, or which it is
provided hereby may be exercised by, any such additional
trustee or trustees, shall be exercised hereunder by such
additional trustee or trustees, except jointly with, or with
the consent in writing of, the Trustee, anything herein
contained to the contrary notwithstanding;
(iv) no trustee hereunder shall be personally
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liable by reason of any act or omission of any other trustee
hereunder; and
(v) the Mobile Energy Parties and the Trustee, at
any time, by an instrument in writing, executed by them
jointly, may remove any such additional trustee, and in that
case, by an instrument in writing executed by them jointly,
may appoint a successor or successors to such additional
trustee or trustees (as the case may be), anything herein
contained to the contrary notwithstanding. In the event
that neither of the Mobile Energy Parties shall have joined
in the execution of any such instrument within ten (10) days
after the receipt of a written request from the Trustee to
do so, the Trustee shall have the power to remove any such
additional trustee and to appoint a successor additional
trustee without the concurrence of the Mobile Energy
Parties, each hereby appointing the Trustee its agent and
attorney to act for it in such connection in such
contingency. In the event that the Trustee alone shall have
appointed an additional trustee or trustees or co-trustee or
co-trustees as above provided, it may at any time, by an
instrument in writing, remove any such additional trustee or
co-trustee, the successor to any such trustee or co-trustee
so removed to be appointed by the Mobile Energy Parties and
the Trustee, or by the Trustee alone, as hereinbefore in
this Section 9.15 provided.
SECTION 9.16. Taxes. Any United States withholding taxes
imposed with respect to payments made to a Holder of a Security
shall be the sole responsibility of such Holder and therefore no
Holder shall have the right to have any payment to it
"grossed-up" for, or paid free of, any such withholding taxes.
ARTICLE X.
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND MOBILE ENERGY PARTIES
SECTION 10.1. Company to Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to
the Trustee semiannually, between April 1 and April 15 and
between October 1 and October 15, in each year, and at such other
times as the Trustee may request in writing, within thirty (30)
days after receipt by the Company of any such request, a list, in
such form as the Trustee may reasonably require, of the names and
addresses of the Holders, in each case as of a date not more than
fifteen (15) days prior to the time such list is furnished;
provided, however, that so long as the Trustee is the sole
Security Registrar or is otherwise furnished a copy of the
Security Register, no such list need be furnished.
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SECTION 10.2. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders
(i) contained in the most recent list furnished to the Trustee as
provided in Section 10.1 and (ii) received by the Trustee in its
capacity as Security Registrar, if so acting. The Trustee may
destroy any list furnished to it upon receipt of a new list so
furnished.
(b) If three (3) or more Holders (hereinafter referred to
as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six (6) months preceding the
date of such application, and such application states that the
applicants desire to communicate with other Holders with respect
to their rights under this Indenture or under the Securities and
is accompanied by a copy of the form of proxy or other
communication that such applicants propose to transmit, then the
Trustee shall, within five (5) Business Days after the receipt of
such application, at its election, either:
(i) afford such applicants access to the
information preserved at the time by the Trustee in
accordance with Section 10.2(a), or
(ii) inform such applicants as to the
approximate number of Holders of Securities whose names and
addresses appear in the information preserved at the time by
the Trustee in accordance with Section 10.2(a), and as to
the approximate cost of mailing to such Holders the form of
proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Holder whose name and
address appears in the information preserved at the time by the
Trustee in accordance with Section 10.2(a), a copy of the form of
proxy or other communication that is specified in such request,
with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within
five (5) days after such tender, the Trustee shall mail to such
applicants and file with the SEC, together with a copy of the
material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the
best interests of the Holders or would be in violation of
applicable law. Such written statement shall specify the basis
of such opinion. If the SEC, after opportunity for a hearing
upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections
or if, after the entry of an order sustaining one or more of such
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objections, the SEC shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Holders with reasonable promptness
after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty
to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Mobile Energy Parties and the Trustee
that none of the Mobile Energy Parties and the Trustee shall be
held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in
accordance with Section 10.2 (b), regardless of the source from
which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing or filing with the
SEC any material pursuant to a request made under Section
10.2(b).
SECTION 10.3. Reports by Trustee. (a) Within sixty (60)
days after January 1 in each year, commencing with January 1996,
the Trustee shall transmit by mail to all Holders, as their names
and addresses appear in the Security Register, a brief report
dated as of such January 1 with respect to (but if no such event
has occurred within such period, no report need be transmitted):
(i) any change to its eligibility under Section
9.9 and its qualifications under Section 9.8;
(ii) the creation of or any material change
to a relationship specified in paragraphs (i) through (x) of
Section 9.8(c).
(iii) the character and amount of any advances
(and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as
such) that remain unpaid on the date of such report, and for
the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities, on the trust estate
or any property or funds held or collected by it as Trustee,
except that the Trustee shall not be required (but may
elect) to report such advances if such advances so remaining
unpaid aggregate not more than one-half of one percent (1/2 of
1%) of the principal amount of the Securities Outstanding on
the date of such report;
(iv) the amount, interest rate and maturity
date of all other indebtedness owing by an obligor on the
Securities within the meaning of the Trust Indenture Act to
the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as
collateral security therefor, except an indebtedness based
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upon a creditor relationship arising in any manner described
in Section 9.13(b)(ii), (iii), (iv) or (vi);
(v) any change to the property and funds
physically in the possession of the Trustee (as such) on the
date of such report;
(vi) any release, or release and
substitution, of property subject to the Lien of this
Indenture (and the consideration therefor, if any) that the
Trustee has not previously reported;
(vii) any additional issue of Securities that
the Trustee has not previously reported; and
(viii) any action taken by the Trustee in the
performance of its duties hereunder that it has not
previously reported and that in its opinion materially
affects the Securities of any series, except action in
respect of an Event of Default, notice of which has been or
is to be withheld by the Trustee in accordance with Section
9.2.
(b) The Trustee shall transmit by mail to all Holders, as
their names and addresses appear in the Security Register, a
brief report with respect to:
(i) the release, or release and substitution, of
property subject to the Lien of this Indenture (and the
consideration therefor, if any) unless the fair value of
such property is less than ten percent (10%) of the
principal amount of Securities Outstanding at the time of
such release, or such release and substitution, such report
to be transmitted within ninety (90) days after such time;
and
(ii) the character and amount of any advances
(and if the Trustee elects so to state the circumstances
surrounding the making thereof) made by the Trustee (as
such) since the date of the last report transmitted pursuant
to Section 10.3(a) (or if no such report has yet been so
transmitted, since the date of execution of this instrument)
for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Securities of any series, on
property or funds held or collected by it as Trustee, and
that it has not previously reported pursuant to this Section
9(b), except that the Trustee shall not be required (but may
elect) to report such advances if such advances remaining
unpaid at any time aggregate ten percent (10%) or less of
the principal amount of Securities Outstanding at such time,
such report to be transmitted within ninety (90) days after
such time.
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(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, and also
with the SEC. Either of the Mobile Energy Parties will notify
the Trustee when the Securities of any series are listed on any
stock exchange.
SECTION 10.4. Reports by Mobile Energy Parties. Each of the
Mobile Energy Parties will:
(a) file with the Trustee, within fifteen (15) days
after it is required to file the same with the SEC, copies
of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the
foregoing as the SEC may from time to time by rules and
regulations prescribe) that either of the Mobile Energy
Parties may be required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act;
(b) file with the Trustee and the SEC, in accordance
with rules and regulations prescribed from time to time by
the SEC, such additional information, documents and reports
with respect to compliance by the Mobile Energy Parties with
the conditions and covenants of this Indenture, as may be
required by such rules and regulations;
(c) transmit by mail to all Holders, as their names
and addresses appear in the Security Register, within thirty
(30) days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required
to be filed by the Mobile Energy Parties pursuant to Section
10.4 (a) and (b) as may be required by rules and regulations
prescribed from time to time by the SEC.
ARTICLE XI.
SUPPLEMENTAL INDENTURES
SECTION 11.1. Supplemental Indentures Without Consent of
Holders. Without the consent of the Holders of any Securities,
the Mobile Energy Parties, in each case when authorized by Board
Resolutions, and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto in form
satisfactory to the Trustee, for any of the following purposes:
(a) to establish the form and terms of Securities of
any series permitted by Sections 2.1 and 2.3 and to provide
for the sale, authentication and delivery of additional
Securities and refunding Securities and the disposition of
the proceeds from the sale thereof, in the manner and to the
extent authorized by this Indenture; or
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(b) to grant to or confer upon the Holders or the
Trustee for the benefit of the Holders any additional
rights, remedies, powers or authorities or security that may
lawfully be granted to or conferred upon the Holders or the
Trustee; or
(c) to evidence the succession of a new Trustee
hereunder or a co-trustee or separate trustee pursuant to
Section 9.15; or
(d) to add to the covenants of either of the Mobile
Energy Parties, for the benefit of the Holders, or to
surrender any right or power herein conferred upon such
Mobile Energy Party; or
(e) to convey, transfer and assign to the Trustee, and
to subject to the Lien of this Indenture, additional
properties or assets, and to correct or amplify the
description of any property at any time subject to the Lien
of this Indenture or to assure, convey and confirm unto the
Trustee any property subject or required to be subject to
the Lien of this Indenture; or
(f) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to
continue the qualification of this Indenture (including any
supplemental indenture) under the Trust Indenture Act, or
under any similar Federal statute hereafter enacted, or to
permit the qualification of any Securities for sale under
the securities laws of any of the States of the United
States, and to add to this Indenture such other provisions
as may be expressly permitted by the Trust Indenture Act, or
under any similar Federal statute hereafter enacted,
excluding, however, the provisions referred to in Section
316(a)(2) of the Trust Indenture Act as in effect at the
date as of which this instrument was executed or any
corresponding provision in any similar Federal statute
hereafter enacted; or
(g) to permit or facilitate the issuance of Securities
in uncertificated form or to provide for the cessation
thereof; or
(h) to cure any ambiguity, inconsistency or formal
defect or omission, or to make any other provisions with
respect to matters or questions arising under this
Indenture, provided such action shall not be inconsistent
with this Indenture, shall not impair the security for the
Securities and shall not adversely affect the interest of
the Holders of any series; or
(i) to secure or maintain the rating for any
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Securities from any Rating Agency.
SECTION 11.2. Supplemental Indenture with Consent of
Holders. With the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all
series then Outstanding, considered as one class, by Act of said
Holders delivered to the Mobile Energy Parties and the Trustee,
the Mobile Energy Parties, in each case, when authorized by Board
Resolutions, may, and the Trustee, subject to Sections 11.3 and
11.4, shall, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this
Indenture; provided, however, that if there shall be Securities
of more than one series Outstanding hereunder and if a proposed
supplemental indenture shall directly affect the rights of the
Holders of one or more, but less than all, of such series, then
the consent only of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of all
series so directly affected, considered as one class, shall be
required; provided further, however, that no such supplemental
indenture shall, without the consent of the Holder of each
Outstanding Security directly affected thereby:
(a) change the Stated Maturity of any Security (or, if
the principal thereof is payable in installments, the Stated
Maturity of any such installment), or of any payment of
interest thereon, or the dates or circumstances of payment
of premium, if any, on any Security, or change the principal
amount thereof or the interest thereon or any premium
payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any
Security or the premium, if any, or the interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment of principal or interest on
or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date) or such payment
of premium, if any, on or after the date such premium
becomes due and payable or change the dates or the amounts
of payments to be made through the operation of the Sinking
Fund in respect of such Securities, if any; or
(b) permit the creation of any Lien prior to or pari
passu with the Lien of the Security Documents with respect
to any of the Indenture Securities Collateral, or terminate
the Lien of the Security Documents on any Indenture
Securities Collateral or deprive any Holder of the security
afforded by the Lien of the Security Documents, except to
the extent expressly permitted by this Indenture or any of
the Security Documents; or
(c) reduce the percentage in principal amount of the
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Outstanding Securities, the consent of whose Holders is
required for any such supplemental indenture, or the consent
of whose Holders is required for any waiver (of compliance
with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in
this Indenture, or reduce the requirements of Section 13.4
for quorum or voting; or
(d) modify any of the provisions of Section 3.2 or
Section 8.7 (except to increase the percentage of the
principal amount of the Outstanding Securities required to
waive past defaults) or of this Section 11.2 (except to
provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the
Holder of each Security affected thereby).
A supplemental indenture that changes or eliminates any
covenant or other provision of this Indenture that has expressly
been included solely for the benefit of one or more particular
series of Securities, or that modifies the rights of the Holders
of Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
Upon receipt by the Trustee of Board Resolutions of the
Mobile Energy Parties and such other documentation as the Trustee
may reasonably require and upon the filing with the Trustee of
evidence of the Act of such Holders, the Trustee shall join in
the execution of such supplemental indenture or other instrument
(as the case may be), subject to the provisions of Sections 11.3
and 11.4.
It shall not be necessary for any Act of Holders under this
Section 11.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.
SECTION 11.3. Documents Affecting Immunity or Indemnity. If
in the opinion of either of the Mobile Energy Parties or the
Trustee any document required to be executed by it pursuant to
the terms of Section 11.2 affects any interest, right, duty,
immunity or indemnity in favor of the Mobile Energy Parties or
the Trustee under this Indenture, either of the Mobile Energy
Parties or the Trustee (as the case may be), may in its
discretion decline to execute such document.
SECTION 11.4. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any
Series Supplemental Indenture or other supplemental indenture
permitted by this Article XI or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to section 9.1) shall be fully protected
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in relying upon, an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this
Indenture.
SECTION 11.5. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article XI,
this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 11.6. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article XI shall
conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 11.7. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article
XI may, and shall if required by the Company, bear a notation in
form approved by the Company and the Trustee as to any matter
provided for in such supplemental indenture; and, in such case,
suitable notation may be made upon Outstanding Securities after
proper presentation and demand. If the Company shall so
determine, new Securities so modified as to conform, in the
opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE XII.
SATISFACTION AND DISCHARGE
SECTION 12.1. Satisfaction and Discharge of Securities. (a)
Except as otherwise provided with respect to the Securities of
any series in the Series Supplemental Indenture relating thereto,
the Securities of such series shall, prior to the Stated Maturity
thereof (or, if principal is payable in installments, the Stated
Maturity of the final installment of principal thereof), on the
ninety-first (91st) day after the date of the deposit referred to
in paragraph (i) below, be deemed to have been paid for all
purposes of this Indenture, and the entire indebtedness of the
Mobile Energy Parties in respect thereof shall be deemed to have
been satisfied and discharged, upon satisfaction of the following
conditions:
(i) the Company shall have irrevocably deposited with
the Trustee, in trust, specifically pledged as security for
and dedicated solely for the benefit of the Holders of
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Securities of such series (A) monies in an amount that shall
be sufficient, (B) U.S. Government Obligations, the payment
of interest and principal on which when due, without any
regard to reinvestment thereof, will provide monies that
shall be sufficient or (C) any combination of clause (A) and
(B) above that shall be sufficient, in each case, in the
opinion of a firm of independent certified public
accountants of recognized national standing expressed in a
written certification thereof delivered to the Trustee, to
pay when due the principal of and premium, if any, and
interest due and to become due on the Securities of such
series, whether at Stated Maturity or upon redemption,
acceleration or otherwise;
(ii) if any such deposit of monies or U.S. Government
Obligations shall have been made prior to the Stated
Maturity (or, if principal is payable in installments, the
Stated Maturity of the final installment of principal) or
Redemption Date or Prepayment Date of such Securities, the
Company shall have delivered to the Trustee a Company Order
stating that such monies shall be held by the Trustee, in
trust, as provided in Section 12.3;
(iii) if the Company has deposited or caused to be
deposited monies or U.S. Government Obligations (or a
combination thereof) to pay or discharge the principal of
and premium, if any, and interest on the Outstanding
Securities of such series to and including a Redemption Date
on which all of the Outstanding Securities of such series
are eligible for optional redemption and on which all of the
Outstanding Securities of such series are to be redeemed,
such Redemption Date shall be irrevocably designated by a
Board Resolution of the Company delivered to the Trustee on
or prior to the date of such deposit of such monies or U.S.
Government Obligations, and such Board Resolution shall be
accompanied by an irrevocable Company Request that the
Trustee give notice of such redemption in the name and at
the expense of the Company not less than thirty (30) nor
more than sixty (60) days prior to such redemption in
accordance with Section 6.4;
(iv) the Mobile Energy Parties shall have delivered to
the Trustee an Opinion of Counsel to the effect that (A) the
trust resulting from such deposit does not constitute an
investment company under the Investment Company Act of 1940
and (B) the Holders shall have a perfected security interest
under applicable Law in the monies and U.S. Government
Obligations so deposited;
(v) no Event of Default or event that with notice,
lapse of time or both would become an Event of Default
(including by reason of such deposit) arising pursuant to
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Section 8.1(a) or (n) with respect to the Securities of such
series shall have occurred and be continuing on the date of
deposit or during the period ending on the ninety-first
(91st) day after such date;
(vi) the Mobile Energy Parties shall have delivered to
the Trustee an Opinion of Counsel to the effect that based
upon (A) a change in the applicable Federal income tax law
since the date of this Indenture (or a change in the
official interpretation thereof) or (B) the receipt by the
Company from, or the publishing by, the Internal Revenue
Service of a ruling on which such counsel is relying for the
opinion contemplated herein, the Holders of Securities of
such series will not recognize income, gain or loss for
Federal income tax purposes as a result of the deposit,
defeasance and discharge pursuant to this Section 12.1(a)
and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times as
would have been the case if such deposit, defeasance and
discharge had not occurred; and
(vii) there shall have been delivered to the Trustee
an Officer's Certificate of each of the Mobile Energy
Parties and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of the Securities of such series
have been complied with.
Upon satisfaction of the aforesaid conditions with respect
to the Securities of any series, the Trustee shall, upon receipt
of a Company Request, acknowledge in writing that the Securities
of such series are deemed to have been paid for all purposes of
this Indenture and that the entire indebtedness of the Mobile
Energy Parties in respect thereof is deemed to have been
satisfied and discharged.
In the event that Securities that shall be deemed to have
been paid as provided in this Section 12.1(a) do not mature and
are not to be redeemed within the sixty (60) day period
commencing on the date of the deposit with the Trustee of monies,
the Mobile Energy Parties shall, as promptly as practicable, give
a notice, in the same manner as a notice of redemption with
respect to such Securities, to the Holders of such Securities to
the effect that such Securities are deemed to have been paid and
the circumstances thereof.
Notwithstanding the satisfaction and discharge of any
Securities as aforesaid, (i) the rights of Holders of Securities
of such series to receive, solely from the trust funds described
in paragraph (i) of this Section 12.1(a), payment of the
principal of and premium, if any, and interest on the Securities
of such series on the Stated Maturity thereof (to and including
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the Redemption Date, if any, designated pursuant to paragraph
(iii) of this Section 12.1(a)) and (ii) the rights and
obligations of the Mobile Energy Parties and the Trustee in
respect of the Securities of such series under Sections 2.7, 2.8,
2.9, 2.10, 2.11, 2.12 and 2.15, Article VI (in the case of
redemption as contemplated by paragraph (iii) of this Section
12.1(a), to the extent Article VI applies to the redemption to be
made on such Redemption Date), Sections 9.3(e) and 9.7 and this
Article XII shall survive.
(b) If (i) each of the conditions set forth in paragraphs
(i), (ii), (iii), (iv) and (v) of this Section 12.1(a) shall have
been satisfied with respect to the Outstanding Securities of any
series, but the conditions set forth in paragraphs (vi) and (vii)
thereof are not satisfied and (ii) the Mobile Energy Parties
shall have delivered to the Trustee (A) an opinion of counsel to
the effect that the Holders of such series will not recognize
income, gain or loss for Federal income tax purposes as a result
of the deposit, defeasance and discharge pursuant to this Section
12.1(a) and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had
not occurred and (B) an Officer's Certificate of each of the
Mobile Energy Parties and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to the
defeasance of the Securities of such series pursuant to this
Section 12.1(b) have been complied with, then:
(A) with respect to the Securities of such series, the
Mobile Energy Parties shall be released from their covenants
and other obligations contained in Articles V (other than
Section 5.3) and XIV and Section 2.15 of this Indenture and
all their obligations under the other Security Documents,
and may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in
any such covenant or obligation whether directly or
indirectly, by reason of any reference elsewhere herein to
any other provision of this Indenture or any other document
and any failure to comply with any such covenant shall not
constitute an Event of Default with respect to the
Securities of such series;
(B) the occurrence of any event specified in any of
paragraphs (b) through (m), (o) or (p) of Section 8.1 shall
not constitute an Event of Default with respect to the
Securities of such series;
(C) the Securities of such series shall thereafter be
deemed not to be "Outstanding" solely for purposes of
determining whether or not the Holders of the requisite
aggregate principal amount of Securities have concurred in
any Act under this Indenture with respect to any covenant or
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obligation from which the Mobile Energy Parties have been
released pursuant to paragraph (A) above, or with respect to
any event that shall have ceased to be an Event of Default
with respect to Securities of such series pursuant to
paragraph (B) above (or the consequences thereof); and
(D) the Securities of such series shall cease to be
secured by or to be entitled to any benefit under the
Security Documents or any other Lien upon any Collateral,
including any monies, security or other property held by the
Trustee (other than monies and U.S. Obligations deposited
with the Trustee pursuant to paragraph (i) of Section
12.1(a) in respect of Securities of such series and interest
and other amounts earned and received thereon);
provided, however, that the provisions of this Section 12.1(b)
shall not be deemed to relieve the Company of its obligations
with respect to the payment of the principal of and premium, if
any, and interest on the Outstanding Securities of such series.
In respect of the foregoing, it is understood and agreed that:
(1) satisfaction by the Company of the conditions
necessary to achieve the consequences specified in this
Section 12.1(b) with respect to any series of Securities
shall not be construed to preclude the Company from
achieving the consequences specified in Section 12.1(a) with
respect to such Securities at a later date upon satisfaction
of the conditions set forth in Section 12.1(a); and
(2) if at any time the only Outstanding Securities are
Securities with respect to which the conditions described in
this Section 12.1(b) have been satisfied, the Trustee shall,
upon receipt of a Company Request, take the actions
specified in the last paragraph of Section 12.2
notwithstanding the failure to satisfy and discharge the
Indenture as provided in Section 12.2.
(c) For purposes of this Section 12.1, if the Mobile Energy
Parties, or either of them, shall incur any Debt and all or any
portion of the proceeds thereof are concurrently applied to make
a deposit pursuant to paragraph (i) of Section 12.1(a) in respect
of any series of Securities (or to acquire U.S. Government
Obligations that are concurrently so deposited), whether for
purposes of Section 12.1(a) or 12.1(b), then any Event of Default
that would arise as a result of such incurrence or as a result of
any Lien granted to secure such Debt shall not constitute an
Event of Default with respect to the Securities of such series;
provided, however, that if, on or before the ninety-first (91st)
day after the date of such deposit any of the applicable
conditions under Section 12.1(a) or (b), as the case may be,
required to be satisfied on such date or during the period ending
on such date are not satisfied, then any such Event of Default
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shall be deemed to have occurred at the time and to the extent
such Event of Default would have occurred without regard to this
Section 12.1(c).
(d) Notwithstanding anything herein to the contrary, if, at
any time after a Security would be deemed to have been paid for
purposes of this Indenture, and, if such is the case, the
Company's indebtedness in respect thereof would be deemed to have
been satisfied and discharged, pursuant to this Section 12.1
(without regard to provisions of this paragraph), the Trustee or
any Paying Agent, as the case may be, shall be required to return
the monies or U.S. Government Obligations, or combination
thereof, deposited with it to either of the Mobile Energy Parties
or any Affiliate thereof or its representatives under any
applicable Federal or state bankruptcy, insolvency or other
similar Law such Security shall thereupon be deemed retroactively
not to have been paid and any satisfaction and discharge of the
Company's indebtedness in respect thereof shall retroactively be
deemed not have been effected, and such Security shall be deemed
to remain Outstanding.
SECTION 12.2. Satisfaction and Discharge of Indenture. This
Indenture and the Guaranty shall upon a Company Request and a
Mobile Energy Request cease to be of further effect (except as
hereinafter expressly provided), and the Trustee, at the expense
of the Company, shall execute proper instruments prepared by the
Company acknowledging satisfaction and discharge of this
Indenture and the Guaranty, when:
(a) either
(i) all Securities theretofore authenticated and
delivered (other than (A) Securities that have been
destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.9 and (B) Securities deemed to
have been paid in accordance with Section 12.1) have been
delivered to the Trustee for cancellation; or
(ii) all Securities not theretofore delivered
to the Trustee for cancellation shall be deemed to have been
paid in accordance with Section 12.1;
(b) all other sums due and payable hereunder have been
paid; and
(c) the Mobile Energy Parties have delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this
Indenture have been complied with.
Upon satisfaction of the aforesaid conditions, the Trustee
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shall, upon receipt of a Company Request and Mobile Energy
Request, acknowledge in writing the satisfaction and discharge of
this Indenture and the Guaranty.
Notwithstanding the satisfaction and discharge of this
Indenture and the Guaranty as aforesaid, if at the time of such
satisfaction and discharge any Securities are deemed to have been
paid in accordance with Section 12.1, but have not actually been
fully paid, then the rights and obligations of the Mobile Energy
Parties and the Trustee in respect of such Securities shall
survive to the extent provided in Section 12.1 until all such
Securities have actually been repaid in full.
Upon satisfaction and discharge of this Indenture and the
Guaranty as provided in this Section 12.2, the Trustee shall
assign, transfer and turn over to or upon the order of the
Company, any and all monies, securities and other property then
held by the Trustee for the benefit of the Holders other than
monies and U.S. Government Obligations deposited with the Trustee
pursuant to Section 12.1 and interest and other amounts earned or
received thereon.
SECTION 12.3. Application of Trust Money. The monies
deposited with the Trustee pursuant to Section 12.1 and all
monies received by the Trustee in respect of U.S. Government
Obligations deposited with the Trustee pursuant to Section 12.1
shall not be withdrawn or used for any purpose other than, and
shall be held in trust for, the payment of the principal of and
premium, if any, and interest on the Securities or portions of
principal amount thereof in respect of which such deposit was
made. The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against U.S. Government Obligations deposited pursuant to Section
12.1 or the interest and principal received in respect of such
obligations other than any such tax, fee or other charge payable
by or on behalf of Holders.
ARTICLE XIII.
MEETINGS OF HOLDERS OF SECURITIES;
ACTION WITHOUT MEETING
SECTION 13.1. Purposes for Which Meetings May Be Called. A
meeting of Holders of Securities of one or more, or all, series,
may be called at any time and from time to time pursuant to this
Article XIII to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders
of such series.
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SECTION 13.2. Call, Notice and Place of Meetings. (a) The
Trustee may at any time call a meeting of Holders of one or more,
or all, series of Securities for any purposes specified in
Section 13.1, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, or at such other
place, as the Trustee shall determine. Notice of every such
meeting, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 1.6, not less
than twenty (20) nor more than sixty (60) days prior to the date
fixed for the meeting.
(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series, by the Company, by Mobile Energy or by the Holders of ten
percent (10%) in aggregate principal amount of the Outstanding
Securities of such series (or, in the case of a meeting of the
Holders of the Securities of all series, ten percent (10%) in
aggregate principal amount of the Outstanding Securities of all
series, considered as one class), by written request setting
forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made the first mailing of
the notice of such meeting within twenty-one (21) days after
receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Mobile Energy
Parties or such Holders (as the case may be) may determine the
time and the place in the Borough of Manhattan, the City of New
York, or in such other place as the Mobile Energy Parties or such
Holders (as the case may be) shall determine, for such meeting
and may call such meeting for such purposes by giving notice
thereof as provided in Section 13.2(a).
(c) Any meeting of Holders of Securities of one or more, or
all, series shall be valid without notice if the Holders of all
Outstanding Securities of such series are present in person or by
proxy and the Trustee is present, or if notice is waived in
writing before or after the meeting by the Holders of all
Outstanding Securities of such series, or by such of them as are
not present at the meeting in person or by proxy.
SECTION 13.3. Persons Entitled to Vote at Meetings. To be
entitled to vote at any meeting of Holders of Securities of one
or more, or all, series, a Person shall be (a) a Holder of one or
more Outstanding Securities of such series or (b) a Person
appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities of such series by
such Holder or Holders. The only Persons who shall be entitled
to attend any meeting shall be the Holders described above and
any proxies of such Holders and their respective counsel, any
representatives of the Trustee and its counsel and any
representatives of the Mobile Energy Parties and their respective
counsels.
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SECTION 13.4. Quorum; Action. The Persons entitled to vote
a majority in aggregate principal amount of the Outstanding
Securities of the series with respect to which a meeting shall
have been called as hereinbefore provided, considered as one
class, shall constitute a quorum for a meeting of Holders of
Securities of such series; provided, however, that if any action
is to be taken at such meeting that this Indenture expressly
provides may be taken by the Holders of a specified percentage
that is less than a majority in principal amount of the
Outstanding Securities of such series, considered as one class,
the Persons entitled to vote such specified percentage in
principal amount of the Outstanding Securities of such series,
considered as one class, shall constitute a quorum. In the
absence of a quorum, the meeting may be adjourned for a period of
not less than ten (10) days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than ten (10)
days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Except as provided in
Section 13.5(e), notice of the reconvening of any adjourned
meeting shall be given as provided in Section 13.2(a), except
that such notice need be given only once not less than five (5)
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series
that shall constitute a quorum.
Except as limited by Section 11.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted by the affirmative
vote of the Holders of a majority in aggregate principal amount
of the Outstanding Securities of the series with respect to which
such meeting shall have been called, considered as one class;
provided, however, that, except as so limited, any resolution
with respect to any action that this Indenture expressly provides
may be taken by the Holders of a specified percentage that is
less than a majority in principal amount of the Outstanding
Securities of such series, considered as one class, may be
adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote
of the Holders of such specified percentage in principal amount
of the Outstanding Securities of such series, considered as one
class.
Any resolution passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section
13.4 shall be binding on all the Holders of Securities of the
series with respect to which such meeting shall have been held,
whether or not present or represented at the meeting.
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SECTION 13.5. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of Meetings. (a)
Attendance at meetings of Holders of Securities may be in person
or by proxy, and, to the extent permitted by law, any such proxy
shall remain in effect and be binding upon any future Holder of
the Securities with respect to which it was given, unless and
until specifically revoked by the Holder or future Holder of such
Securities before being voted.
(b) Notwithstanding any other provision of this Indenture,
the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities in regard to
proof of the holding of such Securities and of the appointment of
proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in
the manner specified in Section 1.4 and the appointment of any
proxy shall be proved in the manner specified in Section 1.4.
Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine
without the proof specified in Section 1.4 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint
a temporary chairman of the meeting, unless the meeting shall
have been called by either of the Mobile Energy Parties or by
Holders of Securities as provided in Section 13.2(b), in which
case such Mobile Energy Party or the Holders of Securities of the
series calling the meeting (as the case may be) shall in like
manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series represented at
the meeting, considered as one class.
(d) At any meeting each Holder of an Outstanding Security
of any series or such Holder's proxy shall be entitled to one
vote for each $1,000 original principal amount of Securities of
such series held or represented by such Holder, and each Holder
of any such Security or such Holder's proxy shall be entitled to
divide the votes carried by such Security, casting some for and
some against a particular action, as such Holder sees fit;
provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not Outstanding
and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except
as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 13.2 at
which a quorum is present may be adjourned from time to time by
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Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of all series represented at the
meeting, considered as one class; and the meeting may be held as
so adjourned without further notice.
SECTION 13.6. Counting Votes and Recording Action of
Meetings. The vote upon any resolution submitted to any meeting
of Holders of Securities shall be by written ballots on which
shall be subscribed the signatures of the Holders of Outstanding
Securities or of their representatives by proxy and the principal
amounts and serial numbers of the Outstanding Securities, of the
series with respect to which the meeting shall have been called,
held or represented by them. The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all
votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their
verified written reports in quadruplicate of all votes cast at
the meeting. A record, at least in quadruplicate, of the
proceedings of each meeting of Holders of Securities shall be
prepared by the secretary of the meeting and there shall be
attached to such record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that such notice
was given as provided in Section 13.2 and, if applicable, Section
13.4. Each copy shall be signed and verified by the affidavits
of the permanent chairman and secretary of the meeting and one
such copy shall be delivered to each of the Mobile Energy
Parties, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 13.7. Action Without Meeting. In lieu of the vote
of Holders of Securities at a meeting as hereinbefore
contemplated in this Article XIII, any request, demand,
authorization, direction, notice, consent, waiver or other action
may be made, given or taken by Holders of Securities by written
instruments as provided in Section 1.4.
ARTICLE XIV.
GUARANTY
SECTION 14.1. Guaranty of Payment and Performance. Mobile
Energy hereby (a) guarantees to the Trustee for its own benefit
and the benefit of the Holders from time to time the due and
punctual payment, observance and performance of all of the
Guaranteed Obligations in accordance with their respective terms
and when and as due (whether at maturity, by reason of
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acceleration or otherwise), or deemed to be due pursuant to
Section 14.2, and (b) agrees so to pay, observe or perform the
same when so due, or deemed to be due, upon demand.
SECTION 14.2. Continuance and Acceleration of Guaranteed
Obligations upon Certain Events. If (a) any Event of Default
described in Section 8.1(n) shall have occurred and be
continuing, (b) any injunction, stay or the like that enjoins any
acceleration, or demand for the payment, observance or
performance, of any Guaranteed Obligations that would otherwise
be required or permitted under the Security Documents shall
become effective or (c) any Guaranteed Obligations shall be or be
determined to be or become discharged, disallowed, invalid,
illegal, void or otherwise unenforceable (whether by operation of
any present or future law or by order of any Governmental
Authority) against the Company then (i) such Guaranteed
Obligations shall, for all purposes of this Indenture, be deemed
(A) in the case of clause (c) above, to continue to be
outstanding and in full force and effect notwithstanding the
unenforceability thereof against the Company and (B) if such is
not already the case, to have thereupon become immediately due
and payable and to have commenced bearing interest at the rate
equal to ( )% and (ii) the Trustee may, with respect to such
Guaranteed Obligations, exercise all of the rights and remedies
hereunder that would be available to it during an Event of
Default.
SECTION 14.3. Recovered Payments. The Guaranteed
Obligations shall be deemed not to have been paid, observed or
performed, and Mobile Energy's obligations under this Guaranty in
respect thereof shall continue and not be discharged, to the
extent that any payment, observance or performance thereof by the
Company or any other guarantor, or out of the proceeds of any
collateral, is recovered from or paid over by or for the account
of the Trustee for any reason, including as a preference or
fraudulent transfer or by virtue of any subordination (whether
present or future or contractual or otherwise) of the Guaranteed
Obligations, whether such recovery or payment over is effected by
any judgment, decree or order of any Governmental Authority, by
any plan of reorganization or by settlement or compromise by the
Trustee (whether or not consented to by either of the Mobile
Energy Parties or any other guarantor) of any claim for any such
recovery or payment over. Mobile Energy hereby expressly waives
the benefit of any applicable statute of limitations and agrees
that it shall be liable hereunder with respect to any Guaranteed
Obligation whenever such a recovery or payment over thereof
occurs.
SECTION 14.4. Evidence of Guaranteed Obligations. The
records of the Trustee shall be conclusive evidence (absent
manifest error) of the Guaranteed Obligations and of all
payments, observances and performances in respect thereof.
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SECTION 14.5. Binding Nature of Certain Adjudications.
Mobile Energy shall be conclusively bound by the adjudication in
any action or proceeding, legal or otherwise, involving any
controversy arising under, in connection with, or in any way
related to, any of the Guaranteed Obligations, and by a judgment,
award or decree entered therein, if Mobile Energy shall have had
the right, or shall have been given the opportunity, to
participate in such action or proceeding and shall have been
given notice of such action or proceeding in time to exercise
such right or avail itself of such opportunity.
SECTION 14.6. Nature of Mobile Energy's Obligations. Mobile
Energy's obligations hereunder (a) are absolute and
unconditional, (b) are unlimited in amount, (c) constitute a
guaranty of payment and performance and not a guaranty of
collection, (d) are as primary obligor and not as a surety only,
(e) shall be a continuing guaranty of all present and future
Guaranteed Obligations and all promissory notes and other
documentation given in extension or renewal or substitution for
any of the Guaranteed Obligations and (f) shall be irrevocable.
SECTION 14.7. No Release of Mobile Energy. The Obligations
of Mobile Energy under this Guaranty shall not be reduced,
limited or terminated, nor shall Mobile Energy be discharged from
any thereof, for any reason whatsoever (other than, subject to
Sections 14.3 and 14.12, the payment, observance and performance
of the Guaranteed Obligations), including (and whether or not the
same shall have occurred or failed to occur once or more than
once and whether or not the Guarantor shall have received notice
thereof): (a) (i) any increase in the principal amount of, or
interest rate applicable to, (ii) any extension of the time of
payment, observance or performance of, (iii) any other amendment
or modification of any of the other terms and provisions of, (iv)
any release, composition or settlement (whether by way of
acceptance of a plan of reorganization or otherwise) of (v) any
subordination (whether present or future or contractual or
otherwise) of or (vi) any discharge, disallowance, invalidity,
illegality, voidness or other unenforceability of, in each case
the Guaranteed Obligations; (b) (i) any failure to obtain, (ii)
any release, composition or settlement of, (iii) any amendment or
modification of any of the terms and provisions of, (iv) any
subordination of or (v) any discharge, disallowance, invalidity,
illegality, voidness or other unenforceability of, in each case
any other guaranties of the Guaranteed Obligations; (c) (i) any
failure to obtain or any release of, (ii) any failure to protect
or preserve, (iii) any release, compromise, settlement or
extension of the time of payment of any obligations constituting,
(iv) any failure to perfect or maintain the perfection or
priority of any Lien upon, (v) any subordination of any Lien upon
or (vi) any discharge, disallowance, invalidity, illegality,
voidness or other unenforceability of any Lien or intended Lien
upon, in each case any collateral now or hereafter securing the
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Guaranteed Obligations or any other guaranties thereof; (d) any
termination of or change in any relationship between Mobile
Energy and the Company, including any such termination or change
resulting from a change in the ownership of Mobile Energy or the
Company or from the cessation of any commercial relationship
between Mobile Energy and the Company; (e) any exercise of, or
any election not or failure to exercise, delay in the exercise
of, waiver of, or forbearance or other indulgence with respect
to, any right, remedy or power available to the Trustee,
including (i) any election not or failure to exercise any right
of setoff, recoupment or counterclaim, (ii) any election of
remedies effected by the Trustee, including the foreclosure upon
any real estate constituting collateral, whether or not such
election affects the right to obtain a deficiency judgment and
(iii) any election by the Trustee in any proceeding under the
Bankruptcy Code of the application of Section 1111(b)(2) of such
Code; and (f) any other act or failure to act or any other event
or circumstance that (i) varies the risk of Mobile Energy under
this Guaranty or (ii) but for the provisions hereof, would, as a
matter of statute or rule of law or equity, operate to reduce,
limit or terminate the obligations of Mobile Energy hereunder or
discharge Mobile Energy from any thereof.
SECTION 14.8. Certain Waivers. Mobile Energy waives (a) any
requirement, and any right to require, that any right or power be
exercised or any action be taken against the Company, any other
guarantor or any collateral for the Guaranteed Obligations, (b)
all defenses to, and all setoffs, counterclaims and claims of
recoupment against, the Guaranteed Obligations that may at any
time be available to the Company or any other guarantor, (c)
(i) notice of acceptance of and intention to rely on this
Guaranty, (ii) notice of the issuance of any Securities under
this Indenture and of the incurrence or renewal of any other
Guaranteed Obligations, (iii) notice of any of the matters
referred to in Section 14.7 and (iv) all other notices that may
be required by Law or otherwise to preserve any rights against
Mobile Energy under this Guaranty, including any notice of
default, demand, dishonor, presentment and protest, (d)
diligence, (e) any defense based upon, arising out of or in any
way related to (i) any claim that any sale or other disposition
of any collateral for the Guaranteed Obligations was not
conducted in a commercially reasonable fashion or that a public
sale, should the Trustee or the Collateral Agent (as the case may
be), have elected to so proceed, was, in and of itself, not a
commercially reasonable method of sale, (ii) any claim that any
election of remedies by the Trustee or the Collateral Agent (as
the case may be) including the exercise by the Trustee or the
Collateral Agent (as the case may be) of any rights against any
collateral, impaired, reduced, released or otherwise extinguished
any right that Mobile Energy might otherwise have had against the
Company or any other guarantor or against any collateral,
including any right of subrogation, exoneration, reimbursement or
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contribution or right to obtain a deficiency judgment, (iii) any
claim based upon, arising out of or in any way related to any of
the matters referred to in Section 14.7 and (iv) any claim that
this Guaranty should be strictly construed against the Trustee
and (f) ALL OTHER DEFENSES UNDER APPLICABLE LAW THAT WOULD, BUT
FOR THIS CLAUSE (f), BE AVAILABLE TO MOBILE ENERGY AS A DEFENSE
AGAINST OR A REDUCTION OR LIMITATION OF ITS OBLIGATIONS
HEREUNDER.
SECTION 14.9. Independent Credit Evaluation. Mobile Energy
has independently, and without reliance on any information
supplied by the Trustee, taken, and will continue to take,
whatever steps it deems necessary to evaluate the financial
condition and affairs of the Company, and the Trustee shall have
no duty to advise Mobile Energy of information at any time known
to it regarding such financial condition or affairs.
SECTION 14.10. Subordination of Rights Against Company,
Other Guarantors and Collateral. All rights that Mobile Energy
may at any time have against the Company, any other guarantor or
any collateral for the Guaranteed Obligations (including rights
of subrogation, exoneration, reimbursement and contribution and
whether arising under Law or otherwise), and all obligations that
the Company or any other guarantor may at any time have to Mobile
Energy, Mobile Energy's obligations hereunder or any payment made
are hereby expressly subordinated to the prior payment,
observance and performance in full of the Guaranteed Obligations.
Mobile Energy shall not enforce any of the rights, or attempt to
obtain payment or performance of any of the obligations,
subordinated pursuant to this Section 14.10 until the Guaranteed
Obligations have been paid, observed and performed in full,
except that such prohibition shall not apply to routine acts,
such as the giving of notices and the filing of continuation
statements, necessary to preserve any such rights. If any amount
shall be paid to or recovered by Mobile Energy (whether directly
or by way of setoff, recoupment or counterclaim) on account of
any right or obligation subordinated pursuant to this Section
14.10, such amount shall be held in trust by Mobile Energy for
the benefit of the Trustee, not commingled with any of Mobile
Energy's other funds and forthwith paid over to the Trustee, in
the exact form received, together with any necessary
endorsements, to be applied and credited against, or held as
security for, the Guaranteed Obligations and the obligations of
Mobile Energy hereunder.
SECTION 14.11. Payments by Mobile Energy. (a) All
payments due to the Trustee hereunder shall be made to the
Trustee at the Corporate Trust Office or at such other address
the Trustee may designate by notice to Mobile Energy. A payment
shall not be deemed to have been made on any day unless such
payment has been received by the Trustee at the required place of
payment, in lawful money of the United States of America in funds
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immediately available to the Trustee.
(b) All payments due the Trustee under this Guaranty,
and all of the other terms, conditions, covenants and agreements
to be observed and performed by Mobile Energy under this
Guaranty, shall be made, observed or performed by Mobile Energy
without any reduction or deduction whatsoever, including any
reduction or deduction for any set-off, recoupment, counterclaim
(whether, in any case, in respect of an obligation owed by the
Trustee to Mobile Energy, the Company or any other guarantor and,
in the case of a counterclaim, whether sounding in tort, contract
or otherwise) or tax.
(c) If any tax is required to be withheld or deducted
from, or is otherwise payable by Mobile Energy in connection
with, any payment due to the Trustee hereunder, Mobile Energy (i)
shall, if required, withhold or deduct the amount of such tax
from such payment and, in any case, pay such tax to the
appropriate taxing authority in accordance with Law and (ii)
shall pay to the Trustee (A) such additional amounts as may be
necessary so that the net amount received by the Trustee with
respect to such payment, after withholding or deducting all taxes
required to be withheld or deducted, is equal to the full amount
payable hereunder and (B) an amount equal to all taxes payable by
the Trustee as a result of payments made by Mobile Energy
(whether to a taxing authority or to the Trustee) pursuant to
this Section 14.11(c). If any tax is withheld or deducted from,
or is otherwise payable by Mobile Energy in connection with, any
payment due to the Trustee under this Guaranty, Mobile Energy
shall, within thirty (30) days after the date of such payment,
furnish to the Trustee the original or a certified copy of a
receipt for such tax from the applicable taxing authority. If
any payment due to the Trustee hereunder is or is expected to be
made without withholding or deducting therefrom, or otherwise
paying in connection therewith, any tax payable to any taxing
authority, Mobile Energy shall, within thirty (30) days after any
request from the Trustee, furnish to the Trustee a certificate
from such taxing authority, or an Opinion of Counsel acceptable
to the Trustee, in either case stating that no tax payable to
such taxing authority was or is, as the case may be, required to
be withheld or deducted from, or otherwise paid by Mobile Energy
in connection with, such payment.
(d) Mobile Energy hereby authorizes the Trustee, if
and to the extent any amount payable by Mobile Energy under this
Guaranty is not otherwise paid when due, to charge such amount
against any or all of the accounts of Mobile Energy with the
Trustee or any of its Affiliates (whether maintained at a branch
or office located within or without the United States), with
Mobile Energy remaining liable for any deficiency.
(e) Whenever any payment to the Trustee under this
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Article XIV would otherwise be due (except by reason of
acceleration) on a day that is not a Business Day, such payment
shall instead be due on the next succeeding Business Day. If the
date any payment hereunder is due is extended (whether by
operation of this Indenture, Law or otherwise), such payment
shall bear interest for such extended time at the rate of
interest applicable hereunder.
SECTION 14.12. Continuance of Guaranty; Survival. The
obligations of Mobile Energy under this Article XIV shall
continue in full force and effect until the payment, observance
and performance in full of the Guaranteed Obligations. The
rights and obligations of Mobile Energy and the Trustee shall
survive the repayment in full of all principal of and premium, if
any, and interest on, and all other amounts payable under, the
Securities.
SECTION 14.13. Assignments and Participations.
Assignments. Mobile Energy may not assign any of its rights or
obligations under this Guaranty without the prior written consent
of the Trustee, and no assignment of any such obligation shall
release Mobile Energy therefrom unless the Trustee shall have
consented to such release in a writing specifically referring to
the obligation from which Mobile Energy is to be released.
SECTION 14.14. Benefit and Enforcement. This Guaranty
is given for the benefit of the Trustee and, subject to the terms
and conditions set forth herein, the Holders from time to time of
the Securities, all of whom shall be entitled in the same manner
as set forth herein to enforce performance and observance of this
Guaranty.
ARTICLE XV.
NONRECOURSE LIABILITY OF MOBILE ENERGY PARTIES
Satisfaction of the obligations of the Mobile Energy Parties
under this Indenture for the payment of the principal of or
premium, if any, or interest on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect
thereof or related thereto, shall be had solely from the assets
of the Mobile Energy Parties. No recourse shall be had to (a)
any assets or properties of the Members (other than Mobile Energy
as provided in Article XIV hereof) or of the stockholders of
Mobile Energy, other than their respective interests in the
Collateral, (b) any Member (other than Mobile Energy as provided
in Article XIV hereof) or (c) any Affiliate, incorporator,
stockholder, partner, member, officer, director or employee of
any Member (other than the Company and, in respect of any
Southern Guaranty on deposit in any Reserve Account Security
Account, Southern) or of the Company (other than Mobile Energy
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and, in respect of any Southern Guaranty on deposit in any
Reserve Account Security Account, Southern) and in the event of
any non-performance by either of the Mobile Energy Parties of its
obligation to pay the principal of or premium, if any, or
interest on any Securities, or any part thereof, or for any claim
based thereon or otherwise in respect thereof, no judgment for
any deficiency upon the obligations of either of the Mobile
Energy Parties under this Indenture, for the payment of the
principal of or premium, if any, or interest on any Securities,
or any part thereof, or for any claim based thereon or otherwise
in respect thereof or related thereto, shall be obtainable by the
Holders, the Trustee or the Collateral Agent against any Member
(other than Mobile Energy as provided in Article XIV hereof) or
any Affiliate, incorporator, stockholder, partner, member,
officer, director or employee of any Member (other than the
Company and, in respect of any Southern Guaranty on deposit in
any Reserve Account Security Account, Southern) or of the Company
(other than Mobile Energy as provided in Article XIV hereof and,
in respect of any Southern Guaranty on deposit in any Reserve
Account Security Account, Southern). Notwithstanding anything in
this Article XV to the contrary, (i) nothing contained herein or
in the Securities shall limit or otherwise prejudice in any way
the right of the Trustee, the Collateral Agent or any Holder to
proceed against any Person whomsoever (A) with respect to the
enforcement of such Person's obligations under any Project
Document (including the Guaranty and any Southern Guaranty to
which such Person is a party) or limit or otherwise prejudice in
any way the right of the Holders, the Trustee or the Collateral
Agent to proceed against such Person with respect to the
enforcement of such obligations or (B) to the extent necessary to
realize the benefit of the Indenture Securities Collateral
granted hereunder or under the Security Documents and (ii) any
limitations of liability herein shall not apply if and to the
extent that any Person commits fraud or wilful
misrepresentations, including those contained in Officer's
Certificates issued from time to time.
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IN WITNESS WHEREOF, the parties have caused this Indenture
to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
MOBILE ENERGY SERVICES
COMPANY, L.L.C.
By:
Name:
Title:
MOBILE ENERGY SERVICES
HOLDINGS, INC.
By:
Name:
Title:
FIRST UNION NATIONAL BANK
OF GEORGIA, as Trustee
By:
Name:
Title:
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SCHEDULE 5.2
INSURANCE POLICIES
General Conditions:
(a) All policies shall waive the rights of subrogation
against the Collateral Agent.
(b) All property and liability policies shall name the
Collateral Agent as an additional insured. (All policies
protecting real and personal property or loss of income shall
include a Lenders Loss Payable provision, equivalent to 438 BFU,
for the benefit of the (Collateral Agent) (Trustee).)
(c) All policies shall be endorsed to provide a minimum of
thirty (30) days notice of cancellation, nonrenewal, or material
change (restricting coverage) to the Collateral Agent and the
Company.
(d) Where commercially available, all policies shall
stipulate by endorsement or equivalent policy language that the
additional insured status of the Collateral Agent places no
responsibility on the Collateral Agent for the payment of policy
premiums, nor does the action or failure to take action by any
other insured or additional insured invalidate coverages for the
Collateral Agent under said policy.
(e) A severability of interest clause or equivalent cross
liability endorsement shall be included in each policy.
(f) All policies shall be primary as respects coverage
provided for the Energy Complex and the Site.
(g) All policies shall be provided through insurance
carriers rated A-IX or better by the Best's Insurance Guide
(except for policies underwritten by Lloyd's of London, AEGIS and
approved English companies) or other insurance companies
reasonably acceptable to the Collateral Agent, in each case,
which are authorized to do business in the State of Alabama.
(h) All policies shall stipulate by endorsement or
equivalent policy language that following a Trigger Event (as
defined in the Intercreditor Agreement) and the exercise of
remedies under the Security Documents, the Collateral Agent shall
have the right to make all claims made under said policy.
(i) All policies shall stipulate by endorsement or
equivalent policy language that following a Trigger Event (as
defined in the Intercreditor Agreement) and the exercise of
remedies under the Security Documents, said policy can be
assigned to the Collateral Agent.
The following coverages shall be maintained in effect at all
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times until all obligations of the Mobile Energy Parties pursuant
to this Indenture, the Securities, the Guaranty and the other
Security Documents have been fully discharged:
Required Insurance:
(a) Workers' Compensation Insurance. Workers' compensation
insurance, as required by state and Federal laws (including
United States Longshoremen and Harbor Workers and Maritime
Liability (Jones Act) Insurance), including, employer's liability
insurance for all employees of the Energy Complex in the minimum
amount of $1,000,000 per occurrence and in the aggregate where
applicable; provided; however, that the Company may satisfy such
obligations, in whole or in part, through the self-insurance of
the Operator against workers' compensation claims.
(b) Comprehensive General Liability Insurance.
Comprehensive general liability insurance against claims for
personal injury (including bodily injury and death), and property
damage. Such insurance shall provide coverage for products-
completed operations, premises/operations, blanket contractual,
explosion, collapse and underground coverage, broad form property
damage and personal injury insurance coverage to protect the
Collateral Agent against claims arising out of operations
performed by the Company and its subcontractors, with a
$1,000,000 minimum limit per occurrence for combined bodily
injury and property damage and with an aggregate of $2,000,000.
The general liability insurance shall, at a minimum, be provided
under a 1986 ISO Commercial General Liability form of policy or
equivalent policy and shall be written on an occurrence basis, or
the AEGIS claim-first-made policy form.
(c) Comprehensive Automobile Liability. Comprehensive
automobile liability insurance against claims of personal injury
(including bodily injury and death) and property damage,
including loss of use thereof, covering all owned, leased, non-
owned and hired vehicles used by the Company in the operation of
the Energy Complex, with a $1,000,000 minimum limit per
occurrence for bodily injury and property damage and a $2,000,000
minimum limit per occurrence for combined bodily injury and
property damage.
(d) Aircraft and Watercraft Liability. Aircraft Liability
insurance (if applicable), including Passengers and Crew
Liability, and Watercraft Liability insurance (if applicable),
each having a $25,000,000 minimum limit per occurrence for
property damage and bodily injury, covering all aircraft or
watercraft that is owned, leased or chartered by the Company or
any of its subcontractors. If the performance of any obligations
by a subcontractor in connection with services performed at the
Energy Complex requires the use of any aircraft or watercraft
that is owned, leased or chartered by such subcontractor or any
of its subcontractors, such subcontractor shall obtain Aircraft
Liability and Watercraft Liability insurance with a $25,000,000
minimum limit per occurrence for property damage and bodily
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injury. If a helicopter is used to lift materials or equipment,
any Aircraft Liability insurance required hereunder shall not
contain any exclusion of coverage for "slung-cargo."
(e) Umbrella Liability or Excess Insurance. Excess
Liability insurance on an "occurrence" basis, or the AEGIS
claims-first-made policy form pursuant to an "Umbrella" policy
covering claims in excess of and following the terms of the
underlying insurance as set forth in (a), (b) and (c) with a
$24,000,000 minimum limit per occurrence and a $24,000,000 annual
aggregate limit; provided that, in the event that claims under
such aggregate liability coverage would reduce the coverage to an
amount less than or equal to $50,000,000, the Company shall
provide prompt written notice thereof to the Collateral Agent and
promptly after such claims are made, restore the coverage under
such policy to the coverage amount maintained prior to the
assertion of such claims.
(f) Property Damage Insurance. Property Damage
insurance on an "all risk" replacement cost basis including
coverage against damage or loss caused by earth movement, flood
and windstorm and providing (i) coverage for the Energy Complex
in a minimum aggregate amount of the lesser of (A) the full
replacement value of the Energy Complex and (B) the outstanding
amount of Senior Debt of the Company (for which purpose there
shall be included all steam, gas and electrical transmission
lines along with related equipment for which the Company has an
insurable interest) and (ii) Transit coverage, including Ocean
marine coverage (if applicable), with sub-limits sufficient to
insure the full replacement value of all property or equipment
removed from the Energy Complex. (For the perils of flood, earth
movement, increased cost of construction, debris removal and loss
to undamaged property, a sub-limit not less than $100,000,000.)
For purposes of this paragraph (f), "replacement cost," including
any improvements and equipment and supplies, shall be without
deduction for physical depreciation. All such policies may have
deductibles of not greater than $1,000,000, except for earth
movement, flood and windstorm, which will have the lowest
deductible available on commercially reasonable terms in the
insurance marketplace. Such insurance shall include and "Agreed
Amount" Clause or Waiver of Co-Insurance and shall provide for
increased cost of construction, debris removal, and loss to
undamaged property as the result of enforcement of building laws
or ordinances.
(g) Boiler and Machinery Insurance. Boiler and
Machinery insurance coverage to be written on a "comprehensive
form" basis for all insurable objects including all production
machinery, pressure vessels, electrical turbines and equipment,
motors, air tanks, boilers, machinery, pressure piping or any
other similar objects located on or adjacent to the Site in a
minimum aggregate amount equal to the maximum foreseeable loss
and expediting expenses in the amount of $2,500,000 (with losses
to be adjusted on a replacement value) (subject to the limit set
forth in paragraph (f) above). All such policies may have
S(5.2)-3
<PAGE>
deductibles of not greater than $1,000,000.
(h) Business Interruption and Extra Expense Insurance.
Business Interruption insurance covering as a minimum amount all
fixed expenses and debt service for a period of twelve (12)
months arising from any loss insured by (f) and (g). The maximum
deductible shall be no greater than thirty (30) days. There
shall be either an Agreed Amount Clause or Waiver of Coinsurance.
(i) Subcontractor Insurance. The Company shall
require each of its subcontractors (including the Operator) to
obtain, from an insurance company meeting the qualifications set
forth above, on or before the effective date of any agreement
between the Company and such subcontractor with respect to the
Energy Complex, each of the insurance coverages set forth in
paragraphs (a), (b) and (c). Each subcontractor shall furnish
the Collateral Agent and the Trustee a certificate of insurance
verifying that the insurance to be provided as required hereunder
has been secured.
S(5.2)-4
<PAGE>
Exhibit B-4(c)
DRAFT
6/15/95
FIRST SUPPLEMENTAL INDENTURE
dated as of ( ), 1995
to
TRUST INDENTURE
dated as of ( ), 1995
among
MOBILE ENERGY SERVICES COMPANY, L.L.C.,
MOBILE ENERGY SERVICES HOLDINGS, INC.
and
FIRST UNION NATIONAL BANK OF GEORGIA, as Trustee
Providing for the Issuance of $(260,000,000) of
First Mortgage Bonds due ( ) and 2017 with the
Interest Rates and Stated Maturities Set Forth Herein
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of ( ),
1995, to the Trust Indenture, dated as of ( ), 1995 (the
"Original Indenture"), among MOBILE ENERGY SERVICES COMPANY,
L.L.C., an Alabama limited liability company (the "Company"), its
principal office and mailing address being at ( ), MOBILE
ENERGY SERVICES HOLDINGS, INC., an Alabama corporation ("Mobile
Energy"), its principal office and mailing address being at (
), and FIRST UNION NATIONAL BANK OF GEORGIA, as Trustee
(the "Trustee"), its corporate trust office and mailing address
being at ( ).
WHEREAS, the Company, Mobile Energy and the Trustee
have heretofore executed and delivered the Original Indenture to
provide for the issuance from time to time of the Company's
Securities (as defined in the Original Indenture) to be issued in
one or more series;
WHEREAS, Sections 2.1, 2.3 and 11.1 of the Original
Indenture provide, among other things, that the Company, Mobile
Energy and the Trustee may enter into indentures supplemental to
the Original Indenture for, among other things, the purpose of
establishing the designation, form, terms and provisions of
Securities of any series as permitted by Sections 2.1, 2.3 and
11.1 of the Original Indenture;
WHEREAS, the Company and Mobile Energy (i) desire the
issuance of (two) (2) separate series of Securities to be
designated as hereinafter provided and (ii) have requested the
Trustee to enter into this First Supplemental Indenture for the
purpose of establishing the designation, form, terms and
provisions of the Securities of such series;
WHEREAS, all action on the part of the Company and
Mobile Energy necessary to authorize the issuance of the
Securities of such series under the Original Indenture and this
First Supplemental Indenture (the Original Indenture, as
supplemented by this First Supplemental Indenture, being
hereinafter called the "Indenture") has been duly taken; and
WHEREAS, all acts and things necessary to make said
Securities of such series, when executed by the Company and
Mobile Energy and authenticated and delivered by the Trustee as
provided in the Original Indenture, the legal, valid and binding
obligations of the Company and Mobile Energy, and to constitute
these presents a valid and binding supplemental indenture
according to its terms, have been done and performed, and the
execution of this First Supplemental Indenture and the creation
and issuance under the Indenture of the Securities of such series
have in all respects been duly authorized, and the Company and
Mobile Energy, in the exercise of the legal right and power
vested in them, execute this First Supplemental Indenture and
propose to create, execute, issue and deliver the Securities of
such series.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH, that, in order to establish the designation, form,
<PAGE>
terms and provisions of, and to authorize the authentication and
delivery of, the Securities of such series, and in consideration
of the acceptance of the Securities of such series by the holders
thereof and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings specified
unless the context otherwise requires. Such definitions shall be
equally applicable to the singular and plural forms of the terms
defined. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Original Indenture.
"Initial Securities" means, collectively, the Series A
First Mortgage Bonds and the Series B First Mortgage Bonds.
"Series A First Mortgage Bonds" has the meaning
specified in Section 2.1 hereof.
"Series B First Mortgage Bonds" has the meaning
specified in Section 2.2 hereof.
ARTICLE II
THE TERMS OF THE SECURITIES
SECTION 2.1. Terms of Series A First Mortgage Bonds.
(a) There is hereby created a series of Securities
designated "( )% First Mortgage Bonds Due ( ), Series A" in
the aggregate principal amount of $( ) (the "Series A
First Mortgage Bonds"). Upon delivery of a Company Order to the
Trustee in accordance with the provisions of Section 2.4 of the
Original Indenture, the Trustee shall authenticate and deliver
the Series A First Mortgage Bonds. Such Company Order shall
specify the amount of the Series A First Mortgage Bonds to be
authenticated and the date on which such Securities are to be
authenticated.
(b) The Series A First Mortgage Bonds shall be
substantially in the form of Schedule A hereto and shall have and
be subject to such other terms as provided in the Indenture.
SECTION 2.2. Terms of Series B First Mortgage Bonds.
(a) There is hereby created a series of Securities
designated "( )% First Mortgage Bonds Due ( ), Series B" in
the aggregate principal amount of $( ) (the "Series B
-2-
<PAGE>
First Mortgage Bonds"). Upon delivery of a Company Order to the
Trustee in accordance with the provisions of Section 2.4 of the
Original Indenture, the Trustee shall authenticate and deliver
the Series B First Mortgage Bonds. Such Company Order shall
specify the amount of the Series B First Mortgage Bonds to be
authenticated and the date on which such Securities are to be
authenticated.
(b) The Series B First Mortgage Bonds shall be
substantially in the form of Schedule B hereto and shall have and
be subject to such other terms as provided in the Indenture.
SECTION 2.3. Interest, Principal and Maturity Date.
Each of the Initial Securities shall bear interest on
the unpaid principal amount thereof from time to time Outstanding
from the date thereof until such amount is paid in full at the
rate of interest set forth in the forms thereof attached hereto.
The principal amount of each of the Initial Securities shall be
due and payable as set forth in the form thereof attached hereto.
Payment of principal of and interest on each of the
Initial Securities shall be made, if the Company so elects, by
check mailed to the Holder at its registered address or otherwise
as provided in Section 2.10 of the Original Indenture, except
that the final payment of principal of any of the Initial
Securities shall be made on the due date therefor to the accounts
of the Holders thereof as such accounts shall appear in the
Security Register, which shall be due and payable as set forth in
the form thereof attached hereto. For so long as any series of
the Initial Securities is issued in the form of one or more
global Initial Securities, payment of principal of and interest
on such Initial Securities shall be made in immediately available
funds by wire transfer to the clearing corporation or clearing
agency acting as depositary for such global Initial Securities,
or a nominee of such clearing corporation or clearing agency.
Any Holder of $1,000,000 or more in aggregate principal amount of
Initial Securities of either series may, by delivery of a written
notice to the Paying Agent, elect to have all such payments to
such Holder made by wire transfer of immediately available funds
to a designated account maintained in the United States (so long
as the Paying Agent has received proper wire transfer
instructions in writing by the Regular Record Date next preceding
the date for such payment).
Each of the Initial Securities shall mature on the date
set forth in the forms thereof attached hereto.
SECTION 2.4. Redemption.
(a) Optional Redemption. The Securities are not
subject to optional redemption.
-3-
<PAGE>
(b) Mandatory Redemption. In accordance with the
provisions of Section 6.3 of the Original Indenture, the
Securities are subject to mandatory redemption under certain
conditions, on the terms set forth in the Original Indenture.
SECTION 2.5 Debt Service Reserve Account.
(a) A Debt Service Reserve Account designated the
"First Supplemental Indenture Debt Service Reserve Account" is
hereby established and created with the Trustee for the benefit
of the Holders of the Initial Securities.
(b) The Debt Service Reserve Account Required Balance
in respect of the First Supplemental Indenture Debt Service
Reserve Account shall be an amount equal to $( ). The
First Supplemental Indenture Debt Service Reserve Account shall
be funded on the date of original issuance of the Initial
Securities in an amount equal to such Debt Service Reserve
Account Required Balance.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Execution of Supplemental Indenture.
This First Supplemental Indenture is executed and shall
be construed as an indenture supplemental to the Original
Indenture and, as provided in the Original Indenture, this First
Supplemental Indenture forms a part thereof.
SECTION 3.2. Concerning the Trustee.
The Trustee shall not be responsible in any manner for
or with respect to the validity or sufficiency of this First
Supplemental Indenture, or the due execution hereof by the
Company or Mobile Energy, or for or with respect to the recitals
and statements contained herein, all of which recitals and
statements are made solely by the Company and Mobile Energy.
SECTION 3.3. Counterparts.
This First Supplemental Indenture may be executed in
any number of counterparts, each of which when so executed shall
be deemed to be an original; but all such counterparts shall
together constitute but one and the same instrument.
SECTION 3.4. GOVERNING LAW.
THIS FIRST SUPPLEMENTAL INDENTURE AND EACH OF THE
INITIAL SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
-4-
<PAGE>
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF
NEW YORK.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this First
Supplemental Indenture to be duly executed by their respective
officers thereunder duly authorized as of the date and year first
above written.
MOBILE ENERGY SERVICES COMPANY,
L.L.C.
By:
Name:
Title:
MOBILE ENERGY SERVICES HOLDINGS,
INC.
By:
Name:
Title:
FIRST UNION NATIONAL BANK OF
GEORGIA, as Trustee
By:
Name:
Title:
-6-
<PAGE>
Schedule (A) (B)
(FORM OF BOND)
Unless this Security is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer hereof or its agent for registration of transfer,
exchange or payment, and any Security of this series issued is
registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
MOBILE ENERGY SERVICES COMPANY, L.L.C.
(__)% First Mortgage Bond Due (_____), Series (A) (B)
unconditionally guaranteed by
MOBILE ENERGY SERVICES HOLDINGS, INC.
No. CUSIP No.
Final Principal
Principal Amount Payment Date Issuance Date Interest Rate
MOBILE ENERGY SERVICES COMPANY, L.L.C., a limited
liability company duly organized and in good standing under the
laws of the State of Alabama (herein called the "Company," which
term includes any permitted successor or assign under the
Indenture referred to below), for value received, hereby promises
to pay to (CEDE & CO.), or its registered assigns, the Principal
Amount set forth above, such payment to be made in semi-annual
installments on January 1 and July 1 of each year, commencing on
(_____), and ending on the Final Principal Payment Date set forth
above, each such installment to be in an amount equal to the
Principal Amount set forth above multiplied by the percentage set
forth opposite the date of such installment set forth under the
caption "Principal Payment Date" on Annex A attached hereto
(provided that the portion of the Principal Amount set forth
above remaining unpaid on the Final Principal Payment Date set
forth above, together with all interest accrued thereon, shall in
any and all cases be due on the Final Principal Payment Date set
forth above), and to pay interest on the unpaid portion of the
Principal Amount set forth above at the Interest Rate set forth
above from the most recent Interest Payment Date to which
interest has been paid or duly provided for, or if no interest
has been paid or duly provided for, from the Issuance Date set
forth above, semi-annually on January 1 and July 1 in each year,
<PAGE>
commencing on January 1, 1996, until the Principal Amount set
forth above is paid in full or payment therefor is duly provided
for. Any payment of principal and, to the extent permitted by
applicable Law, any payment of interest not punctually paid or
duly provided for shall continue to bear interest at a rate equal
to the Interest Rate set forth above plus two percent (2%). The
principal and interest so payable on any payment date shall, as
provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered in the Security Register at the close of business on
the Regular Record Date for such payment of principal or
interest, which shall be the preceding December 15 and June 15,
respectively, provided that interest payable on the Final
Principal Payment Date set forth above shall be payable to the
person to whom the principal hereof shall be payable. Any such
principal or interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the person in whose name
this Security (or one or more Predecessor Securities) was
registered in the Security Register at the close of business on
the Regular Record Date therefor, and may be paid to the Person
in whose name this Security is registered at the close of
business on a Special Record Date for the payment of such
defaulted principal or interest to be fixed by the Trustee
referred to below, notice of which shall be given to the Holder
hereof to be mailed not less than ten (10) days prior to such
Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange (if any) on which this Security may be
listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. All payments in
respect of this Security shall be made in such coin or currency
of the United States of America as at the time of payment is
legal tender for payment of debts, in immediately available
funds. Interest on this Security shall be computed on the basis
of a 360-day year of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual
number of days elapsed in such period.
Principal of and interest on this Security payable on
the Final Principal Payment Date set forth above shall be paid
upon presentation and surrender of this Security at the office of
the Paying Agent in the Borough of Manhattan, the City of New
York. Payments of principal of and interest on this Security
shall be made in immediately available funds by wire transfer for
so long as this Security is issued in the form of a global
security, or by check mailed on or prior to the date for such
payment to the address of the Holder entitled thereto as such
address appears on the Security Register; provided, however, that
if this security is not held in global form, any Holder of
$1,000,000 or more in aggregate principal amount of Securities of
this series may, by delivery of a written request to the Paying
Agent, elect to have all such payments to such Holder made by
wire transfer of immediately available funds to a designated
account maintained in the United States (so long as the Paying
-[A][B]-2-
<PAGE>
Agent has received proper wire transfer instructions in writing
by the Regular Record Date next preceding the date for such
payment).
The provisions of this Security are continued on the
reverse hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at this
place.
This Security shall not be entitled to any benefit
under the Indenture, or be valid or become obligatory for any
purpose, until FIRST UNION NATIONAL BANK OF GEORGIA, the Trustee
under the Indenture, or its successor thereunder, shall have
authenticated the form of certificate endorsed hereon.
-[A][B]-3-
<PAGE>
IN WITNESS WHEREOF, Mobile Energy Services Company,
L.L.C. has caused this Security to be signed in its name by its
President or Vice President, by the signature or a facsimile
thereof, attested by its Secretary by the signature or a
facsimile thereof.
Dated:
MOBILE ENERGY SERVICES
COMPANY, L.L.C.
By:
Title:
Attest:
By:
Secretary
TRUSTEE'S AUTHENTICATION CERTIFICATE
This Security is one of the Securities referred to in
the within-mentioned Indenture.
FIRST NATIONAL BANK OF GEORGIA,
as Trustee
By
Authorized Trust Officer
-[A][B]-4-
<PAGE>
(REVERSE)
MOBILE ENERGY SERVICES COMPANY, L.L.C.
(__)% First Mortgage Bonds Due (_____), Series (A) (B)
This Security is one of an authorized issue of
Securities of the Company, known as its (__)% First Mortgage
Bonds Due (_____), Series (A) (B), to be issued under a Trust
Indenture, dated as of (_____), 1995 (the "Original Indenture"),
among the Company, Mobile Energy Services Holdings, Inc., an
Alabama Corporation ("Mobile Energy"), and First Union National
Bank of Georgia, as trustee (the "Trustee"). The Original
Indenture, as supplemented by the First Supplemental Indenture
dated as of (_____), 1995 (the "First Supplemental Indenture"),
and as the same may be amended, modified and further
supplemented, is hereinafter referred to as the "Indenture."
Capitalized terms used herein, but not otherwise defined herein,
shall have the meanings assigned thereto in the Indenture.
As provided in the Indenture, the aggregate principal
amount of Securities that may be issued thereunder is unlimited.
The Securities of this series are limited in principal amount as
provided in the First Supplemental Indenture.
All Securities shall be secured equally and ratably
with one another (except as to any Debt Service Reserve Account
or Sinking Fund established in accordance with the Indenture for
the benefit of any particular series). Reference is hereby made
to the Indenture for a description of the nature of the
Securities and the respective rights of the Holders of Securities
and of the Trustee, the Company and Mobile Energy in respect of
the Securities and the terms upon which the Securities are to be
authenticated and delivered.
The principal of and interest on this Security are
payable only from, and secured by, the Indenture Collateral, and
all payments of principal and interest shall be made in
accordance with the terms of the Indenture.
The Securities, and the rights of the Holders in
respect of the Shared Collateral, are subject to the terms of an
Intercreditor and Collateral Agency Agreement, dated as of
(_____), 1995 (the "Intercreditor Agreement"), among Bankers
Trust Company, as collateral agent, the Trustee (on behalf of the
Holders of the Securities), First Union National Bank of Georgia,
as trustee under an Amended and Restated Indenture of Trust,
dated as of (_____), 1995, with The Industrial Development Board
of the City of Mobile, Alabama (on behalf of the holders of the
securities issued thereunder), (_____), as the Working Capital
Provider, such Industrial Development Board, the Company and
Mobile Energy, to which reference is hereby made.
<PAGE>
As provided in Section 6.3(b) of the Indenture, all
Outstanding Securities shall be subject to redemption in whole
prior to the Final Principal Payment Date set forth on the face
of this Security at a redemption price equal to one hundred
percent (100%) of the principal amount thereof plus accrued
interest thereon, if any, to the Redemption Date, if an Event of
Loss or an Event of Eminent Domain shall occur and, subject to
the terms of the Intercreditor Agreement, the Energy Complex is
not rebuilt, repaired, restored or replaced.
Pursuant to Section 6.3(c) of the Indenture, the
Outstanding Securities shall be subject to partial redemption,
ratably among all outstanding series and maturities, prior to the
Final Principal Payment Date set forth on the face of this
Security at a redemption price equal to one hundred percent
(100%) of the principal amount thereof plus accrued interest
thereon, if any, to the Redemption Date, if an Event of Loss or
an Event of Eminent Domain shall occur, to the extent of any
excess Casualty Proceeds or Eminent Domain Proceeds (as the case
may be) and provided, subject to certain exceptions, that such
loss Proceeds exceed $3,000,000, if the Energy Complex or a
portion thereof is rebuilt, repaired, restored or replaced. The
aggregate amount of Securities to be so redeemed will equal the
amount made available to the Trustee for such purpose pursuant to
the Intercreditor Agreement, which will equal the ratable share
of the Securities of this series (based on the principal amount
of Securities and Tax-Exempt Indenture Securities then
outstanding plus, if the committed availability under the Working
Capital Facility was reduced in connection with such Event of
Loss or Event of Eminent Domain (as the case may be), the lesser
of (i) the principal amount of Working Capital Loans payable as a
result of such reduction and (ii) the principal amount of Working
Capital Loans then outstanding) of the amount by which all of the
Casualty Proceeds and Eminent Domain Proceeds (as the case may
be) in respect of such Event of Loss or Event of Eminent Domain
exceeds the total cost of rebuilding, repairing, restoring or
replacing the Energy Complex.
Securities of this series are not subject to optional
redemption prior to the Final Principal Payment Date set forth on
the face of this Security.
Notice of any redemption of Securities will be given at
least thirty (30) but not more than sixty (60) days prior to the
Redemption Date.
The Indenture contains provisions permitting the
Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders
of all the Securities, to waive compliance by the Company and
Mobile Energy with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.
Any such consent or waiver or direction shall be conclusive and
binding upon the Holder, and all future Holders, of this Security
-[A][B]-2-
<PAGE>
and of any Security issued upon the transfer hereof whether or
not citation of such consent or waiver is made upon this
Security.
As more fully described therein, the Indenture permits,
with certain exceptions, the amendment thereof and the rights and
obligations of the Company and Mobile Energy and the rights of
the Holders of the Securities under the Indenture at any time by
the Company and Mobile Energy with the consent of the Holders of
not less than a majority in aggregate principal amount of the
Securities at the time Outstanding and, in certain cases, without
any consent or other action by Holders of the Securities.
The principal hereof may be declared or may become due
on the conditions, in the manner and at the time set forth in the
Indenture, upon the occurrence and during the continuance of an
Event of Default as provided in the Indenture.
Except as otherwise described in the Security
Documents, satisfaction of the obligations of the Company under
this Security, for the payment of the principal of or interest on
this Security, or any part hereof, or for any claim based thereon
or otherwise in respect hereof or related hereto, shall be solely
from the assets of the Company and Mobile Energy.
The Securities of this series are issuable only as
registered bonds without coupons in denominations of $100,000 and
integral multiples of $5,000 in excess thereof. This Security is
transferable as prescribed in the Indenture by the registered
owner hereof, in person or by attorney duly authorized, at an
office or agency of the Trustee, in the Borough of Manhattan, the
City of New York, upon surrender and cancellation of this
Security and thereupon a new registered Security or Securities of
the same series for a like principal amount, in authorized
denominations, will be issued to the transferee in exchange
therefor, as provided in the Indenture. The Company and the
Trustee shall deem and treat the person in whose name this
Security is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal due hereof
and interest due hereon and for all other purposes. Registered
Securities of this series shall be exchangeable at said offices
or agencies of the Trustee for registered Securities of other
authorized denominations having the same aggregate principal
amount, in the manner and upon the conditions prescribed in the
Indenture. No service charge shall be required of any Holder in
connection with any transfer or exchange, but the Security
Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Notwithstanding any provision of the Indenture, neither the
Company nor the Trustee shall be required to register the
transfer or exchange any Securities of this series during the
period (i) beginning at the opening of business fifteen (15) days
before the day of the mailing of a notice of redemption of
Securities of this series under the Indenture and ending on the
-[A][B]-3-
<PAGE>
close of business on the day of such mailing and (ii) beginning
on the Regular Record Date for the Stated Maturity of principal
of or interest on the Securities of this series and ending on the
Stated Maturity of such payment, or to register the transfer or
exchange any Securities of this series so selected for redemption
in whole or in part, except the unredeemed portion of any
Security of this series selected for redemption in part. The
Holder hereof, by the acceptance of this Security, agrees that
each payment received by it hereunder shall be applied in the
manner set forth in Section 2.16 of the Indenture.
This Security is a global security within the meaning
of the Indenture and is registered in the name of a depositary or
its nominee with respect to the Securities of this series. This
Security is exchangeable for other Securities of this series
registered in the name of a person other than such depositary or
its nominee only if (i) the Company advises the Trustee in
writing that such depositary is no longer willing or able to
discharge properly its responsibilities as depositary with
respect to the Securities of this series and is unable to locate
a qualified successor, (ii) the Company, at its option elects to
terminate the book-entry system through such depositary with
respect to the Securities of this series and (iii) after the
occurrence of an Event of Default, beneficial owners of the
Securities of this series holding interests representing an
aggregate principal amount of the Securities of this series of
not less than a majority in principal of the Securities of this
series represented by this global security advise the Trustee
through such depositary in writing that the continuation of a
book-entry through such depositary (or any successor thereto)
with respect to the Securities of this series is no longer in
such beneficial owners' best interest.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF
NEW YORK.
GUARANTY
For value received, Mobile Energy hereby guarantees to
the Holder of this Security upon which this Guaranty is endorsed
and to the Trustee for its own benefit and the benefit of the
Holders from time to time the due and punctual payment,
observance and performance of all of the Guaranteed Obligations
in accordance with their respective terms and when and as due
(whether at maturity, by reason of acceleration or otherwise), or
deemed to be due hereunder, and agrees so to pay, observe or
perform the same when so due, or deemed to be due, upon demand.
Mobile Energy's obligations above, (i) are absolute and
unconditional, (ii) are unlimited in amount (except as provided
in Article XIV of the Indenture), (iii) constitute a guaranty of
payment and performance and not a guaranty of collection,
(iv) are as primary obligor and not as a surety only, (v) shall
-[A][B]-4-
<PAGE>
be a continuing guaranty of all present and future Guaranteed
Obligations and all promissory notes and other documentation
given in extension or renewal or substitution for any of the
Guaranteed Obligations and (vi) shall be irrevocable.
The obligations of Mobile Energy under this Guaranty
shall continue in full force and effect until the payment,
observance and performance in full of the Guaranteed Obligations.
The rights and obligations of Mobile Energy and the Trustee shall
survive the repayment in full of all principal of and interest on
the Securities.
This Guaranty is given for the benefit of the Trustee
and, subject to the terms and conditions set forth herein, the
Holders from time to time of the Securities of this series, all
of whom shall be entitled in the same manner as set forth herein
to enforce performance and observance of this Guaranty.
Reference is made to Article XIV of the Indenture for
further provisions with respect to this Guaranty.
THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF
NEW YORK.
-[A][B]-5-
<PAGE>
IN WITNESS WHEREOF, Mobile Energy Services Holdings,
Inc. has caused this Guaranty to be signed in its name by its
President or Vice President, by the signature or a facsimile
thereof, attested by its Secretary, by the signature or a
facsimile thereof.
Dated:
MOBILE ENERGY SERVICES
HOLDINGS, INC.
(Seal)
By:
Title:
Attest:
By:
Secretary
-[A][B]-6-
<PAGE>
ABBREVIATIONS
The following abbreviations when used in the
inscription on the face of this instrument shall be construed as
though they were written out in full according to applicable laws
or regulations:
TEN COM as tenants in common
TEN ENT as tenants by the entireties
JT TEN as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT___________________
(Cust)(Minor)
under Uniform Gift to Minors Act
_______________________________________
(State)
Additional abbreviations may also be used though
not in the above list
_________________
<PAGE>
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Social Security Number or Other
Identifying Number of Assignee
(Please print or typewrite name and address,
including zip code of Assignee)
the written Security and all rights thereunder, hereby
irrevocably constituting and appointing ________________________
attorney to transfer said Security on the books of the Company,
with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with
the name as written upon the first page of the within
instrument in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
(To be included if principal payable in installments)
Annex A
Principal Percentage of
Payment Date Principal Amount Payable
<PAGE>
Exhibit B-4(d)
WSP&R
6/29/95
Appendix A
DEFINED TERMS
For purposes of any Financing Document (as defined herein),
terms used in such Financing Document (including terms used
herein) that are not otherwise defined therein shall have the
following meanings, subject to any provisions contained in such
Financing Document that affect the construction or interpretation
of such terms. Except as otherwise expressly provided in any
such Financing Document, if and to the extent that such Financing
Document shall be amended, restated, supplemented or otherwise
modified from time to time pursuant to the terms and provisions
thereof, this Appendix A shall be, or be deemed to have been,
amended, restated, supplemented or otherwise modified
concurrently with the execution and delivery of such amendment,
restatement, supplement or other modification in order to conform
the terms herein and therein, mutatis mutandis, to the terms set
forth in or required by such amendment, restatement, supplement
or other modification.
Except as otherwise expressly provided in any such Financing
Document:
(a) the terms used in such Financing Document have the
meanings assigned to them in this Appendix A and include the
plural as well as the singular; provided, however, that, in
the case of the Indenture, all such terms that are defined
in the Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
(b) (i) all accounting terms not otherwise defined in
such Financing Document have the meanings assigned to them,
(ii) all financial statements and all certificates and
reports as to financial matters required to be delivered to
the Collateral Agent, the Indenture Trustee or the Tax-
Exempt Indenture Trustee, or any other Person (as the case
may be), under such Financing Document shall be prepared and
(iii) all calculations made for the purpose of determining
compliance with such Financing Document shall (except as
otherwise expressly provided herein) be made, in the case of
clauses (i), (ii) and (iii) above, in accordance with, or by
application of, GAAP applied on a basis consistent (except
inconsistencies that are disclosed in writing to the
Collateral Agent, the Indenture Trustee or the Tax-Exempt
Indenture Trustee, or any other Person (as the case may be),
and are in accordance with GAAP as certified by a firm of
independent certified public accountants of recognized
national standing) with that used in the preparation of the
then most recent corresponding financial statements
<PAGE>
furnished under such Financing Document to the Collateral
Agent, the Indenture Trustee or the Tax-Exempt Indenture
Trustee, or any other Person (as the case may be);
(c) all references in such Financing Document to any
designated "Article," "Section," "Appendix," "Schedule,"
"Exhibit" and other subdivision are to the designated
Article, Section, Appendix, Schedule, Exhibit and other
subdivision, respectively, of such Financing Document;
(d) all references in such Financing Document to (i)
the words "herein," "hereof" and "hereunder" and other words
of similar import refer to such Financing Document as a
whole and not to any particular Article, Section or other
subdivision and (ii) the term "this Agreement" or "this
Indenture" means such Financing Document as a whole,
including Appendices, Schedules and Exhibits thereto;
(e) all references in such Financing Document to any
Project Document or other Contract defined or referred to
therein shall include such Contract (and, in the case of the
Senior Securities or any other instrument, any other
instrument issued in substitution therefor) as the terms
thereof may have been or may be amended, supplemented,
waived or otherwise modified, or as such Contract may have
been replaced (including (i) in the case of an Energy
Services Agreement or the Master Operating Agreement, any
replacement Contract therefor then satisfying the Restricted
Payment Alternative Agreement Requirements with respect
thereto and (ii) in the case of any Project Contract, any
replacement Contract therefor then satisfying the Event of
Default Alternative Agreement Requirements with respect
thereto), from time to time;
(f) all references in such Financing Document to any
Person (including any of its capacities) shall include the
permitted successors and assigns of such Person (including
in such capacity) in accordance with the terms of such
Financing Document and the other Project Documents and, in
the case of any Governmental Authority, any Person
succeeding to its functions and capacities;
(g) all references in such Financing Document to any
Law shall include such Law or any successor Law as amended,
supplemented or otherwise modified and in effect from time
to time, and any other Law in substance substituted
therefor;
(h) any item or list of items set forth following the
word "including," "include" or "includes" in such Financing
Document is set forth only for the purpose of indicating
that, regardless of whatever other items are in the category
in which such item or items are "included," such item or
items are in such category, and shall not be construed as
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indicating that the items in the category in which such item
or items are "included" are limited to such item or items
similar to such items;
(i) all references in such Financing Document to the
Collateral Agent, the Trustee, the Tax-Exempt Trustee, the
IDB or the Working Capital Facility Provider shall be deemed
to refer to each such Person however designated in the
Financing Documents so that (i) references to rights or
duties of the Collateral Agent under such Financing Document
shall be deemed to include the rights or duties of such
Person as the "Secured Party" under the Security Agreement
and as the "Mortgagee" under the Mortgage, (ii) references
to rights or duties of the Trustee under such Financing
Document shall be deemed to include the rights or duties of
such Person as a "Senior Secured Party" under the
Intercreditor Agreement, (iii) references to rights or
duties of the Tax-Exempt Trustee under such Financing
Document shall be deemed to include the rights or duties of
such Person as a "Senior Secured Party" under the
Intercreditor Agreement and (iv) references to rights or
duties of the Working Capital Facility Provider under such
Financing Document shall be deemed to include the rights or
duties of such Person as a "Senior Secured Party" under the
Intercreditor Agreement; provided, however, that, if such
Financing Document is (A) the Security Agreement, references
to rights or duties of the "Secured Party" thereunder shall
be deemed to include the rights or duties of such Person as
the Collateral Agent, (B) the Mortgage, references to rights
or duties of the "Mortgagee" thereunder shall be deemed to
include the rights or duties of such Person as the
Collateral Agent and (C) the Working Capital Facility,
references to rights or duties of the "Agent" thereunder
shall be deemed to include the rights or duties of such
Person as the Working Capital Facility Provider;
(j) all terms defined in such Financing Document shall
have the meanings therein ascribed to them when used in any
certificate, opinion or other document delivered pursuant
thereto and, in the case of the Indenture and the Tax-Exempt
Indenture, in the Senior Securities;
(k) all references in such Financing Document to the
knowledge of any Person that is a corporation, limited
liability company or partnership, or any other Person that
is not an individual, with respect to any subject or event
(including the occurrence or non-occurrence of any
circumstance, the failure to perform or observe, or the
satisfaction of, any covenant or agreement or the pending or
threatened nature of any action) shall be deemed to mean
that an Authorized Officer of such Person (, or any other
responsible officer or employee of such Person who has
significant understanding of and familiarity with such
subject or event,) has actual knowledge or awareness of such
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<PAGE>
subject or event or when notice of such subject or event
shall have been given, or deemed to have been given, to such
Person in accordance with the provisions of such Financing
Document; and
(k) all references in such Financing Document to the
Project Contracts shall be deemed to exclude any Project
Contract (and the Consent to Assignment (if any) with
respect thereto) (i) after the date on which such Project
Contract (A) may have been terminated in accordance with
Section 5.10 of the Indenture or Section ( ) of the Tax-
Exempt Indenture, (B) shall have reached its stated
termination date (if any) or (C) (other than in the case of
the Energy Services Agreements and the Master Operating
Agreement in connection with a Mill Closure) shall have been
fully and finally performed by all parties thereto and (ii)
after the date of any disposition of the Company's rights
and obligations under such Project Contract in accordance
with Section 5.8 of the Indenture or Section ( ) of the
Tax-Exempt Indenture, except, in the case of clauses (i) and
(ii) above, if and to the extent that any provisions of such
Project Contract so excluded provide that the rights and
obligations of any Person that is a party to such Contract
shall survive the termination thereof.
"Accounts" means, collectively, the Intercreditor Agreement
Accounts, the Indenture Accounts and the Tax-Exempt Indenture
Accounts.
"Act" has the meaning specified, (a) in the case of any
Holder of Indenture Securities, in Section 1.4 of the Indenture
and (b) in the case of any Holder of Tax-Exempt Indenture
Securities, in Section ( ) of the Tax-Exempt Indenture.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by, or
under direct or indirect common control with, such Person. For
purposes of this definition, the term "control" (including the
correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of such Person,
whether through the ownership of securities or partnership or
other ownership interests or by contract or otherwise.
Notwithstanding the foregoing, Southern, Mobile Energy, Southern
Electric, the Operator and each Person owning, directly or
indirectly, five percent (5%) or more of the membership interests
in the Company shall be deemed to be an Affiliate of the Company.
"Affiliate Subordinated Debt" means any unsecured,
subordinated loan or loans to the Company from any of its
Affiliates pursuant to a Subordinated Loan Agreement, fully
subordinated as to payment and exercise of remedies and payable
only from monies otherwise distributable by the Company from the
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<PAGE>
Distribution Account in accordance with the Intercreditor
Agreement.
"Aggregate Demand" has the meaning specified in the Master
Operating Agreement.
"Alabama Act" means Ala. Code section 11-54-80 to section
11-54-101.
"Annual Budget" means the operating plan and budget for the
Energy Complex developed by the Company for operation of the
Energy Complex for any Fiscal Year, as the same may be amended,
restated, supplemented or otherwise modified from time to time
and as more particularly described in Section 5.12 of the
Indenture or Section 4.12 of the IDB Lease Agreement (as the case
may be).
"Articles of Organization" means the Articles of
Organization of the Company dated ( ), 1995.
"Authenticating Agent" means any Person acting as
Authenticating Agent pursuant to, in the case of the Indenture,
Section 9.14(b) thereof and, in the case of the Tax-Exempt
Indenture, Section ( ) thereof.
"Authorized Agent" means any Paying Agent, Authenticating
Agent or Security Registrar or other agent appointed by the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
case may be) or the Company or the IDB (as the case may be) in
accordance with the Indenture or the Tax-Exempt Indenture (as the
case may be) to perform any function that such Indenture
authorizes such agent to perform.
"Authorized Officer" means (a) in the case of a corporation
(including Mobile Energy) or limited liability company (including
the Company), the chief executive officer, the president, the
chief financial officer, a vice president, the treasurer or an
assistant treasurer of such corporation or limited liability
company and (b) in the case of any general or limited
partnership, any Person authorized by the managing general
partner (or such other Person that is responsible for the
management of such partnership) to take the applicable action on
behalf of such partnership or any officer (with a title specified
in clause (a) above) of such partnership's managing general
partner (or such other Person that is responsible for the
management of such managing general partner).
"Authorized Representative" means, in respect of any Person,
the individual or individuals authorized to act on behalf of such
Person by the board of directors, manager, management committee,
board of control or any other governing body of such Person as
designated from time to time in a certificate of such Person,
which shall include or attach thereto specimen signatures,
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<PAGE>
delivered to the Collateral Agent upon which the Collateral Agent
may conclusively rely.
"Authorized Trust Officer" means any officer of the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
case may be) or any other individual who shall be duly authorized
by appropriate corporate action on the part of either such
Trustee to authenticate Senior Securities.
"Automatic Acceleration Default" has the meaning specified,
(a) in the case of the Indenture, in Section 8.2(a) thereof and
(b) in the case of the Tax-Exempt Indenture, in Section ( )
thereof.
"Available Amount" means, at any time, (a) in the case of
any Reserve Account Letter of Credit, the undrawn stated amount
of such Reserve Account Letter of Credit at such time and (b) in
the case of any Southern Guaranty, an amount equal to the
"Available Amount" set forth therein (as such amount may be
increased or decreased in accordance with such Southern
Guaranty).
"Bankruptcy Code" means the Federal Bankruptcy Code of 1978.
"Bankruptcy Event" means, in respect of any Person, (a) such
Person's general inability, or its admission of its inability, to
pay its debts as such debts become due, (b) the application by
such Person for or its consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
property, (c) the commencement by such Person of a voluntary case
under the Bankruptcy Code, (d) the making by such Person of a
general assignment for the benefit of its creditors, (e) the
filing of a petition by such Person seeking to take advantage as
a debtor of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement, winding-up
or readjustment of debts, (f) the failure by such Person to
controvert in a timely and appropriate manner, or its
acquiescence in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, (g) the taking of any
corporate or other action by such Person for the purpose of
effecting any of the foregoing, (h) the commencement of a
proceeding or case, without the application or consent of such
Person, in any court seeking (A) such Person's reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (B) the appointment of
a trustee, receiver, custodian, liquidator, examiner or the like
of such Person or all or any substantial part of its property or
(C) similar relief in respect of such Person under any law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debt and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and (except in the case of Section 5.19(a)(ii)
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<PAGE>
of the Indenture and Section 4.19(a)(ii) of the IDB Lease
Agreement) in effect for a period of sixty (60) or more days or
(i) an order for relief against such Person shall be entered in
any involuntary case under the Bankruptcy Code.
"Board of Directors" means (a) when used with respect to the
Company, either the board of directors of the Manager of the
Company or any committee of such board duly authorized to act for
it hereunder and (b) when used with respect to Mobile Energy,
either the board of directors of Mobile Energy or any committee
of such board duly authorized to act for it hereunder.
"Board Resolution" means (a) when used with respect to the
Company, a copy of a resolution certified by an Authorized
Officer of the Company or the secretary or assistant secretary of
the Company as having been adopted by the Manager of the Company
and to be in full force and effect on the date of such
certification and (b) when used with respect to Mobile Energy,
means a copy of a resolution certified by an Authorized Officer
or the secretary or assistant secretary of Mobile Energy as
having been adopted by the Board of Directors of Mobile Energy
and to be in full force and effect on the date of such
certification.
"Bond Counsel" means Balch & Bingham or other nationally
recognized counsel experienced in matters of municipal law and
the tax-exempt status of obligations under the Code.
"Business Day" means any day other than a Saturday or Sunday
or other day on which banks in New York, New York or Atlanta,
Georgia are authorized or required to be closed.
"Capital Budget" means the capital plan and budget developed
by the Company with respect to the capital improvements to the
Energy Complex specified in the Master Operating Agreement and
certain other planned capital expenditures thereto.
"Capital Budget Subaccount" means the subaccount of the
Completion Account so designated established and created under
Section 2.2(c) of the Intercreditor Agreement.
"Casualty Proceeds" means all insurance proceeds (including
title insurance proceeds) and other amounts actually received on
account of an Event of Loss, other than proceeds of third-party
liability insurance (to the extent paid directly from an insurer
or insurers to a third-party).
"Closing Date" means the date on which the First Mortgage
Bonds and the Tax-Exempt Bonds are originally issued.
"Coal Supplier" means E.J. Hodder & Associates, Inc., a
Tennessee corporation.
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<PAGE>
"Coal Supply Agreement" means the Coal Supply Agreement
dated as of May 1, 1995 between the Coal Supplier and the
Company.
"Code" means the Internal Revenue Code of 1986 and the rules
and regulations promulgated thereunder.
"Collateral" means, collectively, all of the collateral
mortgaged, pledged or assigned to the Collateral Agent, the
Indenture Trustee and the Tax-Exempt Indenture Trustee by the
Company and the IDB (as the case may be), in each case pursuant
to the granting and assigning clauses of the applicable Financing
Documents.
"Collateral Agent" means Bankers Trust Company or any other
Person appointed as a substitute or replacement Collateral Agent
under the Intercreditor Agreement.
"Collateral Agent Claims" means all obligations of the
Senior Secured Parties and the Mobile Energy Parties, now or
hereafter existing, to pay fees, costs and expenses to the
Collateral Agent pursuant to Section 7.3(f) and Article VIII of
the Intercreditor Agreement.
"Combined Exposure" means, at any time, the sum of (a) the
aggregate principal amount of all Senior Securities Outstanding
and (b) the aggregate principal amount of all outstanding Working
Capital Loans made, and undrawn commitments to lend, under the
Working Capital Facility.
"Common Services Agreement" means the Common Services
Agreement dated as of December 12, 1994 among the Company (as
assignee of Mobile Energy), the Pulp Mill Owner, the Tissue Mill
Owner and the Paper Mill Owner.
"Company" means Mobile Energy Services Company, L.L.C., an
Alabama limited liability company.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by an
Authorized Officer of the Company and delivered to the Indenture
Trustee or the Tax-Exempt Indenture Trustee (as the case may be).
"Company Step-In Rights" has the meaning specified for "MESC
Step-In Rights" in the Master Operating Agreement.
"Completion Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
"Consents to Assignment" means, collectively, (a) the
Consents to Assignment of Scott with respect to the Project
Contracts to which it is a party, (b) the Consent to Assignment
of the Pulp Mill Owner with respect to the Project Contracts to
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<PAGE>
which it is a party, (c) the Consent to Assignment of the Tissue
Mill Owner with respect to the Project Contracts to which it is a
party, (d) the Consent to Assignment of the Paper Mill Owner with
respect to the Project Contracts to which it is a party, (e) the
Consent to Assignment of Southern Electric with respect to the
Project Contracts to which it is a party, (f) the Consent to
Assignment of SCS with respect to the SCS Agreement, (g) the
Consent to Assignment of Coal Supplier with respect to the Coal
Supply Agreement, (h) the Consent to Assignment of TRT with
respect to the Nondisturbance Agreement and (i) the Consent to
Assignment of the IDB with respect to the Project Contracts to
which it is a party.
"Contract" means any (a) any agreement (whether executory or
non-executory and whether a Person entitled to rights thereunder
is so entitled directly or as a third-party beneficiary),
including an indenture, lease or license, (b) any deed or other
instrument of conveyance, (c) any certificate of incorporation,
articles of organization or charter and (d) any by-law.
"Corporate Trust Office" means the designated corporate
trust office of the Indenture Trustee or the Tax-Exempt Indenture
Trustee (as the case may be) at which at any particular time
corporate trust business of such Trustee shall be administered,
which as of the Closing Date is, in the case of the Indenture
Trustee, ( ) and, in the case of the Tax-Exempt Indenture
Trustee, is ( ), or in either case such other office as may
be designated by such Trustee to the Mobile Energy Parties.
"Credit Standard Event" means (a) with respect to any
Reserve Account Letter of Credit on deposit in any Reserve
Account Security Account, the unsecured long-term Debt of the
provider of such Reserve Account Letter of Credit shall not be
rated "A" or higher by S&P, "A" or higher by Fitch and "A2" or
higher by Moody's and (b) with respect to any Southern Guaranty
on deposit in any Reserve Account Security Account, (i) the
Collateral Agent or the Trustee shall have been provided with an
Officer's Certificate of Southern certifying as to the
determination that the Southern Credit Standard has not been
satisfied or (ii) Southern shall have failed, or the Company
shall have failed to cause Southern, to provide to the Collateral
Agent or the Trustee, on or prior to the date that is forty-five
(45) days after the end of each fiscal quarter of Southern, an
Officer's Certificate of Southern certifying as to the
determination that the Southern Credit Standard has been
satisfied.
"Current Fiscal Quarter" has the meaning specified in the
definition of Maintenance Reserve Account Required Deposit.
"Debt" means, in respect of any Person, (a) indebtedness for
borrowed money or the deferred purchase price of property or
services (excluding obligations under agreements for the purchase
price of goods and services in the normal course of business
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<PAGE>
which are not more than ninety (90) days past due), (b)
obligations as lessee under leases that shall have been or should
be, in accordance with GAAP, recorded as capital leases, (c)
obligations (whether matured or contingent) with respect to any
letters of credit issued for the account of such Person, (d)
obligations under direct or indirect guaranties or other similar
contingent liabilities in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clause (a), (b)
or (c) above and (e) all Debt of another Person secured by a lien
on any property owned by the first Person (whether or not such
Debt has been assumed by such first Person).
"Debt Service Event" means (a) with respect to any Reserve
Account Letter of Credit on deposit in any Reserve Account
Security Account, the Collateral Agent, the Trustee or the Tax-
Exempt Trustee (as the case may be) shall be authorized to draw
upon such Reserve Account Letter of Credit pursuant to (i) if
such Reserve Account Security Account is the Maintenance Reserve
Account, clause second of Section 3.5(b) of the Intercreditor
Agreement, (ii) if such Reserve Account Security Account is the
Distribution Account, clause second of Section 3.8(b) of the
Intercreditor Agreement, (iii) if such Reserve Account Security
Account is a Debt Service Reserve Account, clause second of
Section 4.5 of the Indenture and (iv) if such Reserve Account
Security Account is a Tax-Exempt Debt Service Reserve Account,
clause second of Section ( ) of the Tax-Exempt Indenture and (b)
with respect to any Southern Guaranty on deposit in any Reserve
Account Security Account, the Collateral Agent or the Trustee (as
the case may be) shall be authorized to call upon such Southern
Guaranty pursuant to (i) if such Reserve Account Security Account
is the Maintenance Reserve Account, clause third of Section
3.5(b) of the Intercreditor Agreement, (ii) if such Reserve
Account Security Account is the Distribution Account, clause
third of Section 3.8(b) of the Intercreditor Agreement and (iii)
if such Reserve Account Security Account is a Debt Service
Reserve Account, clause third of Section 4.5 of the Indenture.
"Debt Service Reserve Account" means the Account so
designated (if any) established and created under any Series
Supplemental Indenture to the Indenture for the benefit of
Holders of Indenture Securities established thereunder.
"Debt Service Reserve Account Required Balance" means, in
respect of any Debt Service Reserve Account, the amount so
designated in the Series Supplemental Indenture to the Indenture
establishing such Debt Service Reserve Account.
"Default Event" means (a) with respect to any Reserve
Account Letter of Credit on deposit in any Reserve Account
Security Account, (i) the provider of such Reserve Account Letter
of Credit shall default in its payment obligations thereunder or
(ii) the provider of such Reserve Account Letter of Credit shall
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<PAGE>
become insolvent and (b) with respect to any Southern Guaranty,
(i) Southern shall fail to perform any of the "Guaranteed
Obligations" thereunder or (ii) Southern shall become insolvent.
"Designated Southern Subsidiaries" means, for purposes of
the satisfaction of the Southern Credit Standard, all of the
Eligible Southern Subsidiaries other than, as designated by the
Company to be excluded for such purposes, any one or all
(including any combination) of the Eligible Southern
Subsidiaries, provided that the aggregate net worth of such
Eligible Southern Subsidiaries so excluded is equal to or less
than ten percent (10%) of the aggregate net worth of all of the
Eligible Southern Subsidiaries. For such purposes, "net worth"
means (a) par value of common stock plus (b) paid-in capital plus
(c) premium on preferred stock plus (d) retained earnings minus
(e) accrued and unpaid dividends on, or other amounts due and
payable in respect of, capital stock, in each case, of each of
such Eligible Southern Subsidiaries.
"Determination of Taxability" means a final determination by
the Internal Revenue Service or a court of competent jurisdiction
in a proceeding in which the Company has been afforded an
opportunity to participate, or a determination by the Company
based on an opinion of Bond Counsel, that as a result of any
event the interest payable on any Tax-Exempt Indenture Security
(in respect of which, at the time of original issuance, the Tax-
Exempt Indenture Trustee received an opinion of Bond Counsel to
the effect that interest payable on such Tax-Exempt Indenture
Security was not includable for Federal income tax purposes in
the gross income of any owner of such Tax-Exempt Indenture
Security (other than an owner who is a "substantial user" of the
Energy Complex or a "related person" within the meaning of
Section 147(a) of the Code)) is includable for Federal income tax
purposes in the gross income of any owner of such Tax-Exempt
Indenture Security (other than any owner who is a "substantial
user" of the Energy Complex or a "related person" within the
meaning of Section 147(a) of the Code). No such determination
shall be considered final unless the Company has been given
written notice and, if it so desires, has been given the
opportunity to contest the same, either directly or in the name
of any owner of a Tax-Exempt Indenture Security and until the
conclusion of any appellate review, if sought. Interest on Tax-
Exempt Indenture Securities shall not be deemed includable for
Federal income tax purposes merely by reason of such interest
being treated as a tax preference item for purposes of a Federal
alternative minimum tax, loss of or reduction in a related
deduction or other indirect adverse tax consequences.
"Distribution Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
"Distribution Date" means the Business Day immediately
following each Interest Payment Date.
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"Easement Deeds" means, collectively, (a) the Easement Deed,
dated as of December 12, 1994 between the Company (as assignee of
Mobile Energy) and the Pulp Mill Owner granting the Company
certain easements, (b) the Easement Deed dated as of December 12,
1994 between the Company (as assignee of Mobile Energy) and the
Pulp Mill Owner granting the Pulp Mill Owner certain easements,
(c) the Easement Deed dated as of December 12, 1994 between the
Company (as assignee of Mobile Energy) and the Tissue Mill Owner
granting the Company certain easements, (d) the Easement Deed
dated as of December 12, 1994 between the Company (as assignee of
Mobile Energy) and the Tissue Mill Owner granting the Tissue Mill
Owner certain easements, (e) the Easement Deed dated as of
December 12, 1994 between the Company (as assignee of Mobile
Energy) and the Paper Mill Owner granting the Company certain
easements and (f) the Easement Deed dated as of December 12, 1994
between the Company (as assignee of Mobile Energy) and the Paper
Mill Owner granting the Paper Mill Owner certain easements.
"Easements" means, collectively, all easements, licenses,
franchises, rights-of-way and spur track agreements to which the
Company is now or hereafter a party or beneficiary affecting
construction on, or the use or operation of, or constituting a
part of, the Site (including the Easement Deeds).
"Eligible Southern Subsidiaries" means, at any time, each of
Alabama Power Company, an Alabama corporation, Georgia Power
Company, a Georgia corporation, Gulf Power Company, a Maine
corporation, Mississippi Power Company, a Mississippi
corporation, and Savannah Electric and Power Company, a (Georgia)
corporation, provided that a majority of the voting securities of
such Person is owned, directly or indirectly, by Southern at such
time.
"Eminent Domain Proceeds" means all amounts and proceeds
actually received in respect of any Event of Eminent Domain.
"Energy Complex" has the meaning specified in the Asset
Purchase Agreement dated as of December 12, 1994 between Scott,
as seller, and the Company (as assignee of Mobile Energy), as
buyer, together with additions thereto and replacements thereof.
"Energy Services Agreements" means, collectively, the Pulp
Mill Energy Services Agreement, the Tissue Mill Energy Services
Agreement and the Paper Mill Energy Services Agreement.
"Environmental Bonds" means, collectively, (a) (i) the IDB's
Environmental Improvement Revenue Bonds (Scott Paper Company
Project), Series A of 1973, (ii) the IDB's Environmental
Improvement Revenue Bonds (Scott Paper Company Project), Series A
of 1976 and (iii) the IDB's Environmental Improvement Revenue
Bonds (Scott Paper Company Project), Series A of 1980, in the
case of clauses (i), (ii) and (iii) above, issued under and
secured by a Trust Indenture dated as of April 1, 1973 between
the IDB and (AmSouth Bank of Alabama), as trustee, as
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supplemented by a First Supplemental Indenture thereto dated as
of September 1, 1976 and a Second Supplemental Indenture thereto
dated as of October 1, 1980 and (b) the IDB's Industrial Revenue
Bonds (Scott Paper Company Project), Series B of 1976 issued
under and secured by a Trust Indenture dated as of September 1,
1976 between the IDB and (AmSouth Bank of Alabama), as trustee .
"Environmental Requirement" means any Governmental Approvals
in effect from time to time relating to the protection of the
environment or otherwise addressing environmental issues or
environmental requirements of or by any Governmental Authority,
or otherwise relating to noise or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport,
emission, discharge, release or handling of Hazardous Material,
including the Comprehensive Environmental Response Compensation,
and Liability Act of 1980 (42 U.S.C. section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C.
section 6901 et seq.), the Toxic Substance Control Act (15 U.S.C.
section 2601 et seq.), the Clean Air Act (42 U.S.C. section 7401
et seq.), the Clean Water Act (33 U.S.C. section 1251 et seq.),
the Emergency Planning and Community Right to Know Act (42 U.S.C.
section 1101 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. section 136 et seq.), the Oil Pollution
Act of 1990 (33 U.S.C. section 2761), the Occupational Health and
Safety Act (29 U.S.C. section 641 et seq.), the Pollution
Prevention Act (42 U.S.C. section 1201 et seq.), the Safe
Drinking Water Act (42 U.S.C. section 300f et seq.), Preservation
Development, Etc. of Coastal Areas (Ala. Code section 9-7-1 et
seq.), the Alabama Environmental Management Act (Ala. Code
section 22-22A-1 et seq.), the Alabama Water Pollution Control
Act (Ala. Code section 22-22A-1 et seq.), the Alabama Safe
Drinking Water Act (Ala. Code section 22-23-30 et seq.), Water
Well Standards (Ala. Code section 22-24-1 et seq.), Water
Wastewater Systems and Treatment Plants (Ala. Code section 22-25-
1 et seq.), Sewage Collection, Treatment, and Disposal Facilities
(Ala. Code section 22-26-1 et seq.), Solid Wastes Disposal Act
(Ala. Code section 22-27-1 et seq.), the Alabama Air Pollution
Control Act of 1971 (Ala. Code section 22-28-1 et seq.), the
Hazardous Wastes Management and Minimization Act (Ala. Code
section 22-30-1 et seq.), the Alabama Hazardous Substance Cleanup
Fund (Ala. Code section 22-30A-1 et seq.), the Water Pollution
Control Authority (Ala. Code section 22-34-1 et seq.), the
Alabama Underground and Aboveground and Storage Tank Trust Fund
Act (Ala. Code section 22-34-1 (22-35-1 in the S-1) et seq.), the
Alabama Underground Storage Tank and Wellhead Protection Act of
1988 (Ala. Code section 22-36-1 et seq.) and the Alabama Lead Ban
Act of 1988 (Ala. Code section 22-37-1 et seq.) and, in each
case, any regulations promulgated thereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974.
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"ESA Blockage Event" means, with respect to any Mill Owner,
its respective Energy Services Agreement and its Mill, that:
(a) such Energy Services Agreement or the Master
Operating Agreement has been declared unenforceable by a
Governmental Authority having jurisdiction, unless the
Company has delivered to the Indenture Trustee or the Tax-
Exempt Indenture Trustee (as the case may be) and the
Collateral Agent an Officer's Certificate, together with an
Independent Engineer Confirmation, certifying that either
(i) such Energy Services Agreement and the Master Operating
Agreement have been reinstated on identical and enforceable
terms by the Company and such Mill Owner, (ii) such
declaration of enforceability has been overruled, reversed
or rescinded by such Governmental Authority or by another
Governmental Authority having final jurisdiction or greater
jurisdiction than such first Governmental Authority or (iii)
the Company has satisfied the Restricted Payment Alternative
Agreement Requirements with respect to such Energy Services
Agreement or the Master Operating Agreement (as the case may
be);
(b) such Mill Owner has either (i) terminated, or
delivered written notice pursuant to the Master Operating
Agreement of its intention to terminate (which notice has
not been rescinded), its rights and obligations under such
Energy Services Agreement or the Master Operating Agreement
in connection with a Mill Closure with respect to such Mill
or (ii) denied that it has any obligations and substantially
ceased performance under such Energy Services Agreement or
the Master Operating Agreement, unless, in either case, the
Company has delivered to the Indenture Trustee or the Tax-
Exempt Indenture Trustee (as the case may be) and the
Collateral Agent an Officer's Certificate, together with an
Independent Engineer Confirmation, certifying that either
(A) such Energy Services Agreement or the Master Operating
Agreement (as the case may be) has been reinstated on
identical and enforceable terms by the Company and such Mill
Owner or, provided that another Person is reasonably capable
of performing such Mill Owner's obligations under such
Energy Services Agreement or the Master Operating Agreement
(as the case may be), by the Company and such other Person
or (B) the Company has satisfied the Restricted Payment
Alternative Agreement Requirements with respect to such
Energy Services Agreement or the Master Operating Agreement
(as the case may be);
(c) a default has occurred and is continuing in
respect of such Mill Owner's obligations under such Energy
Services Agreement or the Master Operating Agreement,
unless, if such Energy Services Agreement or the Master
Operating Agreement with respect to such Mill Owner has been
terminated as a result of such default, the Company has
delivered to the Indenture Trustee or the Tax-Exempt
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Indenture Trustee (as the case may be) and the Collateral
Agent an Officer's Certificate, together with an Independent
Engineer Confirmation, certifying that the Company has
satisfied the Restricted Payment Alternative Agreement
Requirements with respect to such Energy Services Agreement
or the Master Operating Agreement (as the case may be);
(d) based upon the knowledge of either of the Mobile
Energy Parties, it is reasonably likely that, on or prior to
the next Distribution Date, either (i) there will be a Mill
Closure with respect to such Mill or (ii) such Mill Owner
will deliver written notice pursuant to the Master Operating
Agreement of such Mill Owner's intention to terminate its
rights and obligations under such Energy Services Agreement
or the Master Operating Agreement, unless, in either case,
if such Energy Services Agreement or the Master Operating
Agreement with respect to such Mill Owner has been
terminated as a result of such Mill Closure, the Company has
delivered to the Indenture Trustee or the Tax-Exempt
Indenture Trustee (as the case may be) and the Collateral
Agent an Officer's Certificate, together with an Independent
Engineer Confirmation, certifying that the Company has
satisfied the Restricted Payment Alternative Agreement
Requirements with respect to such Energy Services Agreement
or the Master Operating Agreement (as the case may be); or
(e) a Bankruptcy Event has occurred and is continuing
in respect of such Mill Owner, unless (i) the obligations of
such Mill Owner under such Energy Services Agreement and the
Master Operating Agreement have been expressly assumed with
the approval of a court of competent jurisdiction or (ii) if
such Energy Services Agreement or the Master Operating
Agreement with respect to such Mill Owner has been rejected
or otherwise terminated, the Company has delivered to the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as
the case may be) and the Collateral Agent an Officer's
Certificate, together with an Independent Engineer
Confirmation, certifying that the Company has satisfied the
Restricted Payment Alternative Agreement Requirement with
respect to such Energy Services Agreement or the Master
Operating Agreement (as the case may be).
"Event of Default" means, so long as there are any Financing
Commitments or any Financing Liabilities outstanding, an "Event
of Default" under the Indenture, an "Event of Default" under the
Tax-Exempt Indenture or an "Event of Default" under the Working
Capital Facility.
"Event of Default Alternative Agreement Requirements" means,
with respect to any Project Contract, another Contract entered
into by the Company with one or more Persons in substitution for
or replacement of any such Project Contract, with respect to some
or all of the Processing Services or other services formerly
provided by the Company thereunder, provided that such
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alternative Contract (a) contains substantially equivalent terms
and conditions or, if such terms and conditions are no longer
available on a commercially reasonable basis, the terms and
conditions then available on a commercially reasonable basis, (b)
would, after giving effect to such alternative Contract and based
on projections prepared by the Company on a reasonable basis,
maintain a minimum annual projected Senior Debt Service Coverage
Ratio through the final maturity date of the Outstanding
Indenture Securities or the Outstanding Tax-Exempt Securities (as
the case may be) equal to or greater than the lesser of (i) the
minimum annual projected Senior Debt Service Coverage Ratio that
would have been in effect had performance under such Project
Contract continued and (ii) 1.2 to 1.0 and (c) is reasonably
capable of being performed by the parties thereto.
Notwithstanding the foregoing, such alternative Contract need not
satisfy the conditions described in clauses (a) and (b) above,
provided that (A) the Company delivers to the Indenture Trustee
or the Tax-Exempt Indenture Trustee (as the case may be) an
Officer's Certificate, together with an Independent Engineer
Confirmation, certifying that the Company has satisfied the
Restricted Payment Alternative Agreement Requirements (other than
the conditions set forth in subclauses (C) and (D) of clause
(b)(ii) of the definition of Restricted Payment Alternative
Agreement Requirements with respect to such alternative Contract)
and (B) after giving effect to such alternative Contract and
based on projections prepared by the Company on a reasonable
basis, the projected average annual Senior Debt Service Coverage
Ratio through the final maturity date of the Outstanding
Indenture Securities or the Tax-Exempt Securities (as the case
may be) is projected to be at least 1.2 to 1.0.
"Event of Eminent Domain" means any compulsory transfer or
taking, or transfer under threat of compulsory transfer or
taking, of a material part of the Energy Complex by any
Governmental Authority or any Person acting with the authority
thereof for more than six (6) months, unless such transfer or
taking is the subject of a Good Faith Contest.
"Event of Loss" means any physical loss or destruction of,
or destruction to, the Energy Complex, or any other event that
causes all or a material part of the Energy Complex to be
rendered unfit for normal use for any reason whatsoever,
including through failure of title.
"Excess Funding Subaccount" means the subaccount of the
Maintenance Reserve Account so designated established and created
under Section 2.2(b) of the Intercreditor Agreement.
"Exchange Act" means the Securities Exchange Act of 1934.
"Financing Commitment" means any commitment pursuant to the
Financing Documents to provide credit to the Company.
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"Financing Documents" means all Contracts evidencing or
securing the Financing Liabilities.
"Financing Liabilities" means all indebtedness, liabilities
and obligations of the Mobile Energy Parties (including
principal, interest, fees, reimbursement obligations, penalties,
indemnities and legal expenses, whether due to acceleration or
otherwise) owing to the Senior Secured Parties (of whatsoever
nature and however evidenced) under or pursuant to the Indenture
(including the Guaranty), the Senior Securities, the IDB Lease
Agreement, the Tax-Exempt Indenture, the Working Capital Facility
and any evidence of indebtedness thereunder entered into, the
other Security Documents, to the extent arising on or prior to
the maturity of the Securities and the Tax-Exempt Indenture
Securities, in each case, direct or indirect, primary or
secondary, fixed or contingent, now or hereafter arising out of
or relating to any such Contract.
"Financing Statements" means Uniform Commercial Code
financing statements filed in connection with the other Security
Documents.
"First Mortgage Bonds" means the Indenture Securities issued
on the Closing Date under the first Series Supplemental Indenture
to the Indenture.
"Fiscal Quarter" means the period of time beginning at 12:01
a.m. on the first day of each calendar quarter and ending at
midnight on the last day of such calendar quarter.
"Fiscal Year" means the period of time beginning at 12:01
a.m. on January 1 of each year and ending at midnight on December
31 of such year.
"Fitch" means Fitch Investors Service, Inc., a New York
corporation.
"Fuel Inventory Proceeds" means the proceeds from the sale
of the fuel inventory of the Energy Complex.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"GDPIPD" means the Gross Domestic Product Implicit Price
Deflator as published in the United States Department of
Commerce, Bureau of Analysis publication entitled "Survey of
Current Business." If the Gross Domestic Product Implicit Price
Deflator ceases to exist or is no longer available, the Company,
with the approval of the Independent Engineer, shall designate a
substitute index that is reasonably similar to the Gross Domestic
Product Implicit Price Deflator.
"GDPIPD Factor" means, with respect to each Fiscal Year, the
GDPIPD most recently published during or prior to such Fiscal
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Year divided by the GDPIPD published with respect to December
1994.
"Good Faith Contest" means the contest of an item if (a)
such item is diligently contested in good faith by appropriate
proceedings and adequate reserves or bonding are established in
accordance with GAAP with respect to such item and (b) the
failure to pay or comply with such item during the period of such
contest would not result in a Material Adverse Effect.
"Governmental Approvals" means those authorizations,
consents, approvals, waivers, exemptions, variances,
registrations, certifications, permissions, permits and licenses
with any Governmental Authority required for the ownership and
operation of the Energy Complex and the performance of a Person's
obligations under the Project Documents.
"Governmental Authority" means any Federal, state, city,
county, municipal, foreign, international, regional or other
governmental or regulatory authority, agency, department, board,
body, instrumentality, commission, arbiter or court.
"Guaranteed Obligations" means all indebtedness,
liabilities, obligations, covenants and duties of, and all terms
and conditions to be observed by, the Company (including in its
capacity as a "debtor in possession" under the Bankruptcy Code)
due or owing, or purporting to be due or owing, to, or in favor
or for the benefit of, the Indenture Trustee or the Tax-Exempt
Indenture Trustee (as the case may be) (in each case for its own
benefit and the benefit of the Holders from time to time) under
the Security Documents, in each case (a) whether due or owing, or
purporting to be due or owing, to, or in favor or for the benefit
of, the Indenture Trustee or the Tax-Exempt Indenture Trustee (as
the case may be) (in each case for its own benefit and the
benefit of the Holders from time to time) or any other Person
that becomes the Indenture Trustee or the Tax-Exempt Indenture
Trustee (as the case may be) by reason of any succession or
assignment at any time thereafter and (b) whether or not an
allowable claim against the Company under the Bankruptcy Code, or
otherwise enforceable against the Company, and including, in any
event, interest accruing after the filing by or against the
Company of a petition under the Bankruptcy Code.
"Guaranty" means the unconditional guaranty by Mobile Energy
of the Guaranteed Obligations included in Article XIV of the
Indenture and Article VIII of the IDB Lease Agreement.
"Hazardous Materials" means hazardous wastes, hazardous
substances, hazardous constituents, air contaminants or toxic
substances, whether solids, liquids or gases, including
substances defined or otherwise regulated as "hazardous
materials," "regulated substances," "hazardous wastes,"
"hazardous substances," "toxic substances," "pollutants,"
"contaminants," "carcinogens," "hazardous air pollutants,"
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"criteria pollutants," "reproductive toxins," "radioactive
materials," "toxic chemicals," or other similar designations in,
or otherwise subject to regulation under, any Environmental
Requirement, including petroleum hydrocarbons,
asbestos-containing materials, urea formaldehyde foam insulation,
polychlorinated biphenyls and radionuclides.
"Holder" means a Person in whose name an Indenture Security
or a Tax-Exempt Indenture Security (as the case may be) is
registered in the register providing for the registration,
including upon transfer or exchange, thereof pursuant to the
Indenture or the Tax-Exempt Indenture (as the case may be).
"IDB" means The Industrial Development Board of the City of
Mobile, Alabama.
"IDB Lease Agreement" means the Amended and Restated Lease
and Agreement dated as of ( ), 1995 among the IDB and the
Mobile Energy Parties.
"IDB Order" and "IDB Request" mean, respectively, a written
request or order signed in the name of the IDB by an Authorized
Officer of the IDB and delivered to the Tax-Exempt Indenture
Trustee.
"Income Tax Deficiency" means (a) with respect to the second
Distribution Date during any Fiscal Year, an amount equal to the
excess, if any, of (i) an amount equal to the sum of (A) the
combined Federal and State of Alabama quarterly estimated income
tax payments that would have been required to be paid by all
Members during such Fiscal Year prior to such Distribution Date
and (B) one-half of the amounts estimated to be required to be
paid for County and City of Mobile, Alabama income taxes in
respect of such Fiscal Year, if any, all calculated, solely for
this purpose, as if such Members collectively were a single
"stand-alone" domestic Alabama corporation for purposes of
Federal, state and local taxes that would not (1) be a member of
a consolidated, affiliated, combined, unitary or other tax group,
(2) be a party to any tax sharing arrangements with any other
Person and (3) have income, loss or credits (including loss and
credit carryovers) available to it that would not be attributable
to any ownership interest in the Company over (ii) the amount of
distributions, if any, from the Distribution Account and the
Subordinated Fee Account made on the first Distribution Date
during such Fiscal Year in excess of the amount of distributions,
if any, that would have been permitted by clause (b) below with
respect to such Distribution Date and (b) with respect to the
first Distribution Date during any Fiscal Year, an amount equal
to the excess, if any, of (i) an amount equal to the estimate, as
of such Distribution Date, of the combined Federal, State of
Alabama, and County and City of Mobile, Alabama income taxes that
relate to the immediately preceding Fiscal Year of all Members,
all calculated solely for this purpose, as if such Members
collectively were a single "stand-alone" domestic Alabama
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corporation for purposes of Federal, state and local taxes that
would not (A) be a member of a consolidated, affiliated,
combined, unitary or other tax group, (B) be a party to any tax
sharing arrangements with any other Person and (C) have income,
loss or credits (including loss and credit carryovers) available
to it that would not be attributable to any ownership interest in
the Company over (ii) the amount of distributions, if any, from
the Distribution Account and the Subordinated Fee Account made on
the second Distribution Date of such prior Fiscal Year.
"Indenture" means the Trust Indenture dated as of ( ),
1995 among the Mobile Energy Parties and the Indenture Trustee.
"Indenture Accounts" means, with respect to the Indenture
Securities of any series, the Indenture Securities Account and
each Debt Service Reserve Account (if any) established for the
benefit of Holders of the Indenture Securities of such series.
"Indenture Securities" means all Outstanding Debt issued
pursuant to the Indenture.
"Indenture Securities Account" means the Account so
designated established and created under Section 4.1 of the
Indenture.
"Indenture Securities Collateral" means, collectively, the
Indenture Accounts, including any and all monies contained
therein or hereafter delivered to the Indenture Trustee for
deposit therein and the right to receive monies thereunder, and
the Shared Collateral.
"Indenture Securities Interest Subaccount" means the
subaccount of the Indenture Securities Account so designated
established and created under Section 4.1 of the Indenture.
"Indenture Securities Principal Subaccount" means the
subaccount of the Indenture Securities Account so designated
established and created under Section 4.1 of the Indenture.
"Indenture Securities Redemption Subaccount" means the
subaccount of the Indenture Securities Account so designated
established and created under Section 4.1 of the Indenture.
"Indenture Trustee" means First Union National Bank of
Georgia, a national banking association organized and existing
under the laws of ( ).
"Independent Engineer" means Stone & Webster Engineering
Corporation or another nationally recognized consulting or
engineering firm appointed Independent Engineer pursuant to the
terms of the Intercreditor Agreement.
"Independent Engineer Agreement" means the Independent
Engineer Agreement dated as of ( ), 1995 among the Mobile
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Energy Parties, the Senior Secured Parties, the Collateral Agent
and the Independent Engineer or any other similar Contract among
such Persons.
"Independent Engineer Confirmation" means a certificate
signed by an authorized representative of the Independent
Engineer confirming the reasonableness of statements and
projections contained in certain Officer's Certificates delivered
to the Indenture Trustee or the Tax-Exempt Indenture Trustee (as
the case may be) or the Collateral Agent under the Financing
Documents, which confirmation may not be unreasonably withheld,
conditioned or delayed.
"Independent Insurance Advisor" means Sedgwick James or
another nationally recognized insurance advisory firm appointed
as insurance advisor under the Indenture and the Tax-Exempt
Indenture by the Collateral Agent.
"Intercreditor Agreement" means the Intercreditor and
Collateral Agency Agreement dated as of ( ), 1995 among the
Senior Secured Parties, the Collateral Agent, the IDB and the
Mobile Energy Parties.
"Intercreditor Agreement Accounts" means, collectively, the
Completion Account, the Revenue Account, the Mill Owner
Reimbursement Account, the Working Capital Facility Account, the
Operating Account, the Maintenance Reserve Account, the Loss
Proceeds Account, the Subordinated Debt Account, the Subordinated
Fee Account and the Distribution Account.
"Intercreditor Parties" means, collectively, the Senior
Secured Parties, the IDB, the Mobile Energy Parties, any
Subordinated Debt Provider and any other Person party to the
Intercreditor Agreement (other than the Collateral Agent).
"Interest Payment Date" means each January 1 and July 1 of
each year, commencing January 1, 1996.
"Investment Grade" means a rating in one of the four highest
categories (without regard to subcategories within such rating
categories) by a Rating Agency.
"Law" means any constitution, treaty, statute, code,
ordinance, regulation, order, decree, writ or judicial or
arbitral decision.
"Lease Documents" means, collectively, the IDB Lease
Agreement, the Tax-Exempt Indenture and (to the extent relating
to, or securing, the Tax-Exempt Indenture Securities), the other
Financing Documents..
"Leased Land" means the land underlying the components of
the Tax-Exempt Project marked on Exhibit A to the IDB Lease
Agreement.
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"Lien" means any lien, claim, security interest, mortgage,
trust arrangement, judgment, pledge, option, charge, easement,
encumbrance, title retention, conditional sales agreement,
encroachment, right-of-way, building or use restriction,
preferential right or any other security agreement, arrangement
or similar right in favor of any Person, whether voluntarily
incurred or arising by operation of law, and includes any
agreement to give any of the foregoing in the future, and any
contingent sale or other title retention agreement or lease in
the nature thereof.
("Limited Liability Company Agreement" means the Limited
Liability Company Agreement among the Members dated as of (
), 1995 providing for the formation of the Company.)
"Loss Proceeds" means, as applicable, Casualty Proceeds or
Eminent Domain Proceeds.
"Loss Proceeds Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
"Maintenance Expenditures" means all costs and expenses of
operating and maintaining the Energy Complex and, when the
Company is exercising the Company Step-In Rights, the Pulp Mill
Step-In Equipment, other than (a) fuel costs and expenses, (b)
labor and employee expenses, including fringe benefits and labor
relations expense, (c) payments for insurance premiums and like
insurance related expenses required or otherwise maintained under
any Project Document, (d) costs and expenses of consumable items
such as process or cleaning chemicals and lubricants, (e)
equipment rental, small tools and vehicle maintenance expenses,
(f) costs and expenses associated with legal, accounting and
other office and administrative functions, (g) permitting fees,
(h) costs and expenses of safety supplies, office supplies and
other office expenses, (i) property taxes and payments made in
lieu of taxes, (j) computer maintenance expenses, (k) any amounts
payable for services rendered under the Common Services
Agreement, (l) ash disposal costs, (m) liquidated damages payable
to the Mill Owners under the Master Operating Agreement, (n)
amounts payable to the Mill Owners in connection with the
exercise of Mill Owner Step-In Rights, (o) any amounts required
to be rebated to the United States government pursuant to Section
148 of the Code (to the extent not already provided for in the
Tax-Exempt Indenture) and (p) payments required to be made by the
Company with respect to the 1994 Bonds, in the case of clauses
(a) through (p) above, to the extent the foregoing costs or
expenses are not customarily treated as capital expenditures.
"Maintenance Plan" means the maintenance plan and budget for
the Energy Complex, as the same may be amended, restated,
supplemented or otherwise modified from time to time and as more
particularly described in Section 5.12 of the Indenture or
Section 4.12 of the IDB Lease Agreement (as the case may be).
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"Maintenance Plan Funding Subaccount" means the subaccount
of the Maintenance Reserve Account so designated established and
created under Section 2.2(b) of the Intercreditor Agreement.
"Maintenance Reserve Account" means the Account so
designated established and created under Section 2.2(a) of the
Intercreditor Agreement.
"Maintenance Reserve Account Balance" means, with respect to
the Current Fiscal Quarter, the sum of (a) the monies on deposit
in the Maintenance Reserve Account, (b) amounts available to be
drawn or called upon under any Reserve Account Security deposited
in the Maintenance Reserve Account and (c) the monies on deposit
in, or otherwise credited to (by means of a guaranty, capital
infusion agreement or otherwise), the Mill Owner Maintenance
Reserve Account, in the case of clauses (a), (b) and (c) above,
at the beginning of the Current Fiscal Quarter.
"Maintenance Reserve Account Required Deposit" means, with
respect to any Fiscal Quarter during any Fiscal Year (the
"Current Fiscal Quarter"), one or more deposits into the
Maintenance Reserve Account on Monthly Transfer Dates occurring
during the Current Fiscal Quarter in an aggregate amount equal to
the excess of the sum of paragraphs (a), (b) and (c) below over
the Maintenance Reserve Account Balance with respect to the
Current Fiscal Quarter:
(a) the amount of Maintenance Reserve Account Required
Deposits with respect to each Fiscal Quarter preceding the
Current Fiscal Quarter that were required to be deposited
into the Maintenance Reserve Account during each such Fiscal
Quarter but were not, and have not been since, so deposited;
(b) the aggregate amount of any withdrawals from the
Maintenance Reserve Account and the Mill Owner Maintenance
Reserve Account during each Fiscal Quarter preceding the
Current Fiscal Quarter that were in excess of the aggregate
projected Maintenance Expenditures for each such Fiscal
Quarter (as specified in the Maintenance Plan) but were not,
and have not been since, redeposited in the Maintenance
Reserve Account; and
(c) the greatest of:
(i) if the Current Fiscal Quarter is the first
Fiscal Quarter of such Fiscal Year, the amount obtained
by dividing the aggregate of the projected Maintenance
Expenditures for the Current Fiscal Quarter and the
immediately succeeding sixteen (16) Fiscal Quarters (in
each case as specified in the Maintenance Plan) by
sixteen (16);
(ii) if the Current Fiscal Quarter is the first or
second Fiscal Quarter of such Fiscal Year, the amount
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obtained by dividing the aggregate of the projected
Maintenance Expenditures for the Current Fiscal Quarter
and the immediately succeeding fifteen (15) Fiscal
Quarters (in each case as specified in the Maintenance
Plan) by fifteen (15);
(iii) if the Current Fiscal Quarter is the first,
second or third Fiscal Quarter of such Fiscal Year, the
amount obtained by dividing the aggregate of the
projected Maintenance Expenditures for the Current
Fiscal Quarter and the immediately succeeding fourteen
(14) Fiscal Quarters (in each case as specified in the
Maintenance Plan) by fourteen (14); and
(iv) if the Current Fiscal Quarter is the first,
second, third or fourth Fiscal Quarter of such Fiscal
Year, the greatest of the amount obtained by dividing
the aggregate of the projected Maintenance Expenditures
for any period consisting of the Current Fiscal Quarter
and any number of consecutive Fiscal Quarters from one
(1) to thirteen (13) immediately succeeding the Current
Fiscal Quarter (in each case as specified in the
Maintenance Plan) by such number of consecutive Fiscal
Quarters.
"Manager" means Mobile Energy and any Person appointed as an
additional, substitute or replacement manager of the Company
pursuant to the terms of the Articles of Organization.
"Master Operating Agreement" means the Master Operating
Agreement dated as of December 12, 1994 among the Company (as
assignee of Mobile Energy), Scott, the Pulp Mill Owner, the
Tissue Mill Owner and the Paper Mill Owner.
"Material Adverse Effect" means (a) a change in the
financial condition of either of the Mobile Energy Parties or the
Energy Complex that would reasonably be expected to materially
and adversely affect the ability of either of the Mobile Energy
Parties to pay principal of and interest on the Senior Debt as
and when required or (b) any event or occurrence of whatever
nature that would materially and adversely affect (i) the ability
of either of the Mobile Energy Parties to perform its obligations
under the Project Documents or (ii) the Lien of the Security
Documents.
"Member" means any Person owning a membership interest in
the Company.
"Mill Closure" means (a) a public announcement by a Mill
Owner that it will close its respective Mill for a period of at
least one (1) year or that it will reduce production of pulp,
paper or tissue (as applicable) at such Mill (permanently or for
a period of at least two (2) years) to less than ten percent
(10%) of 1994 production levels or (b) the occurrence of a two
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(2) year period during which, for any reason other than the
occurrence of a Force Majeure Event (as defined in the Master
Operating Agreement), such Mill Owner's production of pulp, paper
or tissue (as applicable) at such Mill is less than ten percent
(10%) of 1994 production levels.
"Mill Owner Maintenance Reserve Account" means the account
so designated established and created pursuant to the Master
Operating Agreement for the sole benefit of the Mill Owners.
"Mill Owner Reimbursement Account" means the Account so
designated established and created under Section 2.2(a) of the
Intercreditor Agreement.
"Mill Owner Step-In Rights" has the meaning specified in the
Master Operating Agreement.
"Mill Owners" means, collectively, the Pulp Mill Owner, the
Tissue Mill Owner and the Paper Mill Owner.
"Mills" means, collectively, the Pulp Mill, the Tissue Mill
and the Paper Mill.
"Mixed-Use Bonds" means, collectively, the IDB's Industrial
Development Revenue Bonds (Scott Paper Company Project), Series A
and the IDB's Industrial Development Revenue Bonds (Scott Paper
Company Project), Series B, in each case issued under and secured
by a Trust Indenture dated as of December 1, 1984 between the IDB
and (AmSouth Bank of Alabama), as trustee, as supplemented by a
First Supplemental Indenture thereto dated as of June 1, 1985.
"Mobile Energy" means Mobile Energy Services Holdings, Inc.,
an Alabama corporation.
"Mobile Energy Parties" means, collectively, the Company and
Mobile Energy.
"Mobile Energy Request" or "Mobile Energy Order" means,
respectively, a written request or order signed in the name of
Mobile Energy by an Authorized Officer of Mobile Energy and
delivered to the Indenture Trustee or the Tax-Exempt Indenture
Trustee (as the case may be).
"Mobile Facility" means the integrated pulp, paper and
tissue manufacturing facility located on a 730-acre site along
the Mobile River and the Chickasaw Creek in Mobile, Alabama,
comprised of the Mills and the Energy Complex.
"Monthly Transfer Date" means the last Business Day of each
month of each Fiscal Year, commencing with the first such day
occurring after the Closing Date.
"Moody's" means Moody's Investor Service, Inc., a Delaware
corporation.
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"Mortgage" means the Leasehold Mortgage, Assignment of
Leases, Rents, Issues and Profits and Security Agreement and
Fixture Filing dated as of ( ), 1995 between the Company and
the Collateral Agent.
"1983 Bonds" means the IDB's Exempt Facilities Revenue Bonds
(Scott Paper Company Project), 1983 Series B, issued under and
secured by a Trust Indenture dated as of December 1, 1983 between
the IDB and BankAmerica Trust Company of New York, as trustee.
"1984 Bonds" means the IDB's (Industrial Development Revenue
Bonds (Scott Paper Recovery Boiler Project) 1984 Series A,)
issued under and secured by the 1984 Indenture.
"1984 Indenture" means the Trust Indenture dated as of
December 1, 1984 between the IDB and Chemical Bank, as trustee.
"Non-Affiliate Subordinated Debt" means any unsecured loan
or loans from any Person that is not an Affiliate of the Company
pursuant to a Subordinated Loan Agreement, the amounts necessary
for repayment of which have been included in the Annual Budget
approved by the Collateral Agent and the Independent Engineer.
"Nondisturbance Agreement" means the Estoppel and
Nondisturbance Agreement dated as of December 12, 1994 between
TRT and the Company (as assignee of Mobile Energy).
"Officer's Certificate" means a certificate that has been
signed by an Authorized Officer of either of the Mobile Energy
Parties or of Southern (as the case may be).
"O&M Agreement" means the Facility Operations and
Maintenance Agreement dated as of December 12, 1994 between the
Company (as assignee of Mobile Energy) and the Operator.
"Operating Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
("Operating Agreement" means the Operating Agreement of the
Company dated ( ), 1995 among the Members.)
"Operation and Maintenance Costs" means all costs and
expenses of operating and maintaining the Energy Complex and,
when the Company is exercising the Company Step-In Rights, the
Pulp Mill Step-In Equipment, including (a) Subordinated Fees, (b)
Maintenance Expenditures and (c) payments required to be made by
the Company with respect to the 1994 Bonds.
"Operator" means Southern Electric, in its capacity as
operator under the O&M Agreement.
"Opinion of Counsel" means a written opinion of counsel for
any Person either expressly referred to herein or otherwise
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satisfactory to the Indenture Trustee or the Tax-Exempt Indenture
Trustee (as the case may be) (which may include counsel for
either of the Mobile Energy Parties, whether or not such counsel
is an employee of either or both of them).
"Optional Modifications" means all modifications to the
Energy Complex that are not Required Modifications.
"Optional Modifications Subaccount" means the subaccount of
the Completion Account so designated established and created
under Section 2.2(c) of the Intercreditor Agreement.
"Outstanding" means, when used with respect to Senior
Securities, as of the date of determination, all Senior
Securities theretofore authenticated and delivered under the
Indenture or the Tax-Exempt Indenture (as the case may be),
except:
(a) Senior Securities theretofore canceled by the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as
the case may be) or delivered to either such Trustee for
cancellation;
(b) Senior Securities or portions thereof deemed to
have been paid within the meaning of, in the case of the
Indenture, Section 12.1 thereof and, in the case of the Tax-
Exempt Indenture, Section ( ) thereof; and
(c) Senior Securities that have been exchanged for
other Senior Securities or Senior Securities in lieu of
which other Senior Securities have been authenticated and
delivered pursuant to the Indenture or the Tax-Exempt
Indenture (as the case may be) unless held by a Holder in
whose hands such Senior Securities constitute valid
obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of Senior Securities Outstanding have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder or whether or not a quorum is present
at a meeting of Holders of Senior Securities, Senior Securities
owned by either of the Mobile Energy Parties (or any Affiliate
thereof) shall be disregarded and deemed not to be Outstanding,
except that, in determining whether or not the Indenture Trustee
or the Tax-Exempt Indenture Trustee (as the case may be) shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any
such determination as to presence of a quorum, only Senior
Securities that a Responsible Officer of the Indenture Trustee or
the Tax-Exempt Indenture Trustee (as the case may be) knows to be
so owned shall be so disregarded. Senior Securities so owned
that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
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case may be) such pledgee's right so to act with respect to such
Senior Securities and that such pledgee is not a Mobile Energy
Party (or any Affiliate thereof).
"Paper Mill" means the paper mill located at the Mobile
Facility, which as of the Closing Date is owned by S.D. Warren.
"Paper Mill Energy Services Agreement" means the Paper Mill
Energy Services Agreement dated as of December 12, 1994 between
the Paper Mill Owner and the Company (as assignee of Mobile
Energy).
"Paper Mill Owner" means S.D. Warren, in its capacity as
owner of the Paper Mill.
"Paying Agent" means any Person acting as Paying Agent
pursuant to, in the case of the Indenture, Section 9.14(a)
thereof and, in the case of the Tax-Exempt Indenture, Section (
) thereof.
"Permitted Indebtedness" means, (a) in the case of the
Company, collectively, (i) the First Mortgage Bonds, (ii) Debt
incurred under a Working Capital Facility in an aggregate
principal amount not to exceed $15,000,000 (multiplied by the
Working Capital Escalation Factor in effect at any given time),
provided (and the Working Capital Facility shall contain
provisions to such effect) that (A) no more than $5,000,000
(multiplied by the Working Capital Escalation Factor in effect at
any given time) of such Debt may be scheduled to mature during
any thirty (30)-day period, (B) Working Capital Loans advanced
thereunder shall mature no later than ninety (90) days from the
date such Working Capital Loans were first advanced, (C) the
Company shall be required to repay all amounts advanced
thereunder so that no amounts are outstanding once during each
Fiscal Year (other than the Fiscal Year ending December 31, 1995)
for a period of five (5) consecutive days and (D) the Working
Capital Facility Provider thereunder shall become a party to the
Intercreditor Agreement, (iii) the Tax-Exempt Bonds,
(iv) reimbursement obligations in respect of letters of credit
(if any) and other financial obligations arising under the
Project Contracts, (v) purchase money obligations incurred to
finance discrete items of equipment not comprising an integral
part of the Energy Complex that extend only to the equipment
being financed and that do not in the aggregate have annual debt
service or lease obligations exceeding $2,000,000 (multiplied by
the GDPIPD Factor in effect at any given time), (vi) trade
accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within ninety
(90) days of the date the respective goods are delivered or the
respective services are rendered, (vii) obligations in respect of
surety bonds or similar instruments in an aggregate amount not
exceeding $10,000,000 (multiplied by the GDPIPD Factor in effect
at any given time) at any one time outstanding, (viii) Affiliate
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Subordinated Debt, (ix) Replacement Debt permitted to be issued
pursuant to the terms of the Indenture or the Tax-Exempt
Indenture (as the case may be), (x) Debt permitted to be issued
pursuant to the terms of the Indenture or the Tax-Exempt
Indenture (as the case may be) for Required Modifications and
Optional Modifications, (xi) Non-Affiliate Subordinated Debt in
an aggregate principal amount not to exceed $75,000,000
(multiplied by the GDPIPD Factor in effect at any given time)
permitted to be issued pursuant to the terms of the Indenture or
the Tax-Exempt Indenture (as the case may be), (xii) Refunding
Debt permitted to be issued pursuant to the terms of the
Indenture or the Tax-Exempt Indenture (as the case may be) and
(xiii) the Company's obligations in respect of the 1994 Bonds,
the Mixed-Use Bonds and the Environmental Bonds and (b) in the
case of Mobile Energy, the Guaranty.
"Permitted Investments" means investments in securities that
are (a) direct obligations of the United States of America or of
any agency thereof; (b) obligations fully guaranteed by the
United States of America or any agency thereof; (c) time deposits
(which may be represented by certificates of deposit) issued by
commercial banks organized under the laws of the United States of
America or of any political subdivision thereof or under the laws
of Canada, Japan, Switzerland or any country that is a member of
the European Union having a combined capital and surplus of at
least $500,000,000 and having long-term unsecured Debt having a
rating at least equal to (i) the highest rating assigned to the
Outstanding Indenture Securities or the Tax-Exempt Securities (as
the case may be) by at least two of the Rating Agencies or (ii)
"B" by Thompson Bankwatch, Inc. (in either case provided that
such investments shall not be comprised of more than $30,000,000
in principal amount at any given time from any one such bank);
(d) open market commercial paper of any corporation incorporated
or doing business under the laws of the United States of America
or of any political subdivision thereof then rated at least A-
1/P-1 (or an equivalent thereof) by at least two of the Rating
Agencies (provided that such investments shall not be comprised
of more than $30,000,000 in principal amount at any given time
from any one such corporation); (e) obligations issued or
guaranteed by, and any other obligations the interest on which is
excluded from income for Federal income tax purposes issued by,
any state of the United States of America or the District of
Columbia or the Commonwealth of Puerto Rico or any political
subdivision, agency, authority or instrumentality thereof, which
issuer or guarantor has (i) a short-term Debt rating which is (on
the date of acquisition thereof) A-1/P-1 (or an equivalent
thereof) or better and (ii) a long-term Debt rating that is (on
the date of acquisition thereof) "A" or better, in each case by
at least two of the Rating Agencies (provided that such
investments shall not be comprised of more than $30,000,000 in
principal amount at any given time from any one such issuer or
guarantor); (f) guaranteed investment contracts of any financial
institution organized under the laws of the United States of
America or any state thereof or under the laws of Canada, Japan,
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Switzerland or any country that is a member of the European
Union, which financial institution has assets of at least $5
billion in the aggregate and has a long term Debt rating that is
(on the date of acquisition thereof) "A" or better by at least
two of the Rating Agencies (provided that such investments shall
not be comprised of more than $30,000,000 in principal amount at
any given time from any one such institution); (g) investment
contracts of any financial institution either (i) (A) fully
secured by direct obligations of the United States, (B)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States or (C)
securities or receipts evidencing ownership interests in
obligations or specified portions thereof described in clause (A)
or (B) above, in each case guaranteed as a full faith and credit
obligation of the United States, having a market value at least
equal to 102% of the amount deposited thereunder and possession
of which obligation is held under arrangements satisfactory to
the Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
case may be) or (ii) with long-term Debt ratings of "A" or higher
and short-term ratings in one of the highest two major categories
by any of the Rating Agencies; and (h) a contract or investment
agreement with a provider or guarantor (i) which provider or
guarantor is rated at least "A" or equivalent by each of the
Rating Agencies (provided that if a guarantor is party to the
rating, the guaranty is unconditional and is confirmed in writing
prior to any assignment by the provider to another subsidiary of
such guarantor), (ii) providing that monies invested shall be
payable to the Indenture Trustee or the Tax-Exempt Indenture
Trustee (as the case may be) (except to the extent the monies
invested constitute Shared Collateral, which shall be payable to
the Collateral Agent) without condition (other than notice) and
without breakage fee or other penalty, upon not more than two (2)
Business Days' notice for application when and as required or
permitted under the Indenture, the Intercreditor Agreement or the
Tax-Exempt Indenture (as applicable), (iii) stating that such
contract or agreement is unconditional, expressly disclaiming any
right of setoff and providing for immediate termination in the
event of insolvency of the provider and termination upon demand
of the Indenture Trustee or the Tax-Exempt Indenture Trustee (as
the case may be) (except to the extent the monies invested
constitute Shared Collateral, which shall provide for termination
upon demand of the Collateral Agent) (which demand shall only be
made at the direction of the Company) after any payment or other
covenant default by the provider and (iv) the terms and
provisions of which are in form and substance satisfactory to the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
case may be).
"Permitted Liens" means, collectively, (a) Liens
specifically created, required or permitted by the Indenture or
the Tax-Exempt Indenture, (b) Liens securing obligations under
the Indenture and the Tax-Exempt Indenture, (c) Liens in favor of
the Working Capital Facility Provider, which with respect to the
Shared Collateral shall be of equal priority with the Liens
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securing the Senior Securities, except that the Working Capital
Facility Provider will have priority over the other Senior
Secured Parties, upon a Wind-Up Event, on Receivables and on Fuel
Inventory Proceeds, (d) Liens for taxes that are either not yet
due, are due but payable without penalty or are subject to a Good
Faith Contest, (e) any exceptions to title that are contained in
the title insurance policy delivered to the Collateral Agent on
the Closing Date, (f) such minor defects, easements, rights of
way, restrictions, irregularities, encumbrances and clouds on
title and statutory liens that do not materially impair the
property affected thereby and that do not individually or in the
aggregate materially impair the value of the security interests
granted under the Financing Documents, (g) the easements and
other rights in favor of third- parties contained in the Project
Contracts as of the Closing Date, (h) deposits or pledges to
secure statutory obligations or appeals, release of attachments,
stays of execution or injunction, performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or
leases, or for purposes of like general nature in the ordinary
course of business, (i) Liens in connection with worker's
compensation, unemployment insurance or other social security or
pension obligations, (j) legal or equitable encumbrances deemed
to exist by reason of the existence of any litigation or other
legal proceeding if the same are subject to a Good Faith Contest
(excluding any attachment prior to judgment, judgment lien or
attachment in aid of execution on a judgment), (k) mechanic's,
workmen's, materialmen's, construction or other like Liens
arising in the ordinary course of business or incident to the
construction or improvement of any property in respect of
obligations that are not yet due or that are subject to a Good
Faith Contest, (l) Liens securing purchase money obligations that
constitute Permitted Indebtedness and (m) Liens in favor of the
Mill Owners on the Mill Owner Maintenance Reserve Account,
including monies on deposit therein or otherwise credited thereto
(by means of a guaranty, capital infusion agreement or
otherwise), to the extent arising under the Master Operating
Agreement or such guaranty or capital infusion arrangement.
"Person" means any individual, sole proprietorship,
corporation, partnership, limited liability company, joint
venture, trust, unincorporated association, institution,
Governmental Authority or any other entity.
"Place of Payment" means, when used with respect to the
Senior Securities of any series, the office or agency maintained
pursuant to, in the case of the Indenture, Section 9.14(a)
thereof and, in the case of the Tax-Exempt Indenture, Section (
) thereof and, in either case, such other place or places, if
any, where the principal of and premium, if any, and interest on
the Senior Securities of such series are payable as specified in
the Series Supplemental Indenture to the Indenture or the Tax-
Exempt Indenture (as the case may be) establishing the Senior
Securities of such series.
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"Predecessor Securities" means, with respect to any
particular Senior Security, every previous Senior Security
evidencing all or a portion of the same Debt as that evidenced by
such particular Senior Security. For purposes of this
definition, any Senior Security authenticated and delivered
under, in the case of any Indenture Security, Section 2.9 of the
Indenture and, in the case of any Tax-Exempt Indenture Security,
Section ( ) of the Tax-Exempt Indenture in lieu of a lost,
destroyed or stolen Senior Security shall be deemed to evidence
the same Debt as such lost, destroyed or stolen Senior Security.
"Prepayment Date" has the meaning specified, (a) in the case
of the Indenture, in Section 6.2 thereof and (b) in the case of
the Tax-Exempt Indenture, in Section ( ) thereof.
"Principal Payment Date" means in respect of the Senior
Securities, any January 1 or July 1 on which principal payments
are due to Holders.
"Processing Services" has the meaning specified in the
Master Operating Agreement.
"Project Contracts" means, collectively, (a) the Energy
Services Agreements, (b) the Master Operating Agreement, (c) the
Lease Agreement dated as of December 12, 1994 between Scott, as
lessor, and the Company (as assignee of Mobile Energy), as
lessee, (d) the Supplementary Lease Agreement dated as of
December 12, 1994 between Scott, as lessor, and the Company (as
assignee of Mobile Energy), as lessee, (e) the O&M Agreement, (f)
the Common Services Agreement, (g) the Water Procurement and
Effluent Service Agreement dated as of December 12, 1994 among
the Company (as assignee of Mobile Energy), the Pulp Mill Owner,
the Paper Mill Owner and the Tissue Mill Owner, (h) the Boiler
Ash Disposal Agreement dated as of December 12, 1994 between the
Pulp Mill Owner and the Company (as assignee of Mobile Energy),
(i) the Pulp Mill Environmental Indemnity Agreement dated as of
December 12, 1994 between the Company (as assignee of Mobile
Energy) and the Pulp Mill Owner, (j) the Paper Mill Environmental
Indemnity Agreement dated as of December 12, 1994 between the
Company (as assignee of Mobile Energy) and the Paper Mill Owner,
(k) the Tissue Mill Environmental Indemnity Agreement dated as of
December 12, 1994 between the Company (as assignee of Mobile
Energy) and the Tissue Mill Owner, (l) the Scott Environmental
Indemnity Agreement dated as of December 12, 1994 between Scott
and the Company (as assignee of Mobile Energy), (m) the
Transition Agreement dated as of December 12, 1994 between Scott
and the Company (as assignee of Mobile Energy), (n) the SCS
Agreement, (o) the Easement Deeds, (p) the Asset Purchase
Agreement dated as of December 12, 1994 between Scott, as seller,
and the Company (as assignee of Mobile Energy), as buyer, (q) the
Coal Supply Agreement, (r) any other Contract entered into by
either of the Mobile Energy Parties for the provision of fuel to
the Energy Complex, (s) the Facilities Lease Agreement dated as
of December 1, 1984 between Scott and the IDB, (t) the Lease and
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Assignment Agreement dated as of December 12, 1994 between Scott
and the Company (as assignee of Mobile Energy), (u) the IDB Lease
Agreement, (v) the Lease Assignment and Assumption Agreement
dated as of December 12, 1994 between Scott and the Company (as
assignee of Mobile Energy), (w) the Construction, Financing and
Installment Sale Agreement dated as of April 1, 1973 between the
IDB and Scott, (x) the Lease and Assignment Agreement dated as of
December 12, 1994 between Scott and the Company (as assignee of
Mobile Energy), (y) the Facilities Lease and Agreement dated as
of December 1, 1984 between the IDB and Scott, (z) the Sublease
and Assignment Agreement dated as of December 12, 1994 between
Scott and the Company (as assignee of Mobile Energy), (aa) the
Construction, Financing and Installment Sale Agreement dated as
of September 1, 1976 between the IDB and Scott, (bb) the Lease
and Assignment Agreement dated as of December 12, 1994 between
Scott and the Company (as assignee of Mobile Energy), (cc) the
Recovery Boiler Facilities Lease and Agreement dated as of
December 1, 1994 between the IDB and Scott, (dd) the Lease
Assignment and Assumption Agreement dated as of December 12, 1994
between Scott and the Company (as assignee of Mobile Energy),
(ee) the Nondisturbance Agreement and (ff) the Recognition
Agreements.
"Project Costs" means costs and expenses (other than
financing costs and expenses) paid, incurred or to be incurred by
the Company after the Closing Date to complete the capital
improvements to the Energy Complex specified in the Master
Operating Agreement in accordance with the Capital Budget and
certain other planned expenditures relating to the Energy
Complex.
"Project Documents" means, collectively, the Project
Contracts and the Financing Documents.
"Project Participant" means each Person that is party to a
Project Document.
"Prudent Plant Operating Standards" has the meaning
specified in the Master Operating Agreement.
"Pulp Mill" means the pulp mill (including a process water
plant and waste water treatment plant) located at the Mobile
Facility, which as of the Closing Date is owned by Scott.
"Pulp Mill Energy Services Agreement" means the Pulp Mill
Energy Services Agreement dated as of December 12, 1994 between
the Pulp Mill Owner and the Company (as assignee of Mobile
Energy).
"Pulp Mill Owner" means Scott, in its capacity as owner of
the Pulp Mill.
"Pulp Mill Step-In Equipment" has the meaning specified in
the Master Operating Agreement.
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"PURPA" means the Public Utility Regulatory Policies Act of
1978.
"Qualified Engineer" means an independent engineer listed on
Schedule 1, as such Schedule may be amended from time to time in
accordance with Section 11.3 of the Intercreditor Agreement.
"Qualifying Facility" means a "Qualifying Cogeneration
Facility" as specified in section 3(18)(B) of the Federal Power
Act or a qualifying small power production facility within the
meaning of section 201 of PURPA.
"Rating Agencies" means, collectively, S&P, Fitch and
Moody's, together with any other nationally recognized credit
agency of similar standing if any such Person is not then
currently rating the proposed subject of such rating.
"Receivables" means all of the Company's rights to payment
for goods sold or leased or services performed by the Company,
including rights evidenced by an account, note, contract,
security, instrument, chattel paper, or other evidence of
indebtedness.
"Recognition Agreements" means, collectively, (a) the
Recognition, Cooperation and Consent Agreement relating to the
Mixed-Use Bonds dated as of ( ), 1995 among the Company, the
IDB, AmSouth Bank of Alabama, TRT and the Collateral Agent and
(b) the Recognition, Cooperation and Consent Agreement relating
to the Tax-Exempt Bonds dated as of ( ), 1995 among the
Company, the IDB and the Collateral Agent.
"Redemption Date" has the meaning specified, (a) in the case
of the Indenture, in Section 6.2 thereof and (b) in the case of
the Tax-Exempt Indenture, in Section ( ) thereof.
"Refunding Debt" means Debt, the proceeds of which are used
to refund outstanding Senior Debt.
"Regular Record Date" means, for the Stated Maturity of any
Senior Security of a series, or for the Stated Maturity of any
installment of principal thereof or payment of interest thereon,
the 15th day of the month (whether or not a Business Day) prior
to the next succeeding Stated Maturity, or any other date
specified for such purpose in the form of Senior Security of such
series attached to the Series Supplemental Indenture to the
Indenture or the Tax-Exempt Indenture (as the case may be)
relating to the Senior Securities of such series.
"Replacement Debt" means Senior Securities, the proceeds of
which are used to refinance all or a portion of the outstanding
Tax-Exempt Indenture Securities (whether by effecting a gross-up
of, or by the issuance of Senior Securities to replace, affected
Tax-Exempt Indenture Securities) upon the occurrence of a
Determination of Taxability.
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"Replacement Facility" means a facility with materially
different performance capabilities from the Energy Complex that
can be built to provide services to some or all of the Mills
following the occurrence of an Event of Loss or an Event of
Eminent Domain.
"Required Deposit" means, at the time of any Required
Deposit Event with respect to any Reserve Account Security
Account, an amount equal to the aggregate Available Amount under
all Reserve Account Security on deposit in such Reserve Account
Security Account at such time; provided, however, that if such
Required Deposit Event results from the occurrence of a Debt
Service Event, such amount shall be equal to the aggregate amount
(after giving effect to monies then on deposit in such Reserve
Account Security Account) due and owing at such time in respect
of principal of and premium, if any, and interest on any Senior
Securities pursuant to, if such Reserve Account Security Account
is (a) the Maintenance Reserve Account, Section 3.5(b) of the
Intercreditor Agreement, (b) the Distribution Account, Section
3.8(b) of the Intercreditor Agreement, (c) a Debt Service Reserve
Account, Section 4.5 of the Indenture and (d) a Tax-Exempt Debt
Service Reserve Account, Section ( ) of the Tax-Exempt
Indenture.
"Required Deposit Event" means (a) in the case of any
Reserve Account Letter of Credit on deposit in any Reserve
Account Security Account, (i) the occurrence of any Debt Service
Event with respect to such Reserve Account Letter of Credit, (ii)
the date that is fifteen (15) days prior to the occurrence of any
Termination Event with respect to such Reserve Account Letter of
Credit, unless such Reserve Account Letter of Credit has been
replaced with other Reserve Account Security (other than, if such
Reserve Account Security Account is a Tax-Exempt Debt Service
Reserve Account, a Southern Guaranty) prior to such date, (iii)
the occurrence of a Credit Standard Event or Default Event with
respect to such Reserve Account Letter of Credit and the
continuance thereof for five (5) days, unless such Reserve
Account Letter of Credit has been replaced with other Reserve
Account Security (other than, if such Reserve Account Security
Account is a Tax-Exempt Debt Service Reserve Account, a Southern
Guaranty) prior to such date or (iv) the date on which a Trigger
Event Notice has been delivered and (b) in the case of any
Southern Guaranty on deposit in any Reserve Account Security
Account, (i) the occurrence of any Debt Service Event with
respect to such Southern Guaranty, (ii) the date that is fifteen
(15) days prior to the occurrence of any Termination Event with
respect to such Southern Guaranty, (iii) the occurrence of a
Credit Standard Event with respect to such Southern Guaranty and
the continuance thereof for fifteen (15) days, unless such
Southern Guaranty has been replaced with other Reserve Account
Security prior to such date, (iv) the occurrence of a Default
Event and the continuance thereof for five (5) days, unless such
Southern Guaranty has been replaced with other Reserve Account
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Security prior to such date or (v) the date on which a Trigger
Event Notice has been delivered.
"Required Modifications" means those modifications
reasonably necessary for the Energy Complex to remain in
compliance with all material Governmental Approvals and maintain,
at a minimum, the Maximum Capacity (as defined in the Master
Operating Agreement) levels as in effect on the Closing Date.
"Required Modifications Subaccount" means the subaccount of
the Completion Account so designated established and created
under Section 2.2(c) of the Intercreditor Agreement.
"Required Senior Creditors" means Senior Secured Parties
holding or otherwise representing 33 % of the Combined Exposure.
"Reserve Account Letter of Credit" means a letter of credit
issued by a commercial bank whose long-term unsecured Debt is
rated at least "A" by S&P, "A" by Fitch and "A2" by Moody's.
"Reserve Account Security" means either, or any combination
of, (a) one or more Southern Guaranties or (b) one or more
Reserve Account Letters of Credit.
"Reserve Account Security Accounts" means, collectively,
each Debt Service Reserve Account (if any), each Tax-Exempt Debt
Service Reserve Account (if any), the Maintenance Reserve Account
and the Distribution Account.
"Responsible Officer" means, when used with respect to the
Collateral Agent, the Indenture Trustee or the Tax-Exempt
Trustee, any officer in the corporate trust and agency group of
such Person or any other officer of such Person to whom a matter
is referred because of such other officer's knowledge of and
familiarity with the particular subject.
"Restricted Payment Alternative Agreement Requirements"
means, with respect to any Project Contract, another Contract
entered into by the Company with one or more other Persons in
substitution for or replacement of any such Project Contract that
has been declared unenforceable or rejected or otherwise
terminated, with respect to some or all of the Processing
Services or other services formerly provided by the Company
thereunder, provided that either (a) the Company has delivered to
the Collateral Agent a letter from any two of the Rating Agencies
(then currently rating the Indenture Securities or the Tax-Exempt
Indenture Securities) confirming that, after giving effect to
such alternative Contract, the ratings of the Outstanding
Indenture Securities or the Outstanding Tax-Exempt Indenture
Securities (as the case may be) are Investment Grade or (b) the
Company (i) has provided to the Collateral Agent the Revenue
Sufficiency Certification and (ii) has delivered to the
Collateral Agent an Officer's Certificate, together with an
Independent Engineer Confirmation, certifying that (A) the term
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of such alternative agreement extends through the earlier of (1)
the final maturity of the Outstanding Indenture Securities or the
Outstanding Tax-Exempt Indenture Securities (as the case may be)
and (2) the term of such Project Contract, (B) such alternative
agreement contains termination provisions no less favorable to
the Company than those contained in such Project Contract, (C)
such alternative agreement has been in full force and effect for
at least thirty-six (36) months, (D) the average Senior Debt
Service Coverage Ratio for the four immediately preceding semi-
annual payment periods was equal to at least 1.25 to 1.0 and,
based on projections prepared by the Company on a reasonable
basis, the projected average annual Senior Debt Service Coverage
Ratio through the final maturity date of the Outstanding
Indenture Securities or the Outstanding Tax-Exempt Indenture
Securities (as the case may be) is projected to be at least 1.25
to 1.0 and (E) such alternative agreement is reasonably capable
of being performed by the parties thereto.
"Restricted Payments" means, collectively, (a) payments from
the Subordinated Fee Account or any other payment in respect of
Subordinated Fees, (b) distributions (from the Distribution
Account or otherwise), including a return of capital
contributions and dividends, paid to, or at the direction or for
the benefit of, any Affiliate of the Company, but excluding
distributions of cash from any Account to the extent such cash
has been replaced with Reserve Account Security in accordance
with the terms of the Financing Documents, (c) the payment of
principal of or premium, if any, or interest on any Affiliate
Subordinated Debt, (d) the repurchase by the Company of any
interest of any Member, or (e) the making of any loans or other
advances from the Company to any Affiliate of the Company, but
excluding advances of cash to the extent such cash (i) has been
replaced with Reserve Account Security in accordance with the
terms of the Financing Documents or (ii) constitutes a payment
required under the O&M Agreement or the SCS Agreement.
"Revenue Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
"Revenue Sufficiency Certification" means an Officer's
Certificate of the Company, together with an Independent Engineer
Confirmation, to the effect that, based upon projections prepared
by the Company in accordance with Section 1.15 of the Indenture
or Section ( ) of the Tax-Exempt Indenture, the Project
Contracts then in effect generate sufficient Revenues to enable
the Company to pay its debts and other obligations (including
Operation and Maintenance Costs) when they become due through the
final maturity of the Outstanding Indenture Securities or the
Tax-Exempt Indenture Securities (as the case may be).
"Revenues" means (without duplication), for any period, the
revenues received by the Company for use of the services and
facilities of the Energy Complex including (a) amounts received
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by the Company under the Project Contracts, (b) interest and
other income earned and credited on monies deposited in the
Accounts (to the extent not retained in such Accounts), (c) the
proceeds of the sale of any part of the Energy Complex, provided
that such sale is not prohibited by the Financing Documents, (d)
the proceeds of any business interruption insurance and other
payments received for interruption of operations (excluding any
proceeds of any liability or physical damage insurance) and (e)
all other monies that have been deposited into the Revenue
Account as required or permitted by the terms of the Financing
Documents. Notwithstanding the foregoing, "Revenues" do not
include (i) capital contributions, (ii) the proceeds of any Debt,
Eminent Domain Proceeds or Casualty Proceeds, (iii) amounts
received by the Company in connection with the exercise of
Company Step-In Rights (to the extent in excess of the Company's
expenses incurred in connection therewith (including the cure or
the attempted cure of the related Pulp Mill Triggering Event (as
defined in the Master Operating Agreement)) and (iv) amounts
received by the Company with respect to the 1994 Bonds.
"S&P" means Standard & Poor's Ratings Group, a New York
corporation.
"Scott" meansScott Paper Company, aPennsylvania corporation.
"SCS" means Southern Company Services, Inc., an Alabama
corporation.
"SCS Agreement" means the Agreement dated as of December 12,
1994 between SCS and the Company (as assignee of Mobile Energy).
"S.D. Warren" means S.D. Warren Company, a Pennsylvania
corporation.
"SEC" means the Securities and Exchange Commission of the
United States of America.
"Secured Obligations" means, collectively, the Financing
Liabilities, the Trustee Claims and the Collateral Agent Claims.
"Securities Act" means the Securities Act of 1933.
"Security Agreement" means the Assignment and Security
Agreement dated as of ( ), 1995 between the Company and the
Collateral Agent.
"Security Documents" means, collectively, (a) the Mortgage,
(b) the Security Agreement, (c) the Indenture, (d) the
Intercreditor Agreement, (e) the Tax-Exempt Indenture, (f) the
IDB Lease Agreement, (g) the Consents to Assignment and (h) each
Financing Statement.
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"Security Interest" means the Liens created, or purported to
be created, on Shared Collateral pursuant to any Security
Document.
"Security Register" has the meaning specified in Section 2.8
of the Indenture or Section ( ) of the Tax-Exempt Indenture (as
the case may be).
"Security Registrar" means any Person acting as Security
Registrar hereunder pursuant to Section 9.14 of the Indenture or
Section ( ) of the Tax-Exempt Indenture (as the case may be).
"Senior Creditor Certificate" means a certificate of a
Senior Secured Party, signed by an Authorized Representative of
such Senior Secured Party, (a) setting forth the principal amount
of the Financing Liabilities owed to such Senior Secured Party as
of the date of such certificate and the outstanding unutilized
Financing Commitments of such Senior Secured Party as of the date
of such certificate, (b) setting forth a contact person for such
Senior Secured Party, including phone and facsimile numbers for
such person, (c) directing the Collateral Agent to take a
specified action and (d) stating specifically the action the
Collateral Agent is directed to take and the Security Document
and the provision thereof pursuant to which the Collateral Agent
is being directed to act.
"Senior Debt" means, collectively, the Outstanding Senior
Securities and the outstanding Working Capital Loans.
"Senior Debt Service Coverage Ratio" means, for any period
and without duplication, the ratio of (a) (i) the sum of (A) all
Revenues for such period and (B) the amount of interest and other
income earned and credited on monies deposited in the Accounts
(to the extent retained in such Accounts) for such period minus
(ii) the sum of (A) Operation and Maintenance Costs for such
period (except for such costs paid with monies on deposit in the
Maintenance Reserve Account and payments made by the Company with
respect to the 1994 Bonds) and (B) the amount deposited in the
Maintenance Reserve Account for such period (but for purposes of
calculating any projected Senior Debt Service Coverage Ratio, not
less than the Maintenance Reserve Account Required Deposit for
such period) to (b) the sum of (i) all amounts payable by the
Company during such period in respect of principal of and
premium, if any, and interest on the Outstanding Securities, (ii)
all amounts payable by the Company during such period in respect
of rent under the IDB Lease Agreement, (iii) all amounts payable
by the Company during such period in respect of payment
obligations under the Working Capital Facility (other than
repayment of principal), (iv) all amounts payable by the Company
during such period as fees and other expenses (including any
interest thereon) to any fiduciary acting in such capacity under
the Security Documents and (v) the aggregate amount of overdue
payments in respect of clauses (b)(i) through (iv) above from
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previous periods, in each case determined on a cash basis in
accordance with GAAP.
"Senior Debt Service Requirement" means, for any period, the
sum of (a) all amounts payable by the Company during such period
in respect of principal of and premium, if any, and interest on
the Outstanding Securities, (b) all amounts payable by the
Company during such period in respect of rent under the IDB Lease
Agreement, (c) all amounts payable by the Company during such
period in respect of payment obligations under the Working
Capital Facility (other than repayment of principal), (d) all
amounts payable by the Company during such period as fees and
other expenses (including any interest thereon) to any fiduciary
acting in such capacity under the Security Documents and (e) the
aggregate amount of overdue payments in respect of the foregoing
from previous periods, in each case determined on a cash basis in
accordance with GAAP.
"Senior Debt Termination Date" means the date on which all
Financing Liabilities, other than contingent liabilities and
obligations that are unasserted at such date, have been paid and
satisfied in full and all Financing Commitments have been
terminated.
"Senior Secured Parties" means, collectively, (a) the
Indenture Trustee (on behalf of itself and the Holders of the
Indenture Securities), (b) the Tax-Exempt Indenture Trustee (on
behalf of itself and the Holders of the Tax-Exempt Indenture
Securities) and (c) the Working Capital Facility Provider.
"Senior Securities" means, collectively, the Securities and
the Tax-Exempt Indenture Securities.
"Series Supplemental Indenture" means an indenture
supplemental to the Indenture or the Tax-Exempt Indenture entered
into by the Mobile Energy Parties or the IDB (as the case may be)
and the Indenture Trustee or the Tax-Exempt Indenture Trustee (as
the case may be) for the purpose of establishing, in accordance
with such Indenture, the title, form and terms of the Senior
Securities of any series.
"Shared Collateral" means all Collateral other than (a) the
Indenture Accounts and (b) the Tax-Exempt Indenture Accounts
(including, in the case of clauses (a) and (b) above, any and all
monies contained therein or hereafter delivered to the Indenture
Trustee or the Tax-Exempt Indenture Trustee (as the case may be)
for deposit therein and, in each case, all monies received and
the right to receive monies thereunder).
"Sinking Fund" has the meaning specified in Section 7.2 of
the Indenture or Section ( ) of the Tax-Exempt Indenture (as the
case may be).
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"Sinking Fund Redemption Dates" has the meaning specified in
Section 7.2 of the Indenture or Section ( ) of the Tax-Exempt
Indenture (as the case may be).
"Sinking Fund Requirements" has the meaning specified in
Section 7.2 of the Indenture or Section ( ) of the Tax-Exempt
Indenture (as the case may be).
"Site" means the real property on which the Energy Complex
is situated, as more fully described in the Mortgage.
"Southern" means The Southern Company, a Delaware
corporation.
"Southern Credit Standard" means, at any time, (a)
Southern's outstanding senior long-term Debt is then rated at
least, and not rated less than, "A" by either S&P or Moody's
(unless such senior long-term Debt is not then rated by either
S&P or Moody's, in which case each Designated Southern Subsidiary
has outstanding senior long-term Debt that is then rated at
least, and not rated less than, BBB by S&P or Baa2 by Moody's)
and (b) the sum of (i) cash and cash equivalents (including
marketable securities) of Southern and the Designated Southern
Subsidiaries, (ii) amounts available from committed credit
facilities of Southern and the Designated Southern Subsidiaries
and (iii) amounts available from commercial paper authorized to
be issued by Southern and rated not less than A-1/P-1 by S&P or
Moody's (in each case as of the end of Southern's most recently
completed fiscal quarter and provided that such cash and cash
equivalents and other amounts are available, without restriction,
for distribution to the Collateral Agent, the Indenture Trustee
or the Tax-Exempt Indenture Trustee (as the case may be), upon
fifteen (15) days' notice) is equal to at least the aggregate
amount of Southern Guaranties then outstanding multiplied by
four.
"Southern Electric" means Southern Electric International,
Inc., a Delaware corporation.
"Southern Guaranty" means one or more unconditional,
absolute and irrevocable guaranties from Southern to be delivered
to (a) the Collateral Agent for deposit into the Maintenance
Reserve Account or the Distribution Account pursuant to and in
accordance with Section 3.15(a) of, and in substantially the form
attached as Exhibit C to, the Intercreditor Agreement or (b) the
Indenture Trustee for deposit into each Debt Service Reserve
Account (if any) pursuant to and in accordance with Section
4.6(a) of, and in substantially the form attached as Exhibit A
to, the Indenture, provided that, in the case of clause (a) and
(b) above, the Southern Credit Standard is satisfied at the time
of such delivery and deposit.
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"Southern Master Tax Sharing Agreement" means the Income Tax
Allocation Agreement dated as of December 29, 1981 among Southern
and its corporate subsidiaries.
"Special Record Date" means, with respect to the payment of
any defaulted principal or interest, a date fixed by the
Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
case may be) pursuant to, in the case of the Indenture Trustee,
Section 2.10 of the Indenture and, in the case of the Tax-Exempt
Indenture Trustee, Section ( ) of the Tax-Exempt Indenture.
"Stated Maturity" means, when used with respect to any
Senior Security or any installment of principal thereof or
payment of interest thereon, the date specified in such Senior
Security as the fixed date on which such Senior Security or such
installment of principal or payment of interest is due and
payable.
"Subordinated Debt" means, collectively, Affiliate
Subordinated Debt and Non-Affiliate Subordinated Debt.
"Subordinated Debt Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
"Subordinated Debt Provider" means any Person providing
Subordinated Debt pursuant to a Subordinated Loan Agreement.
"Subordinated Fee" means a fee in exchange for the
provisions of goods or services to either of the Mobile Energy
Parties, the payment of which is fully subordinated to the Senior
Debt as to payment and exercise of remedies and that is payable
only to the extent it would otherwise be distributable if on
deposit in the Distribution Account.
"Subordinated Fee Account" means the Account so designated
established and created under Section 2.2(a) of the Intercreditor
Agreement.
"Subordinated Loan Agreement" means a binding agreement with
a Subordinated Debt Provider providing unsecured debt financing
for the benefit of the Energy Complex for application toward the
payment of Operation and Maintenance Costs and on terms and
conditions that shall satisfy the requirements of the Financing
Documents.
"Tax-Exempt Bonds" means the Tax-Exempt Indenture Securities
issued on the Closing Date under the Tax-Exempt Indenture.
"Tax-Exempt Debt Service Reserve Account" means the Account
so designated established and created under the Tax-Exempt
Indenture or any Series Supplemental Indenture to the Tax-Exempt
Indenture for the benefit of Holders of the Tax-Exempt Indenture
Securities established thereunder.
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"Tax-Exempt Debt Service Reserve Account Required Balance"
means, in respect of any Tax-Exempt Debt Service Reserve Account,
the amount so designated in the Series Supplemental Indenture to
the Tax-Exempt Indenture establishing such Tax-Exempt Debt
Service Reserve Account.
"Tax-Exempt Indenture" means the Amended and Restated Trust
Indenture dated as of ( ), 1995 between the IDB and the Tax-
Exempt Indenture Trustee.
"Tax-Exempt Indenture Accounts" means, with respect to the
Tax-Exempt Indenture Securities of any series, the Tax-Exempt
Indenture Securities Account and each Tax-Exempt Debt Service
Reserve Account (if any) established for the benefit of Holders
of the Tax-Exempt Indenture Securities of such series.
"Tax-Exempt Indenture Securities" means all Outstanding Debt
issued pursuant to the Tax-Exempt Indenture.
"Tax-Exempt Indenture Securities Account" means the Account
so designated established and created under Section ( ) of the
Tax-Exempt Indenture.
"Tax-Exempt Indenture Securities Collateral" means,
collectively, the Tax-Exempt Indenture Accounts, including any
and all monies contained therein or hereafter delivered to the
Tax-Exempt Indenture Trustee for deposit therein and the right to
receive monies thereunder, and the Shared Collateral.
"Tax-Exempt Indenture Securities Interest Subaccount" means
the subaccount of the Tax-Exempt Indenture Securities Account so
designated established and created under Section ( ) of the Tax-
Exempt Indenture.
"Tax-Exempt Indenture Securities Principal Subaccount" means
the subaccount of the Tax-Exempt Indenture Securities Account so
designated established and created under Section ( ) of the Tax-
Exempt Indenture.
"Tax-Exempt Indenture Securities Redemption Subaccount"
means the subaccount of the Tax-Exempt Indenture Securities
Account so designated established and created under Section ( )
of the Tax-Exempt Indenture.
"Tax-Exempt Indenture Trustee" means First Union National
Bank of Georgia, a national banking association organized and
existing under the laws of ( ).
"Tax-Exempt Project" means those portions of the Energy
Complex financed with the proceeds of the Tax-Exempt Bonds, as
described generally in Exhibit A to the IDB Lease Agreement.
"Termination Event" means, with respect to any Reserve
Account Security, such Reserve Account Security shall have
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terminated or expired (other than any termination thereof
pursuant to the last sentence of Section 3.8(c) of the
Intercreditor Agreement).
"Third Party Engineer" means the independent engineering
firm chosen from the list of engineers maintained as Schedule 1
to the Intercreditor Agreement and appointed Third Party Engineer
pursuant to Section 11.2 of the Intercreditor Agreement.
"Third Party Engineer Dispute Resolution" means the dispute
resolution process involving a Third Party Engineer pursuant to
Section 11.2 of the Intercreditor Agreement.
"Tissue Mill" means the tissue mill located at the Mobile
Facility, which as of the Closing Date is owned by Scott.
"Tissue Mill Energy Services Agreement" means the Tissue
Mill Energy Services Agreement dated as of December 12, 1994
between the Tissue Mill Owner and the Company (as assignee of
Mobile Energy).
"Tissue Mill Owner" means Scott, in its capacity as owner of
the Tissue Mill.
"Total Debt Service Coverage Ratio" means, for any period
and without duplication, the ratio of (a) (i) the sum of (A) all
Revenues for such period and (B) the amount of interest and other
income earned and credited on monies deposited in the Accounts
(to the extent retained in such Accounts) for such period minus
(ii) the sum of (A) Operations and Maintenance Costs for such
period (except for such costs paid with monies on deposit in the
Maintenance Reserve Account and payments made by the Company with
respect to the 1994 Bonds) and (B) the amount deposited into the
Maintenance Reserve Account for such period (but for purposes of
calculating any projected Total Debt Service Coverage Ratio, not
less than the Maintenance Reserve Account Required Deposit for
such period) to (b) the sum of (i) all amounts payable by the
Company during such period in respect of principal of and
premium, if any, and interest on the Outstanding Indenture
Securities, (ii) all amounts payable by the Company during such
period in respect of rent under the IDB Lease Agreement, (iii)
all amounts payable by the Company during such period in respect
of payment obligations under the Working Capital Facility (other
than repayments of principal), (iv) all amounts payable by the
Company as fees and other expenses (including any interest
thereon) to any fiduciary acting in such capacity under the
Security Documents, (v) all amounts payable by the Company during
such period in respect of principal of and premium, if any, and
interest on the outstanding Subordinated Debt, (vi) all amounts
payable by the Company during such period as fees and other
expenses (including any interest thereon) to any Subordinated
Debt Provider and (vii) the aggregate amount of overdue payments
in respect of clauses (b)(i) through (vi) above from previous
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periods, in each case determined on a cash basis in accordance
with GAAP.
"Trigger Event" means (a) an Event of Default under the
Indenture and an acceleration of the indebtedness issued
thereunder, (b) an Event of Default under the Tax-Exempt
Indenture and an acceleration of the indebtedness issued
thereunder, (c) an Event of Default under the Working Capital
Facility and an acceleration of the indebtedness issued
thereunder or (d) a Bankruptcy Event in respect of either of the
Mobile Energy Parties and the expiration of the shortest
applicable grace period with respect thereto.
"Trigger Event Notice" means a written notice delivered by
the Collateral Agent to the Indenture Trustee or the Tax-Exempt
Indenture Trustee specifying that (a) a Trigger Event has
occurred and (b) either (i) the written request of the Required
Senior Creditors specified in Section 5.1(a) of the Intercreditor
Agreement has been delivered to the Collateral Agent and has not
been rescinded or (ii) such Trigger Event was caused by a
Bankruptcy Event in respect of either of the Mobile Energy
Parties.
"TRT" means Three Rivers Timber Company, a Washington
corporation.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which the Indenture was
executed, except as provided in Section 11.6 thereof; provided,
however, that if the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by
such amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee Claims" means all obligations of the Mobile Energy
Parties, now or hereafter existing, to pay fees, costs, expenses
or other amounts to (a) the Indenture Trustee under the Indenture
or (b) the Tax-Exempt Indenture Trustee under the Tax-Exempt
Indenture.
"Uniform Commercial Code" means the Uniform Commercial Code
of the jurisdiction the law of which governs the Contract in
which such term is used.
"U.S. Government Obligations" means non-callable direct
obligations of or obligations as to which the payment of
principal of and interest is unconditionally guaranteed by the
United States of America.
"Wind-Up Event" means, at any time following a Trigger
Event, the application of monies on deposit in any of the
Intercreditor Agreement Accounts, or of proceeds from any sale,
disposition or other realization of any Shared Collateral (other
than the Intercreditor Agreement Accounts), in either case as a
result of the exercise of remedies by the Collateral Agent under
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Article V of the Intercreditor Agreement, to the payment of
amounts owing in respect of any Senior Debt.
"Working Capital Escalation Factor" means, with respect to
any Fiscal Year, an amount (expressed as a percentage and
calculated in June of such Fiscal Year) equal to (a) the amount
obtained by dividing (i) the GDPIPD most recently published
during such Fiscal Year by (ii) the GDPIPD published during the
prior Fiscal Year on the date that most closely corresponds to
the date of such GDPIPD most recently published, (b) minus, if
the amount obtained in clause (a) above is 1.015 or greater,
0.015 and (c) plus, if the amount obtained in clause (a) above is
0.985 or lower, 0.015; provided, however, that if such percentage
is calculated for a Fiscal Year after 1996, such percentage shall
also be multiplied by the Working Capital Escalation Factor with
respect to the immediately preceding Fiscal Year.
"Working Capital Facility" means the Revolving Credit
Agreement dated as of ( ), 1995 between the Company and the
Working Capital Facility Provider or any other Contract between
the Company and a Working Capital Facility Provider pursuant to
which funds for the working capital requirements of the Company
are provided.
"Working Capital Facility Account" means the Account so
designated established and created under Section 2.2(a) of the
Intercreditor Agreement.
"Working Capital Facility Provider" means Banque Paribas or
any other Person providing funds for the working capital
requirements of the Company pursuant to a Working Capital
Facility.
"Working Capital Loan" means a Loan (as defined in the
Working Capital Facility) advanced by the Working Capital
Facility Provider pursuant to the Working Capital Facility.
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<PAGE>
Exhibit B-5(a)
DRAFT
6/9/95
LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES,
RENTS, ISSUES AND PROFITS
and
SECURITY AGREEMENT AND FIXTURE FILING
between
MOBILE ENERGY SERVICES COMPANY, L.L.C.
as Mortgagor
and
BANKERS TRUST COMPANY
as Mortgagee
Dated as of ( ), 1995
Location: County of Mobile
State of Alabama
<PAGE>
TABLE OF CONTENTS
Page
CERTAIN DEFINITIONS........................................ 3
GRANTING CLAUSE............................................ 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR.... 7
1. Rights and Obligations.......................... 7
2. Payments........................................ 8
3. Compliance With Law............................. 8
4. Warranty of Title............................... 8
5. No Actions or Proceedings....................... 8
6. After-Acquired Property......................... 9
7. Maintenance and Modification of Collateral by
Mortgagor....................................... 9
8. Liens........................................... 9
9. Taxes and Governmental and Utility Charges...... 9
10. Condemnation................................... 10
11. Leases and Rents............................... 10
12. Concerning the Conveyance Leases................ 11
13. Transfer or Encumbrance of the Collateral....... 13
14. Advances........................................ 13
15. Indemnification; Waiver of Offset............... 14
16. Security Agreement.............................. 15
17. Performance of Other Agreements................. 16
MORTGAGE EVENTS OF DEFAULT/REMEDIES....................... 20
18. Mortgage Events of Default...................... 20
19. Mortgagee's Right to Cure Defaults.............. 20
20. Non-Waiver...................................... 20
21. Remedies........................................ 21
22. Mortgagor as Tenant Holding Over................ 25
23. Leases.......................................... 26
MISCELLANEOUS............................................. 26
24. Filing of Mortgage, etc......................... 26
25. Usury Laws...................................... 26
26. Option To Release Certain Real Estate........... 26
27. Release of Collateral........................... 27
28. Severability.................................... 27
29. Notices......................................... 28
30. Amendments, Changes and Modifications........... 28
31. Fixture Financing Statement..................... 28
32. Invalidity of Certain Provisions................ 28
33. No Merger....................................... 28
34. Matters in Bankruptcy........................... 29
35. Environmental Matters........................... 29
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<PAGE>
36. Estoppel Affidavits............................. 29
37. Assignment...................................... 29
38. Entire Agreement................................ 29
39. Action Affecting the Collateral................. 30
40. Actions by Mortgagee to Preserve the Collateral. 30
41. Remedies Not Exclusive.......................... 30
42. Relationship.................................... 31
43. Time of the Essence............................. 31
44. Severance of Counterclaims...................... 31
45. Notice Limiting Advances........................ 31
46. Governing Law................................... 31
47. Shared Draftsmanship............................ 31
48. No Third Party Beneficiary...................... 32
49. Security Only................................... 32
50. Release by Mortgagee............................ 32
51. Further Assurances.............................. 32
52. Conflict with Intercreditor Agreement........... 32
53. Effect of Termination of Intercreditor Agreement 32
Exhibit "A" - "The Leased Premises"
Exhibit "B" - "The Conveyance Leases"
Exhibit "C" - "The Easements"
Exhibit "D" - "Definitions"
-ii-
<PAGE>
This Leasehold Mortgage, Assignment of Leases, Rents,
Issues and Profits and Security Agreement and Fixture Filing
(this "Mortgage"), made as of the ( ) day of
( ), 1995, by and between MOBILE ENERGY SERVICES
COMPANY, L.L.C., an Alabama limited liability company, having its
usual place of business at 900 Ashwood Parkway, Atlanta, Georgia
30338 (together with its permitted successors and assigns,
hereinafter called "Mortgagor"), and BANKERS TRUST COMPANY, a New
York banking corporation, having its usual place of business at
Four Albany Street, New York, New York 10006, not individually,
but solely in its capacity as Collateral Agent pursuant to the
Intercreditor Agreement (as hereinafter in Exhibit "D" attached
hereto and made a part hereof) (together with its permitted
successors and assigns, hereinafter called "Collateral Agent" or
"Mortgagee").
W I T N E S S E T H :
WHEREAS, Mortgagor holds interests in certain real
property described in Exhibit "A" attached hereto and made a part
hereof (collectively, the "Leased Premises") and in certain
facilities constructed on the Leased Premises (collectively, the
"Facilities"), under and pursuant to the documents described in
Exhibit "B" attached hereto and made a part hereof (collectively,
the "Conveyance Leases"); and
WHEREAS, Mortgagor further holds interests in certain
premises (collectively, the "Easement Premises"), under and
pursuant to the documents described in Exhibit "C" attached
hereto and made a part hereof (collectively, the "Easements");
and
WHEREAS, the Facilities are and will be constructed
upon the Leased Premises and the Easement Premises (the Leased
Premises, the Easement Premises and the Easements collectively,
the "Site"); and
WHEREAS, Mortgagor will issue certain bonds in
connection with the Site and the Facilities (the "First Mortgage
Bonds"); and
WHEREAS, the First Mortgage Bonds are to be issued
pursuant to that certain Trust Indenture, dated as of (
), 1995 (as such Trust Indenture may be amended, restated,
supplemented, waived or otherwise modified from time to time, the
"Indenture"), by and among Mortgagor, MOBILE ENERGY SERVICES
HOLDINGS, INC., an Alabama corporation (together with its
permitted successors and assigns, "Mobile Energy"), and FIRST
UNION NATIONAL BANK OF GEORGIA, as trustee (together with its
permitted successors and assigns, the "Trustee"); and
WHEREAS, the proceeds of the First Mortgage Bonds will
be used to, among other things, (a) repay to THE SOUTHERN
COMPANY, a Delaware corporation ("Southern"), a bridge loan in
the principal amount of $190,000,000 and return to Southern
approximately $4,500,000 of paid in capital; (b) repay to
<PAGE>
SOUTHERN ELECTRIC INTERNATIONAL, INC., a Delaware corporation
("Southern Electric"), approximately $10,500,000, representing
amounts advanced by Southern Electric to pay certain costs
associated with the acquisition of the Site and the Facilities
and certain capital expenditures required under the Project
Contracts (as defined in Exhibit "D" attached hereto and made a
part hereof); (c) finance the balance of capital expenditures
required under the Project Contracts and certain other planned
capital expenditures aggregating approximately $12,700,000; (d)
pay certain development and start-up costs aggregating
approximately $1,300,000; (e) pay certain financing costs
aggregating approximately $2,000,000; and (f) pay approximately
$31,000,000 to terminate certain interest rate hedging agreements
entered into in connection with the acquisition of the Site and
the Facilities; and
WHEREAS, concurrently with the issuance of the First
Mortgage Bonds, the Industrial Development Board of the City of
Mobile, Alabama (the "IDB") will issue one or more series of tax-
exempt bonds (the "Tax-Exempt Bonds") pursuant to that certain
Amended and Restated Indenture of Trust, dated as of (
), 1995 (as such Amended and Restated Indenture of Trust may be
amended, restated, supplemented, waived or otherwise modified
from time to time, the "Tax-Exempt Indenture"), by and between
the IDB and FIRST UNION NATIONAL BANK OF GEORGIA, as trustee
(together with its permitted successors and assigns, the "Tax-
Exempt Trustee"); payments on the Tax-Exempt Bonds shall be made
from, and secured by, payments made by the Company pursuant to
that certain Amended and Restated Lease Agreement, dated as of (
), 1995 (as such Amended and Restated Lease Agreement may
be amended, restated, supplemented, waived or otherwise modified
from time to time, the "IDB Lease Agreement") by and between the
IDB and the Company; and
WHEREAS, ( ) (together with its permitted
successors and assigns or any other Person (as defined in Exhibit
"D" attached hereto and made a part hereof) providing funds for
the working capital needs of Mortgagor in accordance with the
Indenture and the Tax-Exempt Indenture, the "Working Capital
Provider") will provide up to $15,000,000 (as such amount may be
escalated by an amount equal to the excess, if any, of GDPIPD (as
defined in Exhibit "D" attached hereto and made a part hereof)
over 1-1/2%) of funds for the working capital needs of Mortgagee
pursuant to that certain Revolving Credit Agreement, dated as of
( ), 1995 (as such Revolving Credit Agreement may be
amended, restated, supplemented, waived or otherwise modified
from time to time or any other Contract (as defined in Exhibit
"D" attached hereto and made a part hereof) pursuant to which
funds for the working capital needs of Mortgagee are provided in
accordance with the Indenture and the Tax-Exempt Indenture, the
"Working Capital Facility"), by and between Mortgagor and the
Working Capital Provider; and
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<PAGE>
WHEREAS, as security for Mortgagor's obligations under
the Indenture in connection with the issuance of the First
Mortgage Bonds, the Trustee has required Mortgagor to grant to
Mortgagee a first priority lien on and security interest in the
Collateral (as hereinafter defined); and
WHEREAS, as security for Mortgagor's obligations under
the IDB Lease Agreement in connection with the issuance of the
Tax-Exempt Bonds, the Tax-Exempt Trustee has required Mortgagor
to grant to Mortgagee a first priority security interest in the
Collateral; and
WHEREAS, as security for Mortgagor's obligations under
the Working Capital Facility, the Working Capital Provider has
required Mortgagor to grant to Mortgagee a first priority
security interest in the Collateral; and
WHEREAS, pursuant to that certain Intercreditor and
Collateral Agency Agreement, dated as of ( ), 1995 (as
such Intercreditor and Collateral Agency Agreement may be
amended, restated, supplemented, waived or otherwise modified
from time to time, the "Intercreditor Agreement"), by and among
the Trustee (on behalf of the holders from time to time of the
First Mortgage Bonds), the Tax-Exempt Trustee (on behalf of the
holders from time to time of the Tax-Exempt Bonds), the Working
Capital Provider (together with their respective permitted
successors and assigns, collectively, the "Senior Secured
Parties"), Collateral Agent, the IDB, Mortgagee and Mobile
Energy, the Senior Secured Parties have required Mortgagor to
grant to Mortgagee a first priority lien on and security interest
in the Collateral; and
WHEREAS, this Mortgage is intended to ratably secure
each of the Secured Obligations (as hereinafter defined) pari
passu.
NOW, THEREFORE, in consideration of the premises set
forth above, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and FOR
THE PURPOSE OF SECURING the payment and performance of the
Secured Obligations, which Secured Obligations may increase,
decrease and increase again, from time to time, Mortgagor and
Mortgagee hereby agree as follows:
CERTAIN DEFINITIONS
Except as otherwise expressly provided herein,
capitalized terms used in this Mortgage and its Exhibits shall
have the meanings set forth in Exhibit "D" attached hereto and by
this reference incorporated herein.
GRANTING CLAUSE
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<PAGE>
In order to secure the payment of all sums, amounts and
expenses incurred hereunder and under the Financing Documents by
Mortgagee according to the terms hereof, together with interest
thereon, and to secure the payment of such additional advances as
may be made by the Senior Secured Parties in accordance with the
Financing Documents, at their option, to Mortgagor, for any
purpose, provided that all those advances are to be made within
such lesser period of time as may be provided by Law as a
prerequisite for the sufficiency of actual notice or record
notice of the optional additional advances as against the rights
of creditors or subsequent purchasers for valuable consideration,
and to secure all other obligations under the Financing Documents
(all of the aforesaid are hereinafter referred to collectively as
the "Secured Obligations"), Mortgagor hereby irrevocably grants,
bargains, sells, remises, releases, conveys, warrants, assigns,
transfers, mortgages, pledges, delivers, grants a security
interest, sets over and confirms unto Mortgagee, with warranties
of title as set forth in Section 4 hereof, subject to the terms
and conditions hereinafter set forth, all right, title and
interest of Mortgagor, whether now held, owned or hereafter
acquired in and to all property, estate, rights and interests of
Mortgagor (except as to property, estate, rights and interests
expressly excluded herefrom) (all such property, estate, rights
and interests not expressly excluded herefrom being hereinbefore
and hereinafter collectively referred to as the "Collateral").
Collateral shall include, without limitation:
(a) all of the leasehold estate, right, title and
interest of Mortgagor in the Leased Premises, said leasehold
estate having been created by the Conveyance Leases;
(b) all of the estate, right, title and interest of
Mortgagor under and pursuant to, and all modifications,
extensions and renewals of, the Easements and the rights created
thereunder;
(c) all of the estate, right, title and interest of
Mortgagor under and pursuant to, and all modifications,
extensions and renewals of, each of the Conveyance Leases,
including without limitation, (i) all monies and claims for
monies due and to become due thereunder and (ii) all rights of
Mortgagor to exercise any remedy, election or option or to make
any decision or determination or to give any notice, consent,
waiver or approval under or in respect of any of the Conveyance
Leases;
(d) all of the estate, right, title and interest of
Mortgagor in the buildings, improvements and fixtures now or
hereafter located on the Site (hereinafter referred to as the
"Improvements");
(e) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, either in Law or
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<PAGE>
in equity, in possession or expectancy, in and to the Collateral
and in all replacements, substitutes, renewals, betterments and
extensions of, and all additions and appurtenances to, any of the
Collateral, or any part thereof, and all conversions of the
security constituted thereby, which, immediately upon such
conversion, and in each case without further mortgage,
conveyance, assignment or other act by Mortgagor, shall become
subject to the lien of this Mortgage as fully and completely, and
with the same effect, as though now owned by Mortgagor and
specifically described herein;
(f) all of the estate, right, title and interest of
Mortgagor in the easements, rights-of-way, gores of land,
streets, ways, alleys, passages, sewer rights, waters, water
courses, water rights and powers, and all estates, rights,
titles, interests, privileges, liberties, tenements,
hereditaments, revocable consents, options, appendages and
appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Collateral (including, without
limitation, any and all development rights, air rights, water
rights, minerals, mineral rights or similar or comparable rights
of any nature whatsoever now or hereafter appurtenant to the
Leased Premises or now or hereafter transferred to the Leased
Premises, together with all rights of Mortgagor to renew, extend,
supplement, amend, cancel or terminate the same , and Mortgagor's
estate, right, title and interest in all land lying in the bed of
any street, road or avenue, opened or proposed, in front of or
adjoining the Site to the center line thereof (which rights to
renew, extend, supplement, amend, cancel or terminate shall be
subject to the approval required under the Intercreditor
Agreement);
(g) all machinery, apparatus, equipment, fittings,
fixtures and other property of every kind and nature whatsoever
owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Site and/or the
Improvements or appurtenances thereto, and usable in connection
with the present or future operation and occupancy of the Site
and/or the Improvements and/or the Facilities and all equipment,
materials, supplies, apparatus and other items now or hereafter
attached to, installed in or used (temporarily or permanently) on
or in connection with the present or future operation and
occupancy of the Site and/or the Improvements and/or the
Facilities, of any nature whatsoever, owned by Mortgagor, or in
which Mortgagor has or shall have an interest, now or hereafter
located upon the Site and/or the Improvements and/or the
Facilities and all renewals, replacements and substitutions
thereof and additions thereto owned by Mortgagor or in which
Mortgagor has or shall have an interest, including but not
limited to any and all partitions, ducts, shafts, pipes,
radiators, conduits, wiring, floor coverings, awnings, motors,
engines, boilers, stokers, pumps, dynamos, transformers,
turbines, generators, fans, blowers, vents, switchboards,
elevators, mail or coal conveyors, escalators, compressors,
-5-
<PAGE>
furnaces, cleaning equipment, call and sprinkler systems, fire
extinguishing apparatus, water and other tanks, heating,
ventilating, plumbing, laundry, incinerating, air conditioning
and air cooling systems and water, gas, telephone,
telecommunications, telemetry and electric equipment (hereinafter
collectively referred to as the "Equipment"), and the right,
title and interest of Mortgagor in and to any of the Equipment
that may be subject to any security agreements (as defined in the
Uniform Commercial Code as in effect in the State of Alabama (the
"UCC")), superior in lien to the lien of this Mortgage;
(h) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, in Law or in
equity, in and to all awards or payments, including interest
thereon, and the right to receive the same, which may be made
with respect to the Collateral, from the exercise of the right of
eminent domain, condemnation or otherwise (including any transfer
made in lieu of the exercise of said right), changes of grade of
street or for any other injury to or decrease in the value of the
Collateral now or hereafter located thereon, whether direct or
consequential, which said awards and payments are hereby
assigned, and Mortgagee is hereby authorized to collect and
receive the proceeds thereof (which shall be applied according to
the provisions of the Intercreditor Agreement) and to give proper
receipts and acquittances therefor;
(i) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, in Law or in
equity, in and to all refunds or rebates of taxes or charges in
lieu of taxes, now or hereafter assessed or levied against the
Collateral (which shall be applied according to the provisions of
the Intercreditor Agreement);
(j) all of the estate, right, title, claim, demand and
interest of Mortgagor in and to all leases (including oil, gas
and other mineral leases), lettings, occupancy agreements,
subleases, franchises, licenses, concessions, permits, contracts
and other agreements affecting the use or occupancy of the
Collateral, or any part thereof, now or hereafter entered into
and any renewals or extensions thereof (hereinafter referred to
collectively as the "Leases") and all right, title and interest
of Mortgagor thereunder, including, without limitation, the right
to receive the rents, issues and profits of the Collateral
(subject to the terms and conditions hereinafter set forth),
including, without limitation, the proceeds of all steam,
electricity, hydrocarbons, green liquor or other minerals
produced from the Collateral and all delay rentals and bonuses
from any steam, electricity, and any oil, gas or other mineral
lease (hereinafter referred to collectively as the "Rents");
(k) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, in Law or in
equity, in and to all "accounts," "inventory", "equipment" and
"general intangibles" (as such quoted terms are defined in the
-6-
<PAGE>
UCC) and all contract rights in connection therewith, now or
hereafter owned by Mortgagor, or in which Mortgagor now has or
hereafter shall have any right, title or interest, now or
hereafter located upon, arising in connection with or concerning
the Collateral;
(l) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, in Law or in
equity, in and to the Intercreditor Agreement Accounts, together
with any right to payment for goods sold or leased or for
services rendered in connection with the Intercreditor Agreement
Accounts, whether or not it has been earned by performance;
(m) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, in Law or in
equity, in and to all proceeds of and any unearned premiums on
any insurance policies covering the Collateral and title thereto,
including, without limitation, the right to receive the proceeds
of any insurance, judgments, or settlements made in lieu thereof,
for damage to or impairment of title to the Collateral (which
shall be applied according to the provisions of the Intercreditor
Agreement);
(n) to the extent permitted by Law, the nonexclusive
right, in the name and on behalf of Mortgagor, to appear in and
defend any action or proceeding brought with respect to the
estate, right, title or interest of Mortgagor in and to the
Collateral and to commence any action or proceeding to protect
the estate, right, title or interest of Mortgagee in and to the
Collateral (subject, however, to the provisions of this Mortgage
hereinafter set forth and the provisions of the Intercreditor
Agreement);
(o) all of Mortgagor's right, title and interest in
and to all plans and specifications prepared for construction of
the Facilities, Improvements or other development of the
Collateral (including all amendments, modifications, supplements,
general conditions and addenda thereof or thereto) and all
studies, data and drawings (including without limitation
architectural, engineering, mechanical and electrical drawings)
related thereto, and all contracts and agreements of Mortgagor
relating to the aforesaid plans and specifications or to the
aforesaid studies, data and drawings or to the construction of
the Facilities and Improvements on the Collateral;
(p) all of Mortgagor's right, title and interest in
and to all contracts with property managers, surveyors, real
estate advisors and consultants, real estate brokers and other
like agents and professionals that relate to any part of the
Collateral, including without limitation, any of the Improvements
constructed or to be constructed on the Collateral, and all maps,
reports, surveys, and studies of or relating to any of the
Collateral, now or hereafter owned by Mortgagor or in which
Mortgagor has or hereafter shall have an interest and now or
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<PAGE>
hereafter in the possession of Mortgagor or any such agent or
professional;
(q) to the extent permitted by Law, all of Mortgagor's
right, title and interest in and to all present and future
Governmental Approvals; provided, however, that any of the
Governmental Approvals that by their terms or by operation of Law
would become void, voidable, terminable or revocable or would
constitute a breach or default thereunder if pledged or assigned
hereunder or if a security interest therein were granted
hereunder are expressly excepted and excluded from the lien and
terms of this Mortgage to the extent necessary to avoid such
voidness, voidability, terminability, revocability, breach or
default;
(r) all of Mortgagor's right, title and interest in
and to all warranties, indemnities and guarantees of contractors,
subcontractors, materialmen, vendors and suppliers relating to
the Improvements and the Facilities;
(s) all right, title and interest of Mortgagor in and
under the "Security Agreement Collateral" described in the
Security Agreement;
(t) to the extent permitted by Law, all of Mortgagor's
rights to file for record a notice limiting the maximum principal
amount that may be secured by this Mortgage and all of
Mortgagor's rights under applicable Law to reject any of the
Financing Documents in the event of bankruptcy;
(u) to the extent permitted by Law, all of Mortgagor's
rights and remedies at any time arising under or pursuant to
Section 365(h) of the United States Bankruptcy Code, including,
without limitation, ail of Mortgagor's rights to remain in
possession of all or any part of the Collateral; and
(v) all of the estate, right, title, interest, claim
or demand of any nature whatsoever of Mortgagor, in Law or in
equity, in and to all products and proceeds of any of the
Collateral herein described.
TO HAVE AND TO HOLD the above granted and described
Collateral unto the Mortgagee and its successors and assigns, on
behalf of the Senior Secured Parties and their successors and
assigns, forever, to secure the Secured Obligations, subject to
the terms and conditions hereinafter set forth.
SUBJECT only to Permitted Liens.
PROVIDED, HOWEVER, that the Collateral shall not
include the Indenture Securities Collateral and the Tax-Exempt
Indenture Securities Collateral (as such terms are defined in the
Indenture) other than, in each case, the Shared Collateral.
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<PAGE>
PROVIDED FURTHER, HOWEVER, that if the Secured
Obligations are paid in full in accordance with the Financing
Documents, then this Mortgage shall cease, terminate and be void
in accordance with Section 50 of this Mortgage.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR
1. Rights and Obligations. This Mortgage shall not
be construed to be a consent by Mortgagee to any contract, lease,
license, permit or governmental action or to impose any
obligation with respect to the same.
2. Payments. Mortgagor shall pay all sums, including
interest, secured hereby when due, as provided for in the
Financing Documents and in this Mortgage, and any renewal,
extension or modification of any thereof.
3. Compliance With Law. Mortgagor shall comply with
all applicable Law and Governmental Approvals.
4. Warranty of Title. (a) Mortgagor is the sole
owner and holder of the entire tenant's interest under the
Conveyance Leases, free and clear of any Liens and encumbrances
except for Permitted Liens.
(b) Mortgagor has full right, power and authority to
mortgage its right, title and interest in and under the
Conveyance Leases to Mortgagee pursuant hereto, and each of the
Ground Lessors has granted its express consent to this Mortgage.
(c) Each of the Conveyance Leases is in full force and
effect and Mortgagor has not waived any of its rights thereunder.
(d) Neither Mortgagor nor either of the Ground Lessors
is in default with respect to any of the terms of any of the
Conveyance Leases and Mortgagor knows of no acts or occurrences
constituting a default thereunder.
(e) Mortgagor knows of no adverse claim to the title
and/or possession of Mortgagor and/or either of the Ground
Lessors with respect to any part of the Site, except for
Permitted Liens.
(f) Mortgagor has received no notice from either of
the Ground Lessors terminating any of the Conveyance Leases or
demanding performance or compliance with any of the terms,
covenants or conditions thereof.
(g) No fire or casualty has affected the Site and
Mortgagor knows of no proposed condemnation or eminent domain
proceeding or settlement in lieu thereof that may affect the
Site.
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<PAGE>
(h) (i) Mortgagor is now, and after giving effect to
this Mortgage, will be, in a solvent condition, (ii) the
execution and delivery of this Mortgage by Mortgagor does not
constitute a "fraudulent conveyance" within the meaning of Title
11 of the United States Code as now constituted or under any
other applicable Law and (iii) no bankruptcy or insolvency
proceedings are pending or contemplated by or, to the best of
Mortgagor's knowledge, threatened against Mortgagor.
5. No Actions or Proceedings. There are no actions,
suits or proceedings pending or, to the best knowledge of
Mortgagor, threatened against or affecting Mortgagor, the
Facilities, the Site or the Collateral, or that involve the
validity or enforceability of this Mortgage or the priority of
the lien hereof, at Law or in equity, or before or by any
Governmental Authority.
6. After-Acquired Property. Unless expressly
excluded hereby, all property at any time acquired by Mortgagor
shall, immediately upon the acquisition thereof by Mortgagor and
without any further act, become and be subject to the lien of
this Mortgage as Collateral, as fully and completely as though
now owned by Mortgagor, and specifically described in the
granting clauses hereof.
7. Maintenance and Modification of Collateral by
Mortgagor. (a) Mortgagor agrees that at no time will Mortgagor
permit waste to be committed upon the Collateral and Mortgagor
will operate and maintain the Collateral or cause the Collateral
to be operated and maintained pursuant to Section 5.6 of the
Indenture. Mortgagor agrees that it shall not modify, nor cause
to be modified, the Collateral, or any part thereof, except as
expressly permitted by the Indenture.
(b) Any property for which a substitution or
replacement is made as permitted by the Financing Documents may
be disposed of by Mortgagor in any manner and in the sole
discretion of Mortgagor free and clear of the lien of this
Mortgage.
8. Liens. Mortgagor will not permit any mechanic's,
materialmen's or other Lien or encumbrance, other than Permitted
Liens, to be established or remain against the Collateral.
9. Taxes and Governmental and Utility Charges.
(a) Mortgagor will pay or cause to be paid, before the
date when interest (provided that "interest" shall not include
discounts for early payment under the Law of the State of Alabama
(the "State")) and penalties become due thereon, all taxes and
governmental and utility charges of any kind whatsoever that may
at any time be lawfully assessed or levied against or with
respect to the Collateral or any part thereof (other than taxes
or charges that are the subject of a Good Faith Contest),
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<PAGE>
including, without limiting the generality of the foregoing, (i)
all ad valorem taxes levied against the Collateral and any other
taxes levied upon the Collateral that, if not paid, will become a
Lien on the receipts from the Collateral or against the
Collateral or any interest therein or the revenues derived
therefrom; (ii) all utility and other charges incurred in the
operation, maintenance, use, occupancy and upkeep of the
Collateral that, if not paid, will become a Lien on the receipts
from the Collateral or a Lien against the Collateral or any
interest therein or the revenues derived therefrom; and (iii) all
assessments and charges lawfully made by any Governmental
Authority for public improvements that may be secured by a Lien
on the Collateral, provided that, with respect to special
assessments or other governmental charges that may lawfully be
paid in installments over a period of years, Mortgagor shall be
obligated to pay only such installments when and as they are
required to be paid.
(b) In the event of the passage after the date of this
Mortgage of any Law of the State or in any other state in which
the Collateral is located, changing in any way the Laws now in
force for the taxation of mortgages, deeds of trust or debts
secured thereby, for state or local purposes, or the manner of
the operation of any such taxes so as to adversely affect the
interest of Mortgagee, then and in such event, Mortgagor shall
bear and pay the full amount of such taxes; provided, however,
that if for any reason payment by Mortgagor of any such new or
additional taxes would be unlawful or if the payment thereof
would constitute usury or render the loan or indebtedness secured
hereby wholly or partially usurious under any of the terms or
provisions of this Mortgage, or otherwise, Mortgagee may, at its
option, either (i) exercise its remedies under Section 21 hereof
as soon as the failure to pay such taxes results in a Mortgage
Event of Default (as hereinafter defined) or (ii) waive, as
directed by the Required Senior Creditors in Senior Creditor
Certificates, any such Mortgage Event of Default and any payment
received from Mortgagor to the extent of such unlawful or
usurious amount and Mortgagor shall concurrently therewith pay
the remaining lawful and non-usurious portion or balance of said
taxes.
10. Condemnation. Notwithstanding any taking by any
public or other body given the power of eminent domain through
eminent domain, condemnation or otherwise, Mortgagor shall
continue to pay the Secured Obligations at the time and in the
manner provided for their payment in the Financing Documents, and
the Secured Obligations shall not be reduced until, and only to
the extent that, any award of payment therefor shall have been
actually received and applied by Mortgagee in accordance with the
Intercreditor Agreement to the discharge of the Secured
Obligations. Mortgagor shall file and prosecute its claim or
claims for any award or payment in a Good Faith Contest and shall
cause the same to be collected and paid over to Mortgagee for
application as set forth above. Mortgagor hereby irrevocably
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authorizes and empowers Mortgagee in the name of Mortgagor or
otherwise to collect and receive any such award or payment and to
file and prosecute such claim or claims if (a) Mortgagor fails to
do so within a reasonable time prior to the expiration of the
period allowed therefor by applicable Law or (b) a Mortgage Event
of Default hereunder has occurred and is continuing. Although it
is hereby expressly agreed that the same shall not be necessary
in any event, Mortgagor shall, upon demand of Mortgagee upon
advice of counsel, make, execute and deliver any and all
assignments and other instruments sufficient for the purpose of
assigning any such award or payment to Mortgagee free and clear
of any encumbrances of any kind or nature whatsoever.
11. Leases and Rents. (a) Except as provided in the
Indenture, Mortgagor shall not lease or sublease, as lessor, all
or any portion of the Leased Premises.
(b) Mortgagor hereby assigns to Mortgagee, as security
for the payment and performance of the Secured Obligations, all
of Mortgagor's right, title and interest in and to the Leases and
the Rents. Subject to the terms of this paragraph 11(b),
Mortgagee waives the right to enter the Leased Premises for
purposes of collecting the Rents and grants Mortgagor the right
to collect the Rents. Mortgagor shall hold the Rents, or an
amount sufficient to discharge all sums currently due on the
Secured Obligations, in trust for use in payment of the Secured
Obligations. The right of Mortgagor to collect the Rents may be
revoked by Mortgagee upon the occurrence and during the
continuation of any Mortgage Event of Default by Mortgagor herein
by giving written notice of such revocation to Mortgagor.
Following such notice, Mortgagee may collect, retain and apply
the Rents during the continuation of such Mortgage Event of
Default toward payment of the Secured Obligations according to
the Financing Documents and in such order, priority and
proportions, or to the operation, maintenance and repair of the
Leased Premises, as Mortgagee shall deem proper irrespective of
whether Mortgagee shall have commenced a foreclosure of this
Mortgage or shall have applied or arranged for the appointment of
a receiver. Except to the extent permitted or authorized by the
Financing Documents, Mortgagor shall not, without the consent of
Mortgagee, which consent shall not be unreasonably withheld,
make, or suffer to be made, any Leases or modify or cancel any
Leases or accept prepayments of installments of the Rents for a
period of more than one month in advance or further assign the
whole or any part of the Rents. Mortgagor shall (i) fulfill or
perform each and every provision of the Leases on the part of
Mortgagor to be fulfilled or performed, (ii) promptly send copies
of all notices of default that Mortgagor shall send or receive
under the Leases to Mortgagee, and (iii) enforce, short of
termination of the Leases, the performance or observance of the
provisions thereof by the other parties thereto.
(c) Mortgagor agrees that it will not further pledge
or assign its interest in any of the Leases, or further assign
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the Rents, so long as any of the Secured Obligations remain
unpaid except as otherwise permitted by the Financing Documents.
(d) Nothing contained in this Section 11 shall be
construed as imposing on Mortgagee any of the obligations of the
parties under the Leases.
(d) The assignment of the Leases and Rents in this
Section 12 is intended to be an absolute assignment from
Mortgagor to Mortgagee and not merely a passing of a security
interest.
12. Concerning the Conveyance Leases. Notwithstanding
anything contained herein to the contrary, and in addition to any
rights, privileges and remedies granted to Mortgagee elsewhere in
this Mortgage, Mortgagee shall have, and Mortgagor hereby grants
to Mortgagee, any and all rights, privileges and remedies of
leasehold mortgagees provided for in each of the Conveyance
Leases (including without limitation, Mortgagor's renewal rights,
if any) without the necessity of particularly specifying any or
all of such rights, privileges and remedies that are or could be
granted to leasehold mortgagees pursuant to any of the Ground
Leases.
Mortgagor hereby represents, warrants, covenants and
agrees that:
(a) This Mortgage is lawfully executed and delivered
in conformity with each of the Conveyance Leases.
(b) Mortgagor shall promptly pay or cause to be paid,
when due and payable, the net rent, additional rents, taxes and
all other sums and charges mentioned in and made payable by
Mortgagor under each of the Conveyance Leases.
(c) Mortgagor shall promptly perform and observe, or
cause to be performed and observed, all of the terms, covenants
and conditions required to be performed and observed by Mortgagor
under each of the Conveyance Leases, within the periods provided
therein, and will do all things necessary to preserve and to keep
unimpaired its rights under each of the Conveyance Leases.
Notwithstanding the foregoing, a failure by Mortgagor to comply
with the provisions of this Section 12(c) shall not be deemed to
be an Mortgage Event of Default unless and until an "Event of
Default" has occurred under any of the Conveyance Leases, which
has not been waived or cured.
(d) Mortgagor shall promptly notify Mortgagee in
writing of any default by Mortgagor in the performance or
observance of any of the terms, covenants, or conditions on the
part of Mortgagor to be performed or observed under any of the
Conveyance Lease.
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(e) Mortgagor shall (i) promptly notify Mortgagee in
writing of the receipt by Mortgagor of any notice of termination
of any of the Conveyance Leases or any notice noting or claiming
any default by Mortgagor under any of the Conveyance Leases; (ii)
promptly deliver to Mortgagee a copy of each such notice; and
(iii) promptly deliver to Mortgagee a copy of any material notice
sent to either of the Ground Lessors, including, without
limitation, any notice of election or the exercise of any rights
of renewal under said instrument.
(f) Mortgagor shall not, without the prior written
consent of Mortgagee, terminate, modify or surrender any of the
Conveyance Leases or suffer or permit any termination,
modification or surrender thereof.
(g) Mortgagor shall, within ten (10) days after
written demand from Mortgagee, use its best efforts to obtain
from each of the Ground Lessors and deliver to Mortgagee a
certificate stating that such instrument is in full force and
effect, is unmodified, that no notice of termination thereon has
been served, stating the date to which the rent has been paid and
stating whether or not there are any defaults thereunder and
specifying the nature of such defaults, if any.
(h) Mortgagor shall furnish to Mortgagee, within five
(5) days after demand therefor, proof of payment of all items
that are required to be paid by Mortgagor pursuant to each of the
Conveyance Leases.
(i) Mortgagor shall not consent to any waiver,
modification or cancellation of any provision of any of the
Conveyance Leases nor to the subordination of any of the
Conveyance Leases to any other interest or instrument whatsoever,
including, without limitation, any Lien (other than Permitted
Liens) on the fee estate of the Ground Lessors under any of the
Conveyance Leases without obtaining the prior written consent of
Mortgagee thereto.
(j) Mortgagor does hereby irrevocably appoint and
constitute Mortgagee as its true and lawful attorney-in-fact in
its name, place and stead to perform and comply with all
obligations of Mortgagor under all of the Conveyance Leases
without relying on any grace period provided therein, to do and
take, without the obligation to do so, any action Mortgagee deems
necessary or desirable to prevent or cure any default by
Mortgagor under each of the Conveyance Leases, including, without
limitation, any act, deed, matter or thing whatsoever that
Mortgagor may do in order to cure a default under any of the
Conveyance Leases, to enter in and upon the Leased Premises or
any part thereof to such extent and as often as Mortgagee, in its
sole discretion, deems necessary or desirable in order to prevent
or cure any default by Mortgagor under any of the Conveyance
Leases or to perform or complete any obligation of Mortgagor
pursuant thereto. Mortgagor shall, within five (5) days after
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written request is made therefor by Mortgagee, execute and
deliver to Mortgagee or to any Person that Mortgagee shall
designate, such further instruments, agreements, powers, deeds,
conveyances or the like as may be necessary to complete or
perfect the interest, rights or powers of Mortgagee pursuant to
this Section 12 or as may be reasonably required by Mortgagee.
Mortgagor hereby ratifies all that Mortgagee shall do or cause to
be done as Mortgagor's attorney-in-fact consistent with the
foregoing. Mortgagor also authorizes Mortgagee, upon the
occurrence and during the continuance of a Mortgage Event of
Default, to communicate in its own name with any party to any
Project Document at any time, with regard to any matter relating
to such Project Document.
(k) Until and unless Mortgagee shall elect otherwise
by written notice to Mortgagor and either of the Ground Lessors,
Mortgagee shall be the "Leasehold Mortgagee" for all purposes of
each of the Conveyance Leases. Mortgagor shall deliver all
necessary notices, and take all such other actions, as may be
necessary from time to time, in order to designate Mortgagee as
the "Leasehold Mortgagee" under each of the Conveyance Leases.
(l) If Mortgagor acquires the estate of the landlord
under any of the Conveyance Leases (i) there shall be no merger
between such acquired estate and the estate of Mortgagor under
any of the Conveyance Leases unless all Persons (including
Mortgagee) having an interest in any of the Conveyance Leases
shall consent thereto in writing and (ii) the lien of this
Mortgage shall, ipso facto, without the necessity of any further
conveyance, simultaneously with such acquisition, be spread to
cover such acquired estate and as so spread shall, be prior to
the Lien of any mortgage placed on the acquired estate subsequent
to the date of this Mortgage.
(m) The generality of the provisions of this Section
12 relating to the Conveyance Leases shall not be limited by
other provisions of this Mortgage setting forth particular
obligations of Mortgagor that are also required of Mortgagor as
the lessee under any of the Conveyance Leases.
(n) If any of the Conveyance Leases shall be
terminated prior to the natural expiration of its term due to
default by Mortgagor, and if, pursuant to any provision of any of
the Conveyance Leases, Mortgagee or its designee shall acquire
from the applicable Ground Lessor a new lease of any part of the
Site, Mortgagor shall have no right, title or interest in or to
such new lease or the leasehold estate created thereby, or
renewal privileges therein contained.
(o) Mortgagor shall at all times cause Mortgagor's
estate, rights, title and interest in, to and under the Leased
Premises to be subject to no interests, Liens, charges or
encumbrances other than the interest of the Ground Lessors under
the applicable Conveyance Leases and any of the Permitted Liens.
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Mortgagor shall defend Mortgagor's estate, rights, title and
interest in, to and under the Leased Premises and the interest
in, to and under the Leased Premises and the priority thereof,
and the priority and validity of the Lien hereof, against the
claims of all Persons except as aforesaid.
13. Transfer or Encumbrance of the Collateral. Except
to the extent permitted by the Financing Documents, no part of
the Collateral shall in any manner be further encumbered, sold,
transferred, leased, subleased, assigned or conveyed, or
permitted or suffered to be further encumbered, sold,
transferred, assigned or conveyed.
14. Advances. If Mortgagor fails to pay or cause to
be paid, subject to any right hereunder to contest, any claim,
Lien or encumbrance (other than Permitted Liens), or, prior to
delinquency, any tax or assessment, or, when due, any insurance
premium, or to keep the Collateral in repair, or shall commit or
permit waste, or if there shall be commenced any action or
proceeding affecting the Collateral or any part thereof or the
title thereto, or the interest of Mortgagee therein, including,
but not limited to, condemnation or eminent domain proceedings,
bankruptcy or reorganization proceedings or any proceeding
regarding an Environmental Requirement, then Mortgagee or any
Senior Secured Party (upon written notice to Mortgagee and each
other Senior Secured Party), at its option, may, but shall not be
required to, pay said claim, Lien, encumbrance, tax, assessment
or premium, with right of subrogation thereunder, following a
Mortgage Event of Default and during the continuation thereof, or
at such earlier time as permitted by any consent to the
assignment of a Project Contract to Mortgagee, may make such
repairs and take such steps as it deems advisable to prevent or
cure such waste, and may appear in any such action or proceeding
and retain counsel therein, and take such action therein as
Mortgagee or such Senior Secured Party deems advisable, and for
any of said purposes Mortgagee or such Senior Secured Party may
advance such sums of money, including all costs, reasonable
attorneys' fees and other items of expense as it deems necessary.
Mortgagor shall pay or cause to be paid, upon demand, to
Mortgagee or such Senior Secured Party, as the case may be, all
sums of money so advanced, together with interest on each such
advance at an interest rate per annum equal to the yield on the
First Mortgage Bonds plus three percent (3%), and the repayment
of such advances shall be secured hereby and by the other
Security Documents. In making any payment or securing any
performance relating to any obligation of Mortgagor under this
Mortgage, Mortgagee, so long as it acts in good faith, shall be
the sole judge of the legality, validity and amount of any Lien
or encumbrance and of all other matters necessary to be
determined in satisfaction thereof. No such action of Mortgagee
shall be considered a waiver of any right accruing to it
hereunder. Mortgagee shall not be held accountable for any delay
in making any such payment, which delay may result in any
additional interest, costs, charges or expenses.
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15. Indemnification; Waiver of Offset.
(a) If Mortgagee is made a party defendant to any
litigation, proceeding, action, suit, claim, demand or judgment
of any nature or form, by or on behalf of any person, concerning
this Mortgage or the Leased Premises or any part thereof,
including, but not limited to, any eminent domain, condemnation
or other proceeding, any proceeding, action, suit, claim, demand
or judgment arising in any manner from an Environmental
Requirement concerning the Leased Premises, and any contest,
action or proceeding pursuant to Sections 39, 40 and 41 hereof,
then Mortgagor shall indemnify, defend and hold Mortgagee
harmless from any and all liability, loss or expense by reason of
said litigation, proceeding, action, suit, claim, demand or
judgment (including any appeals therefrom), including reasonable
attorneys' fees and expenses incurred by Mortgagee in any such
litigation, proceeding, action, suit, claim, demand or judgment
(including any appeals therefrom), but excluding liability for
gross negligence or willful misconduct by Mortgagee other than
gross negligence or willful misconduct imputed to Mortgagee
solely by reason of its interest in the Leased Premises, whether
or not any such litigation, proceeding, action, suit, claim or
demand is prosecuted to judgment. If Mortgagee commences an
action against Mortgagor to enforce any of the terms hereof, or
for the recovery of any sum secured hereby, or if Mortgagor
breaches any term of this Mortgage, Mortgagor shall pay to
Mortgagee reasonable attorneys' fees and disbursements (including
any of the same incurred on appeal), and the right to such
reasonable attorneys' fees and expenses shall be deemed to have
accrued on the commencement of such action and shall be
enforceable whether or not such action is prosecuted to judgment.
(b) Mortgagor waives any and all right to claim or
recover against Mortgagee, and its directors, officers, employees
and representatives, for loss of or damage to Mortgagor, the
Collateral or any part thereof, Mortgagor's property or the
property of others under Mortgagor's control, from any cause to
the extent insured against or required to be insured against by
the provisions of the Financing Documents.
16. Security Agreement. This Mortgage constitutes
both a real property mortgage and a "security agreement," within
the meaning of the UCC, and the Collateral includes both real and
personal property and all other rights and interests, whether
tangible or intangible in nature, of Mortgagor in the Collateral.
Information relative to the security interest created hereby may
be obtained by application to the Mortgagee at the address
provided in the introductory clause. Mortgagor, by executing and
delivering this Mortgage, has granted as security for the Secured
Obligations a lien on and security interest in such of the
Collateral as is governed by the UCC in favor of Mortgagee. If a
Trigger Event shall have occurred and be continuing and Mortgagee
shall have received Senior Creditor Certificates with respect
thereto as specified in Section 5.1(a) of the Intercreditor
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Agreement, Mortgagee, in addition to any other rights and
remedies that it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies
granted to Mortgagee upon default under the UCC, including,
without limiting the generality of the foregoing, the right to
take possession of such of the Collateral as is governed by the
UCC or any part thereof and such other rights specified in
Section 21(a)(ii)(C) hereof, and to take such other measures as
Mortgagee may deem necessary for the care, protection and
preservation thereof. Upon request or demand of Mortgagee,
Mortgagor shall at its expense assemble such of the Collateral as
is governed by the UCC and make it available to Mortgagee on
demand and shall reimburse Mortgagee for any and all expense,
including legal expenses and reasonable attorneys' fees, incurred
or paid by Mortgagee in protecting its interest in such of the
Collateral as is governed by the UCC and in enforcing the rights
granted hereunder with respect to such of the Collateral as is
governed by the UCC. Any notice of sale, disposition or other
intended action by Mortgagee with respect to such of the
Collateral as is governed by the UCC sent to Mortgagor in
accordance with the provisions of this Mortgage at least ten (10)
days prior to such action shall constitute reasonable notice to
Mortgagor. Any method of sale or disposition or other intended
action in accordance with the UCC shall conclusively be deemed to
be commercially reasonable within the meaning of the UCC unless
objected to in writing by Mortgagor within ten (10) days after
receipt by Mortgagor of such notice. The proceeds of any sale or
disposition of such of the Collateral as is governed by the UCC,
or any part thereof, shall be applied by Mortgagee to the payment
of the Secured Obligations in such order, priority and
proportions as set forth in Article VI of the Intercreditor
Agreement.
Notwithstanding anything contained in this Section 16
to the contrary, with respect to any Collateral that is also
defined as "Security Agreement Collateral" under the Security
Agreement, Mortgagee hereby reserves, and Mortgagee shall be
entitled to exercise, each of its rights, powers and remedies
under the Security Agreement with respect to such Collateral.
At the request of Mortgagee upon advice of counsel,
Mortgagor will execute one or more Financing Statements and
renewals and amendments thereof pursuant to the UCC of any
jurisdiction deemed applicable by Mortgagee in form satisfactory
to Mortgagee, and Mortgagor will pay the cost of filing the same
in all public offices wherever filing is deemed by Mortgagee to
be necessary or desirable.
Mortgagor covenants to execute and deliver to
Mortgagee, upon demand, such additional assurances, writings and
other instruments as may be reasonably required by Mortgagee to
effect the purpose hereof or to perfect the interest of Mortgagee
in any security hereby given including a copy of the annual
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perfection opinion it delivers to the Trustee and a reliance
letter addressed to it in connection therewith.
Mortgagor hereby appoints (such appointment being
coupled with an interest), until the Secured Obligations are paid
in full, Mortgagee as attorney-in-fact for Mortgagor to execute
in the name of Mortgagor any financing statements or other
comparable documents reasonably deemed by Mortgagee to be
necessary or desirable to perfect or protect or continue the lien
and security interest hereby granted. Mortgagor hereby ratifies
all that Mortgagee shall do or cause to be done as Mortgagor's
attorney-in-fact consistent with the foregoing.
17. Performance of Other Agreements.
(a) Mortgagor shall (i) pay all rents, fees,
additional rents and other sums required to be paid by Mortgagor,
as grantee, under and pursuant to the provisions of the
Easements, (ii) diligently perform and observe all of the terms,
covenants and conditions of the Easements on the part of
Mortgagor, as grantee, to be performed and observed, unless such
performance or observance shall be waived, excused or otherwise
not required by the grantor under the Easements, to the end that
all things shall be done that are necessary to keep unimpaired
the rights of Mortgagor, as grantee, under the Easements and
(iii) promptly notify Mortgagee of the giving of any notice by
the grantor under any of the Easements to Mortgagor of any
default by Mortgagor, as grantee, in the performance or
observance of any of the terms, covenants or conditions of any of
the Easements on the part of Mortgagor, as grantee, to be
performed or observed and deliver to Mortgagee a true copy of
each such notice. Mortgagor shall not, except to the extent
permitted or authorized by the Financing Documents, surrender any
of the Easements or terminate or cancel any of the Easements or
take any action to modify, change, supplement, alter or amend any
of the Easements, in any respect, either orally or in writing,
and Mortgagor hereby assigns to Mortgagee, as further security
for the payment of the obligations evidenced by the Financing
Documents and for the performance and observance of the terms,
covenants and conditions of this Mortgage, all of the rights,
privileges and prerogatives of Mortgagor, as grantee, to
surrender any of the Easements or to terminate, cancel, modify,
change, supplement, alter or amend any of the Easements, and any
such surrender of any of the Easements or termination,
cancellation, modification, change, supplement, alteration or
amendment of any of the Easements without the prior consent of
Mortgagee, as directed by Required Senior Creditors in Senior
Creditor Certificates, and such other Persons as shall be
required by any Financing Document shall be void and of no force
and effect. If Mortgagor shall default in the performance or
observance of any term, covenant or condition of any of the
Easements on the part of Mortgagor, as grantee, to be performed
or observed, and such default continues beyond applicable grace
periods, then, without limiting the generality of the other
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provisions of this Mortgage, and without waiving or releasing
Mortgagor from any of its obligations hereunder, Mortgagee shall
have the right, but shall be under no obligation, to pay any sums
and to perform any act or take any action as may be reasonably
necessary (or, if a Trigger Event shall have occurred and be
continuing and, except in the case of any such Trigger Event that
shall have resulted from a Bankruptcy Event in respect of
Mortgagor or Mobile Energy, Mortgagee shall have received Senior
Creditor Certificates with respect thereto as specified in
Section 5.1(a) of the Intercreditor Agreement, pay any sums and
perform any act or take any action) to cause all of the terms,
covenants and conditions of the Easements on the part of
Mortgagor, as grantee, to be performed or observed to be promptly
performed or observed on behalf of Mortgagor to the end that the
rights of Mortgagor in, to and under the Easements shall be kept
unimpaired and free from any default. If Mortgagee shall make
any payment or perform any act or take action in accordance with
the preceding sentence, Mortgagee will notify Mortgagor of the
making of any such payment, the performance of any such act or
the taking of any such action. In any such event, Mortgagee and
any person designated by Mortgagee shall have, and are hereby
granted, the right to enter upon the Collateral or any part
thereof at any time and from time to time for the purpose of
taking or performing any such action. If any grantor under any
of the Easements shall deliver to Mortgagee a copy of any notice
of default sent by said grantor to Mortgagor, such notice shall
constitute full protection to Mortgagee for any action taken or
omitted to be taken by Mortgagee, in good faith, consistent with
the foregoing, in reliance thereon. Mortgagor shall, from time
to time, use reasonable efforts to obtain from the grantors under
the Easements such certificates of estoppel with respect to
compliance by Mortgagor with the terms of the Easements as may be
requested by Mortgagee. Mortgagor shall exercise each individual
option, if any, to extend or renew the term of the Easements in
conformance with such option upon demand by Mortgagee made at any
time, and, until the Secured Obligations are paid in full,
Mortgagor hereby expressly authorizes and appoints Mortgagee its
attorney-in-fact to exercise, either jointly or individually, any
such option in the name of and upon behalf of Mortgagor if
Mortgagor fails to do so within a reasonable time prior to the
expiration thereof, which power of attorney shall be irrevocable
and shall be deemed to be coupled with an interest.
(b) Mortgagor shall not, without Mortgagee's prior
consent, as directed by Required Senior Creditors in Senior
Creditor Certificates, elect to treat any of the Easements as
terminated under Subsection 365(h)(1) or any other provision of
the Bankruptcy Code, after rejection or disaffirmance of any such
Easements by the grantor thereunder or by any trustee of such
party, and any such election made without such consent shall be
void and ineffective.
(c) Subject to Mortgagor's right to seek and retain
certain offsets as permitted hereunder, Mortgagor hereby assigns,
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transfers and sets over to Mortgagee as security all of
Mortgagor's claims and rights to the payment of damages that may
hereafter arise as a result of any rejection or disaffirmance of
any of the Easements by the grantor thereof or by any trustee of
such party, pursuant to the Bankruptcy Code. Mortgagee shall
have and is hereby granted the right to proceed, in its own name
or in the name of Mortgagor in respect of any claim, suit, action
or proceeding relating to the rejection or disaffirmance of any
Easements (including, without limitation, the right to file and
prosecute, to the exclusion of Mortgagor, any proofs of claim,
complaints, motions, applications, notices and other documents)
in any case in respect of such grantor under the Bankruptcy Code,
if (i) Mortgagor fails to do so within a reasonable time prior to
the expiration of the period allowed therefor by applicable Law,
except in the case of any such Trigger Event that shall have
resulted from a Bankruptcy Event in respect of Mortgagor or
Mobile Energy, or (ii) a Trigger Event shall have occurred and be
continuing and, except in the case of any such Trigger Event that
shall have resulted from a Bankruptcy Event in respect of
Mortgagor or Mobile Energy, Mortgagee shall have received Senior
Creditor Certificates with respect thereto as specified in
Section 5.1(a) of the Intercreditor Agreement. This assignment
constitutes a present, irrevocable, non-exclusive and
unconditional assignment of the foregoing claims, rights and
remedies, and shall continue in effect until the Secured
Obligations shall have been satisfied and discharged in full.
Any amounts received by Mortgagee as damages arising out of any
such rejection of any Easements shall be applied in accordance
with the provisions of Article VI of the Intercreditor Agreement.
(d) In the event that, pursuant to Section 365(h)(2)
or any other provision of the Bankruptcy Code, Mortgagor seeks to
offset against the rent or other sums payable under any of the
Easements the amount of any damages caused by the nonperformance
by the grantor thereunder of such grantor's obligations under any
of the Easements after rejection or disaffirmance thereof under
the Bankruptcy Code, Mortgagor shall, prior to effecting such
offset, notify Mortgagee in writing of Mortgagor's intent to do
so, setting forth the amounts proposed to be so offset and the
basis therefor. Mortgagee shall, as directed by Required Senior
Creditors in Senior Creditor Certificates, have the right to
object in writing (stating the reasons therefor) to all or any
part of such offset, and, in the event of such objection,
Mortgagor shall not effect any offset of the amounts so objected
to by Mortgagee. If Mortgagee shall have failed to object as
aforesaid within twenty (20) days after such notice, Mortgagee's
consent will be deemed to have been given and Mortgagor may
proceed to effect such offset in the amounts set forth in such
notice. If, in the best business judgment of the Mortgagor, such
offset is justified and Mortgagee has received the aforesaid
notices and has not objected but its time to do so has not
expired, then Mortgagor shall have the right to make such offset
and Mortgagor shall set aside the offset amount as a reserve to
be paid only if Mortgagee objects within the aforesaid time.
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Mortgagor shall indemnify and hold Mortgagee and each of its
officers, directors, employees and agents harmless from and
against any and all claims, demands, actions, suits, proceedings,
damages, losses, costs and expenses of every nature whatsoever
(including, without limitation, reasonable legal fees and
disbursements) arising from or relating to any such offset by
Mortgagor.
(e) Mortgagor shall, promptly after obtaining
knowledge thereof, use all reasonable efforts to give prompt oral
notice to Mortgagee of any actual or contemplated filing by or
against any grantor of any Easement of a petition under the
Bankruptcy Code, and give prompt written notice thereof to
Mortgagee of such actual or contemplated filing. The aforesaid
written notice shall set forth any information reasonably
available to Mortgagor concerning the date or anticipated date of
such filing, the court in which such petition was filed or is
expected to be filed, and the relief sought or reasonably
expected to be sought therein. Mortgagor shall, promptly after
receipt thereof, deliver to Mortgagee any and all notices,
summonses, , applications and other documents received by
Mortgagor in connection with any such petition and any
proceedings related thereto.
(f) Subject to the second sentence of this paragraph
(f), in the event that any action, proceeding, motion or notice
shall be commenced or filed in respect of any grantor under any
Easement or any part thereof, in connection with any case under
the Bankruptcy Code, Mortgagee shall have, and is hereby granted,
the option, to the exclusion of Mortgagor, exercisable upon
notice from Mortgagee to Mortgagor, to conduct and control any
such litigation with counsel of Mortgagee's choice. Mortgagee
may proceed, in its own name or in the name of Mortgagor, in
connection with any such litigation, if (i) Mortgagor fails to do
so within a reasonable time prior to the expiration of the period
allowed therefor by applicable Law and Mortgagee, if so directed
to proceed by Required Senior Creditors in Senior Creditor
Certificates, or (ii) a Trigger Event shall have occurred and be
continuing and Mortgagee shall have received the Senior Creditor
Certificates with respect thereto as specified in Section 5.1(a)
of the Intercreditor Agreement, and Mortgagor agrees to execute
any and all powers, authorizations, consents and other documents
required by Mortgagee in connection therewith. Mortgagor shall,
upon demand, pay to Mortgagee all costs and expenses (including
without limitation, reasonable legal fees and disbursements) paid
or incurred by Mortgagee in connection with the prosecution or
conduct of any such proceedings, and, to the extent permitted by
law, such costs and expenses shall be deemed expenses incurred in
upholding the lien of this Mortgage and added to the Secured
Obligations. Mortgagor shall not, without the prior consent of
Mortgagee (which consent of Mortgagee shall not be unreasonably
withheld), commence any action, suit, proceeding or case, or file
any application or make any motion, in respect of any of the
Easements in any such case under the Bankruptcy Code.
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(g) In the event that a petition under the Bankruptcy
Code shall be filed by or against Mortgagor, and Mortgagor, or
anyone claiming through or under Mortgagor or a trustee in
bankruptcy shall have the right to reject any of the Easements
pursuant to Section 365(a) or any other provision of the
Bankruptcy Code or a successor statute, Mortgagor shall give
Mortgagee at least ten (10) days' prior written notice of the
date on which application shall be made to the court for
authority to reject any such Easement; provided, however, that if
a trustee in bankruptcy shall have a right to reject any Easement
in less than ten (10) days, then Mortgagor shall give such notice
to Mortgagee immediately upon Mortgagor's obtaining knowledge of
such application. Mortgagee shall have the right, but not the
obligation (subject to the rights of a trustee in bankruptcy), to
exercise such right, as directed by Required Senior Creditors in
Senior Creditor Certificates, and Mortgagor hereby assigns such
right to Mortgagee. If at any time any grantor under any
Easements, or anyone holding by, through or under the grantor
under any Easements or a trustee in bankruptcy, shall elect to
reject such Easements pursuant to Section 365(a) or any other
provision of the Bankruptcy Code, or a successor statute, thereby
giving to Mortgagor the right to elect to treat such Easements as
terminated pursuant to Section 365(h)(1) or any other provision
of the Bankruptcy Code, or a successor statute, Mortgagee shall
have the right to exercise such right if (i) Mortgagor fails to
do so within a reasonable time prior to the expiration of the
period allowed therefor by applicable Law and Mortgagee is so
directed to proceed by Required Senior Creditors in Senior
Creditor Certificates, or (ii) a Trigger Event shall have
occurred and be continuing and, except in the case of any such
Trigger Event that shall have resulted from a Bankruptcy Event in
respect of Mortgagor or Mobile Energy, Mortgagee shall have
received Senior Creditor Certificates in respect thereof as
specified in Section 5.1(a) of the Intercreditor Agreement, and
Mortgagor hereby assigns said right to Mortgagee on a
non-exclusive basis. If either of the assignments provided for
in this paragraph (g) is held to be enforceable, then Mortgagor,
anyone claiming by, through or under Mortgagor or a trustee in
bankruptcy, shall not exercise rights purportedly assigned to
Mortgagor without the prior consent of Mortgagee, and if
Mortgagee shall give such consent, the Mortgagor, anyone claiming
by, through or under Mortgagor or a trustee in bankruptcy shall
promptly exercise either of such rights.
(h) To the extent permitted by applicable law,
Mortgagor hereby assigns, transfers and sets over to Mortgagee
the right, as directed by Required Senior Creditors in Senior
Creditor Certificates, on a non-exclusive basis, to apply to the
Bankruptcy Court under Section 365(d)(4) or any other provision
of the Bankruptcy Code for an order extending the period during
which any Easements may be rejected or assumed after the entry of
any order for relief under Chapter 7 or Chapter 11 of the
Bankruptcy Code in respect thereof.
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MORTGAGE EVENTS OF DEFAULT/REMEDIES
18. Mortgage Events of Default. Any of the following
events shall be deemed a "Mortgage Event of Default" under this
Mortgage:
(a) a Trigger Event under the Intercreditor Agreement
occurs and is continuing;
(in lieu of the following Mortgage Events of Default,
the next draft of the Indenture will incorporate them as
appropriate).
(b) the failure by Mortgagor to perform or observe any
covenant (other than a payment covenant) set forth in Sections 8,
10, 13, 14 and 15 hereof, and such failure continues for more
than thirty (30) days after Mortgagor has actual knowledge of
such failure;
(c) the failure by Mortgagor to perform or observe any
other covenant or agreement to be performed or observed by it
hereunder (including a payment covenant or agreement) for more
than thirty (30) days after Mortgagor receives written notice of
such failure from Mortgagee; provided, however, that if (i) such
failure cannot reasonably be remedied within such thirty-day
period, (ii) such failure is susceptible of being remedied, (iii)
Mortgagor has commenced to remedy such failure within such
thirty-day period, (iv) Mortgagor is diligently and expeditiously
remedying such failure and (v) Mortgagor certifies to Mortgagee
that no other Mortgage Event of Default has occurred and is
continuing, then such thirty-day period shall be extended to such
date, not to exceed a total of ninety (90) days from the date of
receipt of such written notice, as shall be necessary for
Mortgagor diligently to remedy such failure.
19. Mortgagee's Right to Cure Defaults. If a Trigger
Event shall have occurred and be continuing and, except in the
case of any such Trigger Event that shall have resulted from a
Bankruptcy Event in respect of Mortgagor or Mobile Energy,
Mortgagee shall have received Senior Creditor Certificates with
respect thereto as specified in Section 5.1(a) of the
Intercreditor Agreement, Mortgagee or any Senior Secured Party
(upon notice to Mortgagee and each other Senior Secured Party)
may remedy the same in accordance with the applicable provisions
hereof and of the Intercreditor Agreement and for such purpose
shall have the right to enter upon the Collateral or any portion
thereof without thereby becoming liable to Mortgagor or any
person in possession thereof holding under Mortgagor.
20. Non-Waiver. The failure of Mortgagee to insist
upon strict performance of any term of this Mortgage shall not be
deemed to be a waiver of any term of this Mortgage. Mortgagor
shall not be relieved of Mortgagor's obligation to pay or perform
the Secured Obligations at the time and in the manner provided in
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the Financing Documents by reason of (i) the failure to comply
with any request of Mortgagor to take any action to foreclose
this Mortgage or otherwise enforce any of the provisions hereof
or of the Financing Documents or any other mortgage, deed of
trust, security agreement, instrument or document evidencing,
securing or guaranteeing payment of the Secured Obligations or
any portion thereof, (ii) the release, regardless of
consideration, of the whole or any part of the Collateral or any
other security for the Secured Obligations or (iii) any agreement
or stipulation between Mortgagee and any subsequent owner or
owners of the Collateral or other Person extending the time of
payment or otherwise modifying or supplementing the terms of this
Mortgage, any other Financing Document or any other mortgage,
deed of trust, security agreement, instrument or document
evidencing, securing or guaranteeing payment or performance of
the Secured Obligations or any portion thereof, without first
having obtained the consent of Mortgagor (but without prejudice
to the rights of Mortgagor under the Financing Documents), and in
the latter event, Mortgagor shall continue to be obligated to pay
the Secured Obligations at the time and in the manner provided in
the Financing Documents and this Mortgage, as so extended,
modified and/or supplemented, unless expressly released and
discharged from such obligation by Mortgagee in accordance with
the directions given pursuant to the Intercreditor Agreement.
Regardless of consideration, and without the necessity for any
notice to or consent by the holder of any subordinate Lien or
other interest in the Collateral, Mortgagee may, in accordance
with the directions given pursuant to the Intercreditor
Agreement, release any Person at any time liable for the payment
of the Secured Obligations or any portion thereof or all or any
part of the security held for the Secured Obligations and may
extend the time of payment or otherwise modify the terms of the
Financing Documents, without in any manner impairing or affecting
this Mortgage or the lien thereof or the priority of this
Mortgage as so extended and modified, as security for the Secured
Obligations over any such subordinate Lien or interest.
Mortgagee may resort for the payment of the Secured Obligations
to any other security held by Mortgagee in such order and manner
as Mortgagee may, in accordance with the directions given
pursuant to the Intercreditor Agreement, elect. Mortgagee may
take action to recover the Secured Obligations, or any portion
thereof, or to enforce any covenant hereof in each case in
accordance with the terms hereof and of the Intercreditor
Agreement, without prejudice to the right of Mortgagee thereafter
to foreclose this Mortgage. Mortgagee shall not be limited
exclusively to the rights and remedies herein stated but shall be
entitled to every additional right and remedy now or hereafter
afforded by Law or equity, subject to the terms of the
Intercreditor Agreement with respect to the exercise thereof.
The rights of Mortgagee under this Mortgage shall be separate,
distinct and cumulative, and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed
as an election to proceed under any one provision herein to the
exclusion of any other provision.
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21. Remedies. (a) Subject to the limitations set
forth in Section ( ) and the Intercreditor Agreement, if any
Trigger Event has occurred and be continuing and, except in the
case of any such Trigger Event that shall have resulted from a
Bankruptcy Event in respect of Mortgagor or Mobile Energy,
Mortgagee shall have received Senior Creditor Certificates with
respect thereto as specified in Section 5.1(a) of the
Intercreditor Agreement, then, to the maximum extent permitted by
Law, Mortgagee may exercise any right, power or remedy permitted
to it hereunder, under any other Security Documents or by Law,
and, without limiting the generality of the foregoing, Mortgagee
may, personally or by its agents, to the maximum extent permitted
by Law, do any or all of the following:
(i) without assuming liability for the performance of
any of Mortgagor's obligations hereunder or under the Project
Contracts, enter and take possession of the Collateral or any
part thereof, exclude Mortgagor and all persons claiming under
Mortgagor whose claims are junior to this Mortgage, wholly or
partly therefrom, and use, operate, manage and control the same
either in the name of Mortgagor or otherwise as Mortgagee shall
deem best, and upon such entry, from time to time at the expense
of Mortgagor and the Collateral, make all such repairs,
replacements, alterations, additions or improvements to the
Collateral or any part thereof and, whether or not Mortgagee has
so entered and taken possession of the Collateral or any part
thereof, collect and receive all the Rents and apply the same, to
the extent permitted by Law, to the payment of all expenses that
Mortgagee may be authorized to make under this Mortgage, the
remainder to be applied to the payment of the Secured Obligations
until the same shall have been repaid in full; if Mortgagee
demands or attempts to take possession of the Collateral or any
portion thereof in the proper exercise of any rights hereunder,
Mortgagor shall promptly turn over and deliver complete
possession thereof to Mortgagee; and
(ii) with or without entry:
(A) subject to applicable Law, sell all or any
part of the Collateral for cash at an auction or foreclosure sale
held at such place or places and time and upon such notice and
otherwise in such manner as may be required by Law, or in the
absence of any such requirement, as Mortgagee may deem
appropriate (and in taking such action, Mortgagee may act in
accordance with an opinion of counsel, upon which Mortgagee may
conclusively rely), and from time to time adjourn any such sale
by announcement at the time and place specified for such sale or
for such adjourned sale without further notice, except as may be
required by Law;
(B) proceed to protect and enforce its rights
under this Mortgage, by suit for specific performance of any
covenant contained herein or in any other Security Document or in
aid of the execution of any power granted herein or in any other
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Security Document, or for the foreclosure of this Mortgage (as a
mortgage or otherwise) and the sale for cash of the Collateral
under the judgment or decree of a court of competent
jurisdiction, or for the enforcement of any other right as
Mortgagee shall deem most effectual for such purpose (and in
taking such action, Mortgagee may act in accordance with an
opinion of counsel, upon which Mortgagee may conclusively rely);
provided, however, that in the event of a sale, by foreclosure or
otherwise, of less than all of the Collateral, this Mortgage
shall continue as a lien on and security interest in the
remaining portion of the Collateral, and Mortgagee shall not be
obligated to sell upon credit unless Mortgagee shall have
expressly consented in writing to a sale upon credit; or
(C) exercise any or all of the remedies available
to a secured party under the UCC, including, without limitation:
(1) either personally or by means of a court
appointed receiver, without notice to or demand upon Mortgagor
take possession of all or any portion of the Collateral as shall
be covered by the UCC and exclude therefrom Mortgagor and all
persons claiming under Mortgagor, and thereafter hold, store,
use, operate, manage, maintain and control, make repairs,
replacements, alterations, additions and improvements to, and
exercise all rights and powers of Mortgagor in respect of, any
portion of the Collateral as shall be covered by the UCC; if
Mortgagee demands or attempts to take possession of any portion
of the Collateral, as shall be covered by the UCC in the proper
exercise of any rights hereunder, Mortgagor shall promptly turn
over and deliver complete possession thereof to Mortgagee;
(2) without notice to or demand upon
Mortgagor, make such payments and do such acts as Mortgagee (and
in taking such action, Mortgagee may act in accordance with an
opinion of counsel, upon which Mortgagee may conclusively rely)
may deem necessary to protect its lien on and security interest
in any portion of the Collateral as shall be covered by the UCC,
including, without limitation, paying, purchasing, contesting or
compromising any encumbrance that is prior to or superior to the
lien and security interest granted hereunder, and in exercising
any such powers or authority paying all expenses incurred in
connection therewith;
(3) require Mortgagor to assemble the
Collateral as shall be covered by the UCC, or any portion
thereof, at a place designated by Mortgagee and reasonably
convenient to Mortgagor and Mortgagee, and promptly to deliver
the portions of the Collateral as may be covered by the UCC to
Mortgagee, or an agent or representative designated by it;
Mortgagee, and its agents and representatives, shall have the
right to enter upon the Site and property of Mortgagor to
exercise Mortgagee's rights hereunder;
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(4) sell, lease or otherwise dispose of such
portions of the Collateral as may be covered by the UCC, with or
without having such portions of the Collateral as may be covered
by the UCC at the place of sale, and upon such terms and in such
manner as Mortgagee may determine (and Mortgagee may be a
purchaser at any such sale); and
(5) unless the Collateral is perishable or
threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Mortgagee shall give
Mortgagor at least ten (10) days' prior notice of the time and
place of any sale or other intended disposition, Mortgagor
agreeing that such ten (10) day notice period is sufficient to
constitute a commercially reasonable sale of the Collateral.
(b) If a Trigger Event shall have occurred and be
continuing and, except in the case of any such Trigger Event that
shall have resulted from a Bankruptcy Event in respect of
Mortgagor or Mobile Energy, Mortgagee shall have received Senior
Creditor Certificates with respect thereto as specified in
Section 5.1(a) of the Intercreditor Agreement, and the Secured
Obligations shall have been declared to be immediately due and
payable, or upon the actual or threatened waste to any part of
the Collateral, Mortgagee, to the maximum extent permitted by
Law, shall be entitled to the appointment of a receiver of the
Collateral, without notice or demand, and without regard to the
adequacy of the security for the Secured Obligations or the
solvency of Mortgagor. Notwithstanding the foregoing, in the
event of threatened waste to any part of the Collateral (but not
actual waste), upon the occurrence and during the continuance of
a Trigger Event and, except in the case of any such Trigger Event
that shall have resulted from a Bankruptcy Event in respect of
Mortgagor or Mobile Energy, after receipt by Mortgagee of the
Senior Creditor Certificates with respect thereto as specified in
Section 5.1(a) of the Intercreditor Agreement, Mortgagee shall
provide notice to Mortgagor of its intent to appoint a receiver
and shall permit Mortgagor a reasonable period of time to
eliminate such threatened waste prior to the appointment of said
receiver. Mortgagor hereby irrevocably consents to the
appointment of a receiver pursuant to this paragraph (b) and,
except as otherwise hereinbefore specifically provided or as
required by Law, waives notice of any application therefor. Any
such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases and all the powers
and duties of a mortgagee in case of entry and shall continue as
such and exercise all such powers until the date of confirmation
of sale of the Collateral, unless such receivership is sooner
terminated. Specifically, Mortgagee or any receiver shall be
entitled to take possession of the Collateral from the owners,
tenants and/or occupants of the whole or any part thereof and to
collect and receive the Rents and the value of the use and
occupation of the Collateral, or any part thereof, from the then
owner, tenants and/or occupants thereof for the benefit of
Mortgagee.
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(c) In any sale under any provisions of this Mortgage
upon the occurrence and during the continuation of a Trigger
Event and, except in the case of any such Trigger Event that
shall have resulted from a Bankruptcy Event in respect of
Mortgagor or Mobile Energy, after receipt by Mortgagee of Senior
Creditor Certificates with respect thereto as specified in
Section 5.1(a) of the Intercreditor Agreement, or pursuant to any
judgment or decree of court thereafter granted, the Collateral,
to the maximum extent permitted by Law, may be sold in one or
more parcels or as an entirety and in such order as Mortgagee may
elect, without regard to the right of Mortgagor or any person
claiming under Mortgagor to the marshalling of assets. The
purchaser at any such sale shall take title to the Collateral or
the part thereof so sold free and discharged of the estate of
Mortgagor therein, the purchaser being hereby discharged from all
liability to see to the application of the purchase money. Any
person, including Mortgagee and any Senior Secured Parties, may
purchase at any such sale. The purchaser of the Collateral or
any successor shall succeed to all rights of Mortgagor, including
any rights to proceeds of insurance and in and to all policies or
certificates of insurance assigned and delivered to Mortgagee
pursuant to this Mortgage and the Financing Documents. Upon the
completion of any such sale by virtue of this paragraph (c),
Mortgagee shall, to the extent permitted by applicable Law,
execute and deliver to such purchaser an appropriate instrument
that shall effectively transfer all of Mortgagor's estate, right,
title, interest, property, claim and demand in and to the
Collateral or portion thereof so sold. Upon the occurrence and
during the continuance of a Trigger Event and, except in the case
of any such Trigger Event that shall have resulted from a
Bankruptcy Event in respect of Mortgagor or Mobile Energy, after
receipt by Mortgagee of Senior Creditor Certificates with respect
thereto as specified in Section 5.1(a) of the Intercreditor
Agreement, Mortgagee is hereby irrevocably appointed the
attorney-in-fact of Mortgagor in its name and stead to make all
appropriate transfers and deliveries of the Collateral or any
portions thereof so sold and, for that purpose, Mortgagee may
execute all appropriate instruments of transfer, and may
substitute one or more persons with like power. Mortgagor hereby
ratifies all that said attorneys or such substitute or
substitutes shall lawfully do or cause to be done as Mortgagor's
attorney-in-fact consistent with the foregoing. Nevertheless,
Mortgagor shall ratify and confirm, or cause to be ratified and
confirmed, any such sale or sales by executing and delivering, or
by causing to be executed and delivered, to Mortgagee or to such
purchaser or purchasers all such instruments as may be advisable
(in accordance with an opinion of counsel, upon which Mortgagee
may conclusively rely) for such purpose, and as may be designated
in such request. Mortgagor also authorizes said attorneys or
such substitute or substitutes, upon the occurrence and during
the continuance of a Trigger Event and, except in the case of any
such Trigger Event that shall have resulted from a Bankruptcy
Event in respect of Mortgagor or Mobile Energy, after Mortgagee
shall have received Senior Creditor Certificates with respect
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thereto as specified in Section 5.1(a) of the Intercreditor
Agreement, to communicate in its own name with any party to any
Project Contracts at any time, with regard to any matter relating
to such Project Contracts. Any sale or sales made under or by
virtue of this Mortgage, whether under the power of sale
hereunder, or by virtue of judicial process or a judgment or
decree of purchase and sale, to the extent not prohibited by Law,
shall operate to divest all the estate, right, title, interest,
property, claim and demand whatsoever, whether at Law or in
equity, of Mortgagor in, to and under the Collateral, or any
portions thereof so sold, and shall be a perpetual bar both at
Law and in equity against Mortgagor and against any and all
persons claiming or who may claim to have any rights with respect
to the sale, or any part thereof, by, through or under Mortgagor.
The powers and agency herein granted are coupled with an interest
and are irrevocable. Upon a sale of the Collateral, in whole or
in part, under and by virtue of the provisions of this Mortgage,
every purchaser shall have immediate and peaceable possession of
the Collateral to the extent sold; and if Mortgagor shall remain
in possession after the effective date of such sale, such
possession shall be as a tenancy at sufferance only, giving unto
the purchaser all remedies by way of summary possession or
otherwise under applicable Law for recovery of possession.
(d) All rights of action under this Mortgage or the
other Security Documents may, to the extent permitted by
applicable Law, be enforced by Mortgagee without the possession
or production thereof at any trial or other proceeding relative
thereto.
(e) Mortgagee shall have the right, from time to time,
to bring an appropriate action to recover any sums required to be
paid by Mortgagor under the terms of this Mortgage, as they
become due, without regard to whether or not the Secured
Obligations secured by this Mortgage shall be due, and without
prejudice to the right of Mortgagee thereafter to bring an action
of foreclosure, or any other action, for any default by Mortgagor
existing at the time the earlier action was commenced.
(f) Mortgagee may exercise any and all rights granted
to "Leasehold Mortgagee" under any of the Conveyance Leases.
(g) Mortgagee may consult, at Mortgagor's expense,
with counsel (who may or may not be counsel to Mortgagor), and
the opinion of such counsel shall be full and complete
authorization and protection, and Mortgagee shall be entitled to
conclusively rely on such opinion of counsel, in respect of any
action taken or not taken or suffered by Mortgagee under this
Mortgage.
The proceeds (the "Proceeds") of any foreclosure,
collection, recovery, receipt, appropriation, realization or sale
pursuant to this Section 21 shall be applied by Mortgagee in
accordance with Article VI of the Intercreditor Agreement.
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22. Mortgagor as Tenant Holding Over. In the event of
any foreclosure sale by Mortgagee, Mortgagor shall be deemed a
tenant holding over and shall forthwith deliver possession to the
purchaser or purchasers at such sale or be summarily dispossessed
according to provisions of Law applicable to tenants holding
over.
23. Leases. Mortgagee is authorized (but not
obligated) to subordinate this Mortgage to any Leases and to
foreclose this Mortgage subject to the rights of any tenants of
the Collateral, provided that the failure to so subordinate or to
make any such tenants parties to any such foreclosure proceedings
and to foreclose their rights will not be, nor be asserted to be
by Mortgagor, a defense to any proceedings instituted by
Mortgagee to collect the Secured Obligations.
MISCELLANEOUS
24. Filing of Mortgage, etc. Mortgagor forthwith,
upon the execution and delivery of this Mortgage and thereafter,
from time to time, will cause this Mortgage and any security
instrument creating a Lien or evidencing or perfecting the Lien
hereof upon the Collateral and each instrument of further
assurance to be filed, registered or recorded in such manner and
in such places as may be required by any present or future Law in
order to publish notice of and fully to protect, preserve and
perfect the Lien hereof upon, and the interest of Mortgagee in
the Collateral. Mortgagor will pay all filing, registration or
recording fees, and all expenses incurred by Mortgagee incident
to the preparation, execution and acknowledgment of this
Mortgage, any mortgage or deed of trust supplemental hereto, any
security instrument with respect to the Collateral and any
instrument of further assurance, and all Federal, State, County,
City and municipal taxes, duties, imposts, assessments and
charges arising out of or in connection with the execution and
delivery of this Mortgage, any mortgage or deed of trust
supplemental hereto, any security instrument with respect to the
Collateral or any financing statement, continuation statement or
other instrument of further assurance, including without
limitation all documentary stamp taxes and intangible personal
property taxes, if any. Mortgagor shall hold harmless and
indemnify Mortgagee, its successors and assigns, against any
liability, damages, legal expenses, interest and penalties, and
intervening Liens, incurred by reason of the imposition of any
tax on the making and recording of this Mortgage.
25. Usury Laws. This Mortgage and the other Financing
Documents are subject to the express condition that at no time
shall Mortgagor be obligated or required to pay interest on the
principal balance due under the Secured Obligations at a rate
that could subject the holders of the Secured Obligations to
either civil or criminal liability as a result of being in excess
of the maximum interest rate that Mortgagor is permitted by Law
to contract or agree to pay. If by the terms of this Mortgage or
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any other Financing Document, Mortgagor is at any time required
or obligated to pay interest on the principal balance due under
any Financing Document at a rate in excess of such maximum rate,
the rate of interest under the Financing Document shall be deemed
to be immediately reduced to such maximum rate and the interest
payments in excess of such maximum rate shall be applied toward
reduction of principal.
26. Option To Release Certain Real Estate.
Notwithstanding any other provisions of this Mortgage, Mortgagee
hereby agrees, at any time and from time to time, provided
Mortgagor is not in default under any of the provisions of this
Mortgage, and that no Mortgage Event of Default then exists (of
which a Responsible Officer of Mortgagee has actual knowledge),
to release from this Mortgage any part of the Site with respect
to which fee title is to be conveyed to a railroad, public
utility or public body in order that railroad service, utility
services or roads may be provided for the Collateral, upon
receipt of:
(a) Copies of the instrument of release, in recordable
form;
(b) A certificate of Mortgagor (i) stating that
Mortgagor is not in default under any of the provisions of this
Mortgage and that no Mortgage Event of Default then exists, (ii)
giving an adequate legal description of that portion of the Site
to be released, (iii) stating the purpose for which the release
is desired and (iv) requesting such release;
(c) If applicable, a copy of the instrument conveying
the portion of the Site to be released;
(d) Any instrument or instruments required by the
terms of such release;
(e) A certificate of the Independent Engineer stating
that, in its opinion, (i) the release of the portion of the Site
so proposed to be released is necessary or desirable in order to
obtain railroad service, utility services or roads to benefit the
Collateral, (ii) the release so proposed to be made will not
impair the use or usefulness of the Collateral as a facility for
the purposes for which it was designed and will not materially
impair the means of ingress there into and egress therefrom and
(iii) the release so proposed to be made is not reasonably
expected to result in a Material Adverse Effect or materially
increase the likelihood of the future occurrence of a Material
Adverse Effect; and
(f) an opinion of counsel that the release is
permitted by the Financing Documents, all necessary consents, if
any, have been obtained and all conditions precedent to such
release have been satisfied; provided, however, that if the
portion of the Site to be released has transportation or utility
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facilities located upon it, Mortgagor shall retain an easement to
use such facilities to the extent necessary for the efficient
operation of the Collateral.
Mortgagee agrees that upon receipt of the items
required in this Section 26, it will promptly execute and deliver
to Mortgagor the proposed release prepared by Mortgagor covering
the portion of the Site to be released. In the event of any such
release, Mortgagor shall not be entitled to any postponement,
abatement or diminution of amounts payable on account of the
indebtedness secured hereby. Mortgagor shall pay all costs
(including without limitation reasonable legal fees, transfer
taxes, and recording fees) relating to such release.
27. Release of Collateral. (a) Mortgagor shall not
sell, lease (as lessor), transfer or dispose of any of the
Collateral except in accordance with the Financing Documents.
(b) Upon the request of Mortgagor, subject to
compliance with the Financing Documents, Mortgagee shall, at
Mortgagor's sole cost and expense, deliver and cause to be
delivered to Mortgagor such instruments prepared by Mortgagor as
are reasonably necessary to confirm the release of removed items
of the Equipment from the lien of this Mortgage and cancel any
security interest with respect thereto, provided that such
request complies with the Financing Documents. Mortgagor shall
pay all costs (including without limitation reasonable legal
fees, transfer taxes, and recording fees) relating to such
release.
28. Severability. In the event that any one or more
of the provisions contained in this Mortgage shall for any reason
be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provision of this Mortgage, but this Mortgage shall be
construed as if such invalid, illegal or unenforceable provision
had never been contained herein or therein.
29. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be
deemed given three (3) Business Days after mailing by registered
mail, postage prepaid, addressed as follows: if to Mortgagor, to
_________________________________________________________________
with a copy to
_______________________________________________________________
_______________________________________________________________;
if to Mortgagee, to Bankers Trust Company, Four Albany Street,
New York, New York 10006, with a copy to
_________________________________________________________________
_____________.
Any party hereto may, by written notice given hereunder,
designate any additional or different addresses to which
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subsequent notices, certificates or other communications shall be
sent.
30. Amendments, Changes and Modifications. This
Mortgage may not be effectively amended, restated, changed or
otherwise modified, or terminated, except as permitted under the
other Financing Documents. Mortgagor shall join in any such
amendment, change, modified or termination if required for such
agreement to be effective under applicable Law. No waiver of any
term, covenant or provision of this Mortgage shall be effective
unless given in writing by Mortgagee, and if so given by
Mortgagee, shall be effective only in the specific instance in
which given.
31. Fixture Financing Statement. This Mortgage shall
be recorded in the Office of the Judge of Probate, Mobile County,
Alabama and, from the date of its recording, this Mortgage shall
be effective as a fixture financing statement filed with respect
to all property constituting part of the Collateral that is or is
to become fixtures.
32. Invalidity of Certain Provisions. If the lien of
this Mortgage is invalid or unenforceable as to any part of the
Collateral, the unsecured or partially secured portion of the
Secured Obligations shall be completely paid prior to the payment
of the remaining and secured or partially secured portion of the
Secured Obligations and all payments made on the Secured
Obligations, whether voluntary or under foreclosure or other
enforcement action or procedure, shall be considered to have been
first paid on and applied to the full payment of that portion of
the Secured Obligations that is not secured or fully secured by
the lien of this Mortgage.
33. No Merger. If both the lessor's and lessee's
estates under any lease or any portion thereof that constitutes a
part of the Collateral shall, at any time, become vested in one
owner, this Mortgage and the lien created hereby shall not be
destroyed or terminated by application of the doctrine of merger
and in such event Mortgagee shall continue to have and enjoy all
of the rights and privileges of Mortgagee as to the separate
estates. In addition, upon the foreclosure of the lien of this
Mortgage on the Collateral pursuant to the provisions hereof, any
leases or subleases then existing and created by Mortgagor shall
not be destroyed or terminated by application of the Law of
merger or as a matter of Law or as a result of such foreclosure
unless Mortgagee or any purchaser at any such foreclosure sale
shall so elect. No act by or on behalf of Mortgagee or any such
purchaser shall constitute a termination of any lease or sublease
unless Mortgagee or such purchaser shall give written notice
thereof to such tenant or subtenant.
34. Matters in Bankruptcy. To the extent permitted by
applicable laws, Mortgagor hereby assigns to Mortgagee (a) its
right under Section 365 of the United States Bankruptcy Code and
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other applicable Laws to elect to assume or reject any or all of
the Conveyance Leases in the event of the bankruptcy or
insolvency of Mortgagor and to elect to remain in possession
under each of the Conveyance Leases in the event of the
bankruptcy of the lessor thereunder; and (b) its claims and
rights to the payment of the damages arising from a rejection, if
any, of any of the Conveyance Leases under Section 365 of the
United States Bankruptcy Code or other applicable Laws, it being
agreed, however, that provided no Mortgage Event of Default shall
have occurred, Mortgagee shall not make any decisions that affect
any of the Conveyance Leases in the event of the bankruptcy of
the lessor thereunder, without Mortgagor's prior consent.
35. Environmental Matters. (a) Mortgagor shall
comply, and shall use its best efforts to cause all other Persons
occupying or conducting operations on the Site or at the
Facilities to comply, in all material respects with all
Environmental Requirements pursuant to Section 5.7 of the
Indenture.
(b) Mortgagor shall indemnify and hold Mortgagee
harmless from and against any and all damages, penalties, fines,
claims, Liens, suits, liabilities, costs (including cleanup
costs) judgments and expenses (including attorneys', consultants'
or experts' fees and expenses) of every kind and nature suffered
by or asserted against Mortgagee as a direct or indirect result
of (i) any warrant or representation made by Mortgagor regarding
compliance with Environmental Requirements being false or untrue
in any respect or (ii) Mortgagor, any of the Facilities, the Site
or any other Person occupying or conducting operations on the
Site or at the Facilities, that fail to comply with any
Environmental Requirement, including, without limitation, any
Environmental Requirement relating to the elimination or removal
of Hazardous Materials.
(c) Mortgagor's obligations to Mortgagee under this
Section 35 shall not be limited to any extent by the term of the
First Mortgage Bonds, the Tax Exempt Bonds or the other Financing
Documents, and shall continue, survive, and remain in full force
and effect notwithstanding payment in full and satisfaction of
the Mortgage or any other Loan Document or foreclosure under this
Mortgage or delivery of a deed-in-lieu of foreclosure.
36. Estoppel Affidavits. Mortgagor, within ten (10)
days after written request from Mortgagee, shall furnish a
written statement, setting forth the unpaid principal of, and
interest on, the Secured Obligations and confirming that no
offsets or defenses exist against payments owing to Mortgagee,
including principal or interest.
37. Assignment. Mortgagee may assign this Mortgage to
any successor Collateral Agent under and in accordance with the
Intercreditor Agreement.
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38. Entire Agreement. Mortgagor acknowledges that the
Financing Documents set forth the entire agreement and
understanding of Mortgagor and Mortgagee with respect to the
matters set forth therein, and no oral or other agreements,
understanding, representations or warranties exist with respect
to those matters other than those set forth in the Financing
Documents.
39. Action Affecting the Collateral. (a) Mortgagor
agrees to appear in and contest any action or proceeding
purporting to adversely affect the security hereof or the rights
or powers of Mortgagee and to pay all costs and expenses of
Mortgagee, including costs of evidence of title and reasonable
attorneys' fees and expenses, in any such action or proceeding in
which Mortgagee may appear.
(b) Mortgagee shall have the right to appear in and
defend any action or proceeding brought with respect to the
Collateral and to bring any action or proceeding, in the name and
on behalf of Mortgagor or Mortgagee, that Mortgagee determines to
be necessary or reasonably advisable to protect its interest in
the Collateral if (i) Mortgagor fails to defend or bring such
action or proceeding, as appropriate, in a prompt and diligent
manner, or thereafter fails to proceed with diligence in the
defense or prosecution of the same or (ii) a Trigger Event shall
have occurred and be continuing and, except in the case of any
such Trigger Event that shall have resulted from a Bankruptcy
Event in respect of Mortgagor or Mobile Energy, Mortgagee shall
have received Senior Creditor Certificates with respect thereto
as specified in Section ( ) of the Intercreditor Agreement.
40. Actions by Mortgagee to Preserve the Collateral.
Except as hereinbefore expressly provided, upon the occurrence
and during the continuance of a Trigger Event and, except in the
case of any such Trigger Event that shall have resulted from a
Bankruptcy Event in respect of Mortgagor or Mobile Energy, after
receipt by Mortgagee of Senior Creditor Certificates with respect
thereto as specified in Section ( ) of the Intercreditor
Agreement, Mortgagee or any Senior Secured Party (upon notice to
Mortgagee and each other Senior Secured Party), without
obligation so to do and without notice to or demand upon
Mortgagor and without releasing Mortgagor from any obligation,
may make any payment or do any act as and in the manner provided
in the Financing Documents in such manner and to such extent as
Mortgagee or such Senior Secured Party may deem necessary to
protect the security hereof. In connection therewith (without
limiting any general powers of Mortgagee or such Senior Secured
Party), each of Mortgagee and such Senior Secured Party shall
have and is hereby given the right, but not the obligation, (i)
to the fullest extent permitted in Law and in accordance with the
Intercreditor Agreement and the other Project Documents, to make
additions, alterations, repairs and improvements to the
Collateral that it may consider necessary to keep the Collateral
in good condition and repair and (ii) in exercising such powers,
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to pay necessary expenses, including engagement of counsel or
other necessary or desirable consultants. Mortgagor shall,
immediately upon demand therefor by Mortgagee or such Senior
Secured Party, pay all costs and expenses incurred by Mortgagee
or such Senior Secured Party in connection with the exercise by
Mortgagee or such Senior Secured Party of the foregoing rights,
including without limitation, costs of evidence of title, court
costs, appraisals, surveys and reasonable attorneys' fees and
expenses.
41. Remedies Not Exclusive. Mortgagee shall be
entitled to enforce payment and performance of any indebtedness
or obligations secured hereby and to exercise all rights and
powers granted under this Mortgage or under any other Security
Document or any other agreement or any Laws now or hereafter in
force, notwithstanding some or all of the indebtedness and
obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, deed of trust, pledge, Lien,
assignment or otherwise. Neither the acceptance of this Mortgage
nor its enforcement, whether by court action or pursuant to the
power of sale or other powers herein contained, shall prejudice
or in any manner affect Mortgagee's right to realize upon or
enforce any other security now or hereafter held by Mortgagee, it
being agreed that Mortgagee shall be entitled to enforce this
Mortgage and any other security now or hereafter held by
Mortgagee in such order and manner as it may in its absolute
discretion determine. No remedy herein conferred upon or
reserved is intended to be exclusive of any other remedy herein
or by Law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now
or hereafter existing at Law or in equity or by statute. Every
right, power or remedy given by any of the Security Documents to
Mortgagee may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by
Mortgagee.
42. Relationship. Nothing herein is intended to
create, or shall in any event or under any circumstance be
construed as creating, a partnership, joint venture, tenancy-in-
common, joint tenancy or other relationship of any nature
whatsoever between Mortgagee and Mortgagor other than as lender
and borrower.
43. Time of the Essence. TIME IS OF THE ESSENCE WITH
RESPECT TO EACH AND EVERY COVENANT, AGREEMENT AND OBLIGATION OF
MORTGAGOR UNDER THIS MORTGAGE AND THE OTHER FINANCING DOCUMENTS.
44. Severance of Counterclaims. In the event of
foreclosure of this Mortgage, any and all counterclaims filed by
Mortgagor against Mortgagee, to the extent permitted by Law,
shall be severed by the court having jurisdiction over the
foreclosure action, for all purposes from the basic foreclosure
action, on an ex parte basis and without notice to Mortgagor.
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Mortgagor, by its execution and delivery hereof, hereby expressly
consents and agrees to such severance.
45. Notice Limiting Advances. Mortgagor hereby waives
the right to limit the maximum principal amount that may be
secured by this Mortgage and in accordance with the Indenture and
agrees that all sums advanced under and pursuant to this Mortgage
and any Financing Document shall be secured hereby. The filing
or attempted filing of any notice limiting, or purporting to
limit, the maximum principal amount that may be secured by this
Mortgage shall be a Mortgage Event of Default.
46. Governing Law. THIS MORTGAGE IS GOVERNED BY AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
ALABAMA.
47. Shared Draftsmanship. If there shall be any
ambiguity in the terms of this Mortgage, the doctrine of
construction that holds that the language of the document shall
be construed against its drafter shall not apply as all parties
have shared in the drafting of this Mortgage.
48. No Third Party Beneficiary. This Mortgage and the
other Security Documents are for the sole benefit of Mortgagor,
Mortgagee, and all Senior Secured Parties, and are not for the
benefit of any third party, and no third party shall gain any
subrogation rights against Mortgagor or in, to or with respect to
any portion of the Collateral by reason of this Mortgage or the
provisions hereof.
49. Security Only. This Mortgage is granted for
security purposes only. Accordingly, except as otherwise
permitted by the Security Documents or as otherwise specifically
provided in this Mortgage, Mortgagee shall not enforce
Mortgagor's rights with respect to the Collateral until such time
as a Trigger Event shall have occurred and be continuing and,
except in the case of any such Trigger Event that shall have
resulted from a Bankruptcy Event in respect of Mortgagor or
Mobile Energy, Mortgagee shall have received Senior Creditor
Certificates with respect thereto as specified in Section 5.1(a)
of the Intercreditor Agreement.
50. Release by Mortgagee. Upon the payment,
performance and satisfaction in full of the Secured Obligations,
as set forth above in the granting clause of this Mortgage,
Mortgagee shall at Mortgagor's request and expense, promptly
release the lien of this Mortgage or reconvey the Collateral to
Mortgagor or the person or persons entitled thereto by an
appropriate instrument duly acknowledged and in proper form for
recording.
51. Further Assurances. Mortgagor shall, at its sole
cost and without expense to Mortgagee, on demand, do, execute,
acknowledge and deliver all and every such further acts, deeds,
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conveyances, mortgages, assignments, notices of assignment,
transfers and assurances as Mortgagee shall, from time to time,
reasonably require for better assuring, conveying, assigning,
transferring and confirming unto Mortgagee the property and
rights hereby mortgaged or assigned or intended now or hereafter
so to be, or that Mortgagor may be or may hereafter become bound
to convey, mortgage or assign to Mortgagee, or for carrying out
the intention or facilitating the performance of the terms of
this Mortgage, or for filing, registering or recording this
Mortgage.
52. Conflict with Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein or in
any of the other Financing Documents, all rights, duties,
obligations and indemnities of the Mortgagee hereunder (including
the standard of care pursuant to which it acts) shall be governed
by the provisions of the Intercreditor Agreement, including but
not limited to the exercise of any and all remedies hereunder.
In the event of a conflict between this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor
Agreement shall control.
53. Effect of Termination of Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, if the
Intercreditor Agreement shall be terminated while this Mortgage
remains in effect, each reference in this Mortgage to a Trigger
Event shall be deemed to be a reference to a Mortgage Event of
Default and no Senior Creditor Certificates under the
Intercreditor Agreement shall be required to be received by
Mortgagee prior to its exercise of remedies hereunder and the
term "Mortgage Event of Default" shall be deemed to include any
payment default with respect to the Secured Obligations.
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be duly executed as or the date first written above.
MORTGAGOR:
MOBILE ENERGY SERVICES
COMPANY, L.L.C., an Alabama
limited liability company
By:___________________________
Name:______________________
Title:_____________________
MORTGAGEE:
BANKERS TRUST COMPANY, a New
York banking corporation
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By:___________________________
Name:______________________
Title:_____________________
STATE OF ___________ )
) ss.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me
this ____ day of _______ 1995, by _____________________,
of MOBILE ENERGY SERVICES COMPANY, L.L.C., an Alabama limited
liability company, on behalf of the company. The above-named
individual ( ) is personally known to me or ( ) has produced the
following identification ______________________ which is current
or has been issued within the past five years and bears a serial
or other identifying number and did (did not) take an oath.
___________________________________
Print Name:________________________
NOTARY PUBLIC-STATE OF ____________
Commission Number:_________________
My commission expires:_____________
(Notarial Seal)
STATE OF ___________ )
) ss.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me
this ____ day of _______ 1995, by _____________________,
of BANKERS TRUST COMPANY, a New York banking corporation, on
behalf of the corporation. The above-named individual ( ) is
personally known to me or ( ) has produced the following
identification ______________________ which is current or has
been issued within the past five years and bears a serial or
other identifying number and did (did not) take an oath.
___________________________________
Print Name:________________________
NOTARY PUBLIC-STATE OF ____________
Commission Number:_________________
My commission expires:_____________
(Notarial Seal)
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EXHIBIT "A"
THE LEASED PREMISES
(To be supplied by the title company)
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EXHIBIT "B"
THE CONVEYANCE LEASES
(To be confirmed with the title company)
ALL OF THE FOLLOWING DOCUMENTS HAVE BEEN CONVEYED BY MOBILE
ENERGY SERVICES COMPANY, INC. (FORMERLY KNOWN AS TO MOBILE ENERGY
SERVICES HOLDINGS, INC.) TO MOBILE ENERGY SERVICES COMPANY,
L.C.C. BY VIRTUE OF THAT CERTAIN OMNIBUS DEED, BILL OF SALE,
GENERAL ASSIGNMENT AND CONVEYANCE, OF EVEN DATE HEREWITH:
a) That certain Construction, Financing and Installment Sale
Agreement between THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MOBILE, ALABAMA and SCOTT PAPER COMPANY, dated as of
April 1, 1973, recorded in the Office of the Judge of
Probate, Mobile County, Alabama in Real Property Book ____
at Page ____, as amended by a First Supplemental
Construction, Financing and Installment Sale Agreement,
dated as of September 1, 1976, recorded in the Office of the
Judge of Probate, Mobile County, Alabama in Real Property
Book 1625 at Page 496, and a Second Supplemental Financing
and Installment Sale Agreement, dated as of October 1, 1980,
recorded in the Office of the Judge of Probate, Mobile
County, Alabama in Real Property Book 2159 at Page 199, as
partially assigned to MOBILE ENERGY SERVICES COMPANY, INC.
by that certain Lease and Assignment Agreement, dated as of
December 12, 1994.
b) That certain Construction, Financing and Installment Sale
Agreement between THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MOBILE, ALABAMA and SCOTT PAPER COMPANY, dated as of
September 1, 1976, recorded in the Office of the Judge of
Probate, Mobile County, Alabama in Real Property Book 1625
at Page 541, as partially assigned to MOBILE ENERGY SERVICES
COMPANY, INC. by that certain Lease and Assignment
Agreement, dated as of December 12, 1994.
c) That certain Woodyard Facilities Lease and Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MOBILE,
ALABAMA and SCOTT PAPER COMPANY, dated as of December 1,
1983.
d) That certain Utilities Land Sublease between SCOTT PAPER
COMPANY and THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
MOBILE, ALABAMA, dated as of December 1, 1983, recorded in
the Office of the Judge of Probate, Mobile County, Alabama
in Real Property Book 2557 at Page 176, as amended by that
certain Amendment No. 1 to Utilities Land Sublease, dated as
of December 1, 1984, and by that certain Amendment No. 2 to
Utilities Land Sublease, dated as of November 8, 1994.
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<PAGE>
e) That certain Woodyard Land Sublease No. 2 between THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MOBILE, ALABAMA
and SCOTT PAPER COMPANY, dated as of December 1, 1984.
f) That certain Land Lease between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF MOBILE, ALABAMA and SCOTT PAPER
COMPANY, dated as of December 1, 1984.
g) That certain Facilities Lease and Agreement between THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MOBILE, ALABAMA
and SCOTT PAPER COMPANY, dated as of December 1, 1984, as
amended by that certain First Supplemental Facilities Lease
and Agreement, dated as of June 1, 1985, recorded in the
Office of the Judge of Probate, Mobile County, Alabama in
Real Property Book 2770, Page 2770, at Page 240, and that
certain Second Supplemental Facilities Lease and Agreement,
dated as of November 8, 1994, as assigned by that certain
Sublease and Assignment Agreement, dated as of December 12,
1994.
h) That certain Lease and Agreement between THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF MOBILE, ALABAMA and SCOTT
PAPER COMPANY, dated as of December 1, 1984, recorded in the
Office of the Judge of Probate, Mobile County, Alabama in
Real Property Book 2702 at Page 436, as amended by that
certain Amendment No. 1 to Lease and Agreement, dated as of
November 8, 1994, and by Amendment No. 2 to Lease and
Agreement, dated as of December 9, 1994, as assigned by that
certain Lease Assignment and Assumption Agreement between
SCOTT PAPER COMPANY and MOBILE ENERGY SERVICES COMPANY,
INC., dated as of December 12, 1994.
i) That certain Recovery Boiler Facilities Lease and Agreement
between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
MOBILE, ALABAMA and SCOTT PAPER COMPANY, dated as of
December 1, 1984, recorded in the Office of the Judge of
Probate, Mobile County, Alabama in Real Property Book ____
at Page ____, as assigned to MOBILE ENERGY SERVICES COMPANY,
INC. by that certain Lease Assignment and Assumption
Agreement, dated as of December 12, 1994.
j) That certain Land Lease between SCOTT PAPER COMPANY and THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MOBILE, ALABAMA
dated as of December 1, 1994, recorded in the Office of the
Judge of Probate, Mobile County, Alabama in Real Property
Book ____ at Page ____.
k) That certain Lease and Assignment Agreement between SCOTT
PAPER COMPANY and MOBILE ENERGY SERVICES COMPANY, INC.,
dated as of December 12, 1994.
l) That certain Lease Agreement between SCOTT PAPER COMPANY and
MOBILE ENERGY SERVICES COMPANY, INC., dated as of December
12, 1994, a Memorandum of Lease of which has been recorded
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<PAGE>
in the Office of the Judge of Probate, Mobile County,
Alabama in Real Property Book 4222 at Page 1240.
m) That certain Lease and Assignment Agreement between SCOTT
PAPER COMPANY and MOBILE ENERGY SERVICES COMPANY, INC.,
dated as of December 12, 1994.
n) That certain Supplementary Lease Agreement between SCOTT
PAPER COMPANY and MOBILE ENERGY SERVICES COMPANY, INC.,
dated as of December 12, 1994, a Memorandum of Lease of
which has been recorded in the Office of the Judge of
Probate, Mobile County, Alabama in Real Property Book 4222
at Page 1248, as amended by that certain letter agreement,
dated as of December 15, 1994.
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EXHIBIT "C"
THE EASEMENTS
(To be confirmed with the title company)
1. That certain Easement Deed between S.D. WARREN COMPANY and
MOBILE ENERGY SERVICES COMPANY, INC., dated as of December
12, 1994, recorded in the Office of the Judge of Probate,
Mobile County, Alabama in Real Property Book ____ at Page
____, as assigned to Mortgagee by that certain Omnibus Deed,
Bill of Sale, General Assignment and Conveyance, of even
date herewith, and to be recorded in the Office of the Judge
of Probate, Mobile County, Alabama.
2. That certain Easement Deed between SCOTT PAPER COMPANY and
MOBILE ENERGY SERVICES COMPANY, INC., dated as of December
12, 1994, recorded in the Office of the Judge of Probate,
Mobile County, Alabama in Real Property Book ____ at Page
____, as assigned to Mortgagee by that certain Omnibus Deed,
Bill of Sale, General Assignment and Conveyance, of even
date herewith, and to be recorded in the Office of the Judge
of Probate, Mobile County, Alabama.
3. That certain Easement Deed between SCOTT PAPER COMPANY and
MOBILE ENERGY SERVICES COMPANY, INC., dated as of December
12, 1994, recorded in the Office of the Judge of Probate,
Mobile County, Alabama in Real Property Book ____ at Page
____, as assigned to Mortgagee by that certain Omnibus Deed,
Bill of Sale, General Assignment and Conveyance, of even
date herewith, and to be recorded in the Office of the Judge
of Probate, Mobile County, Alabama.
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EXHIBIT "D"
DEFINITIONS
Capitalized terms used but not defined in this Mortgage
shall have the following meanings:
(To be supplied from the Trust Indenture)
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Exhibit B-5(b)
DRAFT
6/21/95
ASSIGNMENT AND SECURITY AGREEMENT
between
MOBILE ENERGY SERVICES COMPANY, L.L.C.,
as Debtor,
and
BANKERS TRUST COMPANY,
as the Secured Party
Dated as of (_____), 1995
<PAGE>
TABLE OF CONTENTS
Page
1. Definitions and other Provisions of Interpretation . . . -1-
2. Creation of Security Interest . . . . . . . . . . . . . . -1-
3. Representations, Warranties and Covenants . . . . . . . . -4-
4. Default . . . . . . . . . . . . . . . . . . . . . . . . . -6-
5. Rights and Remedies Upon Security Agreement Event of
Default . . . . . . . . . . . . . . . . . . . . . . . . -6-
6. Assignment of Governmental Approvals . . . . . . . . . . -8-
7. Security Interest Absolute . . . . . . . . . . . . . . . -8-
8. Attorney-in-Fact . . . . . . . . . . . . . . . . . . . . -9-
9. Secured Party and Senior Secured Parties May Perform . -10-
10. Debtor Remains Liable . . . . . . . . . . . . . . . . -10-
11. Indemnification; Subrogation; Waiver of Offset . . . . -10-
12. Reasonable Care . . . . . . . . . . . . . . . . . . . -11-
13. Waivers of Rights Inhibiting Enforcement . . . . . . . -11-
14. No Duty on Secured Party's Part . . . . . . . . . . . -12-
15. Notices . . . . . . . . . . . . . . . . . . . . . . . -12-
16. Other Remedies . . . . . . . . . . . . . . . . . . . . -12-
17. Waiver . . . . . . . . . . . . . . . . . . . . . . . . -12-
18. Time of Essence . . . . . . . . . . . . . . . . . . . -12-
19. Successors and Assigns . . . . . . . . . . . . . . . . -12-
20. Headings . . . . . . . . . . . . . . . . . . . . . . . -12-
21. Governing Law . . . . . . . . . . . . . . . . . . . . -12-
22. Amendments, Changes and Modifications . . . . . . . . -13-
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23. Assignment . . . . . . . . . . . . . . . . . . . . . . -13-
24. Severability . . . . . . . . . . . . . . . . . . . . . -13-
25. Secured Party Not Liable . . . . . . . . . . . . . . . -13-
26. No Recourse . . . . . . . . . . . . . . . . . . . . . -13-
27. Counterparts . . . . . . . . . . . . . . . . . . . . . -13-
28. Continuing Assignment, Pledge and Security Interest . -14-
29. Security Only . . . . . . . . . . . . . . . . . . . . -14-
30. Payments Set Aside . . . . . . . . . . . . . . . . . . -14-
31. Further Assurances . . . . . . . . . . . . . . . . . . -14-
32. Shared Drafting . . . . . . . . . . . . . . . . . . . -14-
33. Conflict with Intercreditor Agreement; Conflict with
Disbursement Agreement . . . . . . . . . . . . . . . . -14-
34. Effect of Termination of Intercreditor Agreement . . . -15-
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This ASSIGNMENT AND SECURITY AGREEMENT (this "Security
Agreement"), dated as of ( ), 1995, between MOBILE ENERGY
SERVICES COMPANY, L.L.C., an Alabama limited liability company
("Debtor"), and BANKERS TRUST COMPANY, a New York corporation, as
Collateral Agent under the Intercreditor Agreement referred to
below (the "Secured Party").
W I T N E S S E T H :
WHEREAS, in consideration of (i) the execution and
delivery by the Secured Party and the Senior Secured Parties
(as defined below) of the Financing Documents (as defined
below) to which they are parties, (ii) the Senior Secured
Parties making available to Debtor the Financing Commitments
(as defined below) and advancing the Financing Liabilities
(as defined below) and (iii) the Secured Party providing
certain services under this Agreement, the Mortgage (as
defined below), the Intercreditor Agreement and any other
Financing Documents to which the Secured Party is a party,
the Secured Party requires Debtor to grant the security
interest contemplated by this Agreement to the Secured Party
to secure the Secured Obligations (as defined below); and
WHEREAS, this Agreement is intended as security for the
Secured Obligations.
NOW, THEREFORE, in consideration of the premises set forth
above and the mutual covenants contained herein, in order to
induce each Senior Secured Party to issue or make available the
Secured Obligations pursuant to the terms and provisions of the
Financing Documents to which each such Senior Secured Party is a
party and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and FOR THE
PURPOSE OF SECURING the payment and performance of the Secured
Obligations, which Secured Obligations may increase, decrease and
increase again, from time to time, the parties hereto hereby
agree as follows:
1. Definitions and other Provisions of Interpretation. For
all purposes of this Agreement, except as otherwise expressly
provided in this Agreement or unless the context otherwise
requires, all terms used herein shall have the meanings set forth
in Appendix A.
2. Creation of Security Interest. (a) As security for the
full payment, observance and performance when due (whether at
stated maturity, by acceleration or otherwise) of any and all of
the Secured Obligations now existing or hereafter arising, Debtor
hereby mortgages, pledges and collaterally assigns to the Secured
Party, and grants to and in favor of the Secured Party a
continuing lien upon, and a continuing security interest in, all
estate, right, title and interest (whatever it may be) of Debtor
in, to and under the following (whether now existing or hereafter
acquired, whether or not the same is now contemplated,
anticipated or foreseeable, whether or not the same is subject to
Article 8 or 9 of the Uniform Commercial Code or constitutes
<PAGE>
Collateral by reason of one or more than one of the following
paragraphs and wherever the same may be located) (collectively,
the "Collateral"):
(i) all Project Contracts and any other Contract,
commitment or understanding heretofore or hereafter executed
by (or on behalf of) Debtor in connection with the Energy
Complex, the Site or any of the Project Documents (the
"Assigned Agreements"), including (A) all rights of Debtor
to receive monies due and to become due, and all monies
actually received by Debtor, under or pursuant to the
Assigned Agreements, (B) all rights of Debtor to receive
proceeds of any performance or payment bond, insurance,
indemnity, warranty or guaranty with respect to the Assigned
Agreements, (C) all claims of Debtor for damages arising out
of or for breach of or default under the Assigned Agreements
and (D) all rights of Debtor to take any action to
terminate, amend, supplement, modify or waive performance of
the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
provided, however, that unless a Trigger Event shall have
occurred and be continuing and, except in the case of any
Trigger Event that shall have resulted from a Bankruptcy
Event in respect of either of the Mobile Energy Parties, the
Secured Party shall have received the Senior Creditor
Certificates specified in Section 5.1(a) of the
Intercreditor Agreement, Debtor may exercise all of the
foregoing rights in any lawful manner not inconsistent with
this Agreement, the Mortgage or any of the other Security
Documents;
(ii) all automobiles, trucks, boats and other rolling
stock or moveable personal property ("Rolling Stock"),
including Rolling Stock for which the title thereto is
evidenced by a certificate of title issued by the United
States or a state that permits or requires a lien thereon to
be evidenced upon such certificate, in which Debtor now or
at any time in the future may have an interest. In
connection therewith, Debtor shall notify the Secured Party
before acquiring any such Rolling Stock, and provide the
Secured Party with (A) all lien entry forms and similar
documents, duly completed, executed and acknowledged, (B)
the certificates of title to such Rolling Stock and (C) such
other information or documents, in each case, to the extent
required or reasonably desirable in order to enable the
Secured Party to perfect the lien granted hereunder on such
Rolling Stock. Upon execution of such lien entry forms and
other documents by the Secured Party, Debtor shall, at its
sole cost and expense, cause such lien entry forms and other
documents to be presented to the appropriate authorities in
order to perfect the lien granted hereunder on such Rolling
Stock for the benefit of the Secured Party;
(iii) to the extent permitted by Law, all Governmental
Approvals relating to the Energy Complex; provided, however,
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that any of such Governmental Approvals that by their terms
or by operation of Law would become void, voidable,
terminable or revocable or would constitute a breach or
default thereunder if pledged or assigned hereunder or if a
security interest therein were granted hereunder are
expressly excepted and excluded from the lien and terms of
this Agreement to the extent necessary to avoid such
voidness, voidability, terminability or revocability;
(iv) all Equipment (as such term is defined in the
Mortgage);
(v) all accounts (as defined in the Uniform Commercial
Code), together with any right to payment for goods sold or
leased or for services rendered in connection with such
accounts, whether or not such right to payment has been
earned by performance, and all agreements, rights,
interests, inventory (including fuel supplies), goods,
chattel paper, documents, instruments, general intangibles,
fixtures, trade fixtures, consumer goods, money and other
assets owned by Debtor on the date hereof or hereafter
arising or acquired, including the 1994 Bonds, the
Improvements (as such term is defined in the Mortgage), and
designs, plans and specifications relating to the Site and
the facilities owned by Debtor on the date hereof or
hereafter acquired, if applicable, all offsets or allowances
under the Clean Air Act Amendments of 1990 and any
implementing state Laws in respect thereof and any right,
title or interest of Debtor under any indemnity, warranty or
guaranty in respect of the Site and the Energy Complex or of
any of the foregoing and any rents, revenues, incomes and
profits in respect of the Site and the Energy Complex;
(vi) all proceeds of and any unearned premiums on any
insurance policies covering the Collateral, including the
right to receive the proceeds of any insurance, judgments or
settlements made in lieu thereof for damage to the
Collateral;
(vii) (A) the Intercreditor Agreement Accounts, all
sums of money, from any source whatsoever, now or hereafter
transferred to and comprising the Intercreditor Agreement
Accounts or delivered to the Secured Party for deposit
therein, including all credit balances therein, any and all
cash and investments at any time on deposit in the
Intercreditor Agreement Accounts and any and all interest
and dividends or other income derived from such monies and
investments, and (B) all statements, certificates, passbooks
and instruments representing the Intercreditor Agreement
Accounts and all other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for the Intercreditor Agreement Accounts; and
(viii) to the extent not included in the foregoing, all
proceeds, products and accessions of and to any and all of
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the foregoing, including "proceeds" (within the meaning of
the Uniform Commercial Code) and whatever is received upon
any collection, exchange, sale or other disposition of any
of the Collateral, and any property into which any of the
Collateral is converted, whether cash or noncash proceeds,
and any and all other amounts paid or payable under or in
connection with any of the Collateral.
Notwithstanding the foregoing, the Security Interest granted
hereby in favor of the Secured Party shall be released without
condition as to monies deposited into any Indenture Account or
Tax-Exempt Indenture Account upon the deposit of such monies
therein, and the Collateral shall not include, and no Security
Interest is granted hereby in, any right, title or interest of
Debtor in any Indenture Account or Tax-Exempt Indenture Account,
all sums of money, from any source whatsoever, now or hereafter
transferred to or deposited into any Indenture Account or Tax-
Exempt Indenture Account or delivered to the Indenture Trustee or
the Tax-Exempt Indenture Trustee for deposit therein, including
all credit balances therein, any and all cash and investments at
any time on deposit in any Indenture Account or any Tax-Exempt
Indenture Account, and any and all interest, dividends and other
income derived from such monies and investments and all
certificates, passbooks and instruments representing any
Indenture Account or Tax-Exempt Indenture Account and all other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any Indenture
Account or Tax-Exempt Indenture Account.
It is the intention of the parties that the foregoing
description of the Collateral shall be sufficient, together with
the description of the Collateral set forth in the Mortgage, to
enable the Secured Party to take possession of, or foreclose
upon, all of the right, title and interest of Debtor in and to
the Shared Collateral, including the Site and the Energy Complex
and any and all real property and personal property, tangible and
intangible, used or useable in connection therewith, and to
enable the Secured Party or its designee to, in accordance with
the terms hereof and of the Mortgage, operate, sell or otherwise
dispose of the entire interest of Debtor in and to the Shared
Collateral, including the Site and the Energy Complex or any part
thereof, upon the occurrence and during the continuance of a
Trigger Event and, except in the case of any such Trigger Event
that shall have resulted from a Bankruptcy Event in respect of
either of the Mobile Energy Parties, after receipt by the Secured
Party of the Senior Creditor Certificates specified in
Section 5.1(a) of the Intercreditor Agreement; provided, however,
that all of the Collateral is hereby assigned to the Secured
Party solely as security, and the Secured Party shall have no
duty, liability or obligation whatsoever to Debtor with respect
to any of the Collateral, unless the Secured Party so elects in
writing consistent with its rights under this Agreement.
(b) This Agreement secures, in accordance with the
provisions hereof, the Secured Obligations.
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3. Representations, Warranties and Covenants. Debtor
hereby represents, warrants and covenants as follows:
(a) The Security Interest granted and created pursuant
to this Agreement is a legal and valid security interest in
the Collateral now owned by Debtor or hereafter acquired.
(b) The Security Interest granted and created pursuant
to this Agreement (i) with respect to such of the Collateral
in which a security interest may be perfected by the filing
of a Financing Statement under the Uniform Commercial Code
will, upon the filing of the necessary Financing Statements
in all appropriate jurisdictions, create a perfected first
priority security interest in such Collateral now owned by
Debtor or hereafter acquired, prior and superior to all
other Liens (other than Permitted Liens), and (ii) with
respect to all of the other Collateral to which the Uniform
Commercial Code is applicable (the "Possession Collateral")
will, upon the Secured Party's taking possession of the
Possession Collateral, create a perfected first priority
security interest in the Possession Collateral now owned by
Debtor or hereafter acquired, prior and superior to all
other Liens (other than Permitted Liens).
(c) Debtor is the legal and beneficial owner of the
Collateral now owned by it, and will be the legal and
beneficial owner of the interest in the Collateral hereafter
acquired by it, free and clear of all Liens (other than
Permitted Liens).
(d) No authorization, approval or other action by, and
no notice to or filing with, any Governmental Authority, any
regulatory body or any other Person is required of Debtor
with respect to the execution, delivery and performance of,
or the grant of the Security Interest pursuant to, this
Agreement (other than the filing of the Financing Statements
referred to in Section 3(b)).
(e) Debtor shall notify the Secured Party promptly in
writing of any claim against the Collateral adverse to the
interest of the Secured Party hereunder.
(f) Debtor agrees that from time to time upon the
request of the Secured Party, Debtor will, at its sole cost
and expense, promptly execute and deliver all further
instruments and documents, and take all further action, that
may be necessary or advisable, or that the Secured Party may
request, in order to perfect, maintain, preserve and protect
the Security Interest granted or purported to be granted
hereby in the Collateral, maintain, preserve and protect the
Collateral, or to enable the Secured Party to exercise and
enforce its rights and remedies hereunder with respect to
the Collateral. Without limiting the generality of the
foregoing, Debtor will (i) if any Collateral shall be
evidenced by a promissory note or other instrument, deliver
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and pledge to the Secured Party hereunder such note or
instrument duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and
substance satisfactory to the Secured Party, and (ii)
execute and file such financing or continuation statements,
or amendments thereto and assignments thereof, and such
other instruments, endorsements or notices, as may be
necessary, or as the Secured Party may request, in order to
perfect, maintain, preserve and protect the Security
Interest granted or purported to be granted hereby. Debtor
hereby authorizes the Secured Party to file one or more
financing or continuation statements, and amendments thereto
and assignments thereof, relating to all or any part of the
Collateral without the signature of Debtor where permitted
by Law.
(g) Debtor shall keep and maintain, at its sole cost
and expense, satisfactory and complete records of the
Collateral. Debtor shall furnish to the Secured Party from
time to time statements and schedules further identifying
and describing the Collateral and such other reports in
connection with the Collateral (including such file search
reports from such Uniform Commercial Code and other filing
and recording offices and such opinions of counsel relating
to the Collateral and the attachment and perfection of the
Security Interest) as the Secured Party may request.
(h) Debtor shall not create, incur or permit to exist,
and shall defend the Collateral against and take such other
action as is necessary to remove, any Lien or claim on or to
the Collateral, other than Permitted Liens, and will defend
the right, title and interest of the Secured Party in and to
any of the Collateral against the claims and demands of all
Persons whomsoever. Except with respect to Permitted Liens,
Debtor shall not file or suffer to be on file, or authorize
or permit to be filed or to be on file, in any jurisdiction,
any financing statement or like instrument with respect to
the Collateral in which the Secured Party is not named as
the sole secured party.
(i) Debtor shall notify the Secured Party promptly if
any tangible items of Collateral, or any items that are to
become Collateral, are to be stored for any length of time
(other than temporary storage incident to transportation to
the Site) in any location other than the Site. The notice
shall specify, in such detail as is required by the Secured
Party, (i) the items that are to be stored, (ii) the
location at which such items are to be stored and the name
and address of the owner and operator of the storage
facility, (iii) the length of time that such items are to be
stored at such location and (iv) the name of the Person who
is the owner of such items. To the extent necessary, Debtor
shall execute additional security agreements, financing
statements and other related documents, covering the items
that are to be stored, so as to perfect a first priority
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security interest therein in favor of the Secured Party. If
for any reason a first priority security interest cannot be
perfected in the items stored or to be stored, Debtor shall
promptly transport such items to the Site. Upon
instructions from the Secured Party, Debtor shall obtain
such additional insurance on the Collateral stored at any
location other than the Site as the Secured Party, based on
the advice of the Independent Insurance Advisor, reasonably
deems necessary, consistent with the requirements of the
Financing Documents, to protect the Secured Party's
interests.
(j) In the event that Debtor shall receive directly
from any party to the Assigned Agreements any payments
thereunder, Debtor shall receive such payments in
constructive trust for the benefit of the Secured Party,
shall segregate such payments from other funds of Debtor and
shall forthwith transmit and deliver such payments to the
Secured Party in the same form as so received (with any
necessary endorsements).
4. Default. Any of the following events shall be deemed an
"Security Agreement Event of Default" under this Agreement:
(a) a "Trigger Event" occurs and is continuing under
the Intercreditor Agreement;
(in lieu of the following Security Agreement Events of
Default, the Indenture will incorporate them as appropriate)
(b) the failure by Debtor to perform or observe any
covenant set forth in Section 3(e), 3(f), 3(h) or 3(j), and
such failure continues for more than thirty (30) days after
Debtor has knowledge of such failure;
(c) the failure by Debtor to perform or observe any
covenant set forth in Sections 3(g) and 3(i), and such
failure continues for more than thirty (30) days after
Debtor has received written notice of such failure from the
Secured Party or any Senior Secured Party; or
(d) the failure by Debtor to perform or observe any
other covenant or agreement to be performed or observed by
it hereunder (including a payment covenant or agreement) for
more than thirty (30) days after either of the Mobile Energy
Parties has knowledge of such failure; provided, however,
that if (and for so long as an Authorized Officer of Debtor
provides an Officer's Certificate certifying that) (i) such
failure is susceptible of being remedied, and either of the
Mobile Energy Parties is diligently attempting to remedy
such failure, and (ii) no other Security Agreement Event of
Default has occurred and is continuing, then Debtor may
continue to effect such cure of the default for an
additional one hundred twenty (120) days.
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5. Rights and Remedies Upon Security Agreement Event of
Default. (a) Upon the occurrence and during the continuance of
a Trigger Event and, except in the case of any such Trigger Event
that shall have resulted from a Bankruptcy Event in respect of
either of the Mobile Energy Parties, after the Secured Party
shall have received the Senior Creditor Certificates required in
Section 5.1(a) of the Intercreditor Agreement, the Secured Party
may, in accordance with its obligations under the Intercreditor
Agreement, do one or more of the following:
(i) notwithstanding anything in the Financing
Documents to the contrary, take all cash held by the Secured
Party (including any resulting from the liquidation of
investments) as Collateral, including all cash proceeds
received or receivable by the Secured Party in respect of
the Collateral, and use such cash for such purposes in
accordance with its obligations under the Intercreditor
Agreement, and in the interest of the Energy Complex and/or
apply the same in whole or in part, in satisfaction of all
or any part of the Secured Obligations (whether or not due
and payable) in the manner specified in Section 5(b);
(ii) upon notice to Debtor, which notice need not be in
writing (but which notice shall promptly be confirmed in
writing), make such payments and do such acts in accordance
with its obligations under the Intercreditor Agreement, to
protect, maintain, preserve, perfect or continue the
perfection of the Security Interest in the Collateral and to
maintain, preserve and protect the Collateral, including
paying, purchasing, contesting or compromising any Lien that
is, or purports to be, prior to or superior to the Security
Interest granted hereunder, and commencing, appearing or
otherwise participating in or controlling any action or
proceeding purporting to affect the Security Interest in or
ownership of the Collateral;
(iii) foreclose this Agreement as herein provided or in
any manner permitted by Law and exercise any and all of the
rights and remedies conferred upon the Secured Party by the
Security Documents either concurrently or in such order as
the Secured Party may determine without affecting the rights
or remedies to which the Secured Party may be entitled under
the Security Documents;
(iv) require Debtor to, and Debtor hereby agrees that
it will, at its expense and upon request of the Secured
Party forthwith, assemble all or part of the Collateral as
directed by the Secured Party and make it available to the
Secured Party at a place to be designated by the Secured
Party that is reasonably convenient to both parties;
(v) without notice or demand or legal process, enter
upon any premises of Debtor and take possession of the
Collateral;
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(vi) without notice, except as specified below, sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Secured Party's
offices or elsewhere, at such time or times, for cash, on
credit or for future delivery, and at such price or prices
and upon such other terms as the Secured Party may deem
commercially reasonable. Debtor agrees that, to the extent
notice of sale shall be required by Law, at least ten (10)
days' notice to Debtor of the time and the place of any
public sale or the time after which any private sale is to
be made shall constitute reasonable notification. At any
sale of the Collateral, if permitted by Law, the Secured
Party or any Senior Secured Party may bid (which bid may be,
in whole or in part, in the form of cancellation of
indebtedness) for the purchase of the Collateral or any
portion thereof for the account of the Secured Party or such
Senior Secured Party. The Secured Party shall not be
obligated to make any sale of Collateral regardless of
notice of sale having been given. The Secured Party may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and
place to which it was so adjourned. Debtor authorizes the
Secured Party, at any time and from time to time, to
execute, in connection with a sale of the Collateral
pursuant to the provisions of this Agreement, any
endorsements, assignments or other instruments of conveyance
or transfer with respect to the Collateral; and
(vii) exercise with respect to the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
secured party after default under the Uniform Commercial
Code.
(b) The proceeds of any sale or realization of the
Collateral shall be applied in accordance with Section 6.1 of the
Intercreditor Agreement.
(c) The Secured Party may consult, at Debtor's expense,
with counsel (who may or may not be counsel to Debtor), and the
opinion of such counsel shall be full and complete authorization
and protection, and the Secured Party shall be entitled to
conclusively rely on the opinion of such counsel, in respect of
any action taken or not taken or suffered by the Secured Party
under this Agreement.
6. Assignment of Governmental Approvals. Upon the
occurrence and during the continuance of a Trigger Event and,
except in the case of any such Trigger Event that shall have
resulted from a Bankruptcy Event in respect of either of the
Mobile Energy Parties, after receipt by the Secured Party of the
Senior Creditor Certificates specified in Section 5.1(a) of the
Intercreditor Agreement, Debtor agrees to use its best efforts to
have renewed or extended in the name of the Secured Party (or
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other Person operating the Energy Complex) or otherwise to obtain
for the Secured Party (or such other Person) the benefits of all
of the Governmental Approvals to the extent that such
Governmental Approvals and other rights shall not be assignable
or transferable.
7. Security Interest Absolute. All rights of the Secured
Party hereunder, the Security Interest and all obligations of
Debtor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of
the Project Documents, any of the Collateral (including the
Assigned Agreements) or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any
consent to any departure from any of the Project Documents
or any of the Collateral (including the Assigned
Agreements);
(c) any exchange, release or non-perfection of any
Collateral or any other collateral, or any release or
amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Secured Obligations; or
(d) to the fullest extent permitted by Law, any other
circumstance that might otherwise constitute a defense
available to, or a discharge of, Debtor or any third party
pledgor.
8. Attorney-in-Fact. Debtor, until payment in full of the
Secured Obligations, irrevocably constitutes and appoints the
Secured Party, and any other Person that the Secured Party may
designate, to act, upon the occurrence and during the continuance
of a Trigger Event and, except in the case of any such Trigger
Event that shall have resulted from a Bankruptcy Event in respect
of either of the Mobile Energy Parties, after receipt by the
Secured Party of the Senior Creditor Certificates specified in
Section 5.1(a) of the Intercreditor Agreement, as Debtor's
attorney-in-fact (which appointment as attorney-in-fact shall be
coupled with an interest and be irrevocable), with full authority
in the place and stead of Debtor and in the name of Debtor or
otherwise, from time to time in the Secured Party's discretion,
to take any action and to execute any and all documents and
instruments that the Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement,
including:
(a) to receive, endorse and collect all instruments
made payable to Debtor representing any dividends, interest
payments or other distributions constituting Collateral or
any part thereof and to give full discharge for the same and
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to file any claim or to take any other action or proceeding
in any court of Law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of
collecting any and all of such dividends, payments or other
distributions;
(b) to pay or discharge taxes and Liens levied or
placed on the Collateral; and
(c) (i) to direct any party liable for any payment
under or with respect to any of the Collateral to make
payment of any and all monies due or to become due
thereunder or with respect thereto directly to the Secured
Party or as the Secured Party shall direct, (ii) to ask or
demand for, to collect and to receive payment of and receipt
for any and all monies, claims and other amounts due or to
become due at any time in respect of or arising out of any
Collateral, (iii) to commence and prosecute any suits,
actions or proceedings at Law or in equity in any court of
competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any
Collateral, (iv) to defend any suit, action or proceeding
brought against Debtor with respect to any Collateral, (v)
to settle, compromise or adjust any suit, action or
proceeding described in clauses (iii) and (iv) above and, in
connection therewith, to give such discharges or releases as
the Secured Party may deem appropriate and (vi) generally,
to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as
fully and completely as though the Secured Party were the
absolute owner thereof for all purposes and to do, at the
Secured Party's option and at Debtor's sole cost and
expense, at any time, or from time to time, all acts and
things that the Secured Party deems necessary to protect,
maintain, preserve or realize upon the Collateral and the
Security Interest granted herein and to effect the intent of
this Agreement, all as fully and effectively as Debtor might
do.
Debtor hereby ratifies all that the Secured Party shall do
or cause to be done as Debtor's attorney-in-fact consistent with
the foregoing. Debtor also authorizes the Secured Party, upon
the occurrence and during the continuance of a Trigger Event and,
except in the case of any such Trigger Event that shall have
resulted from a Bankruptcy Event in respect of either of the
Mobile Energy Parties, after receipt by the Secured Party of the
Senior Creditor Certificates specified in Section 5.1(a) of the
Intercreditor Agreement, to communicate in its own name with any
party to any Project Document at any time, with regard to any
matter relating to such Project Document.
9. Secured Party and Senior Secured Parties May Perform.
The Secured Party or any Senior Secured Party (upon notice to the
Secured Party and each other Senior Secured Party), without
releasing Debtor from any obligation, covenant or condition
-11-
<PAGE>
hereof, itself may (but shall not be obligated to) make any
payment or perform, or cause the performance of, any such
obligation, covenant, condition or agreement or any other action
in such manner and to such extent as the Secured Party may deem
necessary to protect, perfect, maintain, preserve or continue the
perfection of the Security Interest in the Collateral or to
protect, maintain or preserve the Collateral. Any costs or
expenses incurred by the Secured Party or any Senior Secured
Party in connection with the foregoing, including reasonable
attorneys' fees and expenses, shall constitute a part of the
Secured Obligations, shall bear interest at a rate per annum
equal to the then highest yield on any of the Outstanding Senior
Debt plus two percent (2%) and shall be payable upon demand by
the Secured Party or such Senior Secured Party, as the case may
be.
10. Debtor Remains Liable. Anything herein to the contrary
notwithstanding, Debtor shall remain liable under the Assigned
Agreements and any other Contracts included in the Collateral to
the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement
had not been executed. The exercise by the Secured Party of any
of the rights or remedies hereunder shall not release Debtor from
any of its duties or obligations under the Assigned Agreements or
any other Contracts included in the Collateral, except to the
extent Debtor is expressly released therefrom by the Secured
Party in writing. The Secured Party shall not have any
obligation or liability under the Assigned Agreements or any
other Contracts included in the Collateral by reason of this
Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of Debtor thereunder or to take
any action to collect or enforce any claim for payment assigned
hereunder, except to the extent the Secured Party expressly
assumes such obligations or duties in writing consistent with its
rights under this Agreement.
11. Indemnification; Subrogation; Waiver of Offset. (a)
Debtor shall indemnify the Secured Party from and against any and
all claims, losses and liabilities growing out of or resulting
from this Agreement or the Collateral or any part thereof
(including enforcement of this Agreement, but excluding any such
claims, losses or liabilities resulting from the Secured Party's
gross negligence or willful misconduct).
(b) Debtor waives any and all right to claim or recover
against the Secured Party, and its directors, officers,
employees, agents and representatives, for loss of or damage to
Debtor, the Collateral, Debtor's property or the property of
others under Debtor's control from any cause to the extent
insured against or required to be insured against by the
provisions of the Financing Documents, except for such loss or
damage to the extent due to gross negligence or willful
misconduct of the Secured Party or its directors, officers,
employees or representatives.
-12-
<PAGE>
12. Reasonable Care. The Secured Party shall exercise the
same degree of care hereunder as it exercises or would exercise
in connection with similar transactions for its own account. The
Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially
equal to that which the Secured Party accords or would accord
collateral held by the Secured Party in similar transactions for
its own account; provided, however, that in respect of any
Collateral constituting "instruments" or "chattel paper" (within
the meaning of the Uniform Commercial Code), the Secured Party
shall have no duty to preserve any rights therein against prior
parties.
Without limiting the generality of the foregoing and except
as otherwise provided by applicable Law, the Secured Party shall
not be required to marshall any collateral, including the
Collateral subject to the Security Interest created hereby, or to
resort to any item of Collateral in any particular order; and all
of the Secured Party's rights hereunder and in respect of such
Collateral shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it
lawfully may, Debtor hereby agrees that it will not invoke any
Law relating to the marshaling of collateral that might cause
delay in or impede the enforcement of the Secured Party's rights
under this Agreement, the Mortgage or under any other instrument
evidencing any of the Secured Obligations or under which any of
the Secured Obligations is outstanding or by which any of the
Secured Obligations is secured or guaranteed.
13. Waivers of Rights Inhibiting Enforcement. Debtor
waives (a) any claim that, as to any part of the Collateral, a
public sale, if Debtor elects so to proceed, is, in and of
itself, not a commercially reasonable method of sale for such
Collateral, (b) the right to assert in any action or proceeding
between it and the Secured Party any offsets or counterclaims
that it may have, (c) except as otherwise provided in any of the
Security Documents, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE SECURED PARTY'S
TAKING POSSESSION OR DISPOSITION OF ANY OF THE COLLATERAL,
INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT DEBTOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO
THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH
RESPECT TO THE ENFORCEMENT OF THE SECURED PARTY'S RIGHTS
HEREUNDER, (d) all rights of redemption, appraisement, valuation,
stay and extension or moratorium, (e) to the extent permitted by
Law, the benefits of all Laws referred to in Section 12 and (f)
all other rights the exercise of which would, directly or
indirectly, prevent, delay or inhibit the enforcement of any of
the rights or remedies under the Security Documents or the
absolute sale of the Collateral, now or hereafter in force under
any applicable Law, and Debtor, for itself and all who may claim
under it, insofar as it or they now or hereafter lawfully may,
-13-
<PAGE>
hereby waives the benefit of all such Laws and rights.
14. No Duty on Secured Party's Part. The powers conferred
on the Secured Party hereunder are solely to protect the Secured
Party's interests in the Collateral and shall not impose any duty
upon it to exercise any such powers. The Secured Party shall be
accountable only for amounts that it receives as a result of the
exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to Debtor for
any act or failure to act hereunder, except for its own gross
negligence or willful misconduct.
15. Notices. All notices, demands, requests and other
communications required or permitted hereunder shall be in
writing and shall be given and deemed to have been given in
accordance with Section 12.4 of the Intercreditor Agreement.
16. Other Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by Law.
The Secured Party shall have all of the rights and remedies
granted under the Security Documents and available at Law or in
equity, and these same rights and remedies may be pursued
separately, successively or concurrently against Debtor or any
collateral under the Security Documents, at the sole discretion
of the Secured Party. The application of the Collateral to
satisfy the Secured Obligations pursuant to the terms hereof
shall not operate to release Debtor from its Secured Obligations
until payment in full of any deficiency has been made in cash.
17. Waiver. By exercising or failing to exercise any of
its rights, options or elections hereunder (without also
expressly waiving the same in writing), the Secured Party shall
not be deemed to have waived any breach or default on the part of
Debtor or to have released Debtor from any of its obligations
secured hereby. No failure on the part of the Secured Party to
exercise, and no delay in exercising (without also expressly
waiving the same in writing), any right, power or privilege shall
preclude any other or further exercise thereof, or the exercise
of any other right, power or privilege.
18. Time of Essence. TIME IS OF THE ESSENCE WITH RESPECT
TO EACH AND EVERY COVENANT, AGREEMENT AND OBLIGATION UNDER THIS
AGREEMENT.
19. Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the parties
hereto shall bind and, to the extent permitted hereby, shall
inure to the benefit of and be enforceable by their respective
successors and assigns, whether so expressed or not.
20. Headings. The captions, headings and table of contents
used in this Agreement are for convenience only and shall not
affect the construction hereof.
21. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
-14-
<PAGE>
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, EXCEPT THAT SUCH LAWS SHALL NOT APPLY WITH RESPECT TO ANY
COLLATERAL WHERE, AND TO THE EXTENT THAT, IT IS NECESSARY TO
APPLY THE LAWS OF ANOTHER JURISDICTION TO PERFECT LIENS RELATING
TO DEBT ISSUED UNDER THE FINANCING DOCUMENTS.
22. Amendments, Changes and Modifications. This Agreement
may not be effectively amended or terminated except as permitted
by the Intercreditor Agreement.
23. Assignment. The Secured Party may assign this
Agreement to any successor Secured Party under and in accordance
with the Intercreditor Agreement.
24. Severability. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization, without
invalidating the remaining provisions hereof or affecting the
validity, enforceability or legality of such provision in any
other jurisdiction.
25. Secured Party Not Liable. Neither this Agreement nor
any action on the part of the Secured Party (other than an
express written assumption) shall constitute an assumption by the
Secured Party of any of the obligations of Debtor related to any
of the Collateral, and Debtor shall continue to be liable for all
such obligations whether incurred before or after a Security
Agreement Event of Default.
26. No Recourse. Satisfaction of the obligations of Debtor
under this Agreement shall be had solely from the assets of the
Mobile Energy Parties. No recourse shall be had to (a) any
assets or properties of the Members (other than Mobile Energy as
provided in Article XIV of the Indenture) or of the stockholders
of Mobile Energy, other than their respective interests in the
Collateral, (b) any Member (other than Mobile Energy as provided
in Article XIV of the Indenture) or (c) any Affiliate,
incorporator, stockholder, partner, member, officer, director or
employee of any Member (other than the Company and, in respect of
any Southern Guaranty on deposit in any Reserve Account Security
Account, Southern) or of the Company (other than Mobile Energy
and, in respect of any Southern Guaranty on deposit in any
Reserve Account Security Account, Southern). Notwithstanding
anything in this Section 26 to the contrary, (i) nothing
contained in this Agreement shall limit or otherwise prejudice in
any way the right of the Secured Party and the Senior Secured
Parties to proceed against any Person whomsoever (A) with respect
to the enforcement of such Person's obligations under any Project
Document (including the Guaranty and any Southern Guaranty to
which such Person is a party) or limit or otherwise prejudice in
any way the right of the Secured Party, the Senior Secured
Parties or the Holders of any Senior Securities to proceed
against such Person with respect to the enforcement of such
obligations or (B) to the extent necessary to realize the benefit
-15-
<PAGE>
of the Collateral granted under the Security Documents and
(ii) any limitations of liability herein shall not apply if and
to the extent that any Person commits fraud or willful
misrepresentations, including those contained in Officer's
Certificates issued from time to time.
27. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be
deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
28. Continuing Assignment, Pledge and Security Interest.
This Agreement shall create a continuing assignment, pledge and
security interest in the Collateral and shall remain in full
force and effect for the benefit of the Secured Party until the
satisfaction in full of the Secured Obligations. Except as set
fourth in Section 30, upon the payment in full of the Secured
Obligations and all other amounts owing to the Secured Party
under the Financing Documents, the Security Interest granted
hereby shall terminate and all rights to the Collateral shall
revert to Debtor. In connection with such termination, the
Secured Party shall execute such instruments of release prepared
by Debtor as Debtor shall reasonably request at Debtor's sole
cost and expense.
29. Security Only. This Agreement is granted for security
purposes only. Accordingly, except as otherwise permitted by any
of the Security Documents, the Secured Party shall not enforce
its rights with respect to the Collateral until such time as (a)
a Trigger Event shall have occurred and be continuing and (b)
except in the case of any such Trigger Event that shall have
resulted from a Bankruptcy Event in respect of either of the
Mobile Energy Parties, the Secured Party shall have received the
Senior Creditor Certificates specified in Section 5.1(a) of the
Intercreditor Agreement.
30. Payments Set Aside. To the extent that Debtor or any
other Person on behalf of Debtor makes a payment or payments to
the Secured Party, or the Secured Party enforces its security
interests or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any
bankruptcy Law, state or Federal Law, common Law or equitable
cause, then, to the extent of such recovery, the Secured
Obligations, or any part thereof originally intended to be
satisfied, and this Agreement and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or
setoff had not occurred.
31. Further Assurances. Debtor shall, at its sole cost and
without expense to the Secured Party, do, execute, acknowledge
and deliver all and every further acts, deeds, conveyances,
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<PAGE>
mortgages, assignments, notices of assignment, transfers and
assurances as the Secured Party shall, from time to time,
reasonably require for better assuring, conveying, assigning,
transferring and confirming unto the Secured Party the property
hereby conveyed, mortgaged or assigned or intended now or
hereafter so to be, or that Debtor may be or hereafter become
bound to convey, mortgage or assign to the Secured Party, or for
carrying our the intention or facilitating the performance of the
terms of this Agreement, or for filing, registering or recording
this Agreement.
32. Shared Drafting. If there shall be any ambiguity in
the terms of this Agreement, the doctrine of construction that
holds that the language of the document shall be construed
against its drafter shall not apply as all parties have shared in
the drafting of this Agreement.
33. Conflict with Intercreditor Agreement; Conflict with
Disbursement Agreement. Notwithstanding anything to the contrary
contained herein or in any of the other Financing Documents, all
rights, duties, obligations and indemnities of the Secured Party
hereunder (including the standard of care pursuant to which it
acts) shall be governed by the provisions of the Intercreditor
Agreement, including the exercise of any and all remedies
hereunder. In the event of a conflict between this Agreement and
the Intercreditor Agreement, the provisions of the Intercreditor
Agreement shall control.
34. Effect of Termination of Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, if the
Intercreditor Agreement shall be terminated while this Agreement
remains in effect, each reference in this Agreement to a Trigger
Event shall be deemed to be a reference to an Event of Default
and no Senior Creditor Certificates under the Intercreditor
Agreement shall be required to be received by the Secured Party
prior to its exercise of remedies hereunder and the term
"Security Agreement Event of Default" shall be deemed to include
any Event of Default.
-17-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
MOBILE ENERGY SERVICES COMPANY, L.L.C.,
an Alabama limited liability company
By:
Name:
Title:
BANKERS TRUST COMPANY, a New York banking
corporation, as Collateral Agent under
the Intercreditor Agreement
By:
Name:
Title:
-18-
<PAGE>
Exhibit B-5(c)
DRAFT
6/29/95
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
Dated as of ( ), 1995
by and among
FIRST UNION NATIONAL BANK OF GEORGIA,
as Trustee under the Trust Indenture
dated as of ( ), 1995
(on behalf of the Holders of the Indenture Securities),
FIRST UNION NATIONAL BANK OF GEORGIA,
as Trustee under the Amended and Restated Indenture of Trust
dated as of ( ), 1995
(on behalf of the Holders of the Tax-Exempt Indenture
Securities),
( ),
as the Working Capital Facility Provider,
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF MOBILE, ALABAMA,
MOBILE ENERGY SERVICES COMPANY, L.L.C.,
MOBILE ENERGY SERVICES HOLDINGS, INC.
and
BANKERS TRUST COMPANY,
as Collateral Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF INTERPRETATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
ARTICLE II
APPOINTMENT OF COLLATERAL AGENT;
ESTABLISHMENT OF ACCOUNTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
SECTION 2.1 Appointment of Collateral Agent . . . . . . . . -2-
SECTION 2.2 Establishment of Intercreditor Agreement
Accounts . . . . . . . . . . . . . . . . . . . -3-
ARTICLE III
COLLECTION AND APPLICATION OF REVENUES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
SECTION 3.1 Collection and Application of Revenues . . . . . -3-
SECTION 3.2 Operating Account . . . . . . . . . . . . . . . -3-
SECTION 3.3 Mill Owner Reimbursement Account . . . . . . . . -4-
SECTION 3.4 Working Capital Facility Account . . . . . . . . -4-
SECTION 3.5 Maintenance Reserve Account . . . . . . . . . . -4-
SECTION 3.6 Subordinated Debt Account . . . . . . . . . . . -5-
SECTION 3.7 Subordinated Fee Account . . . . . . . . . . . . -5-
SECTION 3.8 Distribution Account. . . . . . . . . . . . . . -6-
SECTION 3.9 Completion Account . . . . . . . . . . . . . . . -7-
SECTION 3.10 Loss Proceeds Account . . . . . . . . . . . . . -8-
SECTION 3.11 Revenue Account . . . . . . . . . . . . . . . -11-
SECTION 3.12 Investment of Monies in the Intercreditor
Agreement Accounts . . . . . . . . . . . . . -14-
<PAGE>
SECTION 3.13 Monies to Be Held in Trust . . . . . . . . . -15-
SECTION 3.14 Dominion and Control . . . . . . . . . . . . -15-
SECTION 3.15 Reserve Account Security . . . . . . . . . . -15-
SECTION 3.16 Mill Owner Maintenance Reserve Account . . . -16-
ARTICLE IV
PRIORITIES; SUBORDINATION . . . . . . . . . . . . . . . . . -17-
SECTION 4.1 Priority of Security Interests . . . . . . . -17-
SECTION 4.2 Subordination . . . . . . . . . . . . . . . . -17-
ARTICLE V
EXERCISE OF RIGHTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
SECTION 5.1 Exercise of Rights Under Security Documents . -19-
ARTICLE VI
DIVISION OF PROCEEDS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
SECTION 6.1 Division of Proceeds . . . . . . . . . . . . . -22-
SECTION 6.2 Application of Loss Proceeds . . . . . . . . . -23-
ARTICLE VII
RIGHTS OF SENIOR SECURED PARTIES; RIGHTS
AND DUTIES OF COLLATERAL AGENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
SECTION 7.1 Rights of Senior Secured Parties . . . . . . . -25-
SECTION 7.2 Duties of Collateral Agent. . . . . . . . . -25-
SECTION 7.3 Rights of Collateral Agent . . . . . . . . . . -26-
SECTION 7.4 Lack of Reliance on the Collateral Agent . . . -28-
ARTICLE VIII
INDEMNIFICATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
ii
<PAGE>
ARTICLE IX
ELIGIBILITY OF COLLATERAL AGENT;
REMOVAL AND REPLACEMENT OF COLLATERAL AGENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
SECTION 9.1 Corporate Collateral Agent Required;
Eligibility . . . . . . . . . . . . . . . . -30-
SECTION 9.2 Registration, Removal and Replacement . . . . -30-
ARTICLE X
REPRESENTATIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31-
ARTICLE XI
INDEPENDENT ENGINEER
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-
SECTION 11.1 Removal of Independent Engineer; Payment of
Independent Engineer . . . . . . . . . . . . -33-
SECTION 11.2 Third Party Engineer Dispute Resolution . . . -34-
SECTION 11.3 Qualified Engineers . . . . . . . . . . . . . -34-
ARTICLE XII
MISCELLANEOUS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
SECTION 12.1 Agreement for Benefit of Parties Hereto . . . -35-
SECTION 12.2 No Warranties . . . . . . . . . . . . . . . . -35-
SECTION 12.3 Severability . . . . . . . . . . . . . . . . -35-
SECTION 12.4 Notices . . . . . . . . . . . . . . . . . . . -35-
SECTION 12.5 Successors and Assigns . . . . . . . . . . . -36-
SECTION 12.6 Counterparts . . . . . . . . . . . . . . . . -37-
SECTION 12.7 GOVERNING LAW . . . . . . . . . . . . . . . . -37-
SECTION 12.8 No Impairments of Other Rights . . . . . . . -37-
SECTION 12.9 Amendment; Waiver . . . . . . . . . . . . . . -37-
SECTION 12.10 Headings . . . . . . . . . . . . . . . . . . -37-
SECTION 12.11 Termination . . . . . . . . . . . . . . . . -37-
iii
<PAGE>
SECTION 12.12 Entire Agreement . . . . . . . . . . . . . . -37-
SECTION 12.13 Limitation on Liability of Mobile Energy
Parties . . . . . . . . . . . . . . . . . . -37-
SECTION 12.14 Submission to Jurisdiction . . . . . . . . . -38-
SCHEDULES
Schedule 1 - Third Party Engineers
EXHIBITS
Exhibit A - Form of Requisition or Disbursement from Loss
Proceeds Account
Exhibit B - Form of Monthly Transfer Date Certificate
Exhibit D - Form of Consent to Assignment . . . . . . . . . . -6-
iv
<PAGE>
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT, dated as of (
), 1995, by and among FIRST UNION NATIONAL BANK OF GEORGIA, a
national banking association, as trustee under the Indenture
referred to below (on behalf of the holders of the Indenture
Securities referred to below) (the "Indenture Trustee"), FIRST
UNION NATIONAL BANK OF GEORGIA, a national banking association,
as trustee under the Tax-Exempt Indenture referred to below (on
behalf of the holders of the Tax-Exempt Indenture Securities
referred to below) (the "Tax-Exempt Indenture Trustee"), Banque
Paribas, a ( ), as the Working Capital Facility Provider
referred to below, THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY
OF MOBILE, ALABAMA, an Alabama public corporation (the "IDB"),
MOBILE ENERGY SERVICES COMPANY, L.L.C., an Alabama limited
liability company (the "Company"), MOBILE ENERGY SERVICES
HOLDINGS, INC., an Alabama corporation ("Mobile Energy"), and
BANKERS TRUST COMPANY, a New York banking corporation, as
collateral agent hereunder for the Senior Secured Parties
referred to below (the "Collateral Agent").
WHEREAS, the Company owns and operates an energy and
black liquor recovery complex located at an integrated pulp,
paper and tissue manufacturing facility in Mobile, Alabama
(such complex, as more particularly defined in the Master
Operating Agreement (as defined herein) and including
additions thereto and replacements thereof, the "Energy
Complex");
WHEREAS, 99% of the outstanding ownership interests of
the Company are owned by Mobile Energy;
WHEREAS, the Company intends to finance the
acquisition, construction and equipping of the Energy
Complex through, among other things, the issue and sale by
the Company of the Indenture Securities, the proceeds of
which, net of underwriting commissions, shall be received by
the Company, and, in consideration for such proceeds, the
Indenture Securities shall be secured by substantially all
of the assets of the Company;
WHEREAS, the Company has duly authorized the creation
and issuance of the Indenture Securities pursuant to the
Indenture;
WHEREAS, in connection with the financing of certain
portions of the Energy Complex, the IDB has duly authorized
the creation and issuance of the Tax-Exempt Bonds pursuant
to the Tax-Exempt Indenture, the proceeds of which shall be
used to refund certain existing tax-exempt securities
relating to the Energy Complex;
WHEREAS, the Company intends to finance certain of its
working capital requirements arising in connection with the
operation of the Energy Complex pursuant to the Working
Capital Facility (as defined herein);
WHEREAS, the Company may, from time to time after the
<PAGE>
date of this Agreement, finance certain improvements and
other modifications to the Energy Complex with the proceeds
of Subordinated Debt (as defined herein);
WHEREAS, all obligations of the Company and Mobile
Energy under this Agreement, the Working Capital Facility,
the Indenture, the Tax-Exempt Indenture and the other
Financing Documents (as defined herein) will be secured as
set forth in the Security Documents (as defined herein); and
WHEREAS, the parties hereto desire to enter into this
Agreement to set forth their mutual understanding with
respect to (a) the exercise of certain rights, remedies and
options by the respective parties hereto under the Financing
Documents, (b) the priority of their respective security
interests created by the Security Documents and (c) the
appointment of the Collateral Agent.
NOW, THEREFORE, for and in consideration of the premises and
of the covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally
bound, covenant and agree as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF INTERPRETATION
For all purposes of this Agreement, except as otherwise
expressly provided in this Agreement or unless the context
otherwise requires, all terms used herein shall have the meanings
set forth in Appendix A.
ARTICLE II
APPOINTMENT OF COLLATERAL AGENT;
ESTABLISHMENT OF ACCOUNTS
SECTION 2.1 Appointment of Collateral Agent. The Senior
Secured Parties hereby designate and appoint Bankers Trust
Company to act as Collateral Agent hereunder and under the other
Security Documents, and each of the Senior Secured Parties hereby
authorizes Bankers Trust Company to enter into the Mortgage, the
Security Agreement and any other Security Documents to which
Bankers Trust Company is a party on behalf of the Senior Secured
Parties, to take such actions on its behalf under the provisions
of this Agreement and such other Security Documents and to
exercise such powers and perform such duties as are expressly
delegated to the Collateral Agent by the terms of this Agreement
and the other Security Documents, together with such other powers
as are reasonably incidental thereto. Bankers Trust Company
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hereby accepts such appointment as Collateral Agent hereunder and
agrees to administer the Intercreditor Agreement Accounts and to
receive, deposit and disburse all Revenues and other amounts
delivered to it pursuant to the terms of this Agreement. The
Mobile Energy Parties, the IDB and each Subordinated Debt
Provider hereby consent to such appointment. The Collateral
Agent shall hold and safeguard the Intercreditor Agreement
Accounts (and the Revenues, cash, payments, investments,
insurance proceeds, securities and other amounts on deposit
therein from time to time) in accordance with the terms hereof.
SECTION 2.2 Establishment of Intercreditor Agreement
Accounts. (a) The following Accounts are hereby established and
created with the Collateral Agent: (i) "Mill Owner Reimbursement
Account"; (ii) "Working Capital Facility Account"; (iii) "Revenue
Account"; (iv) "Operating Account"; (v) "Maintenance Reserve
Account"; (vi) "Subordinated Debt Account"; (vii) "Subordinated
Fee Account"; (viii) "Distribution Account"; (ix) "Completion
Account"; and (x) "Loss Proceeds Account."
(b) The following subaccounts of the Maintenance Reserve
Account are hereby established and created with the Collateral
Agent: (i) "Maintenance Plan Funding Subaccount"; and (ii)
"Excess Funding Subaccount."
(c) The following subaccounts of the Completion Account are
hereby established and created with the Collateral Agent: (i)
"Capital Budget Subaccount"; (ii) "Optional Modifications
Subaccount"; and (iii) "Required Modifications Subaccount."
ARTICLE III
COLLECTION AND APPLICATION OF REVENUES
SECTION 3.1 Collection and Application of Revenues. The
Company will arrange for the direct payment to the Collateral
Agent of all Revenues and, to the extent any such Revenues are at
any time received by either of the Mobile Energy Parties, the
Mobile Energy Parties will hold such Revenues in trust for the
Collateral Agent on behalf of the Senior Secured Parties and,
unless otherwise expressly provided for in any other Financing
Document, will transfer such Revenues to the Collateral Agent for
deposit into the Revenue Account, in each case as soon as
reasonably practical but no later than three (3) Business Days
after receipt thereof (duly endorsed, if necessary, to the
Collateral Agent). Without limiting the generality of the
foregoing, the Company shall cause the Mill Owners to pay
directly to the Collateral Agent for deposit into the Revenue
Account all amounts payable by the Mill Owners to the Company
under the Energy Services Agreements, the Master Operating
Agreement or any other Project Contract other than amounts to be
paid to the Company by the Mill Owners in connection with the
exercise by the Company of the Company Step-In Rights.
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SECTION 3.2 Operating Account. (a) The Operating Account
shall be funded by monies transferred from the Revenue Account as
and when specified in Section 3.11(a)(iii). Amounts in the
Operating Account shall be applied to the payment of Operation
and Maintenance Costs other than Subordinated Fees and
Maintenance Expenditures; provided, however, that amounts in the
Operating Account may be applied to pay Maintenance Expenditures
if, and solely to the extent that, the amount of monies, together
with the Available Amount under any Reserve Account Security,
then on deposit in the Distribution Account, the Subordinated Fee
Account, the Subordinated Debt Account and the Maintenance
Reserve Account are insufficient therefor.
(b) The Collateral Agent shall withdraw monies from the
Operating Account upon receipt of an Officer's Certificate of the
Company specifying (i) the amount to be disbursed from the
Operating Account, (ii) that such amounts have been, or within
the immediately succeeding thirty-one (31) days are expected to
be, used for Operation and Maintenance Costs incurred or to be
incurred in accordance with Prudent Plant Operating Standards or
as otherwise authorized by this Section 3.2. The aggregate
monies withdrawn from the Operating Account in any Fiscal Year
shall not, unless the Officer's Certificate of the Company
requesting such withdrawal is accompanied by an Independent
Engineer Confirmation, exceed one-hundred ten percent (110%) of
the aggregate amount of Operation and Maintenance Costs (other
than Maintenance Expenditures) set forth in the Annual Budget for
such Fiscal Year (as such Annual Budget may have been amended at
any such time in accordance with the provisions of the Indenture
and the Tax-Exempt Indenture).
SECTION 3.3 Mill Owner Reimbursement Account. The Mill
Owner Reimbursement Account shall be funded by monies transferred
from the Revenue Account as and when specified in Section
3.11(a)(i). The Collateral Agent shall apply the amounts in the
Mill Owner Reimbursement Account to the payment of amounts due to
the Mill Owners in connection with the exercise of Mill Owner
Step-In Rights (except as otherwise provided in the Consents to
Assignment to which the Mill Owners are parties).
SECTION 3.4 Working Capital Facility Account. The Working
Capital Facility Account shall be funded by monies transferred
from the Revenue Account as and when specified in Section
3.11(a)(ii). The Collateral Agent shall apply the amounts in the
Working Capital Facility Account to the payment of principal of
and interest on, and other amounts due with respect to, any
Working Capital Loans.
SECTION 3.5 Maintenance Reserve Account. (a) The
Maintenance Reserve Account shall be funded by monies transferred
from the Revenue Account as and when specified in Section
3.11(a)(vii). The Collateral Agent shall deposit all such monies
into the Maintenance Plan Funding Subaccount; provided, however,
to the extent such monies are in excess of the Maintenance
Reserve Account Required Deposit at any time, such excess shall
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be deposited into the Excess Funding Subaccount. Subject to
Section 3.5(b), amounts in the Maintenance Reserve Account shall
be applied to the payment of Maintenance Expenditures first from
the Excess Funding Subaccount, to the extent available, and then
from the Maintenance Plan Funding Subaccount.
(b) Monies on deposit in the Maintenance Reserve Account
(including then Available Amounts under any Reserve Account
Security on deposit therein) shall first be transferred by the
Collateral Agent to the Indenture Trustee for deposit into the
Indenture Securities Account and to the Tax-Exempt Indenture
Trustee for deposit into the Tax-Exempt Indenture Securities
Account, ratably, whenever, and to the extent that, monies on
deposit in the Indenture Securities Account, the Tax-Exempt
Indenture Securities Account, the Revenue Account, each
applicable Debt Service Reserve Account (if any), each applicable
Tax-Exempt Debt Service Reserve Account (if any), the
Distribution Account, the Subordinated Fee Account and the
Subordinated Debt Account (including, in the case of any Debt
Service Reserve Account, any Tax-Exempt Debt Service Reserve
Account and the Distribution Account, then Available Amounts
under any Reserve Account Security on deposit therein) are
insufficient to make payments when due on the Senior Securities.
Any such transfers shall be made by the Collateral Agent in the
following order of priority: first, transfer monies then on
deposit in the Maintenance Reserve Account; second, draw upon any
Reserve Account Letter of Credit on deposit in the Maintenance
Reserve Account pursuant to Section 3.15(d) in an amount up to
the Available Amount thereunder and transfer the monies in
respect thereof; and third, call upon any Southern Guaranty on
deposit in the Maintenance Reserve Account pursuant to Section
3.15(d) in an amount up to the Available Amount thereunder and
transfer the monies in respect thereof, in each case, directly to
the Indenture Trustee or the Tax-Exempt Indenture Trustee (as the
case may be) for payment (to the extent necessary) of such
amounts due and owing in respect of such Senior Securities.
SECTION 3.6 Subordinated Debt Account. (a) The
Subordinated Debt Account shall be funded by monies transferred
from the Revenue Account as and when specified in Section
3.11(a)(ix). Subject to Section 3.6(b), the Collateral Agent
shall apply the amounts in the Subordinated Debt Account to the
payment of principal of and interest on, and other amounts due
with respect to, Non-Affiliate Subordinated Debt.
(b) Monies on deposit in the Subordinated Debt Account
shall be first transferred by the Collateral Agent to the
Indenture Trustee for deposit into the Indenture Securities
Account and to the Tax-Exempt Indenture Trustee for deposit into
the Tax-Exempt Indenture Securities Account, ratably, whenever,
and to the extent that, the monies on deposit in the Indenture
Securities Account, the Tax-Exempt Indenture Securities Account,
each applicable Debt Service Reserve Account (if any), each
applicable Tax-Exempt Debt Service Reserve Account (if any), the
Distribution Account and the Subordinated Fee Account (including,
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<PAGE>
in the case of any Debt Service Reserve Account, any Tax-Exempt
Debt Service Reserve Account and the Distribution Account, then
Available Amounts under any Reserve Account Security on deposit
therein) are insufficient to make payments when due on the Senior
Securities; provided, however, that, if an Event of Default shall
have occurred and then be continuing, the Collateral Agent shall
so transfer any amounts on deposit in the Subordinated Debt
Account to pay any deficiencies in the Indenture Securities
Account and the Tax-Exempt Indenture Securities Account before so
transferring any monies (including any then Available Amounts
under any Reserve Account Security) on deposit in any Debt
Service Reserve Account or any Tax-Exempt Debt Service Reserve
Account for such purpose.
SECTION 3.7 Subordinated Fee Account. (a) The
Subordinated Fee Account shall be funded by monies transferred
from the Revenue Account as and when specified in Section
3.11(a)(x). Subject to Section 3.7(b), and provided that the
Company has delivered to the Collateral Agent an Officer's
Certificate of the Company certifying that the requirements of
Section 5.19 of the Indenture and Section 4.19 of the IDB Lease
Agreement are satisfied, the Collateral Agent shall apply monies
in the Subordinated Fee Account to the payment of Subordinated
Fees.
(b) Monies on deposit in the Subordinated Fee Account shall
first be transferred by the Collateral Agent to the Indenture
Trustee for deposit into the Indenture Securities Account and to
the Tax-Exempt Indenture Trustee for deposit into the Tax-Exempt
Indenture Securities Account, ratably, whenever, and to the
extent that, the monies on deposit in the Indenture Securities
Account, the Tax-Exempt Indenture Securities Account, each
applicable Debt Service Reserve Account (if any), each applicable
Tax-Exempt Debt Service Reserve Account (if any) and the
Distribution Account (including, in the case of any Debt Service
Reserve Account, any Tax-Exempt Debt Service Reserve Account and
the Distribution Account, then Available Amounts under any
Reserve Account Security on deposit therein) are insufficient to
make payments when due on the Senior Securities; provided,
however, that if an Event of Default shall have occurred and be
continuing, the Collateral Agent shall so transfer any amounts on
deposit in the Subordinated Fee Account to pay any deficiencies
in the Indenture Securities Account and the Tax-Exempt Indenture
Securities Account before so transferring any monies (including
any then Available Amounts under any Reserve Account Security) on
deposit in any Debt Service Reserve Account or any Tax-Exempt
Debt Service Reserve Account for such purposes.
SECTION 3.8 Distribution Account. (a) The Distribution
Account shall be funded from monies transferred from the Revenue
Account as and when specified in Section 3.11(xi). Subject to
Section 3.8(b) and provided that the Company has delivered to the
Collateral Agent an Officer's Certificate certifying that the
requirements of Section 5.19 of the Indenture and Section 4.19 of
the IDB Lease Agreement are satisfied, the Collateral Agent
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shall, on each Distribution Date, transfer all monies in the
Distribution Account as follows: first, to each Subordinated
Debt Provider of any Affiliate Subordinated Debt, as certified by
the Company, an amount equal to all interest (including overdue
interest) and principal due and payable such Affiliate
Subordinated Debt, and second, the balance to the account or
accounts specified in writing by the Company.
(b) Monies on deposit in the Distribution Account
(including then Available Amounts under any Reserve Account
Security on deposit therein) shall first be transferred by the
Collateral Agent to the Indenture Trustee for deposit into the
Indenture Securities Account and to the Tax-Exempt Indenture
Trustee for deposit into the Tax-Exempt Indenture Securities
Account, ratably, whenever, and to the extent that, the monies on
deposit in the Indenture Securities Account, the Tax-Exempt
Indenture Securities Account, each applicable Debt Service
Reserve Account (if any) and each applicable Tax-Exempt Debt
Service Reserve Account (if any) (including, in the case of any
Debt Service Reserve Account and any Tax-Exempt Debt Service
Reserve Account, then Available Amounts under any Reserve Account
Security on deposit therein) are insufficient to make payments
when due on the Senior Securities; provided, however, that if an
Event of Default shall have occurred and be continuing, the
Collateral Agent shall so transfer any amounts on deposit in the
Distribution Account to pay any deficiencies in the Indenture
Securities Account and the Tax-Exempt Indenture Securities
Account before so transferring any monies (including any then
Available Amounts under any Reserve Account Security) on deposit
in any Debt Service Reserve Account or any Tax-Exempt Debt
Service Reserve Account for such purposes. Any such transfers
shall be made by the Collateral Agent in the following order of
priority: first, transfer monies then on deposit in the
Distribution Account; second, draw upon any Reserve Account
Letter of Credit on deposit in the Distribution Account pursuant
to Section 3.15(d) in an amount up to the Available Amount
thereunder and transfer the monies in respect thereof; and third,
call upon any Southern Guaranty on deposit in the Distribution
Account pursuant to Section 3.15(d) in an amount up to the
Available Amount thereunder and transfer the monies in respect
thereof, in each case, directly to the Indenture Trustee or the
Tax-Exempt Indenture Trustee (as the case may be) for payment (to
the extent necessary) of such amounts due and owing in respect of
such Senior Securities.
(c) Notwithstanding Section 3.8(a), if (i) at any time, the
amount of monies on deposit in (without giving effect to amounts
then available to be drawn or called upon under any Reserve
Account Security on deposit in) the Distribution Account exceeds
the lesser of (A) the amount of Senior Debt and (B) $34,000,000
or (ii) on a Distribution Date, the Company shall have provided
an Officer's Certificate (together with an Independent Engineer
Certification) certifying to the Collateral Agent that (A) the
average Senior Debt Service Coverage Ratio for the two
semi-annual payment periods immediately preceding such
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Distribution Date was equal to at least 1.2 to 1.0, (B) based
upon projections prepared by the Company in accordance with
Section 1.15 of the Indenture and Section 1.12 of the IDB Lease
Agreement, the average Senior Debt Service Coverage Ratio for the
current semi-annual payment period and the immediately succeeding
semi-annual payment period is projected to be at least 1.2 to 1.0
and (C) the requirements of Section 5.19 of the Indenture and
Section 4.19 of the IDB Lease Agreement have not been satisfied
on such Distribution Date and each of the five (5) Distribution
Dates immediately preceding such Distribution Date, then, in the
case of clauses (i) and (ii) above, in replacement of monies on
deposit in the Distribution Account, the Company may deliver to
the Collateral Agent at such time Reserve Account Security having
an Available Amount thereunder equal to the amount of such monies
so replaced; provided, however, that, in the case of clause (i)
above, the amount of monies so replaced shall not be greater than
the amount of the excess described in such clause (i). Any such
Reserve Account Security shall terminate on the first
Distribution Date following the delivery to the Collateral Agent
of such Reserve Account Security on which the requirements of
Section 5.19 of the Indenture and Section 4.19 of the IDB Lease
Agreement have been satisfied.
SECTION 3.9 Completion Account. (a) On the Closing Date,
the Capital Budget Subaccount shall be funded in an amount equal
to $( ). Such monies shall be applied to the payment, or
reimbursement to the extent the same have been paid or satisfied
by the Company, of Project Costs in accordance with the Capital
Budget.
(b) The Company shall deposit the proceeds of any Debt
authorized by Section 5.17 of the Indenture and Section 4.17 of
the IDB Lease Agreement for (i) Optional Modifications into the
Optional Modifications Subaccount and (ii) Required Modifications
into the Required Modifications Subaccount. Such monies shall be
applied to the payment, or reimbursement to the extent the same
have been paid or satisfied by the Company, of costs incurred in
connection with Optional Modifications or Required Modifications
(as the case may be) in accordance with a budget prepared by the
Company and approved by the Independent Engineer and delivered to
the Collateral Agent. Such budget shall identify all costs
reasonably anticipated to be incurred in connection with the
Optional Modifications or the Required Modifications (as the case
may be) and shall include a progress payment schedule for the
projected requisitions to be made from the Optional Modifications
Subaccount with respect to such Optional Modifications or the
Required Modifications Subaccount with respect to such Required
Modifications (as the case may be).
(c) The Collateral Agent shall transfer monies from the
applicable subaccount of the Completion Account upon receipt of
an Officer's Certificate of the Company (together with an
Independent Engineer's Confirmation as to clauses (i) through
(iv) below) specifying (i) the amount to be disbursed from such
subaccount (including reasonable supporting documentation, if
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available), (ii) that such amounts have been, or within the
immediately succeeding forty-five (45) days are expected to be,
used for (A) in the case of Section 3.9(a), Project Costs, which
do not exceed the aggregate amount of the Capital Budget, less
any amounts that previously have been transferred pursuant to
this clause (ii) and (B) in the case of Section 3.9(b), costs
incurred in connection with Optional Modifications or Required
Modifications (as the case may be), (iii) the item for which
payment is requested has not been the basis for a prior
requisition from any Account that has been paid or with respect
to which a request for payment is still pending, (iv) the Person
or Persons to whom such monies shall be transferred (including
appropriate account information) and (v) no Event of Default
under the Indenture, the Tax-Exempt Indenture or the Working
Capital Facility has occurred and is continuing. The Company
shall provide the Collateral Agent with written notice when full
payment of the Project Costs or costs incurred in connection with
Optional Modifications or Required Modifications (as the case may
be) for which monies were held in the applicable subaccount of
the Completion Account has occurred, whereupon the Collateral
Agent shall, within seven (7) days of receipt of such notice,
transfer any monies remaining in such subaccount to the Revenue
Account.
SECTION 3.10 Loss Proceeds Account. (a) All Loss Proceeds
shall be deposited into the Loss Proceeds Account and, subject to
the provisions of this Section 3.10, applied to the payment, or
reimbursement to the extent the same have been paid or satisfied
by the Company, of the costs of (i) rebuilding, repairing and
restoring the Energy Complex or any part thereof that has been
affected by an Event of Loss or Event of Eminent Domain or (ii)
building a Replacement Facility.
(b) The Collateral Agent is hereby authorized to disburse
from the Loss Proceeds Account the amount required to be paid for
the rebuild, repair or restoration of the Energy Complex or any
part thereof, or the building of a Replacement Facility, as
specified in Section 3.10(a). The Collateral Agent is hereby
authorized and directed to issue its checks or transfer funds
electronically for each disbursement from the Loss Proceeds
Account, upon receipt of a requisition in substantially the form
of Exhibit A, submitted to the Collateral Agent, signed by an
Authorized Officer of the Company, together with an Independent
Engineer Confirmation; provided, however, that such Independent
Engineer Confirmation shall not be required if such requisition
includes a certification that the amount requested pursuant to
such requisition, together with the amounts requested pursuant to
all other such requisitions made or reasonably expected to be
made (i) during the same Fiscal Year in which such requisition is
so submitted to the Collateral Agent, does not exceed $5,000,000
in the aggregate or (ii) in respect of any Event of Loss or Event
of Eminent Domain, does not exceed $7,500,000 in the aggregate.
The Collateral Agent shall be entitled to rely on all
certifications and statements in such requisitions. The
Collateral Agent shall keep and maintain adequate records
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pertaining to the Loss Proceeds Account and all disbursements
therefrom and shall file an accounting thereof with the Company,
the Independent Engineer and the Mill Owners within three (3)
months following the end of each Fiscal Year.
(c) If an Event of Loss or an Event of Eminent Domain shall
occur, as soon as reasonably practicable but no later than the
date of receipt of Loss Proceeds with respect thereto, the
Company shall make a reasonable good faith determination as to
whether or not (i) (A) the Energy Complex or any portion thereof
can be rebuilt, repaired or restored to permit operation of the
Energy Complex at substantially the same level of performance as
the Energy Complex was capable of being operated immediately
prior to such Event of Loss or Event of Eminent Domain (and
whether or not such rebuilding, repair or restoration would be
required by Section 10.7(b)(ii) of the Master Operating
Agreement) or (B) a Replacement Facility can be built to provide
services to some or all of the Mills (and whether or not such
Replacement Facility would be required by Section 10.7(b)(ii) of
the Master Operating Agreement), for which (based upon
projections of the Company prepared in accordance with Section
1.15 of the Indenture and Section 1.12 of the IDB Lease
Agreement) the minimum Senior Debt Service Coverage Ratio for
each Fiscal Year commencing with such Replacement Facility's
anticipated commercial operation date through the Fiscal Year in
which the last maturity of Senior Debt is scheduled to mature is
projected to equal or exceed the minimum Senior Debt Service
Coverage Ratio projected for the Energy Complex for each such
Fiscal Year based upon the circumstances existing immediately
prior to such Event of Loss or Event of Eminent Domain and (ii)
such Loss Proceeds, together with any other amounts that are
available to the Company for such rebuilding, repair, restoration
or replacement, are sufficient to permit such rebuilding, repair
or restoration of the Energy Complex or a portion thereof, or
such building of a Replacement Facility (such determination of
sufficiency in each instance in this Section 3.10 to take into
account, among other things, funds required to pay principal of
and interest on the Senior Debt becoming due during such period
in which commercial operation of the Energy Complex is
interrupted as a result of such Event of Loss or Event of Eminent
Domain). The determination of the Company pursuant to this
Section 3.10(c) shall be evidenced by an Officer's Certificate of
the Company filed with the Collateral Agent, which (in the event
the Company determines that the Energy Complex or a portion
thereof can be rebuilt, repaired, restored or replaced subject to
the conditions hereof and that such Loss Proceeds, together with
other amounts available to the Company for such rebuilding,
repair, restoration or replacement, are sufficient) shall also
set forth a reasonable good faith estimate by the Company of the
total cost of such rebuilding, repair, restoration or
replacement. The Company shall also deliver to the Collateral
Agent, at the time it delivers such Officer's Certificate, an
Independent Engineer Confirmation, dated the date of such
Officer's Certificate, stating that, based upon reasonable
investigation and review of the determinations made by the
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Company, the Independent Engineer believes that the
determinations and the estimate of the total cost set forth in
such Officer's Certificate are reasonable.
(d) (i) If a determination relating to an Event of Loss or
Event of Eminent Domain is made pursuant to Section 3.10(c) that
(A) neither the Energy Complex nor any portion thereof can be
rebuilt, repaired, restored or replaced, subject to the
conditions contained therein, or (B) the Loss Proceeds with
respect thereto, together with any other amounts that are
available to the Company for such rebuilding, repair, restoration
or replacement, are not sufficient to permit such rebuilding,
repair, restoration or replacement, then all of such Loss
Proceeds shall be distributed in accordance with Section 6.2(a).
Any such Loss Proceeds that are distributed to the Senior Secured
Parties shall, pursuant to Section 6.2(a), be applied to the
redemption of all Senior Debt in accordance with the terms of the
Financing Documents.
(ii) Subject to paragraph (iv) of this Section 3.10(d), if
a determination relating to an Event of Loss or Event of Eminent
Domain is made pursuant to Section 3.10(c)(i)(A) that (A) the
Energy Complex can be completely rebuilt, repaired or restored to
permit operation on a commercially feasible basis as described
therein and (B) the Loss Proceeds with respect thereto, together
with any other amounts that are available to the Company for such
rebuilding, repair or restoration, are sufficient to permit such
rebuilding, repair or restoration, then all of such Loss Proceeds
shall remain on deposit in, and such other amounts as are
available to the Company and necessary for such rebuilding,
repair or restoration shall be deposited in, the Loss Proceeds
Account and shall be applied in accordance with Section 3.10(b).
Upon completion of any such complete rebuilding, repair or
restoration of the Energy Complex, the amount, if any, by which
all of such Loss Proceeds received with respect to such Event of
Loss or Event of Eminent Domain exceeds the total cost of such
rebuilding, repair or restoration shall be distributed in
accordance with Section 6.2(b). (Any amounts remaining in the
Loss Proceeds Account following such distribution shall be
deposited in the Revenue Account.)
(iii) Subject to paragraph (iv) of this Section 3.10(d), if
a determination relating to an Event of Loss or Event of Eminent
Domain is made pursuant to Section 3.10(c)(i)(A) or 3.10(c)(i)(B)
that (A) a portion of the Energy Complex can be rebuilt, repaired
or restored to permit operation on a commercially feasible basis
as described therein or a Replacement Facility can be built,
subject to the conditions contained therein, and (B) the Loss
Proceeds with respect thereto, together with any other amounts
that are available to the Company and necessary for such
rebuilding, repair, restoration or replacement, are sufficient to
permit such rebuilding, repair, restoration or replacement, then
all of such Loss Proceeds shall remain on deposit in, and any
other amounts that are available to the Company for such
rebuilding, repair, restoration or replacement shall be deposited
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in, the Loss Proceeds Account and shall be applied in accordance
with Section 3.10(b). Upon completion of any such rebuilding,
repair, restoration or replacement of the Energy Complex, the
amount, if any, by which all of such Loss Proceeds received with
respect to such Event of Loss or Event of Eminent Domain exceeds
the total cost of such rebuilding, repair, restoration or
replacement shall be distributed in accordance with Section
6.2(b). (Any amounts remaining in the Loss Proceeds Account
following such distribution shall be deposited in the Revenue
Account.)
(iv) Notwithstanding paragraphs (ii) and (iii) of this
Section 3.10(d), at the election of the Company, all of the Loss
Proceeds with respect to an Event of Loss or Event of Eminent
Domain, together with all other amounts available to the Company,
shall be distributed in accordance with Section 6.2(a), provided
that, at the time of such election, the Company files with the
Collateral Agent an Officer's Certificate certifying (together
with an Independent Engineer Confirmation) that (A) the monies on
deposit in the Loss Proceeds Account, together with all other
amounts available to the Company, are sufficient to redeem all
Senior Debt, (B) all or substantially all of the Energy Complex
(including the Site) has suffered loss or been destroyed or
otherwise rendered unfit for normal use in connection with such
Event of Loss or all or substantially all of the Energy Complex
(including the Site) has been the subject of a compulsory
transfer or taking, or transfer under threat of compulsory
transfer or taking, in connection with such Event of Eminent
Domain and (C) the Company is not otherwise required under the
Master Operating Agreement or the Lease, as applicable, to
rebuild, repair, restore or replace the Energy Complex, or to
apply Loss Proceeds to the rebuilding, repairing, restoration or
replacement of the Energy Complex. Such Officer's Certificate
shall include a written opinion of counsel satisfactory to the
Collateral Agent (which may include counsel for either of the
Mobile Energy Parties, whether or not such counsel is an employee
thereof) to the effect set forth in clause (C) above; provided,
however, that if any Dispute (as defined in the Master Operating
Agreement) has arisen between the Mill Owners and the Company
with respect to the compliance of such election with the
applicable provisions of the Master Operating Agreement and the
Lease, as applicable, the Company shall also deliver to the
Collateral Agent satisfactory evidence of the conclusive
resolution of such Dispute pursuant to the dispute resolution
provisions of the Master Operating Agreement. Any such Loss
Proceeds that are distributed to the Senior Secured Parties
shall, pursuant to Section 6.2(a), be applied to the redemption
of all Senior Debt in accordance with the terms of the Financing
Documents.
(e) Notwithstanding any other provision of this Section
3.10, (i) if the Loss Proceeds Account does not contain an amount
equal to the estimate of the total cost of rebuilding, repair,
restoration or replacement set forth in the Officer's Certificate
filed with the Collateral Agent pursuant to Section 3.10(c), and
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such amounts have not otherwise been committed by the applicable
insurers or condemning authority in a manner satisfactory to the
Collateral Agent, by the tenth (10th) Business Day following the
determination contemplated by Section 3.10(d)(ii) or
3.10(d)(iii), then the Company shall be deemed to have made the
determination contemplated by Section 3.10(d)(i) and (ii) if the
Company receives Loss Proceeds from an Event of Loss or Event of
Eminent Domain and the cost to rebuild, repair, restore or
replace the Energy Complex does not, based upon a reasonable and
good faith determination of the Company, exceed in the aggregate
$7,500,000, then the Company shall not be required to comply with
the provisions of Section 3.10(c) or 3.10(d) and such Loss
Proceeds, together with any other amounts that are available to
the Company, shall be deposited into the Loss Proceeds Account
and applied in accordance with Section 3.10(b).
SECTION 3.11 Revenue Account. (a) Prior to a Wind-Up
Event, monies on deposit in the Revenue Account, upon receipt by
the Collateral Agent of an Officer's Certificate of the Company
(substantially in the form of Exhibit B) certifying the amount of
such monies to be withdrawn and the application thereof
(including appropriate payment instructions in respect thereof),
will be withdrawn on each Monthly Transfer Date to make the
following transfers or deposits to the following Persons or into
the following Accounts and in the following order of priority
(but only to the extent such monies are then on deposit in the
Revenue Account):
(i) for deposit into the Mill Owner Reimbursement
Account, an amount equal to the amount that is or will be
reimbursable to the Mill Owners prior to the immediately
succeeding Monthly Transfer Date in connection with the
exercise of Mill Owner Step-In Rights (except as otherwise
provided in the Consents to Assignment to which the Mill
Owners are parties);
(ii) for deposit into the Working Capital Facility
Account, an amount that is equal to amounts that were
scheduled to be due and payable, but remain unpaid, or are
scheduled to become due and payable for principal of and
interest on, and fees and other charges relating to, the
Working Capital Facility prior to the immediately succeeding
Monthly Transfer Date;
(iii) for deposit into the Operating Account, an amount
sufficient to cause the aggregate amount therein to be equal
to the amount of Operation and Maintenance Costs that are
estimated by the Company to be due and payable prior to the
immediately succeeding Monthly Transfer Date, other than
Subordinated Fees and Maintenance Expenditures (unless and
to the extent that, in the case of Maintenance Expenditures,
the monies, together with the then Available Amounts under
any Reserve Account Security, on deposit in the Maintenance
Reserve Account, the Subordinated Debt Account, the
Subordinated Fee Account and the Distribution Account are
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insufficient therefor);
(iv) to each of the Collateral Agent, the Indenture
Trustee and the Tax-Exempt Trustee, an amount that is equal
to the amount due and payable immediately prior to such
Monthly Transfer Date to each of such Persons in their
capacities as the Collateral Agent under this Agreement, the
Indenture Trustee under the Indenture and the Tax-Exempt
Trustee under the Tax-Exempt Indenture, respectively;
provided, however, that if monies on deposit in the Revenue
Account are insufficient on such Monthly Transfer Date to
make the transfers specified in this Section 3.11(a)(iv),
distribution of monies will be made ratably to each
specified Person based upon the respective amounts owing to
each such Person;
(v) to: (i) the Working Capital Facility Provider, an
amount that is equal to, after giving effect to any payment
to the Working Capital Facility Provider in accordance with
Section 3.11(a)(ii), all amounts due and payable (whether as
a result of acceleration or otherwise) immediately prior to
such Monthly Transfer Date for principal of and interest on,
and fees or other charges with respect to, the Working
Capital Facility; (ii) the Indenture Trustee, for deposit
into (A) the Indenture Securities Interest Subaccount, an
amount that, after giving effect to monies on deposit
therein immediately prior to such Monthly Transfer Date and
together with a uniform amount to be deposited therein on
each succeeding Monthly Transfer Date prior to the
immediately succeeding Interest Payment Date, is equal to
the amount of interest thereon becoming due on such Interest
Payment Date and (B) the Indenture Securities Principal
Subaccount, an amount equal to one-sixth (1/6th) of the
amount of principal thereof becoming due on the Indenture
Securities on each Principal Payment Date occurring within
the six (6) months immediately succeeding the month in which
such Monthly Transfer Date occurs; and (iii) the Tax-Exempt
Trustee, for deposit into (A) the Tax-Exempt Indenture
Securities Interest Subaccount, an amount that, after giving
effect to monies on deposit therein immediately prior to
such Monthly Transfer Date and together with a uniform
amount to be deposited therein on each succeeding Monthly
Transfer Date prior to the immediately succeeding Tax-Exempt
Interest Payment Date, is equal to the amount of interest
thereon becoming due on such Tax-Exempt Interest Payment
Date and (B) the Tax-Exempt Indenture Securities Principal
Subaccount, an amount equal to one-twelfth of the amount of
principal thereof becoming due on the Tax-Exempt Indenture
Securities on each Tax-Exempt Principal Payment Date
occurring within the twelve (12) months immediately
succeeding the month in which such Monthly Transfer Date
occurs; provided, however, that if monies in the Revenue
Account are insufficient on such Monthly Transfer Date to
make the transfers specified in this Section 3.11(a)(v),
distribution of monies shall be made ratably to each
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specified Person based upon the respective amounts owing to
each such Person;
(vi) to: (i) the Indenture Trustee, for deposit into
the Indenture Securities Redemption Subaccount, an amount
that, after giving effect to monies on deposit therein
immediately prior to such Monthly Transfer Date and together
with a uniform amount to be deposited therein on each
succeeding Monthly Transfer Date prior to each succeeding
Redemption Date or Prepayment Date for, or upon acceleration
of, the Indenture Securities, is equal to the amount of
principal thereof and premium, if any, and interest thereon
becoming due on each such Redemption Date or Prepayment Date
or upon such acceleration (as the case may be); and (ii) the
Tax-Exempt Trustee, for deposit into the Tax-Exempt
Indenture Securities Redemption Subaccount, an amount that,
after giving effect to monies on deposit therein immediately
prior to such Monthly Transfer Date and together with a
uniform amount to be deposited therein on each succeeding
Monthly Transfer Date prior to each succeeding Redemption
Date or Prepayment Date for, or upon acceleration of, the
Tax-Exempt Indenture Securities, is equal to the amount of
principal thereof and premium, if any, and interest thereon
becoming due on each such Prepayment Date or Redemption Date
or upon such acceleration (as the case may be); provided,
however, that if monies in the Revenue Account are
insufficient on such Monthly Transfer Date to make the
transfers specified in this Section 3.11(a)(vi),
distribution of monies shall be made ratably to each
specified Person based upon the respective amounts owing to
each such Person;
(vii) for deposit into the Maintenance Reserve Account,
such amount as the Company may elect, but in no event less
than the Maintenance Reserve Account Required Deposit with
respect to the Fiscal Quarter in which such Monthly Transfer
Date occurs;
(viii) to: (i) the Indenture Trustee, for deposit into
each Debt Service Reserve Account (if any), an amount
sufficient to cause the aggregate amount of monies, together
with the then Available Amount under any Reserve Account
Security, on deposit in such Debt Service Reserve Account,
to equal the Debt Service Reserve Account Required Balance
immediately prior to such Monthly Transfer Date; and (ii)
the Tax-Exempt Trustee, for deposit into each Tax-Exempt
Debt Service Reserve Account (if any), an amount sufficient
to cause the aggregate amount of monies, together with the
then Available Amount under any Reserve Account Letter of
Credit, on deposit in such Tax-Exempt Debt Service Reserve
Account, to equal the Tax-Exempt Debt Service Reserve
Account Required Balance immediately prior to such Monthly
Transfer Date; provided, however, that if monies in the
Revenue Account are insufficient on such Monthly Transfer
Date to make the transfers specified in this Section
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3.11(a)(viii), distribution of monies will be made ratably
to each specified Person based upon the respective amounts
owing to each such Person;
(ix) for deposit into the Subordinated Debt Account:
(i) an amount that, after giving effect to monies on deposit
therein immediately prior to such Monthly Transfer Date and
a uniform amount to be deposited therein on each succeeding
Monthly Transfer Date prior to the immediately succeeding
interest payment date for any Non-Affiliate Subordinated
Debt, is not less than the amount of interest on such
Non-Affiliate Subordinated Debt becoming due on such
interest payment date; and (ii) an amount equal to a
fraction (determined by dividing the number of dates during
the Fiscal Year in which such Monthly Transfer Date occurs
on which principal of any Non-Affiliate Subordinated Debt is
scheduled to become due by twelve (12)) of the amount of
principal becoming due in respect of such Non-Affiliate
Subordinated Debt on each such payment date occurring within
a number of months (which number of months shall be equal to
the number of dates used for purposes of the determination
set forth in the first parenthetical clause of this clause
(ii)) immediately succeeding such Monthly Transfer Date;
(x) for deposit into the Subordinated Fee Account, an
amount that, after giving effect to monies on deposit
therein immediately prior to such Monthly Transfer Date and
a uniform amount to be deposited therein on each succeeding
Monthly Transfer Date prior to the immediately succeeding
Distribution Date, will be equal to the amount of Operation
and Maintenance Expenses constituting Subordinated Fees that
will be due and payable or are estimated to be due and
payable as of such Distribution Date; and
(xi) to the Distribution Account.
(b) Prior to a Wind-Up Event, after any Monthly Transfer
Date and prior to the immediately succeeding Monthly Transfer
Date, monies on deposit in the Revenue Account shall be
transferred by the Collateral Agent to the Indenture Trustee for
deposit into the Indenture Securities Account and to the Tax-
Exempt Indenture Trustee for deposit into the Tax-Exempt
Indenture Securities Account, ratably, whenever, and to the
extent that, monies on deposit in the Indenture Securities
Account, the Tax-Exempt Indenture Securities Account, each
applicable Debt Service Reserve Account (if any), each applicable
Tax-Exempt Debt Service Reserve Account (if any), the
Distribution Account, the Subordinated Fee Account and the
Subordinated Debt Account (including, in the case of any Debt
Service Reserve Account, any Tax-Exempt Debt Service Reserve
Account and the Distribution Account, then Available Amounts
under any Reserve Account Security on deposit therein) are
insufficient to make payments when due on the Senior Securities.
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SECTION 3.12 Investment of Monies in the Intercreditor
Agreement Accounts. (a) Amounts deposited in the Intercreditor
Agreement Accounts, at the written request and direction of the
Company, shall be invested by the Collateral Agent in Permitted
Investments. Such investments shall mature in such amounts and
not later than such times as may be necessary to provide monies
when needed to make payments with such monies as provided in this
Agreement. Net interest or gain received from such investments
shall remain in each Intercreditor Agreement Account pending
application as provided in this Agreement. Absent written
instructions from the Company, the Collateral Agent shall invest
the amounts held in the Intercreditor Agreement Accounts in
Permitted Investments described in clause (a) of the definition
of Permitted Investments.
(b) On the Business Day immediately preceding each Monthly
Transfer Date, and immediately following any withdrawal of monies
on deposit in each Intercreditor Agreement Account, the
Collateral Agent shall "mark-to-market" each Permitted Investment
on deposit in each Intercreditor Agreement Account (including
accrued interest) and, promptly thereafter, shall notify the
Company, the Senior Secured Parties and the Independent Engineer
as to the amount of any deficiency or surplus in such
Intercreditor Agreement Account as of such date based upon such
revaluation.
(c) In computing the amount in any Intercreditor Agreement
Account (or any other separate account or fund created under the
provisions of, and for any purpose provided in, this Agreement),
obligations purchased as an investment of monies therein shall be
valued at the market value of, including accrued interest on,
such obligations. Amounts deposited in any Intercreditor
Agreement Account may be combined with amounts deposited in other
Intercreditor Accounts for purposes of making any Permitted
Investment, provided that such Intercreditor Agreement Account
shall maintain an undivided interest in any such combined
Permitted Investment based upon its pro rata share of the amount
contributed by such Intercreditor Agreement Account at the time
of the making of such combined Permitted Investment.
SECTION 3.13 Monies to Be Held in Trust. All monies
required to be deposited with or paid to the Collateral Agent for
the account of any Intercreditor Agreement Account under any
provision of this Agreement and all investments made therewith,
and all monies of this Agreement and all investments made
therewith, and all monies withdrawn from any Intercreditor
Agreement Account and held by the Collateral Agent, shall be held
by the Collateral Agent in trust and, while so held, for and on
behalf of the Senior Secured Parties.
SECTION 3.14 Dominion and Control. Each of the Mobile
Energy Parties hereby transfers, assigns and sets over all of its
right, title and interest in and to all amounts deposited or held
in any Intercreditor Agreement Account and grants to the
Collateral Agent sole dominion and control over such amounts.
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Neither of the Mobile Energy Parties shall have the right to
withdraw monies from any Intercreditor Agreement Account
hereunder, except to the extent such monies are disbursed by the
Collateral Agent pursuant to the terms of this Agreement.
SECTION 3.15 Reserve Account Security. (a) Subject to
Section 3.15(c), the Company shall not be required at any time to
deposit any monies in the Maintenance Reserve Account, and the
Company shall be entitled from time to time to withdraw monies on
deposit in the Maintenance Reserve Account or the Distribution
Account, provided that and for so long as Reserve Account
Security having an Available Amount thereunder equal to the
amount of such monies otherwise required to be and not so
deposited or the amount of such monies so withdrawn (as the case
may be) shall have been delivered to the Collateral Agent, at or
prior to such time, for deposit into the Maintenance Reserve
Account or the Distribution Account (as the case may be). At the
time of any such deposit, the Collateral Agent shall be entitled
to receive, and (subject to Section 7.2) shall be fully protected
in relying upon, an Opinion of Counsel to the effect that (i)
such Reserve Account Security is permitted by this Section 3.15
and has been delivered in accordance with the provisions hereof,
(ii) such Reserve Account Security has been duly authorized,
executed and delivered by the provider thereof and constitutes a
legal, valid and binding obligation of such provider, enforceable
against such provider in accordance with its terms, except as
such enforceability (A) may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and
other similar laws relating to or affecting the enforcement of
creditors' rights and remedies generally as such laws would apply
in the event of a bankruptcy, insolvency or reorganization of, or
other similar occurrence with respect to, such provider and (B)
is subject to general principles of equity (regardless of whether
considered in a proceeding in equity or at law) or other
customary qualifications and limitations and (iii) payments under
such Reserve Account Security would not constitute avoidable
preferences under Section 547 of the Bankruptcy Code or similar
state laws by or against the provider thereof (or any other
account party thereunder). The Company may from time to time, at
its discretion, replace or reduce the Available Amount (in whole
or in part) under any Reserve Account Security on deposit in the
Maintenance Reserve Account or the Distribution Account (as the
case may be) with other Reserve Account Security having an
Available Amount thereunder, or with monies in an amount, equal
to the Available Amount so replaced or reduced.
(b) Each Reserve Account Security on deposit in the
Maintenance Reserve Account or the Distribution Account shall
provide that not less than forty-five (45) days prior to the
occurrence of a Termination Event with respect to such Reserve
Account Security, the provider thereof shall deliver written
notice to the Collateral Agent and the Company of such
occurrence. The Company shall provide notice to the Collateral
Agent of the occurrence of any Credit Standard Event or Default
Event within three (3) Business Days of its actual or
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constructive knowledge of the event giving rise to such
occurrence.
(c) If (in lieu of any monies required to be deposited
into, or in replacement of monies or other Reserve Account
Security on deposit in, the Maintenance Reserve Account or the
Distribution Account) any Reserve Account Security is on deposit
in the Maintenance Reserve Account or the Distribution Account
pursuant to Section 3.15(a), then, immediately upon the
occurrence of a Required Deposit Event with respect to such
Reserve Account Security, the Company agrees to deposit into the
Maintenance Reserve Account or the Distribution Account (as the
case may be) an amount of monies equal to the Required Deposit
with respect to such Required Deposit Event.
(d) If the Company fails to make any Required Deposit
pursuant to Section 3.15(c) as and when due, then the Collateral
Agent shall, and is hereby authorized to, draw or call upon such
Reserve Account Security in an amount equal to the amount of such
Required Deposit that the Company so failed to deposit; provided,
however, that, if a Required Deposit Event occurs at a time when
more than one Reserve Account Letter of Credit or Southern
Guaranty is on deposit in the Maintenance Reserve Account or the
Distribution Account, the Collateral Agent may elect, in its sole
discretion but subject to, in the case of the Maintenance Reserve
Account, Section 3.5(b) and, in the case of the Distribution
Account, Section 3.8(b), the order in which the Collateral Agent
shall draw upon such Reserve Account Letters of Credit or call
upon such Southern Guaranties (as the case may be). Any amounts
drawn or called upon by the Collateral Agent under any such
Reserve Account Security shall be deposited into the Reserve
Account Security Account in which such Reserve Account Security
was deposited. The Company's obligations under Section 3.15(c)
shall be satisfied to the extent of any such deposit.
SECTION 3.16 Mill Owner Maintenance Reserve Account. The
Company hereby agrees that monies on deposit in, or otherwise
credited to (by means of a guaranty, capital infusion agreement
or otherwise), the Mill Owner Maintenance Reserve Account shall
be used for payment to the Indenture Trustee for deposit into the
Indenture Securities Account and to the Tax-Exempt Indenture
Trustee for deposit into the Tax-Exempt Indenture Securities
Account whenever the amount of monies on deposit in the Indenture
Securities Account, the Tax-Exempt Indenture Securities Account,
the Revenue Account, the Maintenance Reserve Account, each
applicable Debt Service Reserve Account (if any), each applicable
Tax-Exempt Debt Service Reserve Account (if any), the
Distribution Account, the Subordinated Fee Account and the
Subordinated Debt Account (including, in the case of the
Maintenance Reserve Account and the Distribution Account, the
then Available Amount under any Reserve Account Security on
deposit therein) are insufficient to make payments when due on
the Senior Securities.
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ARTICLE IV
PRIORITIES; SUBORDINATION
SECTION 4.1 Priority of Security Interests. (a) Each
Senior Secured Party agrees that, as among the Senior Secured
Parties and subject to the priorities set forth in and the other
provisions of Article VI, the Security Interest of each Senior
Secured Party in any Shared Collateral ranks and will rank
equally in priority with the Security Interest of the other
Senior Secured Parties in the same Shared Collateral.
(b) The priorities specified in this Agreement are
applicable irrespective of any statement in any other Security
Document or in any other Contract to the contrary, the time or
order or method of attachment or perfection of Liens or the time
or order of filing of Financing Statements or the giving or
failure to give notice of the acquisition or expected acquisition
of purchase money or other security interests and, to the extent
not provided for in this Agreement, the rights and priorities of
the Senior Secured Parties shall be determined in accordance with
applicable Law.
(c) The Mobile Energy Parties hereby covenant and agree, as
a condition to entering into any Financing Document or
Subordinated Loan Agreement with a Senior Secured Party or
Subordinated Debt Provider (as the case may be), to cause each
Person holding Senior Debt or Subordinated Debt to become a party
to this Agreement by executing an amendment to this Agreement and
becoming a Senior Secured Party or a Subordinated Debt Provider
(as the case may be) hereunder, and each of the Intercreditor
Parties hereby covenants and agrees to cooperate in respect
thereof.
SECTION 4.2 Subordination. (a) The Mobile Energy Parties
and each Subordinated Debt Provider hereby agree for the benefit
of the Senior Secured Parties that all Subordinated Debt shall be
junior and subordinate, to the extent and in the manner set forth
hereinafter, in right of payment to the prior indefeasible
payment or satisfaction in full of all Secured Obligations. In
furtherance thereof, each Subordinated Debt Provider shall be
subject to the following:
(i) A Subordinated Debt Provider shall not ask,
demand, sue for, take or receive from the Company, directly
or indirectly, in cash or other property or by set-off or in
any other manner (including from or by way of the Collateral
or any guaranty of payment or performance), payment of all
or any Subordinated Debt unless and until the Senior Debt
Termination Date shall have occurred; provided, however,
that nothing in this Section 4.2(a)(i) shall be deemed to
prohibit any Subordinated Debt Provider from receiving
payments in accordance with Section 3.11.
(ii) Until the Senior Debt Termination Date, a
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Subordinated Debt Provider shall not (A) accelerate
Subordinated Debt for any reason (other than as a result of
a Bankruptcy Event in respect of either of the Mobile Energy
Parties), (B) exercise any rights or enforce any remedies or
assert any claim with respect to the Collateral or any
assets of either of the Mobile Energy Parties or sell any of
the Collateral, (C) seek to foreclose Liens that may be
granted to it pursuant to the terms of the Contracts
granting such Liens to such Subordinated Debt Provider or
(D) take any action, directly or indirectly, or institute
any proceedings, directly or indirectly, with respect to the
foregoing; provided, however, that if any principal,
interest or other amount required to be paid to such
Subordinated Debt Provider by the Company is not paid when
due, such Subordinated Debt Provider may charge interest at
the overdue rate specified in the applicable Subordinated
Loan Agreement.
(iii) Upon any distribution of all or any of the assets
of either of the Mobile Energy Parties to its creditors upon
the dissolution, winding up, liquidation, arrangement,
reorganization or composition of such Mobile Energy Party,
whether in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings or upon
a general assignment for the benefit of creditors or any
other marshalling of the assets and liabilities of such
Mobile Energy Party or otherwise, any payment or
distribution of any kind (whether in cash, property or
securities) that otherwise would be payable or deliverable
upon or with respect to Subordinated Debt shall be paid or
delivered directly to the Collateral Agent, if such payment
is of cash, for application to and, if such payment is of
non-cash property or securities, as Collateral for, in
either case, the payment or prepayment of the Financing
Liabilities until the Financing Liabilities have been paid
or otherwise satisfied in full and the Collateral Agent
shall have received notice of such satisfaction, termination
or expiration.
(iv) Each of the Senior Secured Parties hereby
authorizes and directs the Collateral Agent on its behalf to
demand specific performance of the terms of subordination
set forth in this Section 4.2(a), whether or not the Mobile
Energy Parties shall have complied with any of the
provisions hereof applicable to them, at any time when a
Subordinated Debt Provider shall have failed to comply with
any of such provisions applicable to such Subordinated Debt
Provider. Each Subordinated Debt Provider hereby
irrevocably waives any defense based upon the adequacy of a
remedy at law that might be asserted as a bar to such remedy
of specific performance.
(v) Until the Senior Debt Termination Date, a
Subordinated Debt Provider shall not commence or join with
any creditor other than the Collateral Agent in commencing
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any proceeding referred to in paragraph (iii) of this
Section 4.2(a) for the payment of any amounts that otherwise
would be payable or deliverable upon or with respect to
Subordinated Debt.
(vi) Subject to the termination of the Financing
Commitments and the indefeasible payment or satisfaction in
full of all of the Financing Liabilities, the Subordinated
Debt Providers shall be subrogated to the rights of the
Senior Secured Parties to receive payments or distributions
of assets of the Mobile Energy Parties made on the Financing
Liabilities until the Subordinated Debt shall have been
satisfied in full.
The foregoing provisions of this Section 4.2(a) regarding
subordination are for the benefit of the Senior Secured Parties
and shall be enforceable by them directly against the
Subordinated Debt Providers, and no Senior Secured Party shall be
prejudiced in its right to enforce subordination of any
Subordinated Debt by any act or failure to act by either of the
Mobile Energy Parties or anyone in custody of its assets or
property. The Mobile Energy Parties shall not make any payment
to the Subordinated Debt Providers, and the Subordinated Debt
Providers shall not retain any payment from the Mobile Energy
Parties, in contravention of this Section 4.2(a).
(b) Each of the parties hereto hereby acknowledges and
agrees that all amounts due and payable to the IDB (including
payments on the 1994 Bonds, but excluding rent payments under the
IDB Lease Agreement) shall be treated as Operation and
Maintenance Costs and shall in no way be affected by or subject
to the terms of this Agreement.
ARTICLE V
EXERCISE OF RIGHTS
SECTION 5.1 Exercise of Rights Under Security Documents.
So long as any Secured Obligations remain outstanding, the
following provisions shall apply:
(a) If a Trigger Event shall have occurred and be
continuing, upon the written request of the Required Senior
Creditors contained in Senior Creditor Certificates, the
Collateral Agent, on behalf of the Indenture Trustee, the
Tax-Exempt Indenture Trustee and the Working Capital
Facility Provider, as applicable, shall be permitted and is
hereby authorized to take any and all actions and to
exercise any and all rights, remedies and options that it
may have under this Agreement, the other Financing Documents
and applicable Law; provided, however, that if the
underlying event that caused such Trigger Event is a
Bankruptcy Event in respect of either of the Mobile Energy
Parties, no written request of the Required Senior Creditors
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shall be required in order to permit and authorize the
Collateral Agent following such Trigger Event to take any
and all actions and to exercise any and all rights, remedies
and options that it may have under this Agreement, the other
Financing Documents or applicable Law; provided further,
however, that the Collateral Agent shall not amend, modify
or supplement (or agree to consent to any such amendment,
modification or supplement), directly or indirectly or in
the name of either of the Mobile Energy Parties, any Project
Contract if such amendment, modification or supplement shall
adversely affect any Senior Secured Party in any material
respect unless the Collateral Agent shall have obtained the
prior written consent of such Senior Secured Party to such
amendment, modification or supplement. The Collateral Agent
shall provide each Senior Secured Party with at least thirty
(30) days prior written notice of all proposed amendments,
modifications or supplements to the Project Contracts.
Nothing contained herein shall be construed as restricting
the right of any Senior Secured Party to cause the
acceleration, in accordance with the applicable Financing
Document, of the Senior Debt held by such Senior Secured
Party.
(b) The Senior Secured Parties hereby agree to give
each other and the Collateral Agent written notice of the
occurrence of any Event of Default or Trigger Event as soon
as practicable after the occurrence thereof; provided,
however, that the failure to provide such notice shall not
limit or impair the rights of the Senior Secured Parties
hereunder or under any other Financing Document or result in
any liability to the Senior Secured Party failing to do so.
(c) Each Intercreditor Party and the Collateral Agent
hereby acknowledge and agree that (i) all Indenture
Securities Collateral held by the Indenture Trustee in
accordance with Article IV of the Indenture is held for the
benefit of the Holders of the Indenture Securities, (ii) the
Indenture Trustee shall hold such Indenture Securities
Collateral solely for the benefit of the Holders of the
Indenture Securities and (iii) such Indenture Securities
Collateral shall not be subject to the Lien granted by the
Security Agreement or the Mortgage. The Indenture Trustee
hereby acknowledges and agrees that it shall make all
payments to the Collateral Agent required to be made by it
pursuant to the Indenture in accordance with the terms and
conditions of the Indenture.
(d) Each Intercreditor Party and the Collateral Agent
hereby acknowledge and agree that (i) all Tax-Exempt
Indenture Securities Collateral held by the Tax-Exempt
Indenture Trustee in accordance with Article ( ) of the
Tax-Exempt Indenture is held for the benefit of the Holders
of the Tax-Exempt Indenture Securities, (ii) the Tax-Exempt
Indenture Trustee shall hold such Tax-Exempt Indenture
Securities Collateral solely for the benefit of the Holders
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of the Tax-Exempt Indenture Securities and (iii) such Tax-
Exempt Indenture Securities Collateral shall not be subject
to the Lien granted by the Security Agreement or the
Mortgage. The Tax-Exempt Indenture Trustee hereby
acknowledges and agrees that it shall make all payments to
the Collateral Agent required to be made by it pursuant to
the Tax-Exempt Indenture in accordance with the terms and
conditions of the Tax-Exempt Indenture.
(e) Each Intercreditor Party hereby acknowledges and
agrees that the Collateral Agent shall administer the Shared
Collateral in the manner contemplated by this Agreement and
the other Security Documents and the Collateral Agent shall
exercise, as directed by the Required Senior Creditors in
Senior Creditor Certificates in accordance with Section
5.1(a), such rights and remedies with respect to the Shared
Collateral (including the curing of defaults under the
Project Contracts) as are granted to it under the Security
Documents, this Agreement and applicable Law. No
Intercreditor Party and no class or classes of Intercreditor
Parties shall have any right (i) to direct the Collateral
Agent to take any action in respect of the Shared Collateral
other than in accordance with Section 5.1(a) or (ii) to take
any action with respect to the Shared Collateral (A)
independently of the Collateral Agent or (B) other than to
direct the Collateral Agent in writing to take action in
accordance with Section 5.1(a) hereof; provided, however,
that nothing in this Section 5.1(e) shall be deemed to limit
the ability of any Senior Secured Party to take any action
in accordance with Section 5.1(i).
(f) From time to time during the continuation of a
Trigger Event, the Collateral Agent shall, as instructed in
Senior Creditor Certificates of the Required Senior
Creditors in accordance with Section 5.1(a), render an
accounting of the current balance of each Intercreditor
Agreement Account or other amounts or monies administered by
the Collateral Agent under this Agreement.
(g) Each of the Mobile Energy Parties covenants and
agrees that it shall not take any action that would prohibit
or impair the ability of the Collateral Agent from
participating in any objection to any foreclosure or similar
proceeding instituted by a junior lienor against either
Mobile Energy Party; provided, however, that nothing in this
Section 5.1(g) shall, or shall be deemed to, affect the
relationship among the Senior Secured Parties or the
relationship among the Senior Secured Parties, the other
Intercreditor Parties and the Collateral Agent, nor shall
anything in this Section 5.1(g) affect any representation,
warranty, covenant or agreement of any Senior Secured Party
under or in this Agreement.
(h) Each Senior Secured Party hereby agrees that, upon
the request of the Collateral Agent, it shall give notice to
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the Collateral Agent and the Company of (i) all the
outstanding Financing Liabilities owed to such Senior
Secured Party as of the date of such request, (ii) the
unutilized outstanding Financing Commitments of such Senior
Secured Party as of the date of such request and (iii) any
other information that the Collateral Agent may reasonably
request. The Company agrees that, upon the request of the
Collateral Agent, the Company shall send to the Collateral
Agent an Officer's Certificate of the Company certifying as
to the matters described in clauses (i) and (ii) of the
preceding sentence.
(i) Notwithstanding the foregoing provisions of this
Article V, each Senior Secured Party individually shall be
authorized to cure any default of the Company under any
Project Contract in accordance with the Consent to
Assignment executed in connection with such Project
Contract; provided, however, that monies advanced in
connection with such cure shall not constitute Senior Debt
unless such monies would otherwise satisfy the requirements
for the issuance of Senior Debt.
(j) Upon the commencement of the exercise of remedies
the Collateral Agent shall act promptly and in good faith
and take such actions as it reasonably believes to be
necessary to achieve the maximum value for all Shared
Collateral, including Receivables and Fuel Inventory
Proceeds.
(k) The Intercreditor Parties hereby agree that if, at
any time during the term of this Agreement, any
Intercreditor Party receives any payment or distribution of
assets of the Mobile Energy Parties of any kind or
character, whether monies or cash proceeds resulting from
liquidation of the Shared Collateral (other than in
accordance with this Agreement), such Intercreditor Party
shall hold such payment in trust for the benefit of the
Senior Secured Parties and shall immediately remit such
payment or distribution to the Collateral Agent, and the
Collateral Agent shall deposit such monies or proceeds in
the Revenue Account for application or distribution, as the
case may be, in accordance with the terms of this Agreement.
ARTICLE VI
DIVISION OF PROCEEDS
SECTION 6.1 Division of Proceeds. (a) Upon and following
a Wind-Up Event, the proceeds of any sale, disposition or other
realization or collection by the Collateral Agent or by any
Senior Secured Party upon the Shared Collateral (or any portion
thereof) pursuant to the Security Documents shall be distributed
in the following order of priorities:
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First, to the Collateral Agent and to the Indenture
Trustee and the Tax-Exempt Indenture Trustee, ratably, from
proceeds of the Shared Collateral (other than Receivables
and Fuel Inventory Proceeds), to the extent available, and
then from Receivables and Fuel Inventory Proceeds, an amount
equal to the amounts due in respect of the Collateral Agent
Claims and the Trustee Claims, respectively, due and payable
as of the date of such distribution, provided that, prior to
any such distribution to the Indenture Trustee or the Tax-
Exempt Indenture Trustee, the Collateral Agent shall have
received a certificate signed by a Responsible Officer of
the Indenture Trustee and the Tax-Exempt Indenture Trustee
(as the case may be), in form and substance reasonably
satisfactory to the Collateral Agent, setting forth the
amount so payable to the Indenture Trustee and the Tax-
Exempt Indenture Trustee (as the case may be) as of the date
of such distribution;
Second, to the Working Capital Facility Provider from
the Receivables and Fuel Inventory Proceeds, an amount equal
to the unpaid amount of all Financing Liabilities owed by
the Company under the Working Capital Facility, provided
that prior to any such distribution the Collateral Agent
shall have received a certificate executed by an Authorized
Representative of the Working Capital Facility Provider, in
form and substance reasonably satisfactory to the Collateral
Agent, setting forth the amount so payable to the Working
Capital Facility Provider as of the date of such
distribution;
Third, to the Senior Secured Parties (including the
Working Capital Facility Provider to the extent that all
amounts owed to it under the Working Capital Facility have
not been repaid pursuant to paragraph Second of this Section
6.1(a)), ratably, an amount equal to the unpaid amount of
all Financing Liabilities owed to the Senior Secured
Parties, provided that prior to any such distribution the
Collateral Agent shall have received a certificate executed
by an Authorized Representative of each such Senior Secured
Party, in form and substance reasonably satisfactory to the
Collateral Agent, setting forth the amount so payable to
such Senior Secured Party as of the date of such
distribution;
Fourth, to the Subordinated Debt Providers, ratably, an
amount equal to the unpaid obligations owed to such
Subordinated Debt Providers by the Mobile Energy Parties
under any Subordinated Loan Agreement, provided that prior
to any such distribution the Collateral Agent shall have
received a certificate executed by an Authorized
Representative of each such Subordinated Debt Provider, in
form and substance reasonably satisfactory to the Collateral
Agent, setting forth the amount so payable to such
Subordinated Debt Provider as of the date of such
distribution; and
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Fifth, to the Mobile Energy Parties or their successors
or assigns or to whomever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may
direct, any surplus then remaining from such proceeds, it
being understood that each of the Mobile Energy Parties
shall remain liable to the extent of any deficiency between
the amount of the proceeds of the Collateral and the
aggregate of the sums referred to in paragraphs First
through Fourth of this Section 6.1(a).
(b) As used in this Section 6.1, "proceeds" of Shared
Collateral shall mean cash, securities and other property
realized in respect of, and distributions in kind of, Shared
Collateral, including any thereof received under any
reorganization, liquidation or adjustment of Debt of the Mobile
Energy Parties or any issuer of or obligor on any of the Shared
Collateral.
(c) The Collateral Agent shall, upon receipt of indemnity
satisfactory to it, use reasonable efforts to join in any
foreclosure or similar proceeding instituted by a junior lienor
with respect to the Shared Collateral. The Collateral Agent
shall hold all proceeds of the Collateral received by it in
connection with such proceeding instituted by a junior lienor and
not consolidated with any action by the Collateral Agent on
behalf of the Senior Secured Parties pending application of such
proceeds by the Collateral Agent in accordance with the written
instructions of the Required Senior Creditors.
SECTION 6.2 Application of Loss Proceeds. (a) All Loss
Proceeds to be distributed by the Collateral Agent pursuant to
Section 3.10(d)(i) or 3.10(d)(iv) shall be distributed within
five (5) Business Days of the receipt by the Collateral Agent of
the appropriate notice thereunder in the following order of
priorities:
First, to the Collateral Agent and to the Indenture
Trustee and the Tax-Exempt Indenture Trustee, ratably, an
amount equal to the amounts due in respect of the Collateral
Agent Claims and the Trustee Claims, respectively, due and
payable as of the date of such distribution, provided that,
prior to any such distribution to the Indenture Trustee or
the Tax-Exempt Indenture Trustee, the Collateral Agent shall
have received a certificate signed by a Responsible Officer
of the Indenture Trustee or the Tax-Exempt Indenture Trustee
(as the case may be), in form and substance reasonably
satisfactory to the Collateral Agent, setting forth the
amount so payable to the Indenture Trustee and the Tax-
Exempt Indenture Trustee (as the case may be) as of the date
of such distribution; and provided further that such amounts
shall be payable from proceeds of the Shared Collateral
other than Loss Proceeds relating solely to Receivables and
Fuel Inventory Proceeds, to the extent available, prior to
the application of Loss Proceeds relating solely to
Receivables or Fuel Inventory Proceeds for such purpose;
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Second, to the Working Capital Facility Provider, from
Loss Proceeds relating solely to Fuel Inventory Proceeds, an
amount equal to the unpaid Financing Liabilities owed under
the Working Capital Facility, provided that prior to any
such distribution the Collateral Agent shall have received a
certificate executed by a Responsible Officer of the Working
Capital Facility Provider, in form and substance reasonably
satisfactory to the Collateral Agent, setting forth the
amount so payable to the Working Capital Facility Provider
as of the date of such distribution;
Third, to the Senior Secured Parties, ratably, an
amount equal to the unpaid amount of all Financing
Liabilities owed to the Senior Secured Parties, provided
that prior to any such distribution the Collateral Agent
shall have received a certificate executed by a Responsible
Officer of each such Senior Secured Party, in form and
substance reasonably satisfactory to the Collateral Agent,
setting forth the amount so payable to such Senior Secured
Party as of the date of such distribution;
Fourth, to the Mill Owners, in an amount specified
pursuant to Section 10.7 of the Master Operating Agreement
or Article XIV of the Lease, as applicable, provided that
prior to any such distributions the Collateral Agent shall
have received a certificate executed by a Responsible
Officer of each of the Mill Owners and the Company, in form
and substance reasonably satisfactory to the Collateral
Agent, setting forth the amount so payable to each such Mill
Owner as of the date of such distribution;
Fifth, to the Subordinated Debt Providers, ratably, an
amount equal to the unpaid amounts owed to such Subordinated
Debt Providers by the Mobile Energy Parties under any
Subordinated Loan Agreement, provided that prior to any such
distribution the Collateral Agent shall have received a
certificate executed by a Responsible Officer of each such
Subordinated Debt Provider in form and substance reasonably
satisfactory to the Collateral Agent setting forth the
amount payable to such Subordinated Debt Provider pursuant
to this clause as of the date of such distribution; and
Sixth, to the Mobile Energy Parties or their successors
or assigns or to whomever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may
direct, any surplus then remaining from such proceeds.
(b) Subject to the following sentence, within five (5)
Business Days of the completion of the rebuilding, repairing,
restoration or replacement of the Energy Complex contemplated by
Section 3.10(d)(ii) or 3.10(d)(iii), all Loss Proceeds that were
not used for such rebuilding, repairing, restoration or
replacement shall be distributed by the Collateral Agent ratably
(based upon the amount allocable to the specified Person given
the aggregate of the amounts indicated by clauses (i), (ii) and
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(iii) below, as set forth in an Officer's Certificate of the
Company delivered to the Collateral Agent), and in each case to
be applied to the redemption of Senior Debt in accordance with
the terms of the Indenture, the Tax-Exempt Indenture and the
Working Capital Facility (as the case may be), to (i) the
Indenture Trustee in respect of the Outstanding Indenture
Securities, (ii) the Tax-Exempt Indenture Trustee in respect of
the Outstanding Tax-Exempt Indenture Securities and (iii) if the
Working Capital Commitment was reduced in connection with the
applicable Event of Loss or Event of Eminent Domain, the Working
Capital Facility Provider in respect of the lesser of (A) the
principal amount of Working Capital Loans payable as a result of
such reduction and (B) the principal amount of outstanding amount
of Working Capital Loans. Notwithstanding the foregoing, if the
Loss Proceeds that were not used for such rebuilding, repair,
restoration or replacement are less than $3,000,000, then, upon
the receipt of an Officer's Certificate of the Company directing
the Collateral Agent to transfer such excess Loss Proceeds as set
forth in clause (1) or (2) below, and subject to any conditions
set forth in such clauses, the Collateral Agent shall transfer
such excess Loss Proceeds (1) to the Revenue Account, provided
that, if there are Outstanding Tax-Exempt Indenture Securities,
the Tax-Exempt Indenture Trustee and the Collateral Agent shall
receive an opinion of Bond Counsel to the effect that such
transfer and the following application will not adversely effect
the exclusion of interest on such Tax-Exempt Securities from
gross income for Federal income tax purposes or (2) to the
Indenture Securities Account and the Tax-Exempt Indenture
Securities Account, ratably, to be applied to the payment or
redemption of Securities and Tax-Exempt Indenture Securities,
respectively, at the earliest date permissible under the terms
thereof.
(c) Each Senior Secured Party agrees that the proceeds of
any sale, disposition or other realization with respect to
Collateral held by it for the benefit of holders of some but not
all of the Senior Secured Parties shall be applied to the payment
of obligations owed to such Senior Secured Parties for as long as
the specific Collateral is held.
ARTICLE VII
RIGHTS OF SENIOR SECURED PARTIES; RIGHTS
AND DUTIES OF COLLATERAL AGENT
SECTION 7.1 Rights of Senior Secured Parties. As between
the Senior Secured Parties and the Subordinated Debt Providers,
the Senior Secured Parties and the Collateral Agent (upon receipt
of Senior Creditor Certificates from the Required Senior
Creditors) may, at any time and from time to time, without any
consent of or notice to any Subordinated Debt Providers and in
each case in accordance with the Financing Documents: (a) amend
in any manner any Financing Document in accordance with the terms
thereof; (b) sell, exchange, release, not perfect and otherwise
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deal with any property at any time pledged, assigned or mortgaged
to secure the Financing Liabilities in accordance with the
Financing Documents; (c) release anyone liable in any manner
under or in respect of the Financing Liabilities; (d) exercise or
refrain from exercising any rights against the Mobile Energy
Parties and others; and (e) apply any sums from time to time
received to payment or satisfaction of the Financing Liabilities,
except as otherwise provided in Article VI.
SECTION 7.2 Duties of Collateral Agent. (a) The
Collateral Agent will give notice to the Senior Secured Parties
of any action taken, or notices received, by the Collateral Agent
hereunder or under any other Financing Document; notice of action
taken shall be given prior to the taking of such action by the
Collateral Agent unless the Collateral Agent determines that to
do so would be detrimental to the interests of the Senior Secured
Parties, in which event such notice shall be given promptly after
the taking of such action.
(b) The Senior Secured Parties agree that all liens on and
security interests in the Shared Collateral securing the Secured
Obligations shall be held in the name of the Collateral Agent and
administered by and through the Collateral Agent, in accordance
with this Agreement, the other Financing Documents and applicable
Law. If, as of the date hereof, or at any time in the future,
any Senior Secured Party at any time holds a lien on or security
interest in any Shared Collateral in its own name, it agrees to
assign it, without warranty or recourse, to the Collateral Agent
(to be held by the Collateral Agent as the collateral agent for
the Senior Secured Parties). The Collateral Agent shall hold its
liens on and security interests in the Shared Collateral for the
benefit of the Senior Secured Parties as provided herein and in
the other Financing Documents.
(c) Notwithstanding anything to the contrary in this
Agreement or any other Financing Document, the Collateral Agent
shall not be required to exercise any rights or remedies under
this Agreement, any of the other Financing Documents or
applicable Law or give any consent under this Agreement or any of
the other Financing Documents or enter into any Contract
amending, modifying, supplementing or waiving any provision of
any this Agreement or any other Financing Document unless it
shall have been directed to do so in Senior Creditor Certificates
of the Required Senior Creditors.
(d) Upon receipt of a written direction contained in Senior
Creditor Certificates representing a majority in principal amount
of the Combined Exposure, the Collateral Agent shall deliver the
written notice specified in Section 5.17(c) of the Indenture to
the Indenture Trustee and in Section 4.17(c) of the IDB Lease
Agreement to the Tax-Exempt Indenture Trustee.
SECTION 7.3 Rights of Collateral Agent. (a) The
Collateral Agent may execute any of its duties under this
Agreement, any other Financing Documents or applicable Law by or
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through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such
duties.
(b) Neither the Collateral Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to
be taken by it under or in connection with this Agreement or any
other Financing Documents (except for its negligence or willful
misconduct) or (ii) responsible in any manner to any of the
Senior Secured Parties for any recitals, statements,
representations or warranties made in this Agreement or any other
Financing Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Collateral Agent under or in connection with, this Agreement or
any other Financing Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Financing Documents or for any failure of
the Mobile Energy Parties or any other Person to perform their
obligations hereunder or thereunder.
(c) The Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing,
resolution, request, direction, certificate, notice, consent,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons or upon
an opinion of legal counsel (including counsel to the Mobile
Energy Parties), independent accountants or other experts
selected by the Collateral Agent. In connection with any request
or direction of the Required Senior Creditors, the Collateral
Agent shall act in accordance with directions contained in, shall
be entitled to rely and shall be fully protected in relying on
any Senior Creditor Certificate delivered by a Senior Secured
Party; provided, however, that in the event the Collateral Agent
receives conflicting directions contained in Senior Creditor
Certificates from more than one of the Senior Secured Parties,
the Collateral Agent shall act in accordance with directions
contained in Senior Creditor Certificates representing the
greatest percentage in principal amount of the Combined Exposure.
The Collateral Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other
applicable Financing Document (i) if such action would, in the
opinion of the Collateral Agent (which may be based upon the
opinion of legal counsel), be contrary to law or the terms of
this Agreement or such other applicable Financing Document, (ii)
if such action is not specifically provided for in this Agreement
or such other Financing Documents or it shall not have received
any such advice or concurrence of the Required Senior Creditors
as it deems appropriate, (iii) if, in connection with the taking
of any such action hereunder or under such Financing Documents
that would constitute an exercise of remedies hereunder or under
such Financing Documents, it shall not first be indemnified to
its satisfaction by the Senior Secured Parties (other than the
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Indenture Trustee and the Tax-Exempt Indenture Trustee in their
individual capacities) against any and all risk of nonpayment,
liability and expense that may be incurred by it by reason of
taking or continuing to take any such action or (iv) if,
notwithstanding anything to the contrary contained in Section
7.3(e), in connection with the taking of any such action that
would constitute a payment due under any Project Contract, it
shall not first have received from the Senior Secured Parties
funds equal to the amount payable. The Collateral Agent shall in
all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Financing Document in
accordance with a request contained in Senior Creditor
Certificates representing the Required Senior Creditors, and such
request and any action taken or failure to act pursuant thereto
shall be binding upon all the Intercreditor Parties.
(d) If, with respect to a proposed action to be taken by
it, the Collateral Agent shall determine in good faith that the
provisions of this Agreement or any other Financing Document
relating to the functions or responsibilities or discretionary
powers of the Collateral Agent are or may be ambiguous or
inconsistent, the Collateral Agent shall notify the Senior
Secured Parties, identifying the proposed action, and may decline
either to perform such function or responsibility or to take the
action requested unless it has received the written confirmation
of the Required Senior Creditors executed by their Authorized
Representatives that the Required Senior Creditors concur in the
circumstances that the action proposed to be taken by the
Collateral Agent is consistent with the terms of this Agreement
or such other Financing Document or is otherwise appropriate.
The Collateral Agent shall be fully protected in acting or
refraining from acting upon the confirmation of the Required
Senior Creditors in this respect, and such confirmation shall be
binding upon the Collateral Agent and the other Intercreditor
Parties.
(e) The Collateral Agent shall not be deemed to have
actual, constructive, direct or indirect knowledge or notice of
the occurrence of any default or Event of Default unless and
until a Responsible Officer of the Collateral Agent has received
a written notice or a certificate from an Authorized
Representative of an Intercreditor Party stating that a default
or an Event of Default has occurred. The Collateral Agent shall
have no obligation whatsoever either prior to or after receiving
such notice or certificate to inquire whether or not a default or
an Event of Default has in fact occurred and shall be entitled to
rely conclusively, and shall be fully protected in so relying, on
any notice or certificate so furnished to it. No provision of
this Agreement or any other Financing Document shall require the
Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or under any other Financing Document or the
exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability, including an
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advance of monies necessary to take the action requested, is not
reasonably assured to it; in addition, in respect of any
potential environmental liability or the taking of title to any
real property, the Collateral Agent may decline to act unless it
receives indemnity satisfactory to it in its sole discretion,
including an advance of monies necessary to take the action
requested. In the event that the Collateral Agent receives such
a notice of the occurrence of any Event of Default, the
Collateral Agent shall give notice thereof to the Senior Secured
Parties. The Senior Secured Parties shall provide evidence of
satisfactory indemnity to the Collateral Agent for any action
directed by the Required Senior Creditors including an advance of
monies necessary to take the action requested. The Collateral
Agent shall take such action with respect to such Event of
Default as so requested pursuant to Section 5.1(a), subject,
however, to the third sentence of this Section 7.3(e).
(f) The Mobile Energy Parties will pay upon demand to the
Collateral Agent the amount of any and all reasonable fees and
out-of-pocket expenses, including the reasonable fees and
expenses of its counsel (and any one local counsel) and of any of
its experts and agents, that the Collateral Agent may incur in
connection with (i) the administration of this Agreement and the
other Financing Documents, (ii) the custody or preservation of,
or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the exercise or enforcement (whether
through negotiations, legal proceedings or otherwise) of any of
the rights of the Collateral Agent or the Senior Secured Parties
hereunder or under the other Financing Documents or (iv) the
failure by the Mobile Energy Parties to perform or observe any of
the provisions hereof or of any of the other Security Documents.
The provision of this Section 7.3(f) shall survive the expiration
or earlier termination of this Agreement.
(g) Each of (i) the Mobile Energy Parties hereby agrees to
deliver to the Collateral Agent, concurrently with the delivery
thereof to any Senior Secured Party, and (ii) the Senior Secured
Parties hereby agrees to deliver to the Collateral Agent,
concurrently with the delivery thereof to either of the Mobile
Energy Parties, all notices, requested documents and other
instruments delivered by such Person to such Senior Secured Party
or the Mobile Energy Parties (as the case may be) under or
pursuant to the Financing Documents.
SECTION 7.4 Lack of Reliance on the Collateral Agent.
Each of the Senior Secured Parties expressly acknowledges that
neither the Collateral Agent nor any of its officers, directors,
employees, agents or attorneys-in-fact has made any
representations or warranties to it and that no act by the
Collateral Agent hereafter taken, including any review of the
Energy Complex or of the affairs of the Mobile Energy Parties,
shall be deemed to constitute any representation or warranty by
the Collateral Agent to any Senior Secured Party. Each Senior
Secured Party (other than the Indenture Trustee and the Tax-
Exempt Indenture Trustee) represents to the Collateral Agent that
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it has, independently and without reliance upon the Collateral
Agent or any other Senior Secured Party, and based upon such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of
the Energy Complex and the Mobile Energy Parties. Each Senior
Secured Party (other than the Indenture Trustee and the Tax-
Exempt Indenture Trustee) also represents that it will,
independently and without reliance upon the Collateral Agent or
any other Senior Secured Party, and based upon such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Energy Complex and the Mobile Energy
Parties. Except for notices, reports and other documents
expressly required to be furnished to the Senior Secured Parties
by the Collateral Agent hereunder, the Collateral Agent shall not
have any duty or responsibility to provide any Senior Secured
Party with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Energy Complex and the Mobile Energy
Parties that may come into the possession of the Collateral Agent
or any of its officers, directors, employees, agents or
attorneys-in-fact.
ARTICLE VIII
INDEMNIFICATION
The Senior Secured Parties severally agree to indemnify the
Collateral Agent in its capacity as such and in its individual
capacity (to the extent not reimbursed by the Mobile Energy
Parties and without limiting the obligation of the Mobile Energy
Parties to do so), ratably according to the aggregate amounts of
their respective Secured Obligations on the date the activities
giving rise to the Collateral Agent's demand for indemnification
occurred, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any
time be imposed on, incurred by or asserted against the
Collateral Agent in its capacity as such and in its individual
capacity in any way relating to or arising out of this Agreement
or the other Financing Documents or the performance of its duties
as Collateral Agent hereunder or thereunder or any action taken
or omitted by the Collateral Agent in its capacity as such under
or in connection with any of the foregoing (including any claim
that the Collateral Agent is the owner or operator of the Energy
Complex and liable as such pursuant to any Environmental
Requirement), provided that the Senior Secured Parties shall not
be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent that any of
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the foregoing result from the Collateral Agent's negligence or
willful misconduct. The agreements in this Article VIII shall
survive the payment or satisfaction in full of the Secured
Obligations or any other termination of this Agreement.
Each of the Mobile Energy Parties agrees, jointly and
severally, to indemnify the Collateral Agent and each Senior
Secured Party from and against any and all claims, losses and
liabilities relating to or arising out of (i) this Agreement or
any other Financing Documents (including enforcement of such
Financing Documents, but excluding any such claims, losses or
liabilities resulting from the Collateral Agent's or such Senior
Secured Party's negligence or willful misconduct) or (ii) any
refund or adjustment of any amount paid or payable to the
Collateral Agent or any Senior Secured Party under or in respect
of any Project Contract or any other Shared Collateral, or any
interest thereon, that may be ordered or otherwise required by
any Person.
ARTICLE IX
ELIGIBILITY OF COLLATERAL AGENT;
REMOVAL AND REPLACEMENT OF COLLATERAL AGENT
SECTION 9.1 Corporate Collateral Agent Required;
Eligibility. There shall at all times be a Collateral Agent
hereunder that shall be a bank or trust company organized and
doing business under the laws of the United States of America or
of any State thereof, authorized under such laws to exercise
corporate trust powers, having (or whose obligations are
unconditionally guaranteed by a corporation having) a combined
capital and surplus of at least $500,000,000, which bank or trust
company is subject to supervision or examination by Federal or
state authority and does not provide credit or credit enhancement
to either of the Mobile Energy Parties. If such bank or trust
company publishes reports of condition at least annually,
pursuant to Law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section 9.1, the combined capital and surplus of such bank or
trust company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Collateral Agent shall cease to be
eligible in accordance with the provisions of this Article, it
shall resign immediately in the manner and with the effect
hereinafter specified in this Section 9.1.
SECTION 9.2 Registration, Removal and Replacement. The
Collateral Agent may resign as Collateral Agent upon thirty (30)
days' written notice to the Senior Secured Parties and may be
removed at any time with or without cause by the Required Senior
Creditors, with any such resignation or removal to become
effective only upon the appointment of a successor Collateral
Agent under this Section 9.2. If the Collateral Agent shall
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resign or be removed as Collateral Agent, then the Required
Senior Creditors shall (and if no such successor shall have been
appointed within thirty (30) days of the Collateral Agent's
resignation or removal, the Collateral Agent may) appoint a
successor agent for the Senior Secured Parties, whereupon such
successor agent shall succeed to the rights, powers and duties of
the "Collateral Agent," and the term "Collateral Agent" shall
mean such successor agent effective upon its appointment, and the
former Collateral Agent's rights, powers and duties as Collateral
Agent shall be terminated, without any other or further act or
deed on the part of such former Collateral Agent (except that the
resigning Collateral Agent shall deliver all Collateral then in
its possession to the successor Collateral Agent) or any of the
Intercreditor Parties. The indemnity given any retiring
Collateral Agent pursuant to Article VIII and any further
indemnity granted under Section 6.1(c), 7.3(c) or 7.3(e) shall
survive any resignation or removal hereunder. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent. In the event that a successor
Collateral Agent is not appointed within the time period
specified in this Section 9.2 following a resignation or removal
of the Collateral Agent, the Collateral Agent or any Senior
Secured Party may petition a court of competent jurisdiction for
the appointment of a successor Collateral Agent.
ARTICLE X
REPRESENTATIONS
(a) Representations of Mobile Energy Parties. Each of the
Mobile Energy Parties represents and warrants, as to itself and
not to the other, to the Collateral Agent as follows:
(i) The Company is (A) a limited liability company
duly formed, validly existing and in good standing under the
laws of the State of Alabama and (B) duly authorized to do
business and is in good standing in each jurisdiction where
the character of its properties or the nature of its
activities makes such qualification necessary. Mobile
Energy is (A) a corporation duly formed, validly existing
and in good standing under the laws of the State of Alabama
and (B) duly authorized to do business and is in good
standing in each jurisdiction where the character of its
properties or the nature of its activities makes such
qualification necessary. Each of the Mobile Energy Parties
has all requisite limited liability company or corporate (as
the case may be) power and authority to own and operate the
property it purports to own and to carry on its business as
now being conducted and as proposed to be conducted in
respect of the Energy Complex.
(ii) Each of the Mobile Energy Parties has all
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necessary limited liability company or corporate (as the
case may be) power and authority to execute, deliver and
perform its obligations under this Agreement.
(iii) All action on the part of the Mobile Energy
Parties that is required for the authorization, execution,
delivery and performance of this Agreement has been duly and
effectively taken. The execution, delivery and performance
of this Agreement by the Mobile Energy Parties does not
require the approval or consent of any member or
shareholder, or holder or trustee of any Debt or other
obligations, of either of the Mobile Energy Parties that has
not been obtained.
(iv) This Agreement has been duly executed and
delivered by each of the Mobile Energy Parties and
constitutes a legal, valid and binding obligation of such
Mobile Energy Party, enforceable against it in accordance
with the terms thereof, except as such enforceability (i)
may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and
similar laws relating to or affecting the enforcement of
creditors' rights and remedies generally and (ii) is subject
to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought and to public policy or
Federal or state laws that might limit rights to
indemnification.
(v) Neither the execution, delivery and performance of
this Agreement by the Mobile Energy Parties nor the
consummation of any of the transactions contemplated hereby
by the Mobile Energy Parties nor performance of or
compliance with the terms and conditions hereof or thereof
by the Mobile Energy Parties (A) contravenes any
Governmental Approvals or any provision of Law applicable to
either of the Mobile Energy Parties or any of the
Collateral, (B) conflicts with or constitutes a default
under or results in the violation of the provisions of the
Articles of Organization or (Operating Agreement) of the
Company or certificate of incorporation or by-laws of Mobile
Energy or, unless such conflict, default or violation would
not reasonably be expect to have a Material Adverse Effect,
of any other Project Documents or any indenture, mortgage,
deed of trust, sale/leaseback agreement, loan agreement or
other similar financing agreement or instrument or other
agreement or instrument to which either of the Mobile Energy
Parties is a party or by which such Mobile Energy Party or
any of its property or assets is bound or to which either
may be subject or (C) results in the creation or imposition
of any Liens (other than Permitted Liens) on any of the
property or assets of either of the Mobile Energy Parties,
or results in the acceleration of any obligation of either
of the Mobile Energy Parties, that would reasonably be
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expected to have a Material Adverse Effect.
(vi) There are no claims, actions, suits,
investigations or proceedings at law or in equity by or
before any arbitrator or any Governmental Authority now
pending or (to the knowledge of the Mobile Energy Parties)
threatened against either of the Mobile Energy Parties or
any Affiliate thereof, or any property or other assets or
rights of either of the Mobile Energy Parties or any
Affiliate thereof with respect to this Agreement, any other
Project Document or the Energy Complex, that would
reasonably be expected to result in a Material Adverse
Effect.
(b) Representations of Senior Secured Parties. Each of the
Indenture Trustee, the Tax-Exempt Indenture Trustee and the
Working Capital Facility Provider, represents and warrants as to
itself and not the others, to the Collateral Agent as follows:
(i) It is duly formed, validly existing and in good
standing under the laws of the jurisdiction of its
organization and is duly qualified to do business and is in
good standing in each jurisdiction where the character of
its properties or the nature of its activities makes such
qualification necessary, except where the failure to effect
such qualification would not have a material adverse effect
upon its ability to perform its obligations under this
Agreement and the other Financing Documents to which it is a
party. It has all necessary power and authority (corporate
or otherwise) to execute, deliver and perform under this
Agreement and such other Financing Documents.
(ii) All action on its part that is required for the
authorization, execution, delivery and performance of this
Agreement and the other Financing Documents to which it is a
party has been duly and effectively taken. The execution,
delivery and performance of this Agreement and the other
Financing Documents to which it is a party do not require
the approval or consent of any shareholder or the holder or
trustee of any Debt or other obligations that has not been
obtained.
(iii) This Agreement and each of the other Financing
Documents to which it is a party have been duly executed and
delivered by each such Senior Secured Party and constitute
the legal, valid and binding obligation of each such Senior
Secured Party, enforceable against it in accordance with the
terms thereof, except as such enforceability (A) may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
the enforcement of creditors' rights and remedies generally
and (B) is subject to general principles of equity
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
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(iv) Neither the execution, delivery and performance of
this Agreement and the other Financing Documents to which it
is a party nor the consummation of any of the transactions
contemplated hereby or thereby or performance of or
compliance with the terms and conditions hereof or thereof
(A) contravenes any Governmental Approvals or any provision
of Law applicable to such Senior Secured Party or any of the
Collateral or (B) constitutes a default under or results in
the violation of the provisions in the charter, certificate
of incorporation or by-laws of such Senior Secured Party or
of any indenture, loan or credit agreement or any other
agreement, lease, instrument or document to which such
Senior Secured Party is a party or by which it or its
properties may be bound.
(v) There are no actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now
pending or, to the best of such Senior Secured Party's
knowledge, threatened that could reasonably be expected to
have a material and adverse effect on the performance by
such Senior Secured Party of its obligations hereunder or
under the other Financing Documents to which it is a party
or that questions the validity, binding effect or
enforceability hereof or of such other Financing Documents,
any action to be taken pursuant hereto or thereto or any
transactions contemplated hereby or thereby.
ARTICLE XI
INDEPENDENT ENGINEER
SECTION 11.1 Removal of Independent Engineer; Payment of
Independent Engineer. (a) The Collateral Agent shall remove the
Independent Engineer (i) if at any time the Independent Engineer
becomes incapable of acting or is, or is reasonably likely to be,
adjudged bankrupt or insolvent or a receiver is appointed for, or
any public officer shall take charge or control of, the
Independent Engineer or its property or its affairs for the
purpose of rehabilitation, conservation or liquidation, (ii) upon
receipt of Senior Creditor Certificates representing 33-1/3% of
the aggregate principal amount of Outstanding Senior Securities
or (iii) upon the reasonable request of the Company if (A) the
Independent Engineer has failed to carry out its obligations
under the Financing Documents or (B) during the last month of a
Fiscal Year the Company demonstrates to the reasonable
satisfaction of the Collateral Agent that a Qualified Engineer
has agreed to perform, for costs and fees in an amount equal to
or less than ninety-five percent (95%) of the amount of costs and
fees charged by the then Independent Engineer, the services
specified in and contemplated by the Financing Documents on
substantially identical non-price terms as those contained in the
Independent Engineer Agreement relating to the engagement of the
then current Independent Engineer. Any such removal of the
Independent Engineer shall become effective only upon the
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appointment of a successor Independent Engineer under Section
11.1(b).
(b) If the Independent Engineer shall be removed or shall
resign, then the Company shall appoint a successor Independent
Engineer from the list of Qualified Engineers attached as
Schedule 1, such successor to be, (i) in the case of a removal of
the Independent Engineer pursuant to Section 11.1(a)(iii)(B), the
Qualified Engineer referred to in such Section 11.1(a)(iii)(B)
and (ii) in any other case, one (1) of two (2) Qualified
Engineers designated by the Collateral Agent.
(c) The Company shall pay for all services performed by the
Independent Engineer and its reasonable costs and expenses
related thereto.
SECTION 11.2 Third Party Engineer Dispute Resolution. If
the Company and the Independent Engineer are in dispute in
respect of a notice, plan, report, certificate or budget and they
are unable to resolve the dispute within seven (7) days of the
Independent Engineer expressing its disagreement with such
notice, plan, report, certificate or budget, a Qualified Engineer
(the "Third Party Engineer") shall be designated to consider and
decide the issues raised by such dispute. The Company shall
designate the Third Party Engineer not later than the third (3rd)
day following the expiration of the seven (7) day period
described above and such designation shall become effective in
three (3) days, unless the Collateral Agent gives notice of its
disagreement with such selection within such three (3) day
period, in which case the Company shall designate a different
Qualified Engineer as the Third Party Engineer. Within three (3)
days of the effectiveness of a designation of a Third Party
Engineer, each of the Company and the Independent Engineer shall
submit to the Third Party Engineer a notice setting forth in
detail such Person's position in respect of the issues in
dispute. Such notice shall include supporting documentation, if
appropriate. The Third Party Engineer shall complete all
proceedings and issue its decision with regard to the issues in
dispute as promptly as reasonably possible, but in any event
within ten (10) days of the date on which it is designated as
Third Party Engineer hereunder unless the Third Party Engineer
reasonably determines that additional time is required in order
to give adequate consideration to the issues raised. In such
case, the Third Party Engineer shall state in writing its reasons
for believing that additional time is needed and shall specify
the additional period required, which such period shall not
exceed ten (10) days without the Company's agreement. If the
Third Party Engineer determines that the concerns set forth in
the Independent Engineer's notice are valid, the Third Party
Engineer shall so state and shall state the corrective actions to
be taken by the Company, if any. In such case, the Company shall
promptly take such actions. The Company shall thereafter bear
all costs that may arise from actions taken pursuant to the Third
Party Engineer's decision. If the Third Party Engineer
determines that the concerns set forth in the Independent
40
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Engineer's notice are not valid, the Third Party Engineer shall
so state and shall state the appropriate actions to be taken by
the Company, if any. In such case, the Company shall take such
actions and for purposes of this Agreement and the other
Financing Documents, the Independent Engineer shall be deemed to
have approved, confirmed, concurred in or consented to the
notice, plan, report, certificate or budget in dispute. The
decision of the Third Party Engineer shall be final and non-
appealable. The Company shall bear all reasonable costs incurred
by the Third Party Engineer in connection with this dispute
resolution mechanism.
SECTION 11.3 Qualified Engineers. Each successor
Independent Engineer and each Third Party Engineer shall be
selected from the list of Qualified Engineers set forth in
Schedule 1. At any time either the Company or the Collateral
Agent may (and, upon receipt of Senior Creditor Certificates
representing 33-1/3% of the aggregate principal amount of
Outstanding Senior Securities, the Collateral Agent shall) remove
a Qualified Engineer from the list by obtaining the other
Person's consent to such removal (which consent shall not be
unreasonably withheld or delayed). However, neither the Company
nor the Collateral Agent may remove a name or names from the list
if such removal would leave the list without at least three (3)
names, unless, concurrently therewith, the Company and the
Collateral Agent reasonably agree to the addition of one (1) or
more names to such list. During January of each year, each of
the Company and the Collateral Agent shall review the current
list of Qualified Engineers and give notice to the other of any
proposed additions and deletions to the list. Any such proposed
addition or deletion shall become effective upon obtaining the
other party's consent (which may not be unreasonably withheld),
provided that in no event may a deletion be effective if such
deletion would leave the list without at least three (3) names,
unless, concurrently therewith, the Company and the Collateral
Agent reasonably agree to the addition of one (1) or more names
to such list. By mutual agreement between the Company and the
Collateral Agent a new name or names may be added to the list of
Qualified Engineers at any time.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Agreement for Benefit of Parties Hereto.
Nothing in this Agreement, express or implied, is intended or
shall be construed to confer upon, or to give to, any Person
other than the parties hereto and Persons for whom the parties
hereto are acting as agents or representatives and their
respective successors and assigns, any right, remedy or claim
under or by reason of this Agreement or any covenant, condition
or stipulation hereof, and the covenants, stipulations and
agreements contained in this Agreement are and shall be for the
sole and exclusive benefit of the parties hereto and their
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respective successors and assigns and Persons for whom the
parties hereto are acting as agents or representatives.
SECTION 12.2 No Warranties. Except as otherwise expressly
provided herein, the Senior Secured Parties have not made to each
other nor do they hereby or otherwise make to each other any
warranties, express or implied, nor do they assume any liability
to each other with respect to the enforceability, validity, value
or collectability of the Collateral (or any portion thereof). No
Senior Secured Party shall be liable to any other Intercreditor
Party for any action or failure to act or any error of judgment,
negligence, or mistake, or oversight whatsoever on the part of
any Intercreditor Party or any Intercreditor Party's agents,
officers, employees or attorneys with respect to any transaction
relating to any of the Contracts evidencing or entered into with
respect to any of the Secured Obligations or any security
therefor.
SECTION 12.3 Severability. In case any provision in this
Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby.
SECTION 12.4 Notices. All notices, demands, certificates
or other communications hereunder shall be in writing and shall
be deemed sufficiently given or served for all purposes when
delivered personally, when sent by certified or registered mail,
postage prepaid, return receipt requested or by private courier
service, or, if followed and confirmed by mail or courier service
notice, when telecopied, in each case, with the proper address as
indicated below. Each party hereto may, by written notice given
to the other parties hereto, designate any other address or
addresses to which notices, certificates or other communications
to them shall be sent as contemplated by this Agreement. Notices
shall be deemed to have been given if and when received by an
officer, manager or supervisor in the department of the addressee
specified for attention (unless such addressee refuses to accept
delivery, in which case they shall be deemed to have been given
when first presented to such addressee for acceptance). Until
otherwise so provided by the respective parties hereto, all
notices, certificates and communications to each of them shall be
addressed as follows:
Indenture Trustee: First Union National Bank of
Georgia
(Address)
Attention:
Tax-Exempt Indenture Trustee: First Union National Bank of
Georgia
(Address)
Attention:
Working Capital Facility
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Provider: Banque Paribas
(Address)
Attention:
IDB: The Industrial Development Board of
The City of Mobile, Alabama
(Address)
Attention:
Company: Mobile Energy Services Company,
L.L.C.
(Address)
Attention:
Mobile Energy: Mobile Energy Services Holdings,
Inc.
(Address)
Attention:
Collateral Agent: Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and
Agency Group
SECTION 12.5 Successors and Assigns. All covenants,
agreements, representations and warranties in this Agreement by
the parties hereto shall bind and, to the extent permitted
hereby, shall inure to the benefit of and be enforceable by their
respective successors and assigns, whether so expressed or not.
SECTION 12.6 Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed
shall be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
SECTION 12.7 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, EXCEPT THAT SUCH
LAWS SHALL NOT APPLY WITH RESPECT TO ANY COLLATERAL WHERE, AND TO
THE EXTENT THAT, IT IS NECESSARY TO APPLY THE LAWS OF ANOTHER
JURISDICTION TO PERFECT LIENS RELATING TO DEBT ISSUED UNDER THE
FINANCING DOCUMENTS.
SECTION 12.8 No Impairments of Other Rights. Nothing in
this Agreement is intended or shall be construed to impair,
diminish or otherwise adversely affect any other rights the
Senior Secured Parties may have or may obtain against the Mobile
Energy Parties, including the rights referred to in Section 8.10
of the Indenture and Section ( ) of the Tax-Exempt Indenture.
SECTION 12.9 Amendment; Waiver. No amendment, modification
or supplement of this Agreement shall be effective unless such
amendment, modification or supplement was effected in accordance
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with Section 7.2(c) of this Agreement. Any approval of an
amendment to, or any waiver of any provision of, this Agreement
shall be effective only in the specific instance and for the
specific purpose for which such approval or waiver is given. No
delay on the part of any Senior Secured Party in the exercise of
any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by any such Senior Secured
Party of any right, power or remedy preclude any further exercise
thereof, or the exercise of any other right, power or remedy.
SECTION 12.10 Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 12.11 Termination. This Agreement shall remain in
full force and effect until payment in full of all the Financing
Liabilities and termination of the Financing Commitments.
Following the Senior Debt Termination Date, this Agreement shall
continue in full force and effect among the Mobile Energy
Parties, the Subordinated Debt Providers and the Collateral
Agent, and the Subordinated Debt Providers shall then have all
powers, duties and obligations granted hereunder to the Senior
Secured Parties as if they were Senior Secured Parties hereunder.
SECTION 12.12 Entire Agreement. This Agreement, including
the documents referred to herein, embodies the entire agreement
and understanding of the parties hereto and supersedes all prior
agreements and understandings of the parties hereto relating to
the subject matter herein contained.
SECTION 12.13 Limitation on Liability of Mobile Energy
Parties. Satisfaction of the obligations of the Mobile Energy
Parties under this Agreement shall be had solely from the assets
of the Mobile Energy Parties. No recourse shall be had to (a)
any assets or properties of the Members (other than Mobile Energy
as provided in Article XIV of the Indenture) or of the
stockholders of Mobile Energy, other than their respective
interests in the Collateral, (b) any Member (other than Mobile
Energy as provided in Article XIV of the Indenture) or (c) any
Affiliate, incorporator, stockholder, partner, member, officer,
director or employee of any Member (other than the Company and,
in respect of any Southern Guaranty on deposit in any Reserve
Account Security Account, Southern) or of the Company (other than
Mobile Energy and, in respect of any Southern Guaranty on deposit
in any Reserve Account Security Account, Southern).
Notwithstanding anything in this Section 12.13 to the contrary,
(i) nothing contained in this Agreement shall limit or otherwise
prejudice in any way the right of the Collateral Agent and the
Senior Secured Parties to proceed against any Person whomsoever
(A) with respect to the enforcement of such Person's obligations
under any Project Document (including the Guaranty and any
Southern Guaranty to which such Person is a party) or limit or
otherwise prejudice in any way the right of the Collateral Agent,
the Senior Secured Parties, the Holders of Indenture Securities
or the Holders of Tax-Exempt Indenture Securities to proceed
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against such Person with respect to the enforcement of such
obligations or (B) to the extent necessary to realize the benefit
of the Collateral granted under the Security Documents and (ii)
any limitations of liability herein shall not apply if and to the
extent that any Person commits fraud or wilful
misrepresentations, including those contained in Officer's
Certificates issued from time to time.
SECTION 12.14 Submission to Jurisdiction. The parties
hereto hereby submit to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New
York and of any New York State Court sitting in New York City for
the purposes of all legal proceedings arising out of or relating
to this Agreement or the other Financing Documents of any of the
transactions contemplated herein or therein. The parties hereto
hereby irrevocably waive, to the fullest extent permitted by law,
any objection that they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized, as of the day and year first above
written.
FIRST UNION NATIONAL BANK OF GEORGIA, as
Trustee (on behalf of the Holders of the
Indenture Securities)
By:
Name:
Title:
FIRST UNION NATIONAL BANK OF GEORGIA, as
Tax-Exempt Indenture Trustee (on behalf
of the Holders of the Tax-Exempt
Indenture Securities)
By:
Name:
Title:
BANQUE PARIBAS, as Working Capital
Facility Provider
By:
Name:
Title:
By:
Name:
Title:
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MOBILE, ALABAMA
By:
Name:
Title:
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MOBILE ENERGY SERVICES COMPANY, L.L.C.
By:
Name:
Title:
MOBILE ENERGY SERVICES HOLDINGS, INC.
By:
Name:
Title:
BANKERS TRUST COMPANY, as Collateral
Agent
By:
Name:
Title:
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<PAGE>
Schedule 1
Qualified Engineers
<PAGE>
Exhibit A
Requisition No. _______
Date:__________________
Form of Requisition or Disbursement from Loss Proceeds Account
Bankers Trust Company, as Collateral Agent
Four Albany Street
New York, New York 10006
Ladies and Gentlemen:
Reference is hereby made to that certain Intercreditor
and Collateral Agency Agreement, dated as of _____, 1995, by and
among First Union National Bank of Georgia, as Trustee, First
Union National Bank of Georgia, as Tax-Exempt Indenture Trustee,
Banque Paribas, as Working Capital Facility Provider, the
Industrial Development Board of the City of Mobile, Alabama,
Mobile Energy Services Company, L.L.C. (the "Company"), Mobile
Energy Services Holdings, Inc. and Bankers Trust Company, as
Collateral Agent (as such agreement may be amended, modified or
supplemented from time to time, the "Intercreditor Agreement").
Terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Intercreditor Agreement.
The Company hereby requests, pursuant to Section
3.10(b) of the Intercreditor Agreement, that the Collateral Agent
make a disbursement from the Loss Proceeds Account in the
aggregate amount of $_____ (the "Requested Disbursement").
The date that the Requested Disbursement is to be made
is _____. Cash disbursement instructions for the Requested
Disbursement are set forth in Annex 1 hereto.
All monies released from the Loss Proceeds Account
pursuant to this Requisition shall be secured by the Financing
Documents, including, without limitation, the Mortgage.
The undersigned, an Authorized Officer of the Company,
hereby certifies in connection with this Requisition that (i) the
proceeds of the Requested Disbursement will be used solely for
the payment (or reimbursement, to the extent the same have been
paid or satisfied by the Company) of the costs of rebuild, repair
and restoration of the Energy Complex or the portion thereof that
has been affected by an Event of Loss or an Event of Eminent
Domain, or the building of a Replacement Facility as a result
thereof, (ii) undisbursed funds in the Loss Proceeds Account are
reasonably expected to be sufficient to complete the rebuild,
repair, restoration or replacement of the Energy Complex (such
determination of sufficiency to take into account, without
limitation, funds required to pay principal of and interest on
<PAGE>
the Senior Debt becoming due during such period in which
commercial operation of the Energy Complex is interrupted as a
result of such Event of Loss or Event of Eminent Domain), (iii)
no payment default with respect to scheduled debt service under
the Senior Debt has occurred and is continuing and (iv) work
performed to date has been satisfactorily performed in a good and
workmanlike manner and according to the rebuild, repair,
restoration or replacement plans.
The Requested Disbursement, together with all other
such requisitions made or reasonably expected to be made (i)
during the current Fiscal Year, total $_____ in the aggregate and
(ii) in respect of such Event of Loss or Event of Eminent Domain,
total $_____ in the aggregate, and the approval of the
Independent Engineer hereto (is) (is not)1/ required.
The Company hereby certifies that all conditions
precedent to the Requested Disbursement as set forth in the
Intercreditor Agreement have been satisfied.
MOBILE ENERGY SERVICES COMPANY,
L.L.C.
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
Approved this ___ day of __________________, ____.1/
STONE & WEBSTER ENGINEERING CORPORATION
By:_______________________________________
1/ Not required if aggregate amount of disbursements requested
or reasonably expected to be requested (i) in any one Fiscal Year
does not exceed $5,000,000 or (ii) in respect of any Event of
Loss or Event of Eminent Domain does not exceed $7,500,000.
2
<PAGE>
Name:_____________________________________
Title:____________________________________
3
<PAGE>
Exhibit B
Date: ___________
Form of Monthly Transfer Date Certificate
Bankers Trust Company, as Collateral Agent
Four Albany Street
New York, New York 10006
Ladies and Gentlemen:
Reference is hereby made to that certain Intercreditor
and Collateral Agency Agreement, dated as of ( ), 1995, by
and among First Union National Bank of Georgia, as Indenture
Trustee, First Union National Bank of Georgia, as Tax-Exempt
Indenture Trustee, Banque Paribas, as Working Capital Facility
Provider, The Industrial Development Board of the City of Mobile,
Alabama, Mobile Energy Services Company, L.L.C., Mobile Energy
Services Holdings, Inc. and Bankers Trust Company, as Collateral
Agent (as the same may be amended, supplemented, waived or
otherwise modified from time to time, the "Intercreditor
Agreement"). Terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Intercreditor
Agreement.
The Company hereby certifies, pursuant to Section 3.11
of the Intercreditor Agreement, that the following monies are to
be transferred or deposited by the Collateral Agent from the
Revenue Account, in the following order of priority, on
___________ (the "Current Monthly Transfer Date"):
1. $_____, for deposit into the Mill Owner
Reimbursement Account, as the amount currently reimbursable to
the Mill Owners prior to the immediately succeeding Monthly
Transfer Date in connection with the exercise of Mill Owner
Step-In Rights;
2. $_____, for deposit into the Working Capital
Facility Account, as the amount scheduled to be due and payable
for principal of, and interest on, and fees and other charges
relating to, the Working Capital Facility prior to the
immediately succeeding Monthly Transfer Date;
3. $_____, for deposit into the Operating Account, as
the amount sufficient to cause the aggregate amount therein to be
equal to the amount of Operation and Maintenance Costs estimated
by the Company to be due and payable prior to the immediately
succeeding Monthly Transfer Date, other than Subordinated Fees
and Maintenance Expenditures (unless and to the extent that, in
the case of Maintenance Expenditures, the monies, together with
the then Available Amounts under and Reserve Account Security on
deposit in the Maintenance Reserve Account, the Subordinated Debt
<PAGE>
Account, the Subordinated Fee Account and the Distribution
Account, are insufficient therefor;
4. $__________, to the Indenture Trustee, as the
amount due and payable to the Indenture Trustee as fees, costs
and expenses owed to the Indenture Trustee under the Indenture
prior to the immediately succeeding Monthly Transfer Date;
5. $__________, to the Tax-Exempt Trustee, as the
amount due and payable to the Tax-Exempt Trustee as fees, costs
and expenses owed to the Tax-Exempt Trustee under the Tax-Exempt
Indenture prior to the immediately succeeding Monthly Transfer
Date;
6. $__________, to the Collateral Agent, as the
amount due and payable to the Collateral Agent as fees, costs and
expenses owed to the Collateral Agent under the Intercreditor
Agreement prior to the immediately succeeding Monthly Transfer
Date;
7. $__________, to the Indenture Trustee for deposit
into the Indenture Securities Account, as the amount equal to the
sum of (i) an amount that, after giving effect to monies on
deposit in the Indenture Securities Interest Subaccount
immediately prior to such Monthly Transfer Date and together with
a uniform amount to be deposited therein on each succeeding
Monthly Transfer Date prior to the immediately succeeding
Interest Payment Date, is equal to the amount of interest thereon
becoming due on such Interest Payment Date and (ii) 1/6th of the
amount of principal thereof becoming due on the Indenture
Securities on each Principal Payment Date occurring within the
six months immediately succeeding the month in which such Monthly
Transfer Date occurs;
8. $__________, to the Tax-Exempt Trustee for deposit
into the Tax-Exempt Indenture Securities Account, as the amount
equal to the sum of (i) an amount that, after giving effect to
monies on deposit in the Tax-Exempt Indenture Securities Interest
Subaccount immediately prior to such Monthly Transfer Date and
together with a uniform amount to be deposited therein on each
succeeding Monthly Transfer Date prior to the immediately
succeeding Interest Payment Date, is equal to the amount of
interest thereon becoming due on such Interest Payment Date and
(ii) 1/12th of the amount of principal thereon becoming due on
the Tax-Exempt Indenture Securities on each Principal Payment
Date occurring within the 12 months immediately succeeding the
month in which such Monthly Transfer Date occurs;
9. $__________, to the Working Capital Facility
Provider, as the amount that, after taking into account any
transfer pursuant to paragraph 2 above, is equal to all amounts
due and payable immediately prior to such Monthly Transfer Date
for principal of and interest on, and fees and other changes with
respect to, the Working Capital Facility;
2
<PAGE>
10. $__________, for deposit into the Maintenance
Reserve Account, as the amount elected by the Company (but not
less than the Maintenance Reserve Account Required Deposit with
respect to the Fiscal Quarter in which the current Monthly
Transfer Date occurs);
11. $___________, to the Indenture Trustee for deposit
into the Indenture Securities Redemption Subaccount, an amount
that, after giving effect to monies on deposit therein
immediately prior to such Monthly Transfer Date and together with
a uniform amount to be deposited therein on each succeeding
Monthly Transfer Date prior to each succeeding Redemption Date or
Prepayment Date for, or acceleration of, the Indenture
Securities, is equal to the amount of principal thereof and
premium, if any, and interest thereon becoming due on each
Redemption Date or Prepayment Date or upon such acceleration (as
the case may be);
12. $___________, to the Tax-Exempt Indenture Trustee
for deposit into the Tax-Exempt Indenture Securities Redemption
Subaccount, an amount that, after giving effect to monies on
deposit therein immediately prior to such Monthly Transfer Date
and together with a uniform amount to be deposited therein on
each succeeding Monthly Transfer Date prior to each succeeding
Redemption Date or Prepayment Date for, or acceleration of, the
Tax-Exempt Indenture Securities, is equal to the amount of
principal thereof and premium, if any, and interest thereon
becoming due on each Redemption Date or Prepayment Date or upon
such acceleration (as the case may be);
13. $__________, to the Indenture Trustee for deposit
into each Debt Service Reserve Account, as the amount sufficient
to cause the aggregate amount of monies, together with the then
Available Amount under any Reserve Account Security on deposit
therein, to equal the Debt Service Reserve Account Required
Balance immediately prior to such Monthly Transfer Date;
14. $__________, to the Tax-Exempt Trustee for deposit
into each Tax-Exempt Debt Service Reserve Account, as the amount
sufficient to cause the aggregate amount of monies, together with
the then Available Amount under any Reserve Account Letter of
Credit on deposit therein, to equal the Tax-Exempt Debt Service
Reserve Account Required Balance immediately prior to such
Monthly Transfer Date;
15. $__________, for deposit into the Subordinated
Debt Account, as the sum of (i) an amount that, after giving
effect to monies on deposit therein immediately prior to such
Monthly Transfer Date and a uniform amount to be deposited
therein on each succeeding Monthly Transfer Date prior to the
immediately succeeding interest payment date for any Non-
Affiliate Subordinated Debt, is not less than the amount of
interest on such Non-Affiliate Subordinated Debt becoming due on
such interest payment date and (ii) an amount equal to the
fraction specified in Section 3.11(a)(ix)(ii) of the
3
<PAGE>
Intercreditor Agreement of the amount of principal becoming due
in respect of Non-Affiliate Subordinated Debt on each payment
date occurring within the number of months specified in Section
3.11(a)(ix)(ii) of the Intercreditor Agreement;
16. $__________, for deposit into the Subordinated Fee
Account, as the amount that, after giving effect to monies on
deposit therein and a uniform amount to be deposited therein on
each succeeding Monthly Transfer Date prior to the immediately
succeeding Distribution Date, is equal to the amount of Operation
and Maintenance Expenditures constituting Subordinated Fees due
and payable as of such Distribution Date; and
17. $__________, for deposit into the Distribution
Account.
MOBILE ENERGY SERVICES
COMPANY, L.L.C.
By:
Name:
Title:
Dated:
4
<PAGE>
Exhibit B-8
WSP&R
7/5/95
REVOLVING CREDIT AGREEMENT
among
MOBILE ENERGY SERVICES COMPANY, L.L.C.
MOBILE ENERGY SERVICES HOLDINGS, INC.
and
THE LENDERS NAMED HEREIN
and
BANQUE PARIBAS,
as Agent
dated as of ( ), 1995
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF INTERPRETATION . . 1
ARTICLE II
COMMITMENTS AND LOANS
SECTION 2.1. The Facility . . . . . . . . . . . . . . . . . . 5
SECTION 2.2. Making Loans . . . . . . . . . . . . . . . . . . 6
SECTION 2.3. Interest . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4. Repayment . . . . . . . . . . . . . . . . . . . 7
SECTION 2.5. Prepayments . . . . . . . . . . . . . . . . . . 8
SECTION 2.6. Fees . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.7. Security . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.8. Payments . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.9. Computation of Interest and Fees . . . . . . . . 9
SECTION 2.10. Payments on Non-Business Days . . . . . . . 9
SECTION 2.11. Sharing of Payments, Etc. . . . . . . . . . 9
SECTION 2.12. Evidence of Debt . . . . . . . . . . . . . 9
SECTION 2.13. Increased Costs . . . . . . . . . . . . . . 9
SECTION 2.14. Capital Adequacy . . . . . . . . . . . . 10
SECTION 2.15. Taxes . . . . . . . . . . . . . . . . . . 10
SECTION 2.16. Change of Law . . . . . . . . . . . . . . 12
SECTION 2.17. Non-Availability . . . . . . . . . . . . 13
SECTION 2.18. Substitution of Lenders . . . . . . . . . 13
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1. Conditions Precedent to Initial Borrowing . . 14
SECTION 3.2. Conditions Precedent to Each Borrowing . . . . 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . 15
ARTICLE V
COVENANTS . . . . . . . . . . . . 16
ARTICLE VI
<PAGE>
DEFAULTS AND REMEDIES . . . . . . . . . 16
ARTICLE VII
THE AGENT
SECTION 7.1. Authorization and Action . . . . . . . . . . . 19
SECTION 7.2. Agent's Reliance, Etc. . . . . . . . . . . . . 19
SECTION 7.3. Initial Lender and Affiliates . . . . . . . . 19
SECTION 7.4. Lender Credit Decision . . . . . . . . . . . . 20
SECTION 7.5. Indemnification . . . . . . . . . . . . . . . 20
SECTION 7.6. Successor Agent . . . . . . . . . . . . . . . 20
ARTICLE I.
GUARANTY
SECTION 8.1. Guaranty of Payment and Performance . . . . . 21
SECTION 8.2. Continuance and Acceleration of Guaranteed
Obligations upon Certain Events . . . . . . . 21
SECTION 8.3. Recovered Payments . . . . . . . . . . . . . . 21
SECTION 8.4. Evidence of Guaranteed Obligations . . . . . . 21
SECTION 8.5. Binding Nature of Certain Adjudications . . . 22
SECTION 8.6. Nature of Mobile Energy's Obligations . . . . 22
SECTION 8.7. No Release of Mobile Energy . . . . . . . . . 22
SECTION 8.8. Certain Waivers . . . . . . . . . . . . . . . 23
SECTION 8.9. Independent Credit Evaluation . . . . . . . . 23
SECTION 8.10. Subordination of Rights Against Company,
Other Guarantors and Collateral. . . . . . . . 23
SECTION 8.11. Payments by Mobile Energy. . . . . . . . . . . 24
SECTION 8.12. Continuance of Guaranty; Survival . . . . 25
SECTION 8.13. Assignments and Participations . . . . . 25
SECTION 8.14. Benefit and Enforcement . . . . . . . . . 25
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Amendments, Etc. . . . . . . . . . . . . . . . 25
SECTION 9.2. Notices, Etc. . . . . . . . . . . . . . . . . 26
SECTION 9.3. No Waiver; Remedies . . . . . . . . . . . . . 26
SECTION 9.4. Costs and Expenses . . . . . . . . . . . . . . 26
SECTION 9.5. Application of Monies . . . . . . . . . . . . 26
SECTION 9.6. Severability . . . . . . . . . . . . . . . . . 27
SECTION 9.7. Non-recourse Liability . . . . . . . . . . . . 27
SECTION 9.8. Binding Effect . . . . . . . . . . . . . . . . 27
SECTION 9.9. Assignments and Participations . . . . . . . . 27
SECTION 9.10. Indemnification . . . . . . . . . . . . . 28
SECTION 9.11. Governing Law . . . . . . . . . . . . . . 29
SECTION 9.12. Headings . . . . . . . . . . . . . . . . 29
SECTION 9.13. Execution in Counterparts . . . . . . . . 29
SECTION 9.14. Third Party Beneficiaries . . . . . . . . 30
SECTION 9.15. Waiver of Jury Trial . . . . . . . . . . 30
Exhibit A - Revolving Promissory Note
Exhibit B - Notice of Borrowing
<PAGE>
Exhibit C - Commitment Transfer Supplement
<PAGE>
Revolving Credit Agreement, dated as of ( ), 1995, among
MOBILE ENERGY SERVICES COMPANY, L.L.C., an Alabama limited
liability company (the "Company"), MOBILE ENERGY SERVICES
HOLDINGS, INC., an Alabama corporation ("Mobile Energy"), BANQUE
PARIBAS (in its individual capacity, the "Initial Lender"), each
other lender that becomes a party hereto pursuant to Section 8.9
(together with the Initial Lender, collectively, the "Lenders")
and BANQUE PARIBAS, as agent (in such capacity, the "Agent") for
the Lenders.
W I T N E S S E T H
WHEREAS, the Company owns and operates the Energy
Complex (as defined herein) and is financing the
acquisition, construction and equipping of the Energy
Complex through, among other things, the issue and sale by
the Company of the First Mortgage Bonds (as defined herein);
WHEREAS, in connection with the financing of certain
portions of the Energy Complex, the IDB (as defined herein)
will issue the Tax-Exempt Bonds (as defined herein);
WHEREAS, the Company may, from time to time after the
date of this Agreement, issue additional Indenture
Securities (as defined herein), or cause the IDB to issue
additional Tax-Exempt Indenture Securities (as defined
herein), for the purposes described in the Financing
Documents (as defined herein);
WHEREAS, the Company intends to finance certain of its
working capital requirements arising in connection with the
operation of the Energy Complex pursuant to, and the Company
has requested that the Lenders make available to the
Company, and the Lenders are willing to make available to
the Company, a revolving credit facility of up to the
maximum aggregate principal amount of $15,000,000, upon the
terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF INTERPRETATION
(a) For the purposes of this Agreement, except as expressly
provided in this Agreement or unless the context otherwise
requires, all terms used herein shall have the meanings set forth
in Appendix A.
(b) The following terms are used in this Agreement with the
following respective meanings:
"Adjusted Base Rate" means the higher of (i) the Federal
Funds Rate plus one-half of one percent (0.50%) and (ii) the
Reference Rate.
<PAGE>
"Adjusted Base Rate Loan" means any Loan the interest on
which is, or is to be, as the context may require, computed on
the basis of the Adjusted Base Rate.
"Borrowing" means a borrowing by the Company consisting of
Loans made on the same day by the Lenders.
"Closing Date" means the date on which the conditions
precedent set forth in Article III have been fulfilled.
"Commitment" means, with respect to each Lender, (i) the
amount set forth opposite such Lender's name on the signature
pages hereof or (ii) if such Lender has entered into one or more
Commitment Transfer Supplements, the amount set forth for such
Lender in the register maintained by the Agent, as the same may
be ratably reduced from time to time pursuant to Section 2.1(c).
"Commitment Transfer Supplement" means such document
substantially in the form of Exhibit C.
"Credit Documents" means this Agreement and each Note.
"Default" means an event that with the giving of any
required notice or the lapse of any required period of time would
constitute an Event of Default.
"Eurodollar Business Day" means any Business Day on which
dealings in United States dollar deposits are carried on by the
Reference Banks in the London interbank market and on which
commercial banks in London are generally open for domestic and
foreign exchange business (including dealings in United States
dollar deposits).
"Event of Default" has the meaning specified in Article VI.
"Excluded Taxes" has the meaning specified in Section
2.15(a).
"Expiration Date" means the earlier of (i) the Scheduled
Expiration Date, (ii) the date on which the Commitments are fully
canceled pursuant to Section 2.1(c) and (iii) the occurrence of
an Event of Default and the Agent's termination (or any automatic
termination) of the obligation of each Lender to make Loans
hereunder, in accordance with the provisions of Article VI.
"Extension Request" has the meaning specified in Section
2.1(b).
"Federal Funds Rate" means, for any day, the rate per annum
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York or, if such
rate is not so published for any day that is a Business Day, the
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<PAGE>
average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Indemnified Party" has the meaning specified in Section
9.10.
"Interest Period" means with respect to any LIBOR Rate Loan,
the period commencing on the date of the making of such Loan and
ending on and including the day preceding the same day in the
first, second or third calendar month thereafter, as selected by
the Company and specified in the related Notice of Borrowing;
provided, however, that (i) any Interest Period that would
otherwise end on a day that is not a Eurodollar Business Day
shall be extended to the next succeeding Eurodollar Business Day,
unless such Eurodollar Business Day falls in a different calendar
month, in which case such Interest Period shall end on the next
preceding Eurodollar Business Day, and (ii) any Interest Period
that begins on the last Eurodollar Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month in which such Interest
Period ends) shall end on the last Eurodollar Business Day of a
calendar month.
"LIBOR Rate" means, with respect to any Interest Period, a
rate per annum (rounded upwards, if necessary, to the nearest
1/16th of one percent (0.0625%)) determined by the Agent to be
equal to (i) (A) the arithmetic mean of the rate at which
deposits in United States dollars (in the approximate amount of
the Loan to which such Interest Period applies) are offered to
the Reference Banks in the London interbank market at
approximately 11:00 a.m. (London time), two Eurodollar Business
Days prior to the first day of such Interest Period, divided by
(B) 100% minus the Reserve Requirement for such Interest Period,
plus (ii) one percent (1.0000%). If any Reference Bank does not
timely furnish such information for determination of any LIBOR
Rate, the Agent shall determine such LIBOR Rate on the basis of
information timely furnished by the remaining Reference Banks.
"LIBOR Rate Loan" means any Loan the interest on which is,
or is to be, as the context may require, computed on the basis of
the LIBOR Rate.
"Loan" means a loan by a Lender to the Company pursuant to
Section 2.1(a).
"Loan Repayment Date" means, in respect of each Loan, the
Business Day specified as such on the Notice of Borrowing
relating thereto; provided, however, that (i) such date shall not
be later than the Scheduled Expiration Date, (ii) such date shall
not exceed 90 days from the date such Loan is advanced to the
Company pursuant to the terms of this Agreement, (iii) in the
case of LIBOR Rate Loans, such date shall correspond to the last
day of the Interest Period specified in the related Notice of
Borrowing and (iv) no more than $5,000,000 principal amount of
Loans may be scheduled to mature within any 30-day period.
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<PAGE>
"Note" has the meaning specified in Section 2.12(a).
"Notice of Borrowing" means a Notice of Borrowing properly
completed and executed by an Authorized Officer of the Company
substantially in the form of Exhibit B.
"Obligations" means all of the obligations of the Mobile
Energy Parties to the Lenders and the Agent under the Credit
Documents, whether for principal, interest, fees, expenses,
indemnification or otherwise.
"Participant" has the meaning specified in Section 9.9(b).
"Purchasing Lender" has the meaning specified in Section
9.9(a).
"Reference Banks" means each of ( ), ( ) and (
).
"Reference Rate" means the variable rate of interest per
annum officially announced or published by Citibank, N.A. in New
York, New York from time to time as its "prime" or "reference"
rate for United States dollar loans in the United States, it
being understood that the Reference Rate is not necessarily the
lowest or best rate actually charged to any customer of Citibank,
N.A. and that Citibank, N.A. may make various commercial or other
loans at rates of interest having no relationship to such rate.
For purposes of this Agreement, each change in the Reference Rate
shall be effective as of the opening of business on the date
announced as the effective date of the change in such "prime" or
"reference" rate.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System.
"Regulatory Change" means, subsequent to the date of this
Agreement, any adoption or change in United States (including
Federal, state or municipal) or foreign law or regulations or the
adoption or change or making of any application, interpretation,
directive, request or guideline of or under any United States
(including Federal, state or municipal) or foreign law or
regulations by any Governmental Authority.
"Required Lenders" means, at any time, Lenders (one of which
shall be the Agent) holding Notes evidencing at least 66 % of the
aggregate unpaid principal amount of the Loans or, if no Loans
are then outstanding, having at least 66 % of the Total
Commitment; provided, however, that, if and so long as there are
only two Lenders, "Required Lenders" shall mean both of such
Lenders.
"Reserve Requirement" means the rate (expressed as a
percentage) at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained
under Regulation D by member banks of the Federal Reserve System
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<PAGE>
in New York City, as it applies to the Agent, against
"Eurocurrency liabilities," as such term is used in Regulation D.
The LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Scheduled Expiration Date" means December 31, 2001, unless
extended pursuant to Section 2.1(b), in which case such extended
date.
"Taxes" means any and all present or future income, stamp,
transfer, turnover and other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings now or hereafter
imposed, levied, collected, withheld or assessed by any
Governmental Authority, and any and all interest, penalties,
claims or other liabilities arising under or relating thereto.
"Total Commitment" means $15,000,000, which is the aggregate
amount of the Commitments, as such amount may be reduced from
time to time pursuant to Section 2.1(c).
ARTICLE II
COMMITMENTS AND LOANS
SECTION 2.1. The Facility. (a) Subject to the terms and
conditions of this Agreement, each Lender severally agrees to
make Loans to the Company from time to time on any Business Day
during the period from the Closing Date to the Expiration Date in
an aggregate unpaid principal amount not to exceed at any time
such Lender's Commitment. Each Borrowing shall consist of Loans
bearing interest at the same rate made on the same day by Lenders
ratably according to their respective Commitments. Each
Borrowing consisting of Adjusted Base Rate Loans shall be in an
amount equal to $50,000 or an integral multiple of $10,000 in
excess thereof (or the amount of the unused Total Commitment) and
each Borrowing consisting of LIBOR Rate Loans shall be in an
amount equal to $200,000 or an integral multiple of $25,000 in
excess thereof (or the amount of the unused Total Commitment).
There shall not be Loans representing more than five Borrowings
outstanding on any date.
(b) Subject to the terms and conditions of this Section
2.1(b), the Scheduled Expiration Date may be extended by an
additional year from time to time at the written request of the
Company (an "Extension Request"). Each Extension Request shall
be delivered to the Agent not more than fifteen (15) months and
not less than twelve (12) months prior to the Scheduled
Expiration Date. If the Agent receives an Extension Request, it
will give prompt notice thereof to each Lender, and each Lender
shall have the right to approve or reject, in its sole and
absolute discretion, such Extension Request by giving the Agent
written notice of its decision within (sixty (60)) days following
its receipt of the Agent's notice thereof. If the Lenders
unanimously approve such Extension Request, the Agent shall so
-5-
<PAGE>
notify the Company within ninety (90) days following its receipt
of such Extension Request and the Scheduled Expiration Date
shall, effective from the date of such notice, be the date one
year subsequent to the prior Scheduled Expiration Date. If for
any reason the Agent does not respond to such Extension Request
within ninety (90) days following its receipt thereof, such
Extension Request shall be deemed to have been rejected.
(c) The Company shall have the right, upon at least five
(5) Business Days' notice to the Agent, to terminate in whole, or
from time to time reduce in part, the unused portion of the Total
Commitment, provided that each partial reduction of the unused
portion of the Total Commitment shall be in an amount equal to $(
) or an integral multiple of $( ) in excess thereof. Upon
receipt of any such notice, the Agent shall promptly notify each
Lender of the contents thereof and the amount to which such
Lender's Commitment is to be ratably reduced.
SECTION 2.2. Making Loans. (a) Borrower shall deliver to
the Agent a Notice of Borrowing not later than 11:00 a.m., New
York time, (i) at least one (1) Business Days prior to the date
of the proposed Borrowing in the case of a Borrowing consisting
of Adjusted Base Rate Loans and (ii) at least three (3)
Eurodollar Business Days prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of LIBOR Rate
Loans, and, in each case, the Agent shall give each Lender prompt
notice thereof by telecopier. Each Lender shall, before 11:00
a.m., New York time, on the date of such Borrowing, make
available to the Agent at its address set forth in Section 9.2,
in immediately available funds, such Lender's ratable portion of
such Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Agent will make such funds available to the Company by
transferring such funds to the Collateral Agent for deposit into
the Revenue Account.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Company.
(c) Unless the Agent receives notice from a Lender prior to
the date of any Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such
Borrowing, the Agent may assume that such Lender has made such
portion available to the Agent on the date of such Borrowing in
accordance with Section 2.2(a), and the Agent may, in reliance
upon such assumption, make available to the Company on such date
a corresponding amount on behalf of such Lender. If and to the
extent that such Lender has not made such ratable portion
available to the Agent, and Agent has made such amount available
to the Company, the Agent shall first make written demand upon
such Lender for payment and shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Company and
the Company shall immediately repay such corresponding amount to
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<PAGE>
the Agent; provided, however, that if the Company repays such
corresponding amount to the Agent and such Lender subsequently
makes available to the Agent its ratable portion of such
Borrowing, the Agent shall promptly make the proceeds thereof
available to the Company. The Agent shall also be entitled to
recover from such Lender or the Company, as the case may be,
interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the
Agent to the Company to the date such corresponding amount is
recovered by the Agent at the following interest rates: (i) with
respect to interest from the Company, at the applicable interest
rate for the type of Loan selected by the Company with respect to
such amount; and (ii) with respect to interest from such Lender,
at the Federal Funds Rate until and including the second Business
Day after demand is made and thereafter at the Adjusted Base
Rate. If such Lender pays to the Agent such corresponding
amount, such amount so paid shall constitute such Lender's Loan
as part of such Borrowing for purposes of this Agreement.
(d) The obligations of the Lenders to make Loans to the
Company pursuant to this Agreement are several and not joint or
joint and several, and the failure of any Lender to make the Loan
to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan
to be made by such other Lender on the date of any Borrowing.
SECTION 2.3. Interest. (a) Unless an Event of Default is
continuing, each Loan shall bear interest at the rates set forth
below, and the Company shall pay interest on the unpaid principal
amount of each Loan made by each Lender from the date of such
Loan until the principal amount thereof has been repaid in full,
at the times and at the rates per annum set forth below:
(i) Adjusted Base Rate Loans shall bear interest at a
rate per annum equal at all times to the Adjusted Base Rate
in effect from time to time, payable (A) on the related Loan
Repayment Date, (B) on the date of any prepayment of such
Loan pursuant to Section 2.5 and (C) on the Expiration Date;
(ii) LIBOR Rate Loans shall bear interest at a rate per
annum equal at all times during the Interest Period for such
Loan equal at all times to LIBOR Rate for such Interest
Period, payable on (A) the last day of such Interest Period,
(B) the date of any prepayment of such Loan pursuant to
Section 2.5 and (C) the Expiration Date.
(b) On and after the date of the occurrence of any Event of
Default caused by the failure to make a monetary payment
hereunder, so long as such Event of Default is continuing, to the
extent permitted by applicable Law the Loans shall bear interest
at a rate per annum equal at all times to the Adjusted Base Rate
in effect from time to time plus ( )%, payable on demand.
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<PAGE>
SECTION 2.4. Repayment. The Company shall repay each Loan
on the earlier of (i) the applicable Loan Repayment Date and (ii)
the Expiration Date. Notwithstanding anything to the contrary
contained in this Agreement, the Company shall repay Loans so
that, or otherwise ensure that, no Loans are outstanding for a
period of five (5) consecutive days during each Fiscal Year
subsequent to 1995.
SECTION 2.5. Prepayments. (a) Subject to the provisions
of Section 2.5(b), the Company may, at any time and from time to
time on any Business Day, prepay without premium or penalty the
outstanding principal amount of the Loans making up one or more
Borrowings in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount
prepaid. The Company shall give the Agent irrevocable prior
written notice of any such prepayment not later than 11:00 a.m.,
New York time, at least one (1) Business Day prior to the date of
any such prepayment, such notice stating the proposed date and
specifying the Borrowing or Borrowings and aggregate principal
amount of the Loans to be prepaid.
(b) The Company agrees to indemnify each Lender and hold
each Lender harmless from any direct loss (and excluding any
indirect, consequential or incidental loss or damage), cost or
out-of-pocket expense that such Lender incurs as a result of a
prepayment of any LIBOR Rate Loan on a date that is not the last
day of the Interest Period applicable thereto.
SECTION 2.6. Fees. The Company shall pay the following
nonrefundable fees to the Agent for the respective accounts of
the Lenders: (a) on the Closing Date, a closing fee equal to one
percent (1.00%) of the Total Commitment and (b) on the first
Business Day of March, June, September and December of each year,
commencing September 1995, and on the Expiration Date, a
commitment fee on the daily unused amount of the Total Commitment
at a rate equal to three-eighths of one percent (0.375%) per
annum, payable in arrears during the period from the Closing Date
to the Expiration Date.
SECTION 2.7. Security. The Obligations shall be secured as
provided in the Security Documents, and the rights and remedies
of the Lenders contained therein shall be exercised as provided
in the Intercreditor Agreement.
SECTION 2.8. Payments. (a) The Company shall make each
payment hereunder and under the Notes not later than 10:00 a.m.,
New York time, on the day when due in United States dollars to
the Agent at its address set forth in Section 9.2, in immediately
available funds. The Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal,
interest or fees ratably (other than amounts payable pursuant to
Sections 9.4) to the Lenders and like funds relating to the
payment of any other amount payable to any Lender to such Lender,
in each case to be applied in accordance with the terms of this
Agreement.
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(b) Unless the Agent receives notice from the Company
before the date on which any payment is due to the Lenders
hereunder that the Company will not make such payment in full,
the Agent may assume that the Company has made such payment in
full to the Agent on such date, and the Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due to such
Lender. If and to the extent that the Company has not so made
such payment in full to the Agent, each Lender shall repay to the
Agent forthwith on demand such amount distributed to such Lender,
together with interest thereon for each day from the date such
amount is distributed to such Lender until the date on which such
Lender repays such amount to the Agent, at the Federal Funds Rate
until (and including) the third (3rd) Business Day after demand
is made and thereafter at the Adjusted Base Rate.
(c) All payments due by the Company to the Agent or any of
the Lenders under the Credit Documents will be made without
setoff, counterclaim or other deduction (except for any deduction
with respect to Excluded Taxes).
SECTION 2.9. Computation of Interest and Fees. Interest on
LIBOR Rate Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed. Interest on
Adjusted Base Rate Loans and all fees shall be computed on the
basis of a year of 365 or 366 days, as applicable, and paid for
the actual number of days elapsed. Interest on Adjusted Base Rate
Loans and fees for any period shall be calculated from and
including the first day thereof to but excluding the last day
thereof. Interest on LIBOR Rate Loans for any Interest Period
shall be calculated from and including the first day thereof to
and including the last day thereof. Each determination by the
Agent of an interest rate hereunder shall be conclusive (absent
manifest error).
SECTION 2.10. Payments on Non-Business Days. Whenever any
payment hereunder or under any Note is stated to be due on a day
other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or
fees (as the case may be). If no due date is specified for the
payment of any amount payable by the Company hereunder, such
amount shall be due and payable not later than ten (10) Business
Days after receipt by the Company of written demand from the
Agent for payment thereof.
SECTION 2.11. Sharing of Payments, Etc. If any Lender
obtains any payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise) on account of its
Commitment or the Loans made by it (other than pursuant to
Section 9.4) in excess of its ratable share of payments on
account of the Commitments or the Loans obtained by all of the
Lenders, then such Lender shall be deemed to have received such
payment as agent for, and on behalf of, all the Lenders and shall
immediately advise the Agent of the receipt of such funds and
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promptly transmit the amount thereof to the Agent for prompt
distribution among the Lenders as provided for in this Agreement
and such funds transmitted to the Agent shall be credited as a
payment by the Company under this Agreement; provided, however,
that such Lender so transmitting funds to the Agent shall not be
deemed to have received, and the Company shall be deemed not to
have made to such Lender (to the extent funds are transmitted to
the Agent), any payment transmitted to the Agent by such Lender
pursuant to this Section 2.11.
SECTION 2.12. Evidence of Debt. (a) The indebtedness of
the Company resulting from all Loans made by each Lender from
time to time shall be evidenced by an appropriately completed and
executed Revolving Promissory Note substantially in the form of
Exhibit A (each a "Note"), delivered by the Company to each
Lender.
(b) The books and accounts of the Agent shall be conclusive
evidence (absent manifest error) of the amounts of all Loans,
fees, interest and other amounts advanced, due, outstanding,
payable or paid pursuant to this Agreement or any Note.
SECTION 2.13. Increased Costs. If, after the date hereof,
any introduction of or change in any Law or in the interpretation
thereof by any Governmental Authority charged with the
administration thereof either (a) imposes, modifies or makes
applicable any reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of, any
Lender or (b) imposes on any Lender any other condition regarding
this Agreement, such Lender or the making of Loans hereunder, and
the result of any event referred to in clause (a) or (b) above is
to increase the cost to such Lender of making Loans hereunder
(other than any increase that is reflected in the Reserve
Requirement), reduce the amount of any payment receivable by such
Lender hereunder or reduce the rate of return on any Lender's
capital as a consequence of its obligations hereunder below that
which such Lender would have achieved but for such circumstance,
then, in each such case, upon demand by such Lender, the Company
shall pay to such Lender, from time to time as specified thereby,
additional amounts sufficient to compensate such Lender for such
increased costs, reduction in payments receivable or reduction in
rate of return. A certificate as to the amount of such increased
cost, submitted to the Company by any Lender through the Agent,
shall be conclusive (absent manifest error).
SECTION 2.14. Capital Adequacy. If any Lender reasonably
determines that compliance with any Law affects or would affect
the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the
existence of such Lender's Commitment or the making of Loans
hereunder, then, upon demand by such Lender, the Company shall
pay to such Lender, from time to time as specified thereby,
additional amounts sufficient to compensate such Lender in light
of such circumstances, to the extent that such Lender reasonably
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determines such increase in capital to be allocable to the
existence of such Lender's Commitment or the making of Loans
hereunder. A certificate as to such amounts submitted to the
Company by any Lender through the Agent shall be conclusive
(absent manifest error).
SECTION 2.15. Taxes. (a) Payments by the Company to each
of the Lenders under this Agreement and the Notes will be made
free and clear of and without deduction for Taxes, other than
Taxes based on the net income of such Lender (including franchise
taxes imposed in lieu of net income taxes) imposed by (i) the
United States federal government, (ii) the jurisdiction where
such Lender is organized or has its principal office or (iii) the
jurisdiction of the branch of such Lender maintaining any Loan or
the branch of the Agent through which it renders its services as
Agent ("Excluded Taxes"). If the Company is required by Law to
deduct Taxes (other than Excluded Taxes) from such a payment,
then the sum payable under the instrument to which the payment
relates will be increased so that there is no diminution in the
amount any Lender actually receives on account of such deduction.
(b) The Company hereby indemnifies and holds harmless each
Lender from and against, and agrees to reimburse each Lender on
an after-tax basis (computed taking into account any deductions
or other benefits available for income tax purposes in any
jurisdiction in which such Lender is a taxpayer), on demand for
any and all Taxes paid or incurred by such Lender in connection
with the transactions contemplated by this Agreement; provided,
however, that the foregoing indemnity does not cover Excluded
Taxes. Reimbursement on an "after-tax basis" means on a basis so
that such Lender is made whole after taking into account income
taxes that such Lender will owe on such indemnity or
reimbursement payment in any jurisdiction and any related tax
benefits. Nothing in this Section 2.15(b) shall interfere with
the right of any Lender to arrange its tax affairs in whatever
manner it sees fit and, in particular, no Lender is under any
obligation to claim a deduction or other benefit relating to
these transactions ahead of any other claim, relief, credit,
deduction or other benefit to which it is entitled. The
applicable Lender shall promptly give written notice to the
Company (but in no event later than sixty (60) days) after such
Lender has actual knowledge of the imposition of any Taxes
subject to indemnification hereunder; provided, however, that
failure to give such notice within such sixty (60) day period
will not relieve the Company of the obligation to indemnify such
Lender in accordance with the terms hereof, except to the extent
of interest that would have been avoided had the notice been
given prior to the end of such sixty (60) day period.
(c) (i) The Company will provide evidence that all Taxes
imposed on payments under this Agreement, any Loan or the Notes
have been fully paid to the appropriate authorities by delivering
official receipts, notarized copies or confirmations of payment
thereof to the Agent within thirty (30) days after payment. The
Company will compensate any Lender that has to pay any Taxes
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because the Company failed to timely furnish such evidence;
provided, however, that prior to paying such Taxes, such Lender
shall have notified the Company of its intent to make such
payment.
(ii) If the Company so requests, promptly in writing
after receipt of any notice under this Section 2.15, such Lender
will subject such Taxes to a Good Faith Contest (at the Company's
expense), keep the Company fully informed about the progress of
such Good Faith Contest, consult in good faith with the Company's
counsel regarding conduct of such Good Faith Contest and not
compromise or otherwise settle such Good Faith Contest without
the Company's consent (which shall not be unreasonably withheld
or delayed); provided, however, that such Lender may in its sole
discretion select the forum for such Good Faith Contest and
determine whether such Good Faith Contest will be by resisting
payment of such Taxes or by paying such Taxes and seeking a
refund; provided further, however, that such Lender will be under
no obligation to subject such Taxes to a Good Faith Contest
unless (A) if such Lender requests, the Company has provided such
Lender an opinion of independent tax counsel selected by the
Company and reasonably acceptable to such Lender to the effect
that there is a reasonable basis for such Good Faith Contest, (B)
the amount in controversy with respect to such Taxes is at least
$( ), (C) such Lender has received satisfactory
indemnification and security for any liability, loss, cost or
expense arising out of such Good Faith Contest (including all
reasonable legal and accounting fees and expenses, penalties,
interest and additions to tax), (D) if requested by such Lender,
the Company has admitted in writing its duty to indemnify such
Lender for such Taxes if such Good Faith Contest is lost (but
such admission shall not preclude the Company from raising a
defense to liability if a court of competent jurisdiction has
rendered a decision articulating the cause of such Taxes, and the
cause is not one for which the Company is responsible under this
Section 2.15) and (E) if such Good Faith Contest is conducted in
a manner that requires paying all or part of such Taxes in
advance, the Company has paid the amount required.
(iii) If the Company so requests within ten (10)
days of notice to the Company of the imposition of any Taxes
(other than Excluded Taxes) on payments to any of the Lenders of
a type not generally imposed on United States or foreign lenders
making loans of the types contemplated hereunder, such Lenders
shall (consistent with legal and regulatory restrictions) comply
with Section 2.18.
(d) Each Lender shall, prior to the Closing Date (or, if a
Lender has become a party hereto pursuant to Section 9.9, the
date upon which such Lender becomes a party hereto), deliver to
the Agent and the Company (i) either (A) a letter stating that it
is incorporated under the laws of the United States of America or
a state thereof or (B) if it is not so incorporated, two duly
completed copies of United States Internal Revenue Service Form
1001 or 4224 or successor applicable form, as the case may be,
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certifying in each case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of
any United States federal income taxes and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as
the case may be, to establish an exemption from United States
backup withholding tax. If any Lender delivers to the Company
and the Agent a Form 1001 or 4224 and a Form W-8 or W-9 pursuant
to the immediately preceding sentence, it shall deliver to the
Company and the Agent two further copies of such Form 1001 or
4224, and such Form W-8 and W-9, or successor applicable forms,
or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Company, and such
extensions or renewals thereof as may reasonably be requested by
the Company, unless an event (including any change in treaty, law
or regulation) has occurred prior to the date on which any such
delivery would otherwise be required that renders any such forms
inapplicable or that would prevent such Lender from duly
completing and delivering any such form with respect to it and
such Lender advises the Company that it is not capable of, in the
case of a Form 1001 or 4224, receiving payments without any
deduction or withholding of United States federal income tax or,
in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax. The provisions of this
Section 2.15(d) shall apply to any successor holder of a Note.
(e) Notwithstanding anything to the contrary contained in
this Section 2.15, if (i)(A) any Lender has previously delivered
to the Company and the Agent a Form 4224 or successor applicable
form and (B) by virtue of any action taken or not taken
voluntarily by such Lender, such Lender is not lawfully entitled
to deliver a subsequent Form 4224 or applicable successor form
solely as a result of such Lender's failure to be engaged in the
active conduct of a trade or business in the United States or a
determination that all amounts to be paid to such Lender
hereunder are not effectively connected to such trade or business
or (ii) any Lender fails to provide any form required under
Section 2.15(d) at a time when such Lender is qualified to
provide such form, the Company shall be under no obligation to
compensate or indemnify such Lender under this Section 2.15 or
otherwise with respect to any Tax required to be paid or withheld
under United States federal income tax law that would not have
been required to be paid or withheld had such Lender so delivered
such Form 4224, applicable successor form or other form.
(f) Notwithstanding anything to the contrary contained in
this Section 2.15, the Company shall not be required to indemnify
or reimburse any Lender who has failed to make available to the
Agent its ratable portion of any Borrowing on the date required
pursuant to this Agreement, after the Agent has made written
demand upon such Lender for such payment, for any additional
documentary stamp taxes or intangibles taxes incurred by such
Lender solely as a result of such failure.
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SECTION 2.16. Change of Law. (a) If on or after the date
of this Agreement any Regulatory Change, or compliance by any
Lender with any Regulatory Change, makes it unlawful or
impossible for any Lender to make, maintain or continue its
interest in any LIBOR Rate Loan, then such Lender shall promptly
give notice together with evidence thereof to the Company and the
Agent and the obligation of such Lender to make or maintain LIBOR
Rate Loans shall be immediately suspended and if such Lender
shall determine that it may not lawfully continue to maintain and
fund such Loans, all outstanding LIBOR Rate Loans made by such
Lender shall automatically and immediately be converted to
Adjusted Base Rate Loans with the Loan Repayment Date as such
LIBOR Rate Loans.
(b) Before giving notice to the Company and the Agent
pursuant to this Section 2.16, a Lender shall (consistent with
legal and regulatory restrictions) designate a different lending
office for the Loans (or Commitments) if such designation will
avoid the requirement of giving such notice and will not, in the
sole opinion of such Lender, be otherwise disadvantageous to such
Lender. If the Company so requests within ten (10) days of
receipt of the notice referred to above (which notice is based on
circumstances not generally applicable to United States or
foreign lenders making loans of the types contemplated
hereunder), such Lender shall (consistent with legal and
regulatory restrictions) comply with Section 2.18 hereof.
SECTION 2.17. Non-Availability. (a) If at any time United
States dollar deposits in the principal amount of any Lender's
obligation to fund LIBOR Rate Loans are not available to such
Lender in the London interbank market for the Interest Period
specified in any Notice of Borrowing, such Lender shall so notify
the Agent, which shall so notify the Company, and the obligation
of such affected Lender to make LIBOR Rate Loans shall be
immediately suspended.
(b) If at any time the LIBOR Rate does not adequately and
fairly reflect, in the reasonable judgment of any Lender, the
cost for such Lender of advancing or maintaining any LIBOR Rate
Loan during any Interest Period, then such Lender shall notify
the Agent, which shall so notify the Company, and the obligation
of such affected Lender to make LIBOR Rate Loans shall be
immediately suspended.
(c) If the Company so requests after the suspension of a
Lender's obligation to make LIBOR Rate Loans under this Section
2.17 for at least thirty (30) consecutive days on at least two
separate occasions based on circumstances not generally
applicable to United States or foreign lenders making loans of
the types contemplated hereunder, such Lender shall (consistent
with legal and regulatory restrictions) comply with Section 2.18.
SECTION 2.18. Substitution of Lenders. If (a) a Lender is
required to comply with this Section 2.18 after a request from
the Company pursuant to Section 2.15, 2.16 or 2.17 or (b) the
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Company requests that the provisions of this Section 2.18 apply
to a Lender within ten (10) days after it receives a notice from
the Agent that (i) such Lender has failed to make available to
the Agent its portion of any Borrowing on the date required to be
made available to the Agent pursuant to this Agreement after the
Agent has made written demand upon such Lender for such payment,
(ii) such Lender has provided the Agent with notice that such
Lender shall not make available to the Agent such portion of any
Borrowing required to be made available to the Agent pursuant to
this Agreement or (iii) such Lender has failed to reimburse the
Agent pursuant to the terms of this Agreement, such Lender shall
promptly consummate an assignment of all of such Lender's
Commitment, Loans, Notes and other rights and obligations
hereunder relative to the Commitment of such Lender to a
replacement Lender (which may be, but is not required to be, one
of the other Lenders) designated by the Company, in accordance
with the provisions of Section 9.9(a), in exchange for an amount
in United States dollars equal to the sum of (A) the outstanding
principal amount of all such Loans, together with all interest
accrued thereon, and (B) all other amounts owing to such Lender
hereunder, payable in immediately available funds.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1. Conditions Precedent to Initial Borrowing.
The obligation of each Lender to make a Loan on the occasion of
the initial Borrowing is subject to the following conditions
precedent:
(a) the Agent shall have received the following, each
dated on or before the Closing Date, in form and substance
satisfactory to the Agent and in the number of originals
reasonably required by the Agent:
(i) this Agreement and the Notes, duly executed
by the Company;
(ii) the Security Documents (other than
the Indenture and the Tax-Exempt Indenture), duly
executed by the parties thereto;
(iii) the Indenture and the Tax-Exempt Indenture,
duly executed by the parties thereto and certified as
to completeness and authenticity by an Authorized
Officer of each of the Mobile Energy Parties; and
(iv) written opinions of counsel to the Company,
as to such matters as the Agent may reasonably request;
(b) all Contracts referred to in Section 3.1(a)(i),
(ii) and (iii) remain in full force and effect;
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(c) the Company shall have paid all accrued fees and
expenses of the Agent and the Lenders as provided in Section
9.4, to the extent one or more statements for such fees and
expenses have been presented for payment;
(d) the conditions precedent contained in the
Underwriting Agreement dated ( ), 1995 among the Mobile
Energy Parties, Goldman Sachs & Co., Bear, Stearns & Co. and
Lehman Brothers Inc. shall have been satisfied (without
waiver, unless approved by the Agent); and
(e) the conditions precedent contained in that certain
Bond Purchase Agreement dated ( ), 1995 between Goldman
Sachs & Co. and the IDB shall have been satisfied (without
waiver, unless approved by the Agent).
SECTION 3.2. Conditions Precedent to Each Borrowing. The
obligation of each Lender to make a Loan on the occasion of each
Borrowing, including the initial Borrowing, is subject to the
satisfaction of the following further conditions precedent:
(a) the Agent shall have received a Notice of
Borrowing with respect to such Loan; and
(b) the following statements shall be true (and the
acceptance by the Company of the proceeds of such Borrowing
shall constitute a representation and warranty by the
Company that on the date of such Borrowing such statements
are true):
(i) the representations and warranties of the
Mobile Energy Parties and each Affiliate thereof
incorporated by reference into this Agreement or
contained in any Security Document are true in all
material respects on and as of the date of such
Borrowing, before and after giving effect to such
Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(ii) no event has occurred and is continuing, or
would result from such Borrowing or from the
application of the proceeds thereof, that constitutes a
Default.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Mobile Energy Parties hereby makes, for the
benefit of the Agent and the Lenders, all of the representations
and warranties of the Mobile Energy Parties made in the Indenture
and the Tax-Exempt Indenture, in the form of such representations
and warranties (including all schedules referred to therein) as
they exist on the date of this Agreement and as they may
hereafter be amended from time to time, but only to the extent
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that the incorporation of any such amendments into this Agreement
has been consented to in accordance with the provisions of
Section 8.1. Such representations and warranties (including all
schedules referred to therein) are hereby, mutatis mutandis,
incorporated herein by reference (with appropriate substitutions,
including the following: (i) the terms "Indenture," "Trustee"
and "Holder," as they appear in Article III of the Indenture,
shall be replaced by the terms "Agreement," "Agent" and "Lender,"
respectively, (ii) the terms "Tax-Exempt Indenture Trustee" and
"Holder," as they appear in Section 3.1 of the IDB Lease
Agreement, shall be replaced by the terms "Agent" and "Lender,"
respectively, and (ii) the phrases "the purchase and ownership of
the Securities" and "the purchase and ownership of the Tax-Exempt
Indenture Securities," as they appear in Section 3.6(a) of the
Indenture and Section 3.1(j) of the IDB Lease Agreement,
respectively, shall be replaced by the phrase "the making of
Loans") as if set forth at length in this Agreement.
ARTICLE V
COVENANTS
So long as any Commitment is in effect or any Obligation
remains unpaid, unless compliance has been waived in writing by
the Required Lenders:
(a) all of the covenants of the Company and Mobile
Energy contained in Article V of the Indenture and Article
IV of the IDB Lease Agreement, together with any schedules
referred to therein (in the form of such covenants and
schedules as they exist as of the date of this Agreement and
as they may hereafter be amended from time to time, but only
to the extent that the incorporation of any such amendments
into this Agreement has been consented to in accordance with
the provisions of Section 8.1), are hereby, mutatis
mutandis, incorporated herein by reference (with appropriate
substitutions, including the following: (i) the term
"Indenture," as it appears in Article V of the Indenture,
shall be replaced by the term "Agreement"; (ii) the terms
"Trustee" and "Tax-Exempt Indenture Trustee," as they appear
in Article V of the Indenture (other than Sections 5.10(b)
and 5.17) and Article IV (other than Sections 4.10(b) and
4.17) of the IDB Lease Agreement, respectively, shall be
replaced by the word "Agent"; (iii) the phrase "the
principal of and premium, if any, and interest on, and all
other amounts payable in respect of, the Securities of each
series in accordance with their terms and the terms of this
Indenture and of the related Series Supplemental Indenture"
and "the rental payments specified in Article II," as they
appear in Section 5.1 of the Indenture and Section 4.1 of
the IDB Lease Agreement, respectively, shall be replaced by
the phrase "all of the Obligations in accordance with the
terms of this Agreement"; and (iv) the phrases "Holder of a
Security or an owner of a beneficial interest therein
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requesting the same in writing" and "Holder of a Tax-Exempt
Indenture Security or an owner of a beneficial interest
therein requesting the same in writing," as they appear in
Section 5.3 of the Indenture and Section 4.3 of the IDB
Lease Agreement, respectively, shall be replaced by the term
"Lender") as if set forth at length in this Agreement, and
the Company will observe and perform all of such
incorporated covenants;
(b) the Company will not terminate, amend, replace or
otherwise modify any provision of any Security Documents or
any Subordinated Loan Agreement if such termination,
amendment, replacement or other modification would, in the
reasonable opinion of the Required Lenders, be expected to
have a Material Adverse Effect on the rights and benefits of
the Lenders or the Agent under the Credit Documents; and
(c) the Company will use the proceeds of the Loans
only to pay Operation and Maintenance Costs and to pay
principal, interest, fees and other amounts payable
hereunder.
ARTICLE VI
DEFAULTS AND REMEDIES
If any one of the following events (each an "Event of
Default") shall occur and be continuing:
(a) any amount due under any Credit Document shall not
be paid in full within 15 days after its due date; or
(b) the Company shall fail to perform or observe any
covenant or agreement contained in Section 5.1(b) or 5.1(c)
of this Agreement; or
(c) either of the Mobile Energy Parties shall fail to
perform or observe any covenant or agreement contained in
(i) Section 5.4(e), 5.7(b) (insofar as such failure relates
to matters specified in Section 5.8(b)(iv)), 5.8(b) (other
than clause (v) thereof), 5.10 or 5.19 of the Indenture or
(ii) Section 4.4(e), 4.7(b) (insofar as such failure relates
to matters specified in Section 4.8(b)(iv)), 4.8(b) (other
than clause (v) thereof), 4.10 or 4.19 of the Tax-Exempt
Indenture, in the case of clause (i) and (ii) above, as such
covenants and agreements are incorporated in Section 5.1(a)
hereof by reference; or
(d) either of the Mobile Energy Parties shall fail to
perform or observe any covenant or agreement contained in
(i) Section 5.2, 5.4(a), 5.7(a), 5.8, 5.14 or 5.16 of the
Indenture or (ii) Section 4.2, 4.4(a), 4.7(a), 4.8, 4.14 or
4.16 of the Tax-Exempt Indenture, in the case of clause (i)
and (ii) above, such failure shall continue uncured for
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thirty (30) or more days after either of the Mobile Energy
Parties has knowledge thereof and as such covenants and
agreements are incorporated in Section 5.1(a) hereof by
reference; or
(e) an Event of Default under the Indenture shall have
occurred and be continuing and shall not have been waived by
the Indenture Trustee until the earlier of (i) the
expiration of thirty (30) days after such occurrence and
(ii) an acceleration of the Indenture Securities; or
(f) an Event of Default under the Tax-Exempt Indenture
shall have occurred and be continuing until the earlier of
(i) the expiration of thirty (30) days and (ii) an
acceleration of the Tax-Exempt Indenture Securities;
then, and in any such event, the Agent shall at the request, or
may with the consent, of the Required Lenders, by notice to the
Company, (i) declare the obligation of each Lender to make Loans
to be terminated, whereupon the same shall forthwith terminate
and (ii) declare the Obligations to be forthwith due and payable,
whereupon the Obligations shall become and be forthwith due and
payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the
Company; provided, however, that upon the occurrence of an Event
of Default specified in paragraph (e) or (f) above that arises
from an Event of Default under the Indenture described in Section
8.1(n) thereof or arises from an Event of Default under the Tax-
Exempt Indenture described in Section 8.1(b) that arises from an
Event of Default under the IDB Lease Agreement described in
Section 7.1(n) thereof, automatically and without any notice to
the Company, (A) the obligation of each Lender to make Loans
shall be terminated and (B) the Obligations shall be forthwith
due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by
the Company.
ARTICLE VII
THE AGENT
SECTION 7.1. Authorization and Action. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by the Credit Documents
(including enforcement of and collection under any Credit
Document or Security Document), the Agent shall not be required
to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall
be binding upon all Lenders and all holders of Notes; provided,
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however, that the Agent shall not be required to take any action
that exposes the Agent to personal liability or that is contrary
to any Credit Document or Security Document or applicable law.
In performing its function and duties hereunder, Agent shall act
solely as the agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Company or any
other party to any Project Document.
SECTION 7.2. Agent's Reliance, Etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them
under or in connection with any Credit Document or Security
Document, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing,
the Agent (a) may treat any Lender that has signed a Commitment
Transfer Supplement as the holder of the applicable portion of
the Obligations; (b) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation
to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in
connection with any Credit Document or Security Document; (d)
shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of any Credit Document or Security Document on the
part of the Company or any Affiliate thereof or to inspect the
property (including the books and records) of the Company or any
Affiliate thereof; (e) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Credit Document or
Security Document or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of any Credit Document or Security Document
by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier or otherwise)
believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.3. Initial Lender and Affiliates. With respect
to its Commitment, the Loans made by it and the Note issued to
it, the Initial Lender shall have the same rights and powers
under this Agreement as any other Lender and may exercise the
same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include
the Initial Lender in its individual capacity. The Initial
Lender and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in
any kind of business with, the Company, any Affiliate thereof and
any Person that may do business with or own securities of the
Company or any Affiliate thereof, all as if the Initial Lender
were not the Agent and without any duty to account therefor to
the Lenders.
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SECTION 7.4. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance on
the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without
reliance on the Agent or any other Lender and based on such
documents and information as it deems appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement.
SECTION 7.5. Indemnification. The Lenders severally agree
to indemnify the Agent (to the extent not promptly reimbursed by
the Company and without limiting the obligation of the Company to
do so), ratably according to their respective Commitments (or, if
the Commitments have been fully canceled pursuant to Section
2.1(c), the respective Commitments that were in effect
immediately prior to such cancellation), from and against any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of
any kind or nature whatsoever that may at any time (including at
any time following the payment of any Obligations or termination
of this Agreement) be imposed on, incurred by or asserted against
the Agent in any way relating to or arising out of any Credit
Document or Security Document or any action taken or omitted by
the Agent under any Credit Document or Security Document;
provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees
to reimburse the Agent promptly upon demand for its ratable share
of any costs and expenses payable by the Company under Section
8.4, to the extent that the Agent is not reimbursed for such
costs and expenses by the Company.
SECTION 7.6. Successor Agent. The Agent may resign at any
time by giving thirty (30) days prior written notice thereof to
the Lenders and the Company. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor
Agent with the consent of the Company, which consent shall not be
unreasonably withheld or delayed. If no successor Agent has been
so appointed by the Required Lenders and accepted such
appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent with the consent
of the Company, which shall not be unreasonably withheld or
delayed, which successor Agent shall be a commercial bank
organized under the laws of the United States of America or of
any state thereof and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
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obligations under the Credit Documents and the other Project
Agreements. After any retiring Agent's resignation as Agent, the
provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
acting as the Agent.
ARTICLE VIII
GUARANTY
SECTION 8.1. Guaranty of Payment and Performance. Mobile
Energy hereby (a) guarantees to the Agent and each Lender from
time to time the due and punctual payment, observance and
performance of all of the Guaranteed Obligations in accordance
with their respective terms and when and as due (whether at a
Loan Repayment Date, by reason of acceleration or otherwise), or
deemed to be due pursuant to Section 8.2, and (b) agrees so to
pay, observe or perform the same when so due, or deemed to be
due, upon demand.
SECTION 8.2. Continuance and Acceleration of Guaranteed
Obligations upon Certain Events. If (a) any Event of Default
specified in paragraph (e) or (f) of Article VI that arises from
an Event of Default under the Indenture described in Section
8.1(n) thereof or arises from an Event of Default under the Tax-
Exempt Indenture described in Section 8.1(b) that arises from an
Event of Default under the IDB Lease Agreement described in
Section 7.1(n) thereof shall have occurred and be continuing, (b)
any injunction, stay or the like that enjoins any acceleration,
or demand for the payment, observance or performance, of any
Guaranteed Obligations that would otherwise be required or
permitted under the Security Documents shall become effective or
(c) any Guaranteed Obligations shall be or be determined to be or
become discharged, disallowed, invalid, illegal, void or
otherwise unenforceable (whether by operation of any present or
future law or by order of any Governmental Authority) against the
Company then (i) such Guaranteed Obligations shall, for all
purposes of this Agreement, be deemed (A) in the case of clause
(c) above, to continue to be outstanding and in full force and
effect notwithstanding the unenforceability thereof against the
Company and (B) if such is not already the case, to have
thereupon become immediately due and payable and to have
commenced bearing interest at the rate equal to ( )% and (ii)
the Agent and each Lender may, with respect to such Guaranteed
Obligations, exercise all of the rights and remedies hereunder
that would be available to it during an Event of Default.
SECTION 8.3. Recovered Payments. The Guaranteed
Obligations shall be deemed not to have been paid, observed or
performed, and Mobile Energy's obligations under this Guaranty in
respect thereof shall continue and not be discharged, to the
extent that any payment, observance or performance thereof by the
Company or any other guarantor, or out of the proceeds of any
collateral, is recovered from or paid over by or for the account
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of the Agent or and Lender for any reason, including as a
preference or fraudulent transfer or by virtue of any
subordination (whether present or future or contractual or
otherwise) of the Guaranteed Obligations, whether such recovery
or payment over is effected by any judgment, decree or order of
any Governmental Authority, by any plan of reorganization or by
settlement or compromise by the Agent or any Lender (whether or
not consented to by either of the Mobile Energy Parties or any
other guarantor) of any claim for any such recovery or payment
over. Mobile Energy hereby expressly waives the benefit of any
applicable statute of limitations and agrees that it shall be
liable hereunder with respect to any Guaranteed Obligation
whenever such a recovery or payment over thereof occurs.
SECTION 8.4. Evidence of Guaranteed Obligations. The
records of the Agent shall be conclusive evidence (absent
manifest error) of the Guaranteed Obligations and of all
payments, observances and performances in respect thereof.
SECTION 8.5. Binding Nature of Certain Adjudications.
Mobile Energy shall be conclusively bound by the adjudication in
any action or proceeding, legal or otherwise, involving any
controversy arising under, in connection with, or in any way
related to, any of the Guaranteed Obligations, and by a judgment,
award or decree entered therein, if Mobile Energy shall have had
the right, or shall have been given the opportunity, to
participate in such action or proceeding and shall have been
given notice of such action or proceeding in time to exercise
such right or avail itself of such opportunity.
SECTION 8.6. Nature of Mobile Energy's Obligations. Mobile
Energy's obligations hereunder (a) are absolute and
unconditional, (b) are unlimited in amount, (c) constitute a
guaranty of payment and performance and not a guaranty of
collection, (d) are as primary obligor and not as a surety only,
(e) shall be a continuing guaranty of all present and future
Guaranteed Obligations and all promissory notes and other
documentation given in extension or renewal or substitution for
any of the Guaranteed Obligations and (f) shall be irrevocable.
SECTION 8.7. No Release of Mobile Energy. The obligations
of Mobile Energy under this Guaranty shall not be reduced,
limited or terminated, nor shall Mobile Energy be discharged from
any thereof, for any reason whatsoever (other than, subject to
Sections 8.3 and 8.12, the payment, observance and performance of
the Guaranteed Obligations), including (and whether or not the
same shall have occurred or failed to occur once or more than
once and whether or not the Guarantor shall have received notice
thereof): (a) (i) any increase in the principal amount of, or
interest rate applicable to, (ii) any extension of the time of
payment, observance or performance of, (iii) any other amendment
or modification of any of the other terms and provisions of, (iv)
any release, composition or settlement (whether by way of
acceptance of a plan of reorganization or otherwise) of (v) any
subordination (whether present or future or contractual or
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otherwise) of or (vi) any discharge, disallowance, invalidity,
illegality, voidness or other unenforceability of, in each case
the Guaranteed Obligations; (b) (i) any failure to obtain, (ii)
any release, composition or settlement of, (iii) any amendment or
modification of any of the terms and provisions of, (iv) any
subordination of or (v) any discharge, disallowance, invalidity,
illegality, voidness or other unenforceability of, in each case
any other guaranties of the Guaranteed Obligations; (c) (i) any
failure to obtain or any release of, (ii) any failure to protect
or preserve, (iii) any release, compromise, settlement or
extension of the time of payment of any obligations constituting,
(iv) any failure to perfect or maintain the perfection or
priority of any Lien upon, (v) any subordination of any Lien upon
or (vi) any discharge, disallowance, invalidity, illegality,
voidness or other unenforceability of any Lien or intended Lien
upon, in each case any collateral now or hereafter securing the
Guaranteed Obligations or any other guaranties thereof; (d) any
termination of or change in any relationship between Mobile
Energy and the Company, including any such termination or change
resulting from a change in the ownership of Mobile Energy or the
Company or from the cessation of any commercial relationship
between Mobile Energy and the Company; (e) any exercise of, or
any election not or failure to exercise, delay in the exercise
of, waiver of, or forbearance or other indulgence with respect
to, any right, remedy or power available to the Agent or any
Lender, including (i) any election not or failure to exercise any
right of setoff, recoupment or counterclaim, (ii) any election of
remedies effected by the Agent or any Lender, including the
foreclosure upon any real estate constituting collateral, whether
or not such election affects the right to obtain a deficiency
judgment and (iii) any election by the Agent or any Lender in any
proceeding under the Bankruptcy Code of the application of
Section 1111(b)(2) of the Bankruptcy Code; and (f) any other act
or failure to act or any other event or circumstance that (i)
varies the risk of Mobile Energy under this Guaranty or (ii) but
for the provisions hereof, would, as a matter of statute or rule
of law or equity, operate to reduce, limit or terminate the
obligations of Mobile Energy hereunder or discharge Mobile Energy
from any thereof.
SECTION 8.8. Certain Waivers. Mobile Energy waives (a) any
requirement, and any right to require, that any right or power be
exercised or any action be taken against the Company, any other
guarantor or any collateral for the Guaranteed Obligations, (b)
all defenses to, and all setoffs, counterclaims and claims of
recoupment against, the Guaranteed Obligations that may at any
time be available to the Company or any other guarantor, (c)
(i) notice of acceptance of and intention to rely on this
Guaranty, (ii) notice of any Loans hereunder and of the
incurrence or renewal of any other Guaranteed Obligations,
(iii) notice of any of the matters referred to in Section 8.7 and
(iv) all other notices that may be required by Law or otherwise
to preserve any rights against Mobile Energy under this Guaranty,
including any notice of default, demand, dishonor, presentment
and protest, (d) diligence, (e) any defense based upon, arising
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out of or in any way related to (i) any claim that any sale or
other disposition of any collateral for the Guaranteed
Obligations was not conducted in a commercially reasonable
fashion or that a public sale, should the Agent, any Lender or
the Collateral Agent (as the case may be), have elected to so
proceed, was, in and of itself, not a commercially reasonable
method of sale, (ii) any claim that any election of remedies by
the Agent, any Lender or the Collateral Agent (as the case may
be) including the exercise by the Agent, any Lender or the
Collateral Agent (as the case may be) of any rights against any
collateral, impaired, reduced, released or otherwise extinguished
any right that Mobile Energy might otherwise have had against the
Company or any other guarantor or against any collateral,
including any right of subrogation, exoneration, reimbursement or
contribution or right to obtain a deficiency judgment, (iii) any
claim based upon, arising out of or in any way related to any of
the matters referred to in Section 8.7 and (iv) any claim that
this Guaranty should be strictly construed against the Agent, or
any Lender and (f) ALL OTHER DEFENSES UNDER APPLICABLE LAW THAT
WOULD, BUT FOR THIS CLAUSE (f), BE AVAILABLE TO MOBILE ENERGY AS
A DEFENSE AGAINST OR A REDUCTION OR LIMITATION OF ITS OBLIGATIONS
HEREUNDER.
SECTION 8.9. Independent Credit Evaluation. Mobile Energy
has independently, and without reliance on any information
supplied by the Agent or any Lender, taken, and will continue to
take, whatever steps it deems necessary to evaluate the financial
condition and affairs of the Company, and the Agent or any
Lender, shall have no duty to advise Mobile Energy of information
at any time known to it regarding such financial condition or
affairs.
SECTION 8.10. Subordination of Rights Against Company,
Other Guarantors and Collateral. All rights that Mobile Energy
may at any time have against the Company, any other guarantor or
any collateral for the Guaranteed Obligations (including rights
of subrogation, exoneration, reimbursement and contribution and
whether arising under Law or otherwise), and all obligations that
the Company or any other guarantor may at any time have to Mobile
Energy, Mobile Energy's obligations hereunder or any payment made
are hereby expressly subordinated to the prior payment,
observance and performance in full of the Guaranteed Obligations.
Mobile Energy shall not enforce any of the rights, or attempt to
obtain payment or performance of any of the obligations,
subordinated pursuant to this Section 8.10 until the Guaranteed
Obligations have been paid, observed and performed in full,
except that such prohibition shall not apply to routine acts,
such as the giving of notices and the filing of continuation
statements, necessary to preserve any such rights. If any amount
shall be paid to or recovered by Mobile Energy (whether directly
or by way of setoff, recoupment or counterclaim) on account of
any right or obligation subordinated pursuant to this Section
8.10, such amount shall be held in trust by Mobile Energy for the
benefit of the Agent and the Lenders, not commingled with any of
Mobile Energy's other funds and forthwith paid over to the Agent,
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in the exact form received, together with any necessary
endorsements, to be applied and credited against, or held as
security for, the Guaranteed Obligations and the obligations of
Mobile Energy hereunder.
SECTION 8.11. Payments by Mobile Energy. (a) All payments
due to the Agent or any Lender hereunder shall be made to the
Agent or such Lender at the address indicated in Section 9.2. A
payment shall not be deemed to have been made on any day unless
such payment has been received by the Agent or the Lender (as the
case may be) at the required place of payment, in lawful money of
the United States of America in funds immediately available to
the Agent or such Lender (as the case may be).
(b) All payments due the Agent or any Lender under this
Guaranty, and all of the other terms, conditions, covenants and
agreements to be observed and performed by Mobile Energy under
this Guaranty, shall be made, observed or performed by Mobile
Energy without any reduction or deduction whatsoever, including
any reduction or deduction for any set-off, recoupment,
counterclaim (whether, in any case, in respect of an obligation
owed by the Agent or any Lender to Mobile Energy, the Company or
any other guarantor and, in the case of a counterclaim, whether
sounding in tort, contract or otherwise) or tax.
(c) If any tax is required to be withheld or deducted from,
or is otherwise payable by Mobile Energy in connection with, any
payment due to the Agent or any Lender hereunder, Mobile Energy
(i) shall, if required, withhold or deduct the amount of such tax
from such payment and, in any case, pay such tax to the
appropriate taxing authority in accordance with Law and (ii)
shall pay to the Agent or any Lender (A) such additional amounts
as may be necessary so that the net amount received by the Agent
or any Lender with respect to such payment, after withholding or
deducting all taxes required to be withheld or deducted, is equal
to the full amount payable hereunder and (B) an amount equal to
all taxes payable by the IDB and the Agent or any Lender as a
result of payments made by Mobile Energy (whether to a taxing
authority or to the Agent or any Lender) pursuant to this Section
8.11(c). If any tax is withheld or deducted from, or is
otherwise payable by Mobile Energy in connection with, any
payment due to the Agent or any Lender under this Guaranty,
Mobile Energy shall, within thirty (30) days after the date of
such payment, furnish to the Agent or any Lender (as the case may
be) the original or a certified copy of a receipt for such tax
from the applicable taxing authority. If any payment due to the
Agent or any Lender hereunder is or is expected to be made
without withholding or deducting therefrom, or otherwise paying
in connection therewith, any tax payable to any taxing authority,
Mobile Energy shall, within thirty (30) days after any request
from the Agent or any Lender, furnish to the Agent or any Lender
(as the case may be) a certificate from such taxing authority, or
an Opinion of Counsel acceptable to the Agent or any Lender (as
the case may be), in either case stating that no tax payable to
such taxing authority was or is, as the case may be, required to
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be withheld or deducted from, or otherwise paid by Mobile Energy
in connection with, such payment.
(d) Mobile Energy hereby authorizes the Agent and each
Lender, if and to the extent any amount payable by Mobile Energy
under this Guaranty is not otherwise paid when due, to charge
such amount against any or all of the accounts of Mobile Energy
with the Agent or such Lender or any of its Affiliates (whether
maintained at a branch or office located within or without the
United States), with Mobile Energy remaining liable for any
deficiency.
(e) Whenever any payment to the Agent or any Lender under
this Article VIII would otherwise be due (except by reason of
acceleration) on a day that is not a Business Day, such payment
shall instead be due on the next succeeding Business Day. If the
date any payment hereunder is due is extended (whether by
operation of this Agreement, Law or otherwise), such payment
shall bear interest for such extended time at the rate of
interest applicable hereunder.
SECTION 8.12. Continuance of Guaranty; Survival. The
obligations of Mobile Energy under this Article VIII shall
continue in full force and effect until the payment, observance
and performance in full of the Guaranteed Obligations. The
rights and obligations of Mobile Energy, the Agent and each
Lender shall survive the repayment in full of all principal of
and premium, if any, and interest on, and all other amounts
payable hereunder.
SECTION 8.13. Assignments and Participations; Assignments.
Mobile Energy may not assign any of its rights or obligations
under this Guaranty without the prior written consent of the Tax-
Exempt Indenture Trustee, and no assignment of any such
obligation shall release Mobile Energy therefrom unless the Tax-
Exempt Indenture Trustee shall have consented to such release in
a writing specifically referring to the obligation from which
Mobile Energy is to be released.
SECTION 8.14. Benefit and Enforcement. This Guaranty is
given for the benefit of the Agent and each Lender, each of whom
shall be entitled in the same manner as set forth herein to
enforce performance and observance of this Guaranty.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or any Note, or consent to any
departure by either of the Mobile Energy Parties therefrom, shall
be effective unless in writing and signed or consented to (in
writing) by the Required Lenders (and, in the case of amendments,
the Mobile Energy Parties), and then such waiver or consent shall
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be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed or
consented to (in writing) by all of the Lenders, do any of the
following: (a) waive any of the conditions specified in Article
III; (b) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations; (c) reduce the principal
of, or interest on, the Loans or any fees or other amounts
payable hereunder; (d) postpone any date fixed for (i) payment of
principal of, or interest on, the Loans or (ii) payment of fees
or other amounts payable hereunder; (e) change the percentage of
the Commitments or of the Loans outstanding, or the number of
Lenders, required for the Lenders or any of them to take any
action hereunder; or (f) amend this Section 8.1.
SECTION 9.2. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including by telecopier) and shall be mailed, telecopied or
delivered, if to the Company, to it at ( ), telephone (
), telecopier ( ), Attention: ( ); if to any Lender other
than the Initial Lender, to it at the address or telecopier
number set forth below its name in the Commitment Transfer
Supplement by which it became a party hereto; if to the Agent or
Initial Lender, to it at ( ), telephone ( ), telecopier (
), Attention: ( ); or, as to each party, to it at such
other address or telecopier number as designated by such party in
a written notice to the other parties. All such notices and
communications shall be deemed received, (a) if personally
delivered, upon delivery, (b) if sent by first class mail, on the
third Business Day following deposit into the mails and (c) if
sent by telecopier, upon acknowledgment of receipt thereof by the
recipient, except that notices and communications to the Agent
pursuant to Article II or VII shall not be effective until
received by the Agent.
SECTION 9.3. No Waiver; Remedies. No failure on the part
of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof, and no single or partial exercise of any such right
shall preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.4. Costs and Expenses. Whether or not any Loans
are made hereunder, the Company shall pay to the Agent on demand
(a) all reasonable costs and expenses of the Agent and the
Lenders in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the
Notes and the other documents to be delivered hereunder,
including the reasonable fees and out-of-pocket expenses of
counsel for the Agent and the Lenders with respect thereto and
with respect to advising the Agent and the Lenders as to their
rights and responsibilities, or the perfection, protection or
reservation of rights or interests, under this Agreement, the
Notes, the Security Documents and the other documents to be
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delivered hereunder and (b) all reasonable costs and expenses of
the Agent and the Lenders (including the reasonable fees and out-
of-pocket expenses of counsel for the Agent and the Lenders) in
connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes, the
Security Documents and the other documents to be delivered
hereunder, whether in any action, suit or litigation, any
bankruptcy, insolvency or similar proceeding or otherwise. In
addition, the Company shall pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of any of the
aforementioned documents, and the Company agrees to indemnify and
hold the Agent and the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying or omission to pay any of the foregoing.
SECTION 9.5. Application of Monies. If any sum paid or
recovered in respect of the Obligations is less than the amount
then due, the Agent may apply that sum to principal, interest,
fees or any other amount due under this Agreement in such
proportions and order and generally in such manner as the Agent
shall determine.
SECTION 9.6. Severability. Any provision of this Agreement
that is prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or
nonauthorization without invalidating the remaining provisions of
this Agreement or affecting the validity, enforceability or
authorization of such provision in any other jurisdiction.
SECTION 9.7. Non-recourse Liability. Satisfaction of the
Obligations shall be had solely from the Collateral. No recourse
shall be had to (a) any assets or properties of any Members
(other than Mobile Energy as provided in Article VIII) or of the
stockholders of Mobile Energy, other than their respective
interests in the Collateral, (b) any Member (other than Mobile
Energy as provided in Article VIII) or (c) any Affiliate,
incorporator, stockholder, partner, member, officer, director or
employee of any Member (other than the Company and, in respect of
any Southern Guaranty on deposit in the Maintenance Reserve
Account or the Distribution Account, Southern) and, in the event
of non-performance by either of the Mobile Energy Parties of any
of the Obligations, no judgment for any deficiency upon the
Obligations shall be obtainable by the Lenders or the Agent
against any Member (other than Mobile Energy as provided in
Article VIII) or any Affiliate, incorporator, stockholder,
partner, member, officer, director or employee of any Member
(other than the Company and, in respect of any Southern Guaranty
on deposit in the Maintenance Reserve Account or the Distribution
Account, Southern) or of the Company (other than Mobile Energy as
provided in Article VIII and, in respect of any Southern Guaranty
on deposit in the Maintenance Reserve Account or the Distribution
Account, Southern).
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<PAGE>
SECTION 9.8. Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the Company, the Agent,
the Lenders and their respective successors and permitted
assigns, except that the Company shall not have the right to
assign any of its rights and obligations hereunder without the
prior written consent of all of the Lenders.
SECTION 9.9. Assignments and Participations. (a) Any
Lender may at any time (with the prior written consent of the
Company, such consent not to be unreasonably withheld or delayed,
the prior written consent of the Agent, such consent not to be
unreasonably withheld or delayed, and the prior written consent
of the Initial Lender) sell to one or more banks or other
entities (a "Purchasing Lender") all or any part of its rights
and obligations under the Credit Documents (which, except in the
case of an assignment to a Person that, immediately before such
assignment, was a Lender, shall be equal to at least $( ) or
an integral multiple of $( ) in excess thereof) pursuant to a
Commitment Transfer Supplement, executed by such Purchasing
Lender, such transferor Lender, the Agent and the Initial Lender
(and, in the case of a Purchasing Lender that is not then a
Lender or an Affiliate thereof, by the Company). Upon (i) the
execution of such Commitment Transfer Supplement and (ii)
delivery of a copy thereof to the Company and payment of the
amount of the purchase price for its participation to such
transferor Lender, such Purchasing Lender shall for all purposes
be a Lender party to this Agreement and shall have all the rights
and obligations of a Lender under this Agreement, to the same
extent as if it were an original party hereto with the Commitment
as set forth in such Commitment Transfer Supplement, which shall
be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing
Lender and the resulting adjustment of Commitments arising from
the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under the Credit
Documents. Upon the consummation of any transfer pursuant to
this Section 9.9, the transferor Lender, the Agent and the
Company shall make appropriate arrangements so that, if required,
a replacement Note is issued to such transferor Lender and a new
Note or, as appropriate, a replacement Note, is issued to such
Purchasing Lender, in each case, in principal amounts reflecting
their Commitment.
(b) Any Lender may, from time to time, sell or offer to
sell participating interests in any Loans owing to such Lender,
any Note held by such Lender, any Commitment of such Lender or
any other interests and obligations of such Lender hereunder, to
one or more banks or other entities (each, a "Participant"), on
such terms and conditions as may be determined by the selling
Lender, without the consent of the Company. The selling Lender
shall notify the Company of the identity of each Participant
within 30 days following such participation; provided, however,
that failure to give such notice within such 30 day period will
not affect the validity or effectiveness of such participation.
The grant of such participation shall not relieve any such Lender
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<PAGE>
of its obligations, or impair the rights of any such Lender,
hereunder. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender shall remain
solely responsible for the performance of such Lender's
obligations under this Agreement, such Lender shall remain the
holder of any such Note for all purposes under this Agreement,
and the Company, the Agent and the Initial Lender will continue
to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and
such Lender shall retain the sole right and responsibility to
exercise the rights of such Lender, and enforce the obligations
of the Company, including the right to approve any amendment,
modification, supplement or waiver of any provision of any Credit
Document and the right to take action under Article VI hereof and
such Lender shall not grant any such Participant any voting
rights or veto power over any such action by such Lender under
this Agreement (provided that such Lender may agree not to
consent to any modification, amendment or waiver of this
Agreement, without the consent of the Participant, that would
alter the principal of or interest on the Loans, postpone the
date fixed for any payment of principal of or interest thereon,
release any Collateral or extend the Scheduled Expiration Date).
No Participant shall have any rights under this Agreement to
receive payment of principal, interest or any other amount except
through a Lender and as provided in this Section 9.9. The
Company agrees that, upon the occurrence and during the
continuance of any Event of Default, each Participant shall have
the right of set-off in respect of its participating interest in
amounts owing under this Agreement and any Notes as set forth in
Section 2.19 to the same extent as if the amount of its
participating interest was owing directly to it as a Lender under
this Agreement or any Note. The Company also agrees that each
Participant shall be entitled to the benefits of Sections 2.5(b),
2.13, 2.14, 2.15 and 2.16 with respect to its participation
granted hereunder, provided that no Participant shall be entitled
to receive any greater amount pursuant to such Sections than the
Lender transferring such participation would have been entitled
to receive in respect of the amount of the participation
transferred to such Participant had no such transfer occurred.
(c) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 9.9, disclose to the Purchasing Lender or
Participant or proposed Purchasing Lender or Participant any
information relating to the Company furnished to such Lender by
or on behalf of the Company.
SECTION 9.10. Indemnification. Each of the Mobile Energy
Parties agrees to indemnify and hold harmless the Agent and each
Lender and each of their respective officers, directors,
employees, agents and Affiliates (each, an "Indemnified Party")
from and against any and all claims, damages, losses,
liabilities, costs and expenses whatsoever that an Indemnified
Party may incur (or that may be claimed against an Indemnified
Party by any Person) arising out of or relating to (a) the
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<PAGE>
execution, delivery or performance of the Credit Documents; (b)
the issuance, sale or delivery of the Securities or the Notes;
(c) the use of the proceeds of the Securities or any Loan; (d)
any reasonable action taken by any Indemnified Party in
protecting and enforcing the rights and remedies of the Agent or
the Lenders under the Credit Documents or the Security Documents;
or (e) any failure of the Company to comply with any
Environmental Requirement; provided, however, that the Mobile
Energy Parties shall not be required to indemnify any Indemnified
Party for any claims, damages, losses, liabilities, costs or
expenses to the extent caused by such Indemnified Party's willful
misconduct or gross negligence. The Mobile Energy Parties, upon
demand by any Indemnified Party at any time, shall also reimburse
such party for any reasonable legal or other expenses incurred in
connection with investigating or defending against any of the
foregoing. If any action, suit or proceeding arising from any of
the foregoing is brought against any Indemnified Party, such
Indemnified Party shall promptly notify the Mobile Energy Parties
in writing, enclosing a copy of all papers served, but the
omission so to notify the Mobile Energy Parties of any such
action shall not relieve it of any obligation to indemnify such
Indemnified Party; provided, however, that the Mobile Energy
Parties shall not be liable for any settlement of any such action
effected without the either of the Mobile Energy Party's prior
written consent. If any such action shall be brought against any
Indemnified Party and it shall notify either of the Mobile Energy
Parties of the commencement thereof, either of the Mobile Energy
Parties shall be entitled to participate in and, to the extent
that it shall wish, to assume the defense thereof with counsel
reasonably satisfactory to such Indemnified Party, and after
notice from such Mobile Energy Party to such Indemnified Party of
such Mobile Energy Party's election so to assume the defense
thereof, the Mobile Energy Parties shall not be liable to such
Indemnified Party for any subsequent legal or other expenses
attributable to such defense, except as provided below, other
than reasonable costs of investigation subsequently incurred by
such Indemnified Party in connection with the defense thereof.
The Indemnified Party shall have the right to employ its own
counsel in any such action where either of the Mobile Energy
Parties has assumed the defense, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party
unless (i) the employment of counsel by such Indemnified Party
has been authorized by either of the Mobile Energy Parties, (ii)
the Indemnified Party shall have reasonably concluded that there
may be a conflict of interest between either of the Mobile Energy
Parties and the Indemnified Party in the conduct of the defense
of such action (in which case the Mobile Energy Parties shall not
have the right to direct the defense of such action on behalf of
the Indemnified Party) or (iii) the Mobile Energy Parties shall
not in fact have employed counsel reasonably satisfactory to the
Indemnified Party to assume the defense of such action.
SECTION 9.11. Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICT-OF-LAW
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<PAGE>
PRINCIPLES THEREOF.
SECTION 9.12. Headings. The section and subsection
headings used herein have been inserted for convenience of
reference only and do not constitute matters to be considered in
interpreting this Agreement.
SECTION 9.13. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 9.14. Third Party Beneficiaries. Nothing contained
in this Agreement or in the Notes, express or implied, shall give
to any Person, other than the parties hereto and their successors
and permitted assigns, any benefits or any legal or equitable
right, remedy or claim under this Agreement or the Notes.
SECTION 9.15. Waiver of Jury Trial. THE MOBILE ENERGY
PARTIES, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO ANY OF THE CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized, as of the day and year first above
written.
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By: ____________________________________
Name:
Title:
MOBILE ENERGY SERVICES HOLDINGS, INC.
By: ____________________________________
Name:
Title:
Commitment
$15,000,000.00 BANQUE PARIBAS, as Agent and as a Lender
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
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<PAGE>
EXHIBIT A
REVOLVING PROMISSORY NOTE
$(15,000,000.00) New York, New York
________ __, 1995
FOR VALUE RECEIVED, the undersigned, MOBILE ENERGY SERVICES
COMPANY, L.L.C., an Alabama limited liability company (the
"Company"), hereby unconditionally promises to pay to the order
of BANQUE PARIBAS (the "Lender") the lesser of (i) the principal
sum of fifteen million dollars ($15,000,000.00) and (ii) the
aggregate unpaid principal amount of the Loans made by the Lender
to the Company under the Credit Agreement referred to below, on
the dates and in the amounts specified therein.
The Company further promises to pay interest on the daily
unpaid principal amount hereof from time to time outstanding on
the dates and at the rates specified in the Credit Agreement.
This Note is hereby expressly limited so that in no contingency
or event, whether by reason of acceleration of the maturity of
any indebtedness evidenced hereby or otherwise, shall the
interest contracted for or charged or received by the Lender
exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be
payable to the Lender in excess of the maximum lawful amount, the
interest payable to the Lender shall be reduced to the maximum
amount permitted under applicable law, and the amount of interest
for any subsequent period, to the extent less than that permitted
by applicable law, shall to that extent be increased by the
amount of such reduction.
Each holder hereof is authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date each such
interest payment is due and the amount of each such interest
payment determined in accordance with the Credit Agreement. All
such notations shall constitute conclusive evidence (absent
manifest error) of the accuracy of the information so recorded
and be enforceable against the Company with the same force and
effect as if such amounts were each set forth in a separate note
executed by the Company.
All payments due hereunder shall be made without setoff,
counterclaim or deduction of any nature to Banque Paribas, as
Agent, at ( ), in lawful money of the United States of America
and in immediately available funds, or at such other place and in
such other manner as may be specified by the Agent pursuant to
the Credit Agreement.
Each holder hereof is authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date and
amount of each Loan made to the Company and each payment or
<PAGE>
prepayment of principal thereof, provided that the failure of
such holder to make, or any error in making, any such recordation
or endorsement shall not affect the obligations of the Company
hereunder or under the Credit Agreement. All such notations
shall constitute conclusive evidence (absent manifest error) of
the accuracy of the information so recorded and be enforceable
against the Company with the same force and effect as if such
amounts were each set forth in a separate note executed by the
Company.
This Note is the "Note" of the Company to the Lender
referred to in, evidences each Loan made by the Lender to the
Company under, is subject to the provisions of, and entitles its
holder to the benefits of, the Revolving Credit Agreement dated
as of ( ), 1995 (the "Credit Agreement") among the Mobile
Energy Parties, the Lender and the other lender parties thereto,
and Banque Paribas, as agent for the Lender and such other
lenders, as the same may be amended, supplemented or otherwise
modified from time to time and to which reference is hereby made
for a more complete statement of the terms and conditions under
which each Loan evidenced hereby is to be made and repaid.
Capitalized terms in this Note that are not specifically defined
herein shall have the meanings ascribed to them in the Credit
Agreement.
The Credit Agreement provides for, among other things, the
acceleration of the maturity of the unpaid principal amount
hereof upon the occurrence of certain stated events and for
voluntary prepayments in certain circumstances and upon certain
terms and conditions. The obligations of the Company under the
Credit Agreement and this Note are secured as provided under, and
the holder hereof is entitled to the benefit of, the Security
Documents.
In addition to any and all costs, fees and expenses for
which the Company is liable under the Credit Agreement, the
Company promises to pay all costs and expenses, including
reasonable attorneys' fees and disbursements, incurred in the
collection and enforcement hereof or any appeal of any judgment
rendered hereon.
The Company hereby expressly waives diligence, presentment,
protest, demand, dishonor, nonpayment and notice of every kind to
the fullest extent permitted by applicable law. No failure or
delay by any holder of this Note to exercise any right or remedy
under this Note or any other document or instrument entered into
pursuant to the Credit Agreement shall operate or be construed as
a waiver or modification hereof or thereof.
This Note shall be binding upon the successors and permitted
assigns of the Company and shall inure to the Lender and its
successors, endorsees and permitted assigns. If any term or
provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions
hereof shall in no way be affected thereby.
Recourse under this Note is limited in accordance with
<PAGE>
Section 9.7 of the Credit Agreement, and the provisions of
Section 9.7 of the Credit Agreement are incorporated herein by
reference.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE
CONFLICT-OF-LAW PRINCIPLES THEREOF.
Borrower hereby expressly and irrevocably agrees and
consents that any suit, action or proceeding arising out of or
related to this Note may be instituted in any state or federal
court (at Lender's option) sitting in the County of New York,
State of New York, and, by the execution and delivery of this
Note, Borrower expressly waives any objection that it may have
now or hereafter to the venue or to the jurisdiction of any such
suit, action or proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such
suit, action or proceeding.
All excise tax due on this Note has been paid by the Company
and proper stamps affixed to the Mortgage securing this Note.
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By: _______________________________
Name:
Title:
<PAGE>
GUARANTY
For value received, Mobile Energy hereby guarantees to
the Lender from time to time the due and punctual payment,
observance and performance of all of the Guaranteed Obligations
in accordance with their respective terms and when and as due
(whether at maturity, by reason of acceleration or otherwise), or
deemed to be due hereunder, and agrees so to pay, observe or
perform the same when so due, or deemed to be due, upon demand.
Mobile Energy's obligations above, (i) are absolute and
unconditional, (ii) are unlimited in amount (except as provided
in Article VIII of the Credit Agreement, (iii) constitute a
guaranty of payment and performance and not a guaranty of
collection, (iv) are as primary obligor and not as a surety only,
(v) shall be a continuing guaranty of all present and future
Guaranteed Obligations and all promissory notes and other
documentation given in extension or renewal or substitution for
any of the Guaranteed Obligations and (vi) shall be irrevocable.
The obligations of Mobile Energy under this Guaranty
shall continue in full force and effect until the payment,
observance and performance in full of the Guaranteed Obligations.
The rights and obligations of Mobile Energy and the Lenders shall
survive the repayment in full amounts borrowed under the Credit
Agreement.
Reference is made to Article VIII of the Credit
Agreement for further provisions with respect to this Guaranty.
THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CONFLICT-OF-LAW PRINCIPLES THEREOF.
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By: _______________________________
Name:
Title:
<PAGE>
SCHEDULE
Total
Amount of Date Amount Principal
Principal Principal Unpaid Interest of Amount of
Date Amount Paid Principal Payment Interest Loans Notation
Made of Loan or Prepaid Balance is Due Due Outstanding Made by
<PAGE>
EXHIBIT B
NOTICE OF BORROWING
(Mobile Energy Services Company, L.L.C. Letterhead)
(Date - at least one Business Day (or three
Eurodollar Business Days for LIBOR Rate
Loans) prior to proposed date of Borrowing)
Attention:
Ladies and Gentlemen:
Pursuant to the Revolving Credit Agreement, dated as of (
), 1995 among Mobile Energy Services Company, L.L.C. (the
"Company"), Mobile Energy Services Holdings, Inc., the financial
institutions named therein (the "Lenders") and Banque Paribas, as
agent for the Lenders (as the same may be amended, modified or
supplemented from time to time, the "Credit Facility")
(capitalized terms used herein, unless otherwise noted, shall
have the meanings ascribed to them in the Credit Facility). The
Company hereby requests that the Agent make available to the
Company on (_________, ____), the following amount:
Funds required by the Company to pay
for Operation and Maintenance Costs $______________
This Borrowing shall consist of (choose Adjusted Base Rate
Loans or LIBOR Rate Loans - if LIBOR Rate Loans, specify Interest
Period of one, two or three months) with a Loan Repayment Date of
(Date - not later than the Scheduled Expiration Date; not later
than 90 days from date of Borrowing; no more than $5,000,000 may
be scheduled for repayment within any 30-day period; if LIBOR
Rate Loans, must correspond with last day of specified Interest
Period).
Attached hereto are invoices or other evidence of amounts
due evidencing the uses contemplated for the requested Borrowing.
We request that the funds representing the requested Borrowing be
deposited in the following account:
(Account Number/Bank)
<PAGE>
In connection with this request for a Borrowing, the Company
further certifies that the proceeds of the Borrowing being
requested herein are to be applied for the uses permitted by the
Credit Facility.
The Company hereby certifies that, as of the date of this
request for a Borrowing, the Company is in compliance, subject to
the satisfaction or waiver by the Agent, with all conditions
precedent set forth in Section (in the case of the initial
Borrowing, 3.1 and) 3.2 of the Credit Facility.
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By: _______________________________
Name:
Title:
<PAGE>
EXHIBIT C
Form of Commitment Transfer Supplement
COMMITMENT TRANSFER SUPPLEMENT, dated as of the date set
forth in Item 1 of Schedule I hereto, among each Transferor
Lender set forth in Item 2 of Schedule I hereto (each, a
"Transferor Lender"), each Purchasing Lender set forth in Item 3
of Schedule I hereto (each, a "Purchasing Lender") and Banque
Paribas, as the Initial Lender and as Agent under the Credit
Agreement described below.
W I T N E S S E T H:
WHEREAS, this Commitment Transfer Supplement is being
executed and delivered in accordance with Section 8.9 of the
Revolving Credit Agreement dated as of ( ), 1995 among
(i) Mobile Energy Services Company, L.L.C., an Alabama
limited liability company (the "Company"), (ii) Mobile
Energy Services Holdings, Inc., an Alabama corporation,
(iii) Banque Paribas, in its individual capacity as initial
lender (the "Initial Lender"), and the other Lenders named
therein (collectively, the "Lenders") and (iv) Banque
Paribas, as agent for the Lenders (the "Agent") (terms
defined therein being used herein as therein defined); and
WHEREAS, each Purchasing Lender desires to purchase and
assume from its respective Transferor Lender certain rights,
obligations and commitments under the Credit Agreement and,
if it is not already a Lender party to the Credit Agreement,
desires to become a Lender party to the Credit Agreement;
and
WHEREAS, each Transferor Lender desires to sell and
assign to its respective Purchasing Lender, certain rights,
obligations and commitments under the Credit Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Upon receipt by Agent of ( ) (( )) fully executed
originals of this Commitment Transfer Supplement, to each of
which is attached a fully completed Schedule I, Schedule II and
Schedule III, and each of which has been executed by each
Transferor Lender, each Purchasing Lender and any other Person
required by the Credit Agreement to execute this Commitment
Transfer Supplement, Agent will transmit to Borrower, each
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<PAGE>
Transferor Lender and each Purchasing Lender a Transfer Effective
Notice, substantially in the form of Schedule IV hereto (a
"Transfer Effective Notice"). Such Transfer Effective Notice
shall set forth, among other things, the date on which the
transfer effected by this Commitment Transfer Supplement shall
become effective (the "Transfer Effective Date"), which date
shall be the date hereof. From and after the Transfer Effective
Date each Purchasing Lender shall be a Lender party to the Credit
Agreement for all purposes thereof.
2. Each Purchasing Lender shall pay to each of its
respective Transferor Lenders an amount in United States dollars
equal to the purchase price, as agreed between such Transferor
Lender and each such Purchasing Lender and set forth on Schedule
II hereto (the "Purchase Price"), for the portion being purchased
(such Purchasing Lender's "Purchased Percentage") by such
Purchasing Lender of the outstanding Loans and other amounts
owing to the respective Transferor Lender under the Credit
Agreement and the Notes (the "Outstanding Obligations"). Each
Purchasing Lender shall pay the appropriate Purchase Price to its
respective Transferor Lender(s), in immediately available funds,
at or before 12:00 noon, local time of the appropriate Transferor
Lender, on the Transfer Effective Date. Effective upon the
Transfer Effective Date, each Transferor Lender hereby
irrevocably sells, assigns and transfers to each of its
respective Purchasing Lenders, without recourse, representation
or warranty other than as set forth in Section 8, and each such
Purchasing Lender hereby irrevocably purchases, takes and assumes
from its respective Transferor Lender(s), such Purchasing
Lender's Purchased Percentage of the Commitment, presently
outstanding Loans and other amounts owing to each such Transferor
Lender under the Credit Agreement and the Notes.
3. Each Transferor Lender has made arrangements with its
respective Purchasing Lender(s) with respect to (a) the portion,
if any, to be paid, and the date or dates for payment, by such
Transferor Lender to its respective Purchasing Lender(s) of any
fees heretofore received by such Transferor Lender pursuant to
the Credit Agreement prior to the Transfer Effective Date that
apply to periods subsequent to the Transfer Effective Date and
(b) the portion, if any, to be paid, and the date or dates for
payment, by each such Purchasing Lender to its respective
Transferor Lender(s) of fees or interest received by each such
Purchasing Lender pursuant to the Credit Agreement from and after
the Transfer Effective Date that apply to periods prior to the
Transfer Effective Date.
4. All payments of principal that would otherwise be
payable, and all interest, fees and other amounts that would
otherwise accrue, from and after the Transfer Effective Date to
or for the account of any Transferor Lender pursuant to the
Credit Agreement and the Notes shall instead be payable and
accrue to or for the account of, the Transferor Lender(s) and the
Purchasing Lender(s) in accordance with their respective
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<PAGE>
interests as reflected in this Commitment Transfer Supplement.
5. On or prior to the Transfer Effective Date, each
Transferor Lender will deliver to the Agent its Note. On or
prior to the Transfer Effective Date, the Company will deliver to
the Agent a new Note for each Purchasing Lender and each
Transferor Lender (if applicable), in each case in principal
amounts reflecting, in accordance with the Credit Agreement,
their respective "Revised Commitment Percentage" or "New
Commitment Percentage," as the case may be, and as set forth in
Schedule III hereto, of the Commitment (as adjusted pursuant to
this Commitment Transfer Supplement). Promptly after the
Transfer Effective Date, the Agent will send to each Transferor
Lender (if applicable) and Purchasing Lender its new Note with
the superseded Note of each Transferor Lender attached to the new
Note (or if there is more than one new Note, the superseded Note
attached to one of such new Notes and copies thereof attached to
all other new Notes).
6. Concurrently with the execution and delivery hereof, the
Transferor Lenders will provide to each Purchasing Lender (if it
is not already a Lender party to the Credit Agreement) copies of
all documents delivered to the Transferor Lenders evidencing
satisfaction of the conditions precedent set forth in the Credit
Agreement.
7. Each of the parties to this Commitment Transfer
Supplement agrees that at any time and from time to time upon the
written request of any other party, it will execute and deliver
such further documents and do such further acts and things as
such other party may reasonably request in order to effect the
purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer
Supplement, each Transferor Lender and each Purchasing Lender
confirms to and agrees with each other, the Agent, the Initial
Lender and the Lenders as follows: (a) other than the
representation and warranty that it is the legal and beneficial
owner of the interest being assigned hereby, free and clear of
any adverse claim, each such Transferor Lender makes no
representation or warranty and assumes no responsibility with
respect to (i) any statements, warranties or representations made
in or in connection with the Credit Agreement or (ii) the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, the Notes or any
other instrument or document furnished pursuant thereto, (b) each
such Transferor Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of Borrower or the performance or observance by Borrower of any
of its obligations under the Credit Agreement, the Notes or any
other instrument or document furnished pursuant thereto, (c) each
such Purchasing Lender confirms that it has received a copy of
the Credit Agreement, together with copies of such other
documents and information as it has deemed appropriate to make
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<PAGE>
its own credit analysis and decision to enter into this
Commitment Transfer Supplement, (d) each such Purchasing Lender
will, independently and without reliance upon Agent, its
respective Transferor Lender(s) or any other Lender or the
Initial Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit
Agreement, (e) each such Purchasing Lender appoints and
authorizes Agent to take such action as agent on its behalf and
to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof together with such
powers as are reasonably incidental thereto and (f) each such
Purchasing Lender agrees that it will perform in accordance with
their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender.
9. Schedule III hereto sets forth for each Transferor
Lender and each Purchasing Lender the revised Commitment and
Commitment Percentage of each Transferor Lender and each
Purchasing Lender, as well as certain administrative information
with respect to each Purchasing Lender.
10. Notwithstanding anything to the contrary contained in
this Commitment Transfer Supplement, if the long-term debt rating
of any Purchasing Lender shall, at any time, be less than a
rating of BBB or the equivalent thereof by S&P or BAA or the
equivalent thereof by Moody's, then the Initial Lender may, in
its sole and absolute discretion, purchase all or any part (as
determined by the Initial Lender) of such Purchasing Lender's
participating interest hereunder (the "Purchased Interests") by
providing such Purchasing Lender with at least two Business Days'
prior notice of such purchase and making a payment to such
Purchasing Lender equal to all outstanding amounts owing to it
under to the Credit Agreement in respect of the Purchased
Interests on the date of such purchase as set forth in such
notice. Upon any such purchase of the Purchased Interests, such
Purchasing Lender shall no longer have any rights or obligations
as a Purchasing Lender hereunder or as a Lender under the Credit
Agreement or under any other instruments or documents furnished
pursuant thereto with respect to the Purchased Interests. The
Initial Lender may, in its sole and absolute discretion, retain
for its own account and/or sell its interest in all or any
portion of the Purchased Interests.
11. THIS COMMITMENT TRANSFER SUPPLEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO THE CONFLICT-OF-LAW PRINCIPLES
THEREOF.
12. This Commitment Transfer Supplement may be executed in
one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same document.
C-4
<PAGE>
13. Execution of this Commitment Transfer Supplement by the
Agent and the Company as set forth below shall constitute any
consent of such Person required pursuant to Section 8.9 of the
Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Commitment Transfer Supplement to be executed by their respective
duly authorized officers on Schedule I hereto as of the date set
forth in Item 1 of Schedule I hereto.
C-5
<PAGE>
SCHEDULE I
TO COMMITMENT
TRANSFER
SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
Re: Revolving Credit Agreement dated as of ( ), 1995 with Mobile
Energy Services Company, L.L.C. as Borrower.
Item 1 Date of Commitment (Insert date of
Transfer Supplement: Commitment
Transfer Supplement)
Item 2 Transferor Lenders: (Insert names of
Transferor Lenders)
Item 3 Purchasing Lenders: (Insert names of
Purchasing Lenders)
Item 4 Signatures of Parties
to Commitment Transfer
Supplement:
______________________,as a
Transferor Lender
By: ________________________
Name:
Title:
______________________,as a
Purchasing Lender
By: ________________________
Name:
Title:
C-6
<PAGE>
SCHEDULE I
(Continued)
BANQUE PARIBAS, as the Initial Lender
and Agent
By:
Name:
Title:
By:
Name:
Title:
CONSENTED TO AND ACKNOWLEDGED:
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By:
Name:
Title:
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By:
Name:
Title:
ACCEPTED FOR RECORDATION IN REGISTER:
BANQUE PARIBAS, as Agent
By:
Name:
Title:
By:
Name:
Title:
C-7
<PAGE>
SCHEDULE II
TO COMMITMENT
TRANSFER
SUPPLEMENT
PURCHASE PRICES
Names of (Insert name of (Insert name of (Insert name of
Transferor Lenders Purchasing Lender) Purchasing Lender) Purchasing Lender)
(Insert name of $(Insert Purchase $(Insert Purchase $(Insert Purchase
Transferor Lender) Price) Price) Price)
C-8
<PAGE>
SCHEDULE III
TO COMMITMENT
TRANSFER
SUPPLEMENT
COMMITMENT AMOUNTS, AND PROPORTIONATE SHARES
Names of Transferor Revised Commitment
Lenders Revised Commitment Percentage
( ) $ %
( ) $ %
Names of Purchasing
Lenders New Commitment Commitment Percentage
( ) $ %
C-9
<PAGE>
SCHEDULE III
(Continued)
(NAME PURCHASING LENDER)
Address for Notices:
Attention:
Telex:
Answerback:
Telephone:
Telecopier:
Clearing Account:
(Insert Acct. #)
C-10
<PAGE>
SCHEDULE IV TO
COMMITMENT
TRANSFER
SUPPLEMENT
TRANSFER EFFECTIVE NOTICE
_______________, ____
Transferor Lenders: ( )
Purchasing Lenders: ( )
Borrower: Mobile Energy Services Company, L.L.C.
The undersigned, as Agent under the Revolving Credit
Agreement, dated as of ( ), 1995, among (i) Mobile Energy
Services Company, L.L.C., an Alabama limited liability company
(the "Company"), (ii) Banque Paribas, as initial lender, and the
other Lenders named therein (collectively, the "Lenders"), and
(iii) Banque Paribas, as agent for the Lenders (the "Agent")
acknowledge receipt of ( ) (( )) copies of the Commitment
Transfer Supplement as described in Annex I hereto, each fully
executed. Terms defined in such Commitment Transfer Supplement
are used herein as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you
are advised that the Transfer Effective Date will be the date
hereof.
2. Pursuant to such Commitment Transfer Supplement, each
Transferor Lender is required to deliver to Agent on or before
the Transfer Effective Date its Note.
3. Pursuant to such Commitment Transfer Supplement, the
Company is required to deliver to the Agent on or before the
Transfer Effective Date the following Notes:
(Describe each new Note for Transferor Lender (if applicable) and
Purchasing Lender as to principal amount and payee.)
SCHEDULE IV
(Continued)
C-11
<PAGE>
4. Pursuant to such Commitment Transfer Supplement, each
Purchasing Lender is required to pay its Purchase Price, in
immediately available funds, to the appropriate Transferor Lender
at or before 12:00 noon, local time of the appropriate Transferor
Lender, on the Transfer Effective Date.
Very truly yours,
BANQUE PARIBAS, as Agent
By:
Name:
Title:
By:
Name:
Title:
C-12
<PAGE>
ANNEX I
INFORMATION IDENTIFYING
COMMITMENT TRANSFER SUPPLEMENT
Re: Revolving Credit Agreement, dated as of ( ), 1995,
with Mobile Energy Services Company, L.L.C., as Borrower
Item I Date of Commitment
Transfer Supplement: _____________, ____
Item 2 Transferor Lenders: ( )
Item 3 Purchasing Lenders: ( )
C-13
<PAGE>
Exhibit B-9
LOAN AND REIMBURSEMENT AGREEMENT
between
THE SOUTHERN COMPANY,
as Borrower
and
BANQUE PARIBAS, NEW YORK BRANCH,
as Bank
Dated as of [____________], 1995
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Other Defined Terms . . . . . . . . . . . . 12
SECTION 2. THE CREDIT FACILITIES AND THE COMMITMENTS . . . . 12
Section 2.1 The Credit Facilities . . . . . . . . . . . 12
Section 2.2 Commitments; Reductions of Commitments . . 12
SECTION 3. THE BANK LOAN FACILITY . . . . . . . . . . . . . . 13
Section 3.1 Bank Loans . . . . . . . . . . . . . . . . 13
Section 3.3 Bank Loan Notes . . . . . . . . . . . . . . 14
Section 3.4 Repayment of Bank Loans . . . . . . . . . . 14
Section 3.5 Conversion and Continuation Options . . . . 14
Section 3.6 Interest on Bank Loans . . . . . . . . . . 15
Section 3.7 Computation of Interest on Bank Loans . . . 16
Section 3.8 Inability to Determine Interest Rate on
Eurodollar Loan . . . . . . . . . . . . . . 16
Section 3.9 Illegality . . . . . . . . . . . . . . . . 17
Section 3.10 Requirements of Law . . . . . . . . . . . 17
Section 3.11 Substitution or Removal of the Bank . . . 19
Section 3.12 Bank's Representation . . . . . . . . . . 20
SECTION 4. THE LETTER OF CREDIT FACILITY . . . . . . . . . . 20
Section 4.1 Letter of Credit . . . . . . . . . . . . . 20
Section 4.2 Notice of Payments under the Letter of
Credit. . . . . . . . . . . . . . . . . . . 20
Section 4.3 Borrower's Obligations in Respect of
Letter of Credit. . . . . . . . . . . . . . 20
Section 4.4 Reduction of Letter of Credit . . . . . . . 21
SECTION 5. GENERAL PROVISIONS APPLICABLE TO BANK LOAN
FACILITY AND LETTER OF CREDIT FACILITY . . . . . . . . . 22
Section 5.1 Fees . . . . . . . . . . . . . . . . . . . 22
Section 5.2 Required Prepayments of Bank L/C Loans . . 22
Section 5.3 Optional Prepayments of Loans . . . . . . . 22
Section 5.4 Taxes . . . . . . . . . . . . . . . . . . . 23
Section 5.5 Certain Indemnities . . . . . . . . . . . . 24
Section 5.6 Additional Letter of Credit Provisions . . 25
SECTION 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 26
Section 6.1 Organization . . . . . . . . . . . . . . . 26
Section 6.2 Authorization; Enforceable Obligations . . 27
Section 6.3 No Legal Bar . . . . . . . . . . . . . . . 27
Section 6.4 Governmental Approvals . . . . . . . . . . 27
Section 6.5 No Proceeding or Litigation . . . . . . . . 27
Section 6.6 ERISA . . . . . . . . . . . . . . . . . . . 28
Section 6.7 No Default . . . . . . . . . . . . . . . . 28
Section 6.8 Financial Statements . . . . . . . . . . . 28
i
<PAGE>
Section 6.9 Federal Regulations . . . . . . . . . . . . 28
SECTION 7. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . 28
Section 7.1 Conditions to Effectiveness of Commitments. 29
Section 7.2 Conditions to Each Bank Loan . . . . . . . 30
SECTION 8. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 30
Section 8.1 Payment of Taxes . . . . . . . . . . . . . 30
Section 8.2 Insurance . . . . . . . . . . . . . . . . . 30
Section 8.3 Maintain Corporate Existence . . . . . . . 31
Section 8.4 Compliance with Applicable Law . . . . . . 31
Section 8.5 Notice of Defaults . . . . . . . . . . . . 31
Section 8.6 Ownership of Certain Subsidiaries . . . . . 31
Section 8.7 Incurrence of Debt . . . . . . . . . . . . 31
Section 8.8 Agreement to Secure Ratably . . . . . . . . 31
Section 8.9 Financial Statements . . . . . . . . . . . 33
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 33
Section 9.1 Events of Default . . . . . . . . . . . . . 33
Section 9.2 Rights and Remedies Following an Event of
Default . . . . . . . . . . . . . . . . . . 35
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . 36
ii
<PAGE>
Exhibits:
A Form of Note
B-1 Form of Notice of Borrowing
B-2 Form of Notice of Conversion
C Form of Letter of Credit
D Form of Opinion of Troutman Sanders
E Form of Interest Rate Election Notice
iii
<PAGE>
LOAN AND REIMBURSEMENT AGREEMENT, dated as of [_________], 1995,
between THE SOUTHERN COMPANY, a Delaware corporation (the
"Borrower") and BANQUE PARIBAS, NEW YORK BRANCH (the "Bank").
W I T N E S S E T H :
WHEREAS, Borrower owns all of the issued and outstanding
common stock of each of Mobile Energy Services Holdings, Inc.
("Mobile Energy") and Southern Electric International, Inc.,
which in turn hold 99% and 1%, respectively, of the outstanding
ownership interests of Mobile Energy Services Company, L.L.C., an
Alabama limited liability company (the "Company");
WHEREAS, the Company owns and operates an energy and black
liquor recovery complex located at an integrated pulp, paper and
tissue manufacturing facility in Mobile, Alabama (the "Energy
Complex");
WHEREAS, the Company is financing the acquisition,
construction, and equipping of the Energy Complex through the
issue and sale of the Indenture Securities (as hereafter defined)
and the execution and delivery of agreements relating to the
issue and sale of the Tax-Exempt Indenture Securities (as
hereafter defined) (collectively, the "Senior Securities");
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Company, Mobile Energy, First Union National
Bank of Georgia (as Indenture Trustee on behalf of the holders of
the Indenture Securities and as Tax-Exempt Indenture Trustee on
behalf of the holders of the Tax-Exempt Indenture Securities),
Banque Paribas, New York Branch (as Working Capital Facility
Provider), The Industrial Development Board of the City of
Mobile, Alabama (the "IDB"), and Bankers Trust Company (as
Collateral Agent) have entered into an Intercreditor and
Collateral Agency Agreement (the "Intercreditor Agreement");
WHEREAS, pursuant to Section 2.2(a) of the Intercreditor
Agreement, the Company and Mobile Energy have established and
created with the Collateral Agent various accounts, including a
Maintenance Reserve Account (as hereafter defined) into which
certain monies shall be deposited and transferred by the
Collateral Agent to the Indenture Trustee and the Tax-Exempt
Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Company, pursuant to Section 3.15(a) of the
Intercreditor Agreement, is depositing the Southern Guaranty
Agreement (as hereafter defined) into the Maintenance Reserve
Account as Reserve Account Security (as defined under the
Intercreditor Agreement) for amounts required to be deposited in
the Maintenance Reserve Account;
1
<PAGE>
WHEREAS, pursuant to Section 4.4(a) of the Tax-Exempt
Indenture, a Tax-Exempt Debt Service Reserve Account (as
hereafter defined) has been established for the benefit of the
holders of the Tax-Exempt Indenture Securities;
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Company, in accordance with Section 4.7(a) of
the Tax-Exempt Indenture, is delivering the Letter of Credit (as
hereafter defined) to the Tax-Exempt Indenture Trustee as Reserve
Account Security (as defined under the Tax-Exempt Indenture) for
amounts required to be deposited in the Tax-Exempt Debt Service
Reserve Account; and
WHEREAS, subject to the terms and conditions set forth
herein, the Bank is willing to provide the Letter of Credit and
to provide revolving credit facilities to Borrower to enable
Borrower to fund its obligations under the Southern Guaranty
Agreement and to borrow amounts disbursed by the Bank under the
Letter of Credit to fund L/C Reimbursement Obligations (as
hereafter defined).
NOW, THEREFORE, in consideration of the premises, and of
the mutual covenants, agreements herein contained and other good
and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
Section 1.1 Defined Terms. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned
to them in Annex A.
"Adjusted Funded Debt": with respect to the Borrower, shall
mean without duplication:
(1)its liabilities for borrowed money, other than Current
Debt;
(2)liabilities, other than Current Debt, secured by any
lien existing on property owned by the Borrower (whether or
not such liabilities have been assumed);
(3)the present value of all payments due under any lease or
under any other arrangement for retention of title
(discounted at the implicit rate if known or 8% per annum
otherwise) if such lease or other arrangement is in
substance (a) a financing lease (including any lease under
which (i) the lessee has or will have an option to purchase
the property subject thereto at a nominal amount or an
amount less than a reasonable estimate of the fair market
value of such property at the date of such purchase, (ii)
2
<PAGE>
the lessor has filed a financing statement, or (iii) the
term of the lease approximates or exceeds the expected
useful life of the property subject thereto), (b) an
arrangement for the retention of title for security
purposes, or (c) an installment purchase; and
(4)any other obligations (other than deferred taxes) which
are required by generally accepted accounting principles to
be shown as liabilities on its balance sheet and which are
payable or remain unpaid more than one year from the
creation thereof.
The "Adjusted Funded Debt" of the Borrower shall mean all
obligations described in the foregoing clauses in respect of
which the Borrower is liable as obligor, guarantor or otherwise.
"Agreement": this Loan and Reimbursement Agreement, as
amended, supplemented or otherwise modified and in effect from
time to time.
"Bank": Banque Paribas, New York Branch or any successor
or assign.
"Bank Default Rate": (a) with respect to any amount due
under a Bank Loan, the applicable Base Rate or Eurodollar Rate,
plus 2%; and (b) with respect to any other amount payable by the
Borrower, the Base Rate, plus 2%
"Bank L/C Loan": a Bank Loan made in accordance with
Section 4.3 hereof to fund an L/C Reimbursement Obligation.
"Bank M/R Loan": a Bank Loan made in accordance with
Section 3.2 hereof to fund a deposit to the Maintenance Reserve
Account [required under the terms of the Southern Guaranty
Agreement].
"Bank Loans": collectively, Bank L/C Loans and Bank M/R
Loans.
"Bank Transfer Supplement": as defined in Section 10.7(b)
hereof.
"Bankruptcy Code": Title 11, United States Code, as
amended from time to time.
"Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Federal Funds Effective Rate as in effect at
such time plus 0.5%, and (b) the per annum rate of interest from
time to time publicly announced by Citibank, N.A. at its
principal office in the United States as its base lending rate
for domestic (United States) commercial loans (which rate may not
3
<PAGE>
be the lowest rate of interest charged by Citibank, N.A. in
connection with extensions of credit to its other customers).
For purposes hereof, 'Federal Funds Effective Rate' means, with
respect to each day, the rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided
that (i) if such day is not a Business Day, the Federal Funds
Effective Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day, and (ii) if no such rate is
so published on such next succeeding Business Day, the Federal
Funds Effective Rate for such day shall be the average rate
quoted to the Bank on such day on such transactions as the Bank
may reasonably determine. If for any reason the Bank shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this
definition until the circumstances giving rise to such inability
no longer exist. Any change in the Base Rate due to a change in
the rate referred to in clause (b) of the first sentence of this
definition or in the Federal Funds Effective Rate shall be
effective as of the opening of business on the date of such
change in the rate referred to in such clause (b) or the Federal
Funds Effective Rate, respectively.
"Base Rate Loans": Bank Loans the rate of interest
applicable to which is based on the Base Rate.
"Borrower": The Southern Company, a Delaware corporation.
"Borrower Representative": any officer or member of the
Company designated as such by Borrower who shall be duly
authorized to execute and deliver Notes, Notices of Borrowing,
Notices of Conversion, Interest Rate Election Notices, and all
other notices, communications or other documents required of
Borrower hereunder.
"Borrowing Date": any Business Day on which the Borrower
requests a Bank M/R Loan or a Bank L/C Loan pursuant to Section
3.2 or Section 4.3, as applicable.
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required by law to close and (with respect to
Eurodollar Loans only) on which deposits in foreign currencies
and exchange between banks may be carried on in London, England.
4
<PAGE>
"Capitalization": with respect to the Borrower, shall mean
the sum of (a) the aggregate of the capital stock (but excluding
treasury stock and capital stock subscribed and unissued) and
other equity accounts (including retained earnings and paid-in
capital) of the Borrower as the same appears on its balance sheet
prepared in accordance with generally accepted accounting
principles as of the date of determination, and (b) the amount of
Adjusted Funded Debt of the Borrower as of the same date.
"Closing Date": means the date on which the First Mortgage
Bonds and the Tax-Exempt Bonds are originally issued.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment Period": the period commencing on and
including the Closing Date to and including the Commitment
Termination Date.
"Commitment Termination Date": the seventh anniversary of
the Closing Date, or such later date as to which the Bank and
Borrower agree to extend the Commitment Termination Date in
accordance with Section 2.2.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower
within the meaning of Section 4001 of ERISA or is part of a group
which includes the Borrower and which is treated as a single
employer under Section 414 of the Code.
"Company": Mobile Energy Services Company, L.L.C., an
Alabama limited liability company.
"Current Debt": with respect to the Borrower, shall mean
all liabilities for borrowed money and all liabilities secured by
any lien existing on property owned by the Borrower whether or
not such liabilities have been assumed, which, in either case are
payable on demand or within one year from the creation thereof,
except:
(1)any such liabilities which are renewable or extendible
at the option of the debtor to a date more than one year
from the date of creation thereof, and
(2)any such liabilities which, although payable within one
year, constitute payments required to be made on account of
principal of indebtedness expressed to mature more than one
year from the date of creation thereof.
"Default": any of the events specified in Section 9.1
hereof, whether or not any requirement for the giving of notice,
5
<PAGE>
the lapse of time, or both, or any other condition set forth in
said Section 9.1, has been satisfied.
"Dollar and $": dollars in lawful currency of the United
States of America.
"ERISA": the Employee Retirement Income security Act of
1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without duplication)
of the rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves
under any regulations of the Board of Governors of the Federal
Reserve System or other Government Authority having jurisdiction
with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during
each Eurodollar Loan Interest Period pertaining to a Eurodollar
Loan, the rate per annum equal to the rate at which the Bank is
offered Dollar deposits at or about 11:00 A.M., London time, two
Business Days prior to the beginning of such Eurodollar Loan
Interest Period in the London interbank eurodollar market for
delivery on the first day of such Eurodollar Loan Interest
Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan to be outstanding
during such Eurodollar Loan Interest Period.
"Eurodollar Loan Interest Period": with respect to any
Eurodollar Loan:
(a)initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months (or, if
available to the Bank, nine months, twelve months or longer)
thereafter, as selected by the Borrower in its Notice of
Borrowing or Notice of Conversion, as the case may be, given with
respect thereto; and
(b)thereafter, each period commencing on the last day of
the next preceding Eurodollar Loan Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months
(or, if available to the Bank, nine months, twelve months or
longer) thereafter, as selected by the Borrower by irrevocable
notice to the Bank not less than three (3) Business Days prior to
the last day of the then current Eurodollar Loan Interest Period
with respect thereto; provided that the foregoing provisions
6
<PAGE>
relating to Eurodollar Loan Interest Periods are subject to the
following:
(1) if any Eurodollar Loan Interest Period would
otherwise end on a day that is not a Business Day, such
Eurodollar Loan Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would
be to carry such Eurodollar Loan Interest Period into another
calendar month, in which event such Eurodollar Loan Interest
Period shall end on the immediately preceding Business Day;
(2) any Eurodollar Loan Interest Period that begins
on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Eurodollar Loan Interest Period) shall
end on the last Business Day of a calendar month;
(3) the Borrower shall select Eurodollar Loan
Interest Periods so as not to require a payment or prepayment of
any Eurodollar Loan; and
(4) the Borrower shall not select a Eurodollar Loan
Interest Period that ends after the Commitment Period.
"Eurodollar Loans": Bank Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Eurodollar Loan Interest Period pertaining to a Eurodollar Loan,
a rate per annum determined for such day in accordance with the
following formula (rounded upward, if necessary, to the nearest
1/100th of 1%):
Eurodollar Base Rate
1 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section
9 hereof, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been
satisfied.
"Facilities": the Bank Loan Facility and the Letter of
Credit Facility.
"Federal Funds Effective Rate": as defined in the
definition of Base Rate.
"First Mortgage Bonds": the Indenture Securities issued on
the Closing Date under the first Series Supplemental Indenture to
the Indenture.
7
<PAGE>
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time.
"Government Authority": any nation or government, any
state or other political subdivision thereof, and any entity
exercising legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Governmental Approvals": authorizations, consents,
approvals, waivers, exemptions, variances, franchises, to the
permissions, permits and licenses of, and filings and
declarations with, any Government Authority.
"IDB": The Industrial Development Board of the City of
Mobile, Alabama.
"Indenture": the Trust Indenture dated as of [ ],
1995, among the Company, Mobile Energy and the Indenture Trustee.
"Indenture Securities": the First Mortgage Bonds and any
supplemental series of First Mortgage Bonds issued pursuant to
the Indenture.
"Indenture Trustee": First Union National Bank of Georgia,
as Trustee under the Trust Indenture.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of
Section 4245 of ERISA.
"Interest Rate Election Notice": a written notice by the
Borrower delivered in connection with a borrowing of Bank Loans,
substantially in the form of Exhibit E to this Agreement.
"L/C Available Amount": at any time, the undrawn stated
amount of the Letter of Credit, as provided in Section 4.1(a)
hereof.
"L/C Disbursement Date": the date on which any L/C
Disbursement is made.
"L/C Reimbursement Date": each date upon which any L/C
Reimbursement Obligation arises and the payment thereof is not
financed with the proceeds of a Bank L/C Loan in accordance with
Section 4.3 hereof.
"L/C Reimbursement Obligations": as defined in Section 4.3
hereof.
"L/C Reimbursement Payments": payments and prepayments of
L/C Disbursements in accordance with Section 4.3 hereof.
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"L/C Disbursement": any disbursements to the Tax-Exempt
Indenture Trustee pursuant to the Letter of Credit.
"Letter of Credit": the irrevocable direct pay letter of
credit issued by the Bank in favor of the Tax-Exempt Indenture
Trustee on the Closing Date pursuant to Section 4 hereof,
substantially in the Form of Exhibit C hereto (with such changes
therein as shall be agreed to by the Bank), as amended,
supplemented, or otherwise modified from time to time in
accordance with its terms.
"Loan Documents": this Agreement, the Notes, and the
Letter of Credit.
"Loan Interest Payment Date": (a) as to any Base Rate
Loan, the last day of [March, June, September and December] of
each year, commencing with the first such day to occur after the
Closing Date, and the date on which such Loan Base Rate is paid
or converted into a Eurodollar Loan, (b) as to any Eurodollar
Loan having a Eurodollar Loan Interest Period of three months or
less, the last day of such Eurodollar Loan Interest Period, and
(c) as to any Eurodollar Loan having a Eurodollar Loan Interest
Period longer than three months, each day which is three months
or a whole multiple thereof, after the first day of such
Eurodollar Loan Interest Period, and the last day of such
Eurodollar Loan Interest Period.
"Maintenance Reserve Account": means the account so
designated, established and created under Section 2.2(a) of the
Intercreditor Agreement.
"Material Adverse Change": an adverse change which
significantly increases the risk that a Note, L/C Reimbursement
Obligation, or other obligation of Borrower hereunder will not be
repaid when due; provided, however, that the Bank agrees that the
inability of one or more of Borrower's operating subsidiaries to
issue first mortgage bonds or preferred stock or an unsuccessful
or failed remarketing, auction or similar procedure by any of
such operating subsidiaries with respect to any security subject
to such procedure shall not, in and of itself, constitute a
Material Adverse Change.
"Mobile Energy": Mobile Energy Services Holdings, Inc., an
Alabama corporation.
"Monthly Transfer Date": means the last Business Day of
each month of each fiscal year, commencing with the first such
day occurring after the Closing Date.
"Multiemployer Plan": a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
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"Notice of Borrowing": a written notice by the Borrower
delivered in connection with a borrowing of Bank Loans,
substantially in the form of Exhibit B-1 to this Agreement.
"Notice of Conversion": a written notice by the Borrower
delivered in connection with a conversion of Base Rate Loans to
Eurodollar Loans, or Eurodollar Loans to Base Rate Loans,
substantially in the form of Exhibit B-2 to this Agreement.
"Notes": collectively, the Base Rate Notes and the
Eurodollar Notes.
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Government Authority or other entity
of whatever nature.
"Plan": at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or
a Commonly Controlled Entity is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"PUHCA": the Public Utility Holding Company Act of 1935,
as amended.
"Purchasing Banks": as defined in Section [10.7] hereof.
"Qualified Financial Institution": (a) Any bank
satisfactory to the Bank that has capital, surplus and undivided
profits of at least $500,000,000 and that is either organized
under the laws of the United States or any state thereof or has a
branch office or agency located in the United States, and (b) any
other bank or financial institution approved by the Bank and the
Borrower (which approval will not be unreasonably withheld).
"Register": as defined in Section 10.7 hereof.
"Reorganization": with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the
meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty
day notice period is waived under subsections .13, .14, .16, .18,
.19 or .20 of PBGC Reg. section 2615.
"Requirements of Law": as to any Person, the Certificate
of Incorporation and By-Laws or the operating agreement or other
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organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator
or a court or other Government Authority, in each case applicable
to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Responsible Officer": the president, vice president,
treasurer or assistant treasurer of the Borrower.
"Significant Subsidiary": with respect to the Borrower,
shall mean any corporation of which the Borrower owns a majority
of the capital stock having voting powers, and which represents
more than 25% of Borrower's assets on a consolidated basis.
"Single Employer Plan": any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"Southern Guaranty Agreement": the Southern Guaranty
Agreement, dated as of [ ], 1995, between the
Borrower (as "Guarantor") and the Collateral Agent (as
"Guaranteed Party").
"Tax-Exempt Bonds": the Tax-Exempt Indenture Securities
issued on the Closing Date under the first Series Supplemental
Indenture to the Tax-Exempt Indenture.
"Tax-Exempt Debt Service Reserve Account": means the
account so designated, established and created under any Series
Supplemental Indenture to the Tax-Exempt Indenture for the
benefit of holders of the Tax-Exempt Indenture Securities
established thereunder.
"Tax-Exempt Debt Service Reserve Account Required Balance":
means, in respect of any Tax-Exempt Debt Service Reserve Account,
the amount so designated in the Series Supplemental Indenture to
the Tax-Exempt Indenture establishing such Tax-Exempt Debt
Service Reserve Account.
"Tax-Exempt Indenture": means the Amended and Restated
Indenture of Trust dated as of [ ], 1995 between the IDB
and the Tax-Exempt Indenture Trustee.
"Tax-Exempt Indenture Securities": the Tax-Exempt Bonds
and any supplemental Series of Tax-Exempt Bonds issued pursuant
to the Tax-Exempt Indenture.
"Tax-Exempt Indenture Trustee": means First Union National
Bank of Georgia, a national banking association organized and
existing under the laws of [ ].
"Taxes": as defined in Section 5.4(a)
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"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1994 Revision), International Chamber of
Commerce Brochure No. 500, as the same may be amended from time
to time.
Section 1.2 Other Defined Terms. Any term defined by
reference to an agreement, instrument or document shall have the
meaning so assigned to it whether or not such document is in
effect.
SECTION 2. THE CREDIT FACILITIES AND THE COMMITMENTS
Section 2.1 The Credit Facilities. The Credit Facilities
provided by the Bank to the Borrower under this Agreement shall
consist of (a) the Bank Loan Facility and (b) the Letter of
Credit Facility.
Section 2.2 Commitments; Reductions of Commitments.
(a) Bank Loan Commitments. The Bank hereby agrees, subject to
the terms and conditions of this Agreement, to make loans
(collectively, 'Bank Loans') to the Borrower from time to time
during the Commitment Period in an aggregate principal amount at
any time outstanding not to exceed eleven million dollars
($11,000,000), in the case of Bank M/R Loans, and six million
five hundred thousand dollars ($6,500,000), in the case of Bank
L/C Loans, as provided in Section 3 hereof.
(b) Letter of Credit Commitment. The Bank hereby agrees,
subject to the terms and conditions of this Agreement, to issue
the Letter of Credit in favor of the Tax-Exempt Indenture Trustee
for the account of the Borrower, as provided in Section 4 hereof.
(c) Commitment Period; Extensions. Unless earlier terminated,
in whole or in part, in accordance with Sections 2.2(d) or 9.2 of
this Agreement, the Commitment Period shall terminate on the
Commitment Termination Date. If Borrower wishes to extend the
Commitment Period for an additional period of up to seven (7)
years, it shall give the Bank written notice to such effect not
more than fifteen (15) nor less than twelve (12) months prior to
the then scheduled Commitment Termination Date. The Borrower may
request an extension of the Commitment Period for either or both
the Bank Loan Commitment or the Letter of Credit Commitment, and
may request different extension periods for each of the
Commitment Periods applicable thereto. The Bank shall notify
Borrower in writing within ninety (90) days of the date of
receipt of the Borrower's request for extension whether it will
agree to an extension of the Commitment Period.
(d) Reduction of Commitments. The Borrower (or the Company on
behalf of the Borrower) may, without penalty, upon at least five
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(5) Business Days prior written notice to the Bank, reduce the
commitment of the Bank to make Bank M/R Loans; provided that (i)
each partial reduction in the commitment of the Bank to make Bank
M/R Loans shall be in an amount not less than $[__], and (ii) the
aggregate principal amount of Bank M/R Loans then outstanding
shall not exceed the commitment of the Bank to make Bank M/R
Loans, as so reduced. The commitment of the Bank to make Bank
L/C Loans shall be reduced automatically in the amount and in the
same manner as any corresponding reduction in the Bank's
commitment under the Letter of Credit, as provided in Section 4.4
hereof.
SECTION 3. THE BANK LOAN FACILITY
Section 3.1 Bank Loans. Subject to the terms and
conditions of this Agreement, including without limitation the
satisfaction of the conditions set forth in Section 7, the Bank
agrees to make Bank Loans which, at the option of Borrower, shall
be made as either (a) Bank M/R Loans, or (b) Bank L/C Loans. The
aggregate principal amount of Bank M/R Loans and Bank L/C Loans
outstanding at any time shall not exceed the Bank M/R Loan
Commitment and Bank L/C Loan Commitment, respectively, as set
forth in Section 2 hereof. Subject to Section 3.2, the Bank
Loans from time to time may be either (x) Eurodollar Loans, (y)
Base Rate Loans, or (z) a combination of the two.
Section 3.2 Procedure for Bank Loan Borrowings
(a) Each borrowing of Bank Loans shall be on a Borrowing Date;
provided that the Borrower shall deliver to the Bank a Notice of
Borrowing substantially in the form of Exhibit B-1 (which notice,
to be effective on the requested Borrowing Date, must be received
by the Bank (i) at least one (1) Business Day prior to the
requested Borrowing Date, if the Borrower is requesting a Base
Rate Loan or (ii) at least three (3) Business Days prior to the
requested Borrowing Date if such borrowing is for a Eurodollar
Loan; provided further that the Borrower shall also deliver to
the Bank an Interest Rate Election Notice substantially in the
form of Exhibit E (which must be received by the Bank (i) prior
to 12:00 Noon, New York City time, three (3) Business Days prior
to the requested Borrowing Date, if all or any part of such Bank
Loans initially are to be Eurodollar Loans, or (ii) prior to
12:00 Noon, New York City time, one (1) Business Day prior to the
requested Borrowing Date, if all of such Bank Loans initially are
to be Base Rate Loans). Each Notice of Borrowing shall specify
(x) the amount to be borrowed, (y) the applicable Borrowing Date,
and (z) whether the amount to be borrowed is to be advanced to
the Collateral Agent for the deposit to the Maintenance Reserve
Account or is intended to evidence an L/C Reimbursement
Obligation. Each Interest Rate Election Notice shall specify (A)
whether the Bank Loans to be borrowed are to be Eurodollar Loans
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or Base Rate Loans or a combination thereof, and (B) if such Bank
Loans are to be entirely or partly Eurodollar Loans, the amount
of such Eurodollar Loan and the duration of the initial
Eurodollar Loan Interest Period therefor. Each Bank Loan shall
be in an amount equal to $50,000 or a whole multiple of $10,000
in excess thereof in the case of any Base Rate Loan, and in an
amount equal to $200,000 or a whole multiple of $25,000 in excess
thereof in the case of any Eurodollar Loan. The Borrower may
have up to five (5) Bank M/R Loans outstanding at any one time.
(b) Each advance of funds under a Bank M/R Loan shall be made
directly to the Collateral Agent for deposit into the Maintenance
Reserve Account.
Section 3.3 Bank Loan Notes. Each Bank Loan shall be
evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit A with appropriate insertions as to date and
principal amount (a 'Note'), payable to the order of the Bank.
Each Note shall (i) be executed by a Borrower Representative,
(ii) be dated the Borrowing Date, (iii) be payable as provided in
Section 3.4, (iv) bear interest for the period from the date
thereof until paid in full on the unpaid principal amount thereof
from time to time outstanding at the applicable interest rate per
annum provided in, and payable as specified in Section 3.6 and
(v) be entitled to the benefits of this Agreement. The Bank is
hereby authorized to record, on the schedules annexed to and
constituting part of each Note or on other appropriate records of
the Bank, the date and amount of each Bank Loan, the date and
amount of each payment or prepayment of principal of such Bank
Loan and, in the case of a Eurodollar Loan, the duration of each
Eurodollar Loan Interest Period with respect thereto, and any
such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded; provided that the
failure to make any such recordation shall not affect the
obligations of the Borrower hereunder or under any Bank Note.
Section 3.4 Repayment of Bank Loans. Unless earlier
prepaid pursuant to Section 5.2 or 5.3 hereof, the Borrower shall
repay in full the then aggregate outstanding principal amount of
the Bank Loans on the Commitment Termination Date.
Section 3.5 Conversion and Continuation Options. (a) The
Borrower may elect from time to time to convert Eurodollar Loans
to Base Rate Loans by delivering to the Bank a Notice of
Conversion in the form of Exhibit B-2 hereto (which notice, to be
effective, must be received by the Bank prior to 12:00 Noon, New
York City time, three (3) Business Days prior to the requested
conversion date), provided that any such conversion of a
Eurodollar Loan may only be made on the last day of a Eurodollar
Loan Interest Period. The Borrower may elect from time to time
to convert Base Rate Loans to Eurodollar Loans by delivering to
the Bank a Notice of Conversion (which notice, to be effective,
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must be received by the Bank prior to 12:00 Noon, New York City
time, three (3) Business Days prior to the requested conversion
date). Any such Notice of Conversion to Eurodollar Loans shall
specify the duration of the initial Eurodollar Loan Interest
Period or Periods therefor. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be converted as provided
herein, provided that (i) no Base Rate Loan may be converted to a
Eurodollar Loan when any Default or Event of Default has occurred
and is continuing and the Bank has determined that the Eurodollar
Loan Interest Period requested is not appropriate in light of
such Default or Event of Default and (ii) no such conversion may
be made if it would not be permitted under the provisions of
Section 3.8 or 3.9 hereof.
(b) Eurodollar Loans may be continued as such upon the
expiration of the then current Eurodollar Loan Interest Period
with respect thereto by the Borrower giving notice to the Bank in
accordance with the definition of 'Eurodollar Loan Interest
Period,' hereof, of the duration of the next Eurodollar Loan
Interest Period to be applicable to such Loans; provided that no
Eurodollar Loan will be continued as such (A) when any Default or
Event of Default has occurred and is continuing and the Bank has
determined that the Eurodollar Loan Interest Period requested by
the Borrower is not appropriate in light of such Default or Event
of Default or (B) if such continuation would not be permitted
under the provisions of Section 3.8 or 3.9 hereof; and provided,
further, that if the Borrower shall fail to give any required
notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso
such Eurodollar Loans shall be automatically converted to Base
Rate Loans on the last day of such then expiring Eurodollar Loan
Interest Period.
Section 3.6 Interest on Bank Loans. (a) Each Eurodollar
Loan shall bear interest for each day (including the first day
but excluding the last day) during each Eurodollar Loan Interest
Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus .35%.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate.
(c) If all or a portion of the principal amount of any
Bank Loan or any interest payable thereon shall not be paid when
due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at the Bank
Default Rate from the date of such non-payment until such amount
is paid in full (after as well as before judgment). In addition
(but without duplication of any amounts payable pursuant to the
preceding sentence), if any Event of Default shall occur, the
outstanding principal amount of all Bank Loans shall bear
interest at the Bank Default Rate from the date on which such
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Event of Default occurred until the date on which no Event of
Default shall be continuing.
(d) Interest shall be payable in arrears on each Loan
Interest Payment Date; provided that interest accruing pursuant
to paragraph (c) of this Section shall be payable on demand.
Section 3.7 Computation of Interest on Bank Loans.
(a) Interest on Base Rate Loans shall be calculated on the basis
of a 365- (or 366-, as the case may be) day year for the actual
number of days elapsed. Interest on Eurodollar Loans shall be
calculated on the basis of a 360-day year for the actual number
of days elapsed. The Bank shall as soon as practicable notify
the Borrower of each determination of a Eurodollar Rate. Any
change in the interest rate on a Bank Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day
on which such change in the Base Rate is announced or such change
in the Eurocurrency Reserve Requirements becomes effective, as
the case may be. The Bank shall as soon as practicable notify
the Borrower of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate on the Bank
Loans by the Bank pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower in the absence of
manifest error. The Bank shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used
by the Bank in determining any interest rate pursuant to Section
3.6 hereof.
Section 3.8 Inability to Determine Interest Rate on
Eurodollar Loan. In the event that, prior to the first day of
any Eurodollar Loan Interest Period, (a) deposits in Dollars (in
the applicable amount) are not being offered to the Bank in the
interbank Eurodollar market for such Eurodollar Loan Interest
Period, or the Bank otherwise determines (which determination
shall be binding and conclusive on the Borrower) that by reason
of circumstances affecting the interbank Eurodollar market
adequate and reasonable means do not exist for ascertaining the
applicable Eurodollar Rate; or (b) the Bank determines that the
Eurodollar Rate will not adequately and fairly reflect the cost
to the Bank of making or maintaining a Eurodollar Loan during
such Eurodollar Loan Interest Period, the Bank shall give telex,
telecopy or telephonic notice thereof (stating the reason
therefor) to the Borrower as soon as practicable. If such notice
is given (i) any Eurodollar Loans requested to be made on the
first day of such Eurodollar Loan Interest Period shall be made
as Base Rate Loans, (ii) any Base Rate Loans that were to have
been converted on the first day of such Eurodollar Loan Interest
Period to Eurodollar Loans shall be converted to or continued as
Base Rate Loans and (iii) any outstanding Eurodollar Loans shall
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be converted, on the first day of such Eurodollar Loan Interest
Period, to Base Rate Loans.
Section 3.9 Illegality. Notwithstanding any other
provision of this Agreement, if any change in any Requirement of
Law (other than any change to any organizational or governing
document of any Bank) or in the interpretation or application
thereof by any authority charged with the interpretation or
administration thereof or by any court of competent jurisdiction
shall make it unlawful for the Bank to make or maintain
Eurodollar Loans as contemplated by this Agreement, the Bank
shall give telex, telecopy or telephonic notice thereof to the
Borrower (specifying the reason for such illegality) as soon as
practicable and (a) the commitment of the Bank hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such, and convert
Base Rate Loans to Eurodollar Loans shall forthwith be suspended
until such time as Bank may again lawfully make and maintain
Eurodollar Loans, and (b) any Eurodollar Loans then outstanding
shall be converted automatically to Base Rate Loans on the
respective last days of the then current Eurodollar Loan Interest
Periods with respect to Eurodollar Loans or within such earlier
period (determined by the Bank in its sole judgment) as required
by law. If, as a result of such change in a Requirement of Law
or in the interpretation or application thereof, any such
conversion of a Eurodollar Loan occurs on a day which is not the
last day of the then current Eurodollar Loan Interest Period with
respect thereto, the Borrower shall pay to such Bank such
amounts, if any, as may be required pursuant to Section 5.5(a)
with respect to such conversion.
Section 3.10 Requirements of Law. (a) In the event that
any Requirement of Law or any change therein or in the
interpretation or application thereof or compliance by the Bank
with any request or directive (whether or not having the force of
law) from any central bank or other Government Authority:
(i) does or shall subject the Bank to any tax (except to
the extent such tax is the subject of the agreements set forth in
Section 5.4) of any kind whatsoever with respect to this
Agreement, any Eurodollar Note or any Eurodollar payments made by
it, or change the basis of taxation of payments to the Bank of
principal, fees, interest or any other amount payable hereunder
(except for changes in the rate of tax on the overall net income
of the Bank);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or
for the account of, advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of
the Bank which are not otherwise included in the determination of
the Eurodollar Rate; or
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(iii) does or shall impose on the Bank any other
condition; and the result of any of the foregoing is to increase
the cost to the Bank, by any amount which the Bank deems to be
material, of making, renewing or maintaining advances or
extensions of credit or to reduce any amount receivable
hereunder, in each case in respect of its Eurodollar Loans made
to the Borrower hereunder, then, in any such case, the Borrower
shall promptly pay the Bank, within ten (10) Business Days after
demand by the Bank in accordance with paragraph (c) of this
Section, any additional amounts necessary to compensate the Bank
for such additional costs or reduced amount receivable.
(b) In the event that the Bank shall have determined that
the adoption after the date hereof of any law, rule, guideline or
regulation regarding capital adequacy, or any change after the
date hereof in any existing or future law, rule, guideline or
regulation regarding capital adequacy or in the interpretation or
application thereof, or compliance by Bank or any corporation
controlling the Bank with any request or directive made or
adopted after the date hereof regarding capital adequacy (whether
or not having the force of law) from any central bank or
Government Authority, does or shall have the effect of reducing
the rate of return on the Bank's or such corporation's capital as
a consequence of its obligations hereunder to a level below that
which the Bank or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration
the Bank's or such corporation's policies with respect to capital
adequacy) by an amount deemed by the Bank to be material, then
from time to time, within ten (10) Business Days after submission
by the Bank to the Borrower of a written request therefor in
accordance with paragraph (c) of this Section, the Borrower shall
pay to the Bank such additional amount or amounts as will
compensate the Bank for such reduction.
(c) If the Bank intends to make a claim pursuant to
paragraph (a) or (b) of this Section, it shall deliver to the
Borrower as soon as practicable after becoming aware of the
circumstances giving or which shall give rise to such claim,
notice of the Bank's intention to make a claim, specifying the
event by which it is or shall be entitled to make such claim and
setting out in reasonable detail the expected basis and
computation of such claim; provided that no claim shall be made
by the Bank, and the Borrower shall not be required to indemnify
the Bank, with respect to any cost, increased cost or other
liability or reduction described in paragraph (a) or (b) of this
Section which is incurred by the Bank and which is payable, or
which is applicable to any period, more than ninety (90) days
prior to the date the Borrower is first notified by the Bank
pursuant to the foregoing provisions of this paragraph (c) that
the Bank is incurring such costs, other liability or reduction,
as the case may be.
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(d) A certificate as to any additional amounts payable to
the Bank pursuant to this Section 3.10, submitted by the Bank to
the Borrower and showing in reasonable detail that such amounts
were computed in accordance with this Section 3.10, shall be
conclusive in the absence of manifest error. The provisions of
this Section 3.10 shall survive the termination of this Agreement
and the payment of the Bank Loans and all other amounts payable
to the Bank hereunder.
(e) The Bank agrees that, as promptly as practicable
after it becomes aware that additional amounts are or will be due
to such Bank under this Section 3.10, it will, to the extent not
inconsistent with the Bank's internal policies, make, fund or
maintain the Bank Loans through another lending office of the
Bank if as a result thereof such amounts will not be required to
be paid and if, as determined by the Bank in it its sole
discretion, the making, funding or maintaining of such Bank Loans
through such other lending office (i) would be permitted by
applicable Requirements of Law and (ii) would not adversely
affect the Bank Loans or the Bank. The Borrower hereby agrees to
pay all reasonable expenses incurred by the Bank in utilizing
another lending office of the Bank as provided in this paragraph.
Section 3.11 Substitution or Removal of the Bank. In the
event the Bank notifies the Borrower pursuant to Section 3.10
that it may no longer make or maintain Eurodollar Loans, or
demands payment of additional amounts pursuant to Section 3.10 or
5.4, the Borrower, at its expense, at any time within 180 days
after such demand, so long as no Default or Event of Default
shall have occurred and be continuing, may require the Bank to
sell in accordance with the provisions of Section [____], at par
plus accrued interest, without recourse or warranty and pursuant
to a Bank Transfer Supplement, its rights and obligations
hereunder (including its Commitment and the Bank Loans at the
time owing to it and the Notes held by it) to a Qualified
Financial Institution specified by the Borrower that is willing
to purchase such rights and obligations on the terms hereof and
is reasonably acceptable to the Bank; provided that (i) such
assignment shall not conflict with or violate any Requirement of
Law applicable to or binding on the Bank, (ii) the Borrower shall
have paid to the Bank all amounts (other than interest) accrued
and owing hereunder to it (including, without limitation, amounts
owing pursuant to Sections 3.10 and 5.4 and (iii) the assignee
Bank shall have executed and delivered a Bank Transfer
Supplement. Notwithstanding anything set forth above in this
Section 3.11 to the contrary, the Borrower shall not be entitled
to require an assignment under this Section 3.11 if prior to any
such requirement by the Borrower, the Bank shall have changed its
lending office so as to eliminate the continued incurrence of the
costs in respect of which such payment was demanded.
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Section 3.12 Bank's Representation. The Bank represents
that the Banks Loans to be made by it hereunder are being made in
the ordinary course of its banking business not with a view to or
for sale in connection with any distribution thereof within the
meaning of the Securities Act of 1933, as amended or for resale
in any transaction which would be in violation of any applicable
securities laws; provided that the sale, transfer or other
disposition by the Bank of the Bank Loans and the Notes shall at
all times be within the Bank's control.
SECTION 4. THE LETTER OF CREDIT FACILITY
Section 4.1 Letter of Credit. (a) The Letter of Credit
shall be substantially in the form of Exhibit C hereto (with such
changes therein as shall be approved by the Bank), shall be
stated to expire on the Commitment Termination Date and shall be
in the stated amount of $6,500,000 (the 'L/C Available Amount').
At the time of any L/C Disbursement with respect to the Letter of
Credit, the L/C Available Amount shall be reduced by the amount
of such L/C Disbursement. Following any L/C Disbursement, the
L/C Available Amount shall be increased in an amount, not to
exceed the amount of such L/C Disbursement, equal to monies on
deposit in the Tax-Exempt Debt Service Reserve that are withdrawn
by the Company in accordance with Section 4.7(a) of the Tax-
Exempt Indenture.
(b) Upon any extension of the Commitment Period pursuant
to Section 2.2(c) hereof, the Bank shall issue and deliver a new
Letter of Credit in exchange for the initial Letter of Credit to
reflect the extension of the Commitment Termination Date. The
terms of such new Letter of Credit shall be identical to those of
the Letter of Credit for which it is being exchanged, except that
(i) such new Letter of Credit shall be dated as of the date of
issuance and shall be in an amount equal to the undrawn amount of
the replaced Letter of Credit, (ii) the expiration date for such
replacement Letter of Credit shall be such Commitment Termination
Date as so extended and (iii) such replacement Letter of Credit
may contain such other changes as the Bank, the Borrower and the
Tax-Exempt Indenture Trustee in whose favor such Letter of Credit
is to be issued shall mutually agree upon.
Section 4.2 Notice of Payments under the Letter of
Credit. The Bank shall give the Borrower prompt cable or tested
telex notice of each demand for an L/C Disbursement received by
the Bank, specifying (i) the amount of such L/C Disbursement, and
(ii) the date such L/C Disbursement is to be made.
Section 4.3 Borrower's Obligations in Respect of Letter
of Credit. (a) Each L/C Disbursement shall be reimbursed by the
Borrower on the date of such disbursement (such reimbursement
payment herein referred to as an 'L/C Reimbursement Payment').
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The Borrower may request the Bank to finance the Borrower's
obligation to make an L/C Reimbursement Payment through the
making of a Bank L/C Loan pursuant to Section 3.1. If the
Borrower fails to make such request in accordance with the
applicable provisions of Section 3.1 or to satisfy the terms and
conditions of this Agreement for such Loan (including those under
Section 7.2), the Borrower shall, on the applicable L/C
Disbursement Date, make an L/C Reimbursement Payment to the Bank.
If an L/C Reimbursement Payment shall not be made on the
applicable L/C Disbursement Date, the amount of the L/C
Reimbursement Payment shall bear interest from the date on which
such payment was due until paid in full at the Bank Default Rate
applicable to Base Rate Loans, such interest being payable on
demand of the Bank.
(b) The Borrower's obligation to make L/C Reimbursement
Payments and payments of interest in respect thereof under this
Section 4.3 (such obligations being herein collectively referred
to as the 'L/C Reimbursement Obligations') shall be absolute,
unconditional and irrevocable, and shall be observed strictly in
accordance with the terms of this Agreement under all
circumstances whatsoever including, without limitation, the
following circumstances: (i) any lack of legality, validity,
enforceability or regularity of the Letter of Credit, this
Agreement, any other Loan Document; (ii) any amendment or waiver
of or any consent to or departure from all or any of the Loan
Documents; (iii) the existence of any claim, set-off, defense,
counterclaim or other right which the Borrower may have at any
time against the Tax-Exempt Indenture Trustee, the Bank, or any
other Person, whether in connection with this Agreement, the
Letter of Credit, the Loan Documents, or any unrelated
transaction; (iv) any statement or any other document presented
under the Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; (v) payment by the Bank
under any Letter of Credit against presentation of a sight draft
or certificate which does not comply strictly with the terms of
the Letter of Credit; and (vi) any other circumstance or
happening whatsoever, whether or not similar to any of the
foregoing; provided that the Borrower shall not be obligated to
reimburse the Bank for any L/C Disbursement made as a result of
the Bank's gross negligence or willful misconduct.
Section 4.4 Reduction of Letter of Credit. The Tax-
Exempt Indenture Trustee may, at the request of the Borrower (or
by the Company on behalf of the Borrower), without penalty, upon
at least five (5) Business Days prior written notice to the Bank,
reduce the stated amount of the Letter of Credit in connection
with an optional prepayment or redemption and cancellation of the
Tax-Exempt Indenture Securities; provided that (i) each partial
reduction of the stated amount of the Letter of Credit shall be
in an amount not less than [$________], and (ii) the stated
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amount as so reduced shall not be less than the Tax-Exempt Debt
Service Reserve Account Required Balance.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO BANK LOAN
FACILITY AND LETTER OF CREDIT FACILITY.
Section 5.1 Fees.
(a) Commitment Fees. The Borrower agrees to pay to the
Bank, for each day during the term hereof, a commitment fee
computed at the rate of 0.10% per annum on the unutilized portion
of the Bank M/R Loan Commitment in effect on such day, and 0.35%
per annum on the unutilized portion of the Letter of Credit
Commitment in effect on such day. Commitment fees payable
pursuant to this Section 5.1(a) shall be payable quarterly in
arrears on the last day of each March, June, September and
December, commencing on the first of such dates to occur after
the Closing Date, and on the Commitment Termination Date , and
shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual number of days elapsed.
(b) Facility Fees; Closing Fees. The Borrower agrees to
pay to the Bank on the Closing Date, a facility fee equal to the
sum of 0.35% of the Bank M/R Loan Commitment and 0.35% of the
Letter of Credit Commitment.
Section 5.2 Required Prepayments of Bank L/C Loans. Each
Bank L/C Loan shall be prepaid [in full] on the [ ] Monthly
Transfer Date following the date of such Bank L/C Loan.
Section 5.3 Optional Prepayments of Loans. (a) The
Borrower may, on any Business Day and from time to time, prepay
the Bank Loans, in whole or in part, upon at least one (1)
Business Day prior irrevocable notice (each such notice, an
'Optional Prepayment Notice') to the Bank; provided that, at such
time and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing;
(b) Each prepayment of Bank Loans pursuant to this
Section 5.3 shall be applied to the prepayment of Bank M/R Loans
and/or Bank L/C Loans, as directed by Borrower, and shall be made
without premium or penalty, except for any amounts due pursuant
to Section 5.5(a).
(c) Partial prepayments of Bank Loans made pursuant to
this Section 5.3 shall at the option of the Borrower be applied
to the installments of principal of the Bank Loans either in the
inverse order of their scheduled maturities or ratably to each of
their scheduled maturities. Partial prepayments pursuant to this
Section 5.3 shall be in an aggregate principal amount of $100,000
or a whole multiple in excess thereof. Amounts of Bank Loans
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prepaid prior to the Commitment Termination Date pursuant to this
Section 5.3 may be reborrowed.
Section 5.4 Taxes. (a) All payments made by the Borrower
under this Agreement shall be made free and clear of, and without
reduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any
Government Authority excluding, in the case of the Bank, net
income and franchise taxes imposed on the Bank by the
jurisdiction under the laws of which the Bank is organized or any
political subdivision or taxing authority thereof or therein, or
by any jurisdiction in which such Bank's lending office is
located or any political subdivision or taxing authority thereof
or therein (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called
'Taxes'). If any Taxes are required to be withheld from any
amounts payable to the Bank hereunder or under the Notes, the
amounts so payable to the Bank shall be increased to the extent
necessary to yield to the Bank (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement and the Notes.
Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the Bank a
certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fails
to remit to the Bank the required receipts or other required
documentary evidence, the Borrower shall indemnify the Bank for
any incremental taxes, interest or penalties that may become
payable by the Bank as a result of such failure.
(b) The Bank agrees that it will deliver to the Borrower
(i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying in each case that the Bank such Lender is
entitled to receive payments under this Agreement and the
relevant Notes payable to it without deduction or withholding of
any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as
the case may be, to establish an exemption from United States
backup withholding tax. The Bank further undertakes to deliver
to the Borrower two further copies of Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Borrower, and such extensions or renewals
thereof as may reasonably be requested by the Borrower,
certifying in the case of a Form 1001 or 4224 that the Bank is
entitled to receive payments under this Agreement and the
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relevant Notes without deduction or withholding of any United
States federal income taxes, unless in any such cases an event
(including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders any such form
inapplicable or which would prevent the Bank from duly completing
and delivering any such form with respect to it and the Bank
advises the Borrower that it is not capable of receiving payments
without deduction or withholding of United States federal income
tax, or in the case of a Form W-8 or W-9, without an exemption
from United States backup withholding tax.
(c) The Bank agrees that, as promptly as practicable
after the Borrower shall have notified it that Taxes are or have
been required to be withheld from any amounts payable hereunder
or under the Notes, or the Bank otherwise becomes aware that any
such Taxes will be required to be withheld from future payments,
it will , to the extent not inconsistent with the Bank's internal
policies, make, fund or maintain its Bank Loans through another
lending office of the Bank if as a result thereof Taxes would not
be required to be so withheld and if, as determined by the Bank
in its sole discretion, the making, funding or maintaining of
such Loans through such other lending office (i) would be
permitted by applicable Requirements of Law and (ii) would not
adversely affect its Loans or the Bank. The Borrower hereby
agrees to pay all reasonable expenses incurred by the Bank in
utilizing another lending office of the Bank as provided in this
paragraph.
(d) The agreements in this Section 5.4 shall survive the
termination of this Agreement and the Letter of Credit and the
payment of the Notes and the other amounts payable hereunder.
Section 5.5 Certain Indemnities.
(a) Funding Indemnities. The Borrower agrees to
indemnify Bank and to hold the Bank harmless from any loss or
expense which Bank may sustain or incur as a consequence
of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the
Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans
on a day which is not the last day of a Loan Interest Period with
respect thereto (including, without limitation, as the result of
acceleration of such Bank Loans pursuant to Section 9.2. If the
Bank shall demand indemnification for any loss or expense
sustained or incurred by it pursuant to this Section 5.5(a), it
shall, at the time of such demand, deliver to the Borrower a
certificate documenting in reasonable detail any such loss or
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expense. Each determination by the Bank of the amounts owing to
it pursuant to this Section 5.5(a) shall be conclusive and
binding on the Borrower and the Bank in the absence of manifest
error.
(b) Survival. The provisions of this Section 5.5 shall
survive the termination of this Agreement and the Letter of
Credit and the payment of the Loans and all other amounts payable
hereunder.
Section 5.6 Additional Letter of Credit Provisions.
(a) The Borrower agrees that neither the Bank nor any of
its officers or directors shall be liable or responsible for:
(i) the validity, sufficiency or genuineness of documents
presented to the Bank under the Letter of Credit, or of any
endorsements) thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient,
fraudulent or forged or any statement therein prove to be untrue
or inaccurate in any respect whatsoever; (ii) payment by the Bank
against presentation of documents which do not comply strictly
with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the
Letter of Credit; or (iii) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit,
except that the Borrower shall have a claim against the Bank, and
the Bank shall be liable to the Borrower, to the extent, but only
to the extent, of any direct (as opposed to consequential)
damages suffered by the Borrower which the Borrower proves were
caused by the Bank's willful failure to pay under Letter of
Credit after the presentation to it of a certificate for payment
strictly complying with the terms and conditions of Letter of
Credit (unless the Bank in good faith believed itself to be
prohibited by law or legal authority from making such payment).
In furtherance and not in limitation of the foregoing, the Bank
may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of
any notice or information to the contrary.
(b) Without limiting the effect of Section 4.3(b), or
5.6(a), the Borrower and the Bank that:
(i) the Bank is authorized to make payments under
the Letter of Credit upon the presentation of the documents
provided for therein and without regard to whether the Borrower
has failed to fulfill any of its obligations with respect to any
Loan Document or any other default has occurred thereunder or
hereunder;
(ii) the Bank is authorized to take such action on
its behalf under the provisions of this Agreement and to exercise
such powers and perform such duties as are specifically delegated
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to or required of the Bank by the terms hereof, together with
such powers as are reasonably incidental thereto;
(iii) the Bank shall be entitled to rely upon any
certificate, notice, demand or other communication (whether by
cable, telegram, telex or other written communication) believed
by it to be genuine and to have been signed or sent by the proper
Person or Persons (and no such reliance or failure shall place
the Bank under any liability to the Borrower or limit or
otherwise affect the Borrower's obligations under this
Agreement);
(iv) any action, inaction or omission on the part
of the Bank under or in connection with the Letter of Credit or
the related instruments or documents, if in good faith and in
conformity with such laws, regulations and customs as the Bank
may reasonably deem to be applicable (including without
limitation the laws of the State of New York and the Uniform
Customs), shall be binding upon the Borrower (and shall not place
the Bank under any liability to the Borrower or limit or
otherwise affect the Borrower's obligations under this
Agreement); and
(v) notwithstanding any change or modification,
with or without the consent of the Borrower, in any instruments
or documents called for in the Letter of Credit, including waiver
of noncompliance of any such instruments or documents with the
terms of the Letter of Credit, this Agreement shall be binding on
the Borrower with regard to the Letter of Credit and to any
action taken by the Bank relative thereto.
(c) The Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws
of the State of New York.
(d) Notwithstanding anything to the contrary in Section 3
or 4, the Bank shall not at any time be obligated to issue the
Letter of Credit hereunder if such issuance would conflict with,
or cause the Bank to exceed any limits imposed by, any applicable
Requirement of Law.
SECTION 6. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Bank as
follows:
Section 6.1 Organization. The Borrower is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware, and each Significant Subsidiary of
the Borrower is a corporation duly organized, validly existing
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and in good standing under the laws of its respective state of
incorporation.
Section 6.2 Authorization; Enforceable Obligations. The
Borrower has taken all necessary corporate action to authorize
its execution, delivery and performance of this Agreement and, on
the Closing Date, the Borrower will have taken all necessary
corporate action to authorize it to obtain the Bank Loans and
Letter or Credit provided for in this Agreement. This Agreement
is, and each Note when executed and delivered and L/C
Reimbursement Obligation when incurred by the Borrower will be,
the valid and binding obligation of the Borrower enforceable in
accordance with its terms, except as such enforcement may be
limited by any bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the enforcement of
creditors' rights generally or general principles of equity.
Section 6.3 No Legal Bar. Neither the execution or
delivery of this Agreement nor the consummation of the
transactions herein contemplated will violate any provisions of
any applicable law or conflict with, result in a breach of, or
constitute a default under, the Borrower's Certificate of
Incorporation or By-laws or any indenture or other agreement or
instrument, or any legal restriction that the Borrower is a party
to or bound by.
Section 6.4 Governmental Approvals. No approval or
consent of, or other filing with or notice to, any Government
Authority is legally required for the execution, delivery and
performance by the Borrower of this Agreement or the consummation
of the transactions herein contemplated except for an order or
orders of the Securities and Exchange Commission under PUHCA,
which order or orders will have been obtained, prior to (and will
be in effect on) the Closing Date.
Section 6.5 No Proceeding or Litigation. Other than in
the ordinary course of business (including, without limitation,
actions, suits or proceedings involving rates or licenses or
permits for the construction or operation of generating or
transmission facilities), there are no actions, suits or
proceedings pending or to the Borrower's knowledge threatened
against or directly involving the Borrower or its properties
before any court, arbitrator or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, except (i) actions, suits or proceedings which will not
effect a Material Adverse Change in the Borrower's financial
condition or operations and (ii) as disclosed in or contemplated
by the Borrower's Annual Report on Form 10-K for the year ended
December 31, 1994, or its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995 and June 30, 1995 (the "Exchange
Act Documents") (or such subsequent prospectus, official
statement or filing under the Securities Exchange Act of 1934 as
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in any such case the Bank shall approve in writing for this
purpose).
Section 6.6 ERISA. To the best knowledge of the
Borrower, no Reportable Event (as defined in Title IV of ERISA)
has occurred and is continuing with respect to any Plan of the
Borrower; the Borrower has not incurred any material accumulated
funding deficiency within the meaning of ERISA and the Borrower
has not incurred any material liability to the PBGC established
under ERISA (or any successor thereto) in connection with any
Plan of the Borrower.
Section 6.7 No Default. No Event of Default (as defined
below), or event which with the passage of time or giving of
notice, or both, would constitute an Event of Default, has
occurred and is continuing.
Section 6.8 Financial Statements. The Borrower has
furnished to the Bank its consolidated balance sheet as of
December 31, 1994, and related statements of income and cash
flows for the twelve months then ended, in each case certified by
Arthur Andersen & Co., independent certified public accountants;
such financial statements fairly present the Borrower's financial
position as of December 31, 1994, and the results of its
operations for the twelve months then ended, in conformity with
generally accepted accounting principles consistently applied
during such period (except as stated therein); there has been no
Material Adverse Change in the financial condition or operations
of the Borrower and its subsidiaries (taken as a whole) since
December 31, 1994, except as reflected in or contemplated by the
Exchange Act Documents (or such subsequent prospectus, official
statement or filing under the Securities Exchange Act of 1934 as
in any such case the Bank shall approve in writing for this
purpose), it being understood and agreed that this exception is
not intended to cover statements in the Exchange Act Documents or
subsequent prospectus, official statement or filing that are
stated therein to be applicable to the electric utility industry
generally unless they describe specific problems or types of
problems which, at the date hereof, are affecting the Borrower's
financial condition or operations or its prospects.
Section 6.9 Federal Regulations. The Borrower is not
engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no
proceeds of any Borrowing are to be used to purchase or carry any
margin stock or to extend credit to others for such purpose.
SECTION 7. CONDITIONS PRECEDENT
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Section 7.1 Conditions to Effectiveness of Commitments.
The Commitments of the Bank shall not become effective, and the
Facilities shall not be available for utilization, until the date
on which all of the following conditions precedent shall have
been satisfied:
(a) Agreement. The Bank shall have received this
Agreement, duly executed and delivered by the Borrower.
(b) Legal opinions. The Bank shall have received the
following legal opinions, each dated the Closing Date:
(i) the opinion of Troutman Sanders, counsel to
the Borrower, substantially in the form of Exhibit D;
(ii) the favorable opinion of Simpson Thacher
Bartlett, special New York counsel to the Bank, as to such
matters relating to the transactions contemplated by this
Agreement as the Bank may reasonably request.
(c) Evidence of Authorization. The Bank shall have
received:
(i) copies, certified on the Closing Date, of all
corporate action of the Borrower authorizing the execution,
delivery and performance by the Borrower of this Agreement and
consummation of each of the transactions contemplated hereby;
(ii) certificates, dated the Closing Date, as to
the incumbency and signature of each individual signing any Loan
Document on behalf of the Borrower;
(iii) certified copies of the Certificate of
Incorporation and By-laws of Borrower; and
(iv) evidence of the existence and good standing
of the Borrower in the State of Delaware and of the Borrower's
authorization to do business and good standing in [____________
_________________________________________________];
(d) Financial Statements. The Bank shall have received a
copy of the most recent audited financial statements of Borrower
and no Material Adverse Change shall have occurred in the
business, operations or financial condition of any of Borrower
referred to in the preceding sentence since the date of such
financial statements.
(e) Fees. All fees payable by the Borrower on or prior
to the Closing Date pursuant to Section 5 hereof, shall have been
paid.
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Section 7.2 Conditions to Each Bank Loan. The obligation
of the Bank to make any Bank Loan requested to be made by it on
any Borrowing Date is subject to the satisfaction, immediately
prior to or concurrently with the making of such Bank Loan, of
the following conditions precedent:
(a) No Default. No Default or Event of Default shall
have occurred and be continuing on such Borrowing Date, or shall
occur after giving effect to the Loans to be made on such date.
(b) Representations and Warranties. Each of the
representations and warranties of the Borrower in this Agreement
shall be true and correct in all material respects on and as of
such Borrowing Date as if made on and as of such date, except for
the representations and warranties set forth in Section 6.8,
which shall be true and correct on and as of the Closing Date.
(c) No Material Adverse Change. On or prior to such
Borrowing Date, there shall not have occurred a Material Adverse
Change.
(d) Extension of Credit Request. The Bank shall have
received, on or before the time required for its receipt pursuant
to Section 3.2, a Notice of Borrowing with respect to such Bank
Loan.
(e) Interest Rate Election Notice. The Bank shall have
received, on or before the time required for its receipt pursuant
to Section 3.2, an Interest Rate Election Notice with respect to
such Bank Loan.
SECTION 8. AFFIRMATIVE COVENANTS
So long as the Commitments remain in effect, the Letter of
Credit remains outstanding and until payment in full of the Bank
Loans and L/C Reimbursement Obligations hereunder, the Borrower
hereby agrees that:
Section 8.1 Payment of Taxes. Borrower will pay and
discharge all taxes, assessments and governmental charges or
levies imposed upon the Borrower or upon its income or profits,
or upon any properties belonging to the Borrower, prior to the
date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a lien or charge upon any
properties of the Borrower, provided it shall not be required to
pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings.
Section 8.2 Insurance. Borrower will maintain insurance
of types and in amounts customarily maintained by similar
companies.
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Section 8.3 Maintain Corporate Existence. Borrower will
preserve and maintain its corporate existence in the State of
Delaware, and qualify and remain qualified as a foreign
corporation in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or
the ownership of its properties.
Section 8.4 Compliance with Applicable Law. Borrower
will comply with the requirements of all applicable laws,
non-compliance with which would effect a Material Adverse Change
in its financial condition or operations except applicable laws
being contested in good faith.
Section 8.5 Notice of Defaults. Borrower will provide
the Bank with prompt notice in writing of any Event of Default or
any event which with the passage of time or giving of notice, or
both, would constitute an Event of Default.
Section 8.6 Ownership of Certain Subsidiaries. Borrower
will not sell or otherwise dispose of any shares of the common
stock (or any options or warrants to purchase common stock or
other securities exchangeable for or convertible into common
stock) of Alabama Power Company, Georgia Power Company, Gulf
Power Company, Mississippi Power Company, Savannah Electric and
Power Company or Southern Company Services, Inc., or cause or
permit any of such common stock to be subject to a lien without
making or causing to be made provision whereby the Notes issued
hereunder will be secured equally and ratably with all other
obligations secured thereby.
Section 8.7 Incurrence of Debt. Borrower will not incur
or in any manner become liable in respect of any Adjusted Funded
Debt unless, after giving effect thereto and to any concurrent
transactions, the aggregate principal amount of its Adjusted
Funded Debt outstanding will not exceed 40% of its
Capitalization.
Section 8.8 Agreement to Secure Ratably. Without making
or causing to be made provision whereby the Notes issued
hereunder will be secured equally and ratably with all other
obligations secured by the affected property, Borrower will not
cause or permit any of its property, whether now owned or
hereafter acquired, to be subject to a lien except:
(a) liens securing taxes, assessments or
governmental charges or levies or the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and
other like persons, provided the payment thereof is not at the
time required by Section 8.2 above;
(b) liens incurred or deposits made in the
ordinary course of business (i) in connection with workers'
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compensation, unemployment insurance, social security and other
like laws, or (ii) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases, statutory
obligations, surety, appeal and performance bonds and other
similar obligations not incurred in connection with the borrowing
of money, the obtaining of advances or the payment of the
deferred purchase price of property;
(c) attachment, judgment and other similar
liens arising in connection with court proceedings, provided the
execution or other enforcement of such liens is effectively
stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(d) reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other similar title exceptions or
encumbrances affecting real property, provided they do not in the
aggregate materially detract from the value of said properties or
materially interfere with their use in the ordinary conduct of
its business;
(e) liens on its property existing at the
date of this Agreement;
(f) liens on real property to secure
indebtedness for money borrowed by it;
(g) any lien existing on any property prior
to its acquisition thereof and not created in contemplation of
such acquisition;
(h) liens on property hereafter acquired
relating to financing the acquisition (by purchase, lease or
otherwise) of such property;
(i) any extension, renewal or replacement
(or successive extensions, renewals or replacements) in whole or
in part of any lien referred to in the foregoing clauses (e),
(f), (g) and (h); provided, however, that the principal amount of
any and all other obligations and indebtedness secured thereby
shall not exceed the principal amount thereof so secured at the
time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or a
part of the property which secured the lien so extended, renewed
or replaced (plus improvements on such property); and
(j)) liens on its property, in addition to
those otherwise permitted by clauses (a) through (i) above,
securing, directly or indirectly, indebtedness which does not
exceed in the aggregate $25,000,000 at any one time outstanding.
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Section 8.9 Financial Statements. The Borrower will
furnish or cause to be furnished to the Bank:
(a) within 120 days after the end of each of its fiscal
years, its consolidated balance sheet and related consolidated
statements of income and cash flows, as well as its corporate
balance sheet and related corporate statement of income, in each
case certified by independent certified public accountants of
nationally recognized standing, showing its financial position at
the close of such year and the results of its operations and cash
flows for such year;
(b) within 55 days after the end of each of the first
three quarters in each of its fiscal years, its unaudited
condensed consolidated balance sheet and related condensed
consolidated statements of income and cash flows, as well as its
condensed corporate balance sheet and related condensed corporate
statement of income, such balance sheets to be as of the end of
such quarter and such statements of income and cash flows to be
for the period from the beginning of the fiscal year to the end
of such quarter, in each case (with respect to the consolidated
financial statements) in the forms included in its Quarterly
Report on Form 10-Q for such quarter filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, and subject to audit and year-end
adjustments;
(c) at the same time that it furnishes or causes to be
furnished to the Bank the financial statements specified in
paragraphs (a) and (b) above, a certificate, signed by the chief
financial officer of the Borrower, stating that such officer has
no knowledge of any Event of Default or any event which, with
notice or lapse of time, or both, would constitute an Event of
Default (or, if such an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the steps
taken or proposed to be taken to remedy the same);
(d) promptly upon the filing thereof, copies of each
prospectus filed by the Borrower with the Securities and Exchange
Commission pursuant to Rule 424 under the Securities Act of 1933,
as amended; and
(e) such other information respecting the Borrower's
business, properties or its condition or operations, financial or
otherwise, as the Bank may from time to time reasonably request.
SECTION 9. EVENTS OF DEFAULT
Section 9.1 Events of Default. The Bank shall have the
rights and remedies specified in Section 9.2 if any of the
following events shall occur and be continuing (whatever the
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reason for such event and whether it shall be voluntary or
involuntary, or come about or be effected by operation of law, or
otherwise):
(a) The Borrower (or, in the case of an event described
in (vii) below, either the Borrower or any Significant Subsidiary
of the Borrower) shall:
(i) fail to pay when due any principal of a Note;
(ii) fail to pay when due any interest on a Note,
any L/C Reimbursement Obligation (unless financed by Borrower
with a Bank L/C Loan), or any of the fees payable under
Section 5.1 of this Agreement, and the same shall remain unpaid
for five (5) Business Days;
(iii) default in the observance or performance of
the covenants set forth in Section 8 of this Agreement;
(iv) default in the performance of any other
agreement or covenant contained in this Agreement or any Note
(other than a covenant or agreement a default in the performance
of which is elsewhere in this Section 9.1(a) specifically dealt
with) and such default shall continue for a period of thirty (30)
days after the Bank has given the Borrower written notice
thereof;
(v) default in the payment when due or within any
applicable period of grace of any Adjusted Funded Debt or Current
Debt of the Borrower (other than Adjusted Funded Debt or Current
Debt incurred under the Notes and under agreements or instruments
involving in the aggregate less than $500,000);
(vi) default under the provisions of any
instrument evidencing Adjusted Funded Debt or Current Debt of the
Borrower (other than Adjusted Funded Debt or Current Debt
incurred under the Notes and under agreements or instruments
involving in the aggregate less than $500,000), or of any
agreement relating to any such Adjusted Funded Debt or Current
Debt the effect of which default is to permit any party or
parties to any such instrument or agreement to cause such
Adjusted Funded Debt or Current Debt to become due prior to its
stated maturity; or
(vii) (A) apply for or consent to the appointment
of a receiver, trustee, liquidator or the like of the Borrower or
any Significant Subsidiary of the Borrower, or of all or a
substantial part of its or any such Significant Subsidiary's
property, (B) be unable, or admit in writing inability, to pay
debts generally as they mature, (C) make a general assignment for
the benefit of creditors, (D) be adjudicated a bankrupt or
insolvent, or (E) file a voluntary petition in bankruptcy or a
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petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any insolvency law or an answer
admitting the material allegations of a petition filed against it
or any such Significant Subsidiary in any bankruptcy,
reorganization or insolvency proceeding, or corporate action
shall be taken by it or any such Significant Subsidiary for the
purpose of effecting any of the foregoing.
(b) Any representation made or deemed made by the
Borrower under this Agreement or in any other document furnished
at any time by the Borrower under or in connection with this
Agreement shall prove incorrect in any material respect when made
or deemed made, and either (i) such incorrectness has resulted in
a Material Adverse Change or (ii) such incorrectness could
reasonably be expected to result in a Material Adverse Change and
the facts or circumstances which caused such representation or
warranty to be materially incorrect are not corrected within
thirty (30) days after the Borrower shall have received written
notice thereof from the Bank.
(c) An order, judgment or decree shall be entered,
without the application, approval or consent of the Borrower or
any Significant Subsidiary of the Borrower, or an involuntary
proceeding shall be commenced or an involuntary petition shall be
filed, by or in any court or governmental agency of competent
jurisdiction, approving or filing a petition seeking the
Borrower's or Significant Subsidiary's reorganization, or
appointing or seeking the appointment of a receiver, trustee,
liquidator, or the like of it or any such Significant Subsidiary,
or of all or a substantial part of its or any such Significant
Subsidiary's assets, and such order, judgment, decree or filing
shall continue unstayed and in effect for any period of sixty
(60) consecutive days.
Section 9.2 Rights and Remedies Following an Event of
Default. If any Event of Default shall occur and be continuing,
then:
(a) If such Event of Default is an Event of
Default specified in clause (A), (C), (D) or (E) of Section
9.1(a)(vii) or Section 9.1(c), automatically (A) the Commitments
immediately shall terminate, (B) the Bank Loans, the Notes and
all unpaid L/C Reimbursement Obligations, all interest accrued
and unpaid thereon, and all other amounts owing by the Borrower
hereunder and under the Notes immediately shall become due and
payable, without presentment, demand, protest, or notice of any
kind, all of which are hereby expressly waived by the Borrower;
and
(b) If such Event of Default is an Event of
Default other than as specified in clause (A), (C), (D) or (E) of
Section 9.1(a)(vii) or Section 9.1(c), then the Bank may, by
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notice to the Borrower, declare the Commitments of the Bank
terminated and declare the entire unpaid principal amount of the
Bank Loans, all unpaid L/C Reimbursement Obligations, all
interest accrued and unpaid thereon, and all other amounts owing
by the Borrower hereunder to the Bank and under the Notes to be
forthwith due and payable, whereupon the Commitments of the Bank
shall terminate and such unpaid principal amount of the Bank
Loans and Notes, all unpaid L/C Reimbursement Obligations, all
interest accrued and unpaid thereon, and all such other amounts
shall become and be forthwith due and payable, without
presentment, demand, protest, or notice of any kind, all of which
are hereby expressly waived by the Borrower; and/or (B) demand
that the Borrower immediately pay to the [Tax-Exempt Indenture
Trustee??] an amount equal to the full amount that can then be
drawn under the Letter of Credit, whereupon the Borrower shall
immediately make such payment to the [Tax-Exempt Indenture
Trustee??], which shall hold such payment as collateral security
for the obligations of the Company under Section [____] of the
Tax-Exempt Trust Indenture; provided that no such action taken by
the Bank shall have the effect of terminating, reducing or
altering in any respect the terms of the Letter of Credit
outstanding at the time.
At any time after the principal of and accrued
interest on the Notes or unpaid L/C Reimbursement Obligations are
declared due and payable, the Bank, by written notice to the
Borrower, may rescind and annul any such declaration and its
consequences with respect to the Notes or unpaid L/C
Reimbursement Obligations if (x) the Borrower has paid all
overdue interest on such Notes or L/C Reimbursement Obligations,
the principal of any such Notes which have become due otherwise
than by reason of such declaration, and interest on such overdue
principal and (to the extent permitted by applicable law) overdue
interest, at the Bank Default Rate, (y) all Events of Default,
other than nonpayment of amounts which have become due solely by
reason of such declaration, and all conditions and events which
constitute Defaults or Events of Default have been cured or
waived, and (z) no judgment or decree has been entered for the
payment of any monies due pursuant to such Notes or L/C
Reimbursement Obligations or this Agreement. No such rescission
and annulment referred to in the proviso in the preceding
sentence shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
SECTION 10. MISCELLANEOUS
(Conform Section 10 to Working Capital Facility)
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IN WITNESS WHEREOF, the parties hereto have caused this
Loan and Reimbursement Agreement to be duly executed and
delivered in New York, New York, by their proper and duly
authorized officers as of the day and year first above written.
THE SOUTHERN COMPANY,
as Borrower
By:__________________________
Name:
Title:
BANQUE PARIBAS, NEW YORK BRANCH,
as Bank
By:_____________________________
Name:
Title:
37
<PAGE>
TROUTMAN SANDERS
NATIONSBANK PLAZA
600 PEACHTREE STREET, SUITE 5200
ATLANTA, GA 30308
404-885-3000
Exhibit F-1
July 6, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Re: The Southern Company - Post-Effective Amendment to
Form U-1 Application (File No. 70-8505)
Ladies and Gentlemen:
We are familiar with the statement on Form U-1 referred to
above, as amended, and are furnishing this opinion with respect
to the transactions proposed therein, which include, among other
proposals, (i) the acquisition by Mobile Energy Services
Holdings, Inc. (formerly Mobile Energy Services Company, Inc.)
("Mobile Energy") and Southern Electric International, Inc.
("Southern Electric"), subsidiaries of The Southern Company, a
Delaware corporation ("Southern"), of the ownership interests of
Mobile Energy Services Company, L.L.C., an Alabama limited
liability company ("Project Company"); (ii) the transfer and
assignment by Mobile Energy to Project Company of all of its
right, title and interest to the energy and resource recovery
complex ("Energy Complex") located in Mobile, Alabama, and, in
connection therewith, the assumption by Project Company of all
material liabilities of Mobile Energy, including without
limitation Mobile Energy's obligations under an outstanding note
evidencing borrowings from Southern in the principal amount of
$190 million and Mobile Energy's obligations in respect of $85
million principal amount of outstanding industrial revenue
development bonds (the "Tax-Exempt Bonds") issued by The
Industrial Development Board of the City of Mobile, Alabama (the
"Board"); (iii) the issue and sale by Project Company of
certain First Mortgage Bonds, as described therein, and the
guaranty thereof by Mobile Energy; (iv) the entering into of
agreements by Project Company, Mobile Energy, and the Board with
respect to the issuance of a new series of Tax-Exempt Bonds for
the purpose of redeeming the outstanding Tax-Exempt Bonds; (v)
the issuance of notes ("Working Capital Notes") by Project
Company evidencing borrowings from Banque Paribas under a
revolving credit agreement, and Mobile Energy's guaranty thereof;
and (vi) Southern's agreement to provide guaranties and other
forms of credit support on behalf of Mobile Energy and/or Project
Company in an aggregate amount at any time outstanding not to
exceed $55 million.
We are of the opinion that Southern, Southern Electric and
Mobile Energy are each a validly organized and duly existing
<PAGE>
Securities and Exchange Commission
July 6, 1995
Page 2
corporation under the laws of the State of its incorporation and
that, upon the issuance of your order or orders herein, and in
the event that the proposed transactions are consummated in
accordance with such statement on Form U-1 and your order or
orders:
(a) all state laws applicable to the proposed
transactions will have been complied with;
(b) upon formation of Project Company in accordance
with resolutions duly adopted by the boards of directors of
Mobile Energy and Southern Electric, Mobile Energy and
Southern Electric, as the initial members thereof, will be
entitled to the rights and privileges appertaining thereto
set forth in the Articles of Organization of Project Company
defining such rights and privileges;
(c) the First Mortgage Bonds, agreements relating to
the issuance of the Tax-Exempt Bonds by the Board, and the
Working Capital Notes will be valid and binding obligations
of Project Company and of Mobile Energy, as guarantor, in
accordance with the terms thereof;
(d) the guaranties and other forms of credit support
to be provided by Southern in respect of certain reserves
required to be maintained under the instruments pursuant to
which the First Mortgage Bonds and Tax-Exempt Bonds will be
issued are in each case legal, valid and binding obligations
of Southern; and
(e) the consummation of the transactions described
above and of the other transactions described in the Post-
Effective Amendment to the Application or Declaration in the
above-referenced proceeding will not violate the legal
rights of the holders of any securities issued by Southern,
Mobile Energy, Project Company or any associate company
thereof.
We hereby consent to the use of this opinion in connection
with the filing of such statement on Form U-1.
Very truly yours,
/s/Troutman Sanders
Troutman Sanders
<PAGE>
