Exhibit I
SUMMARY OF PERTINENT INDEMNITIES
The Mobile Energy Cogeneration Development Agreement imposes the
following indemnity obligations:
(1) If Mobile Energy exercised the option granted to it by SEI under
the agreement to purchase the combustion turbine that GE was fabricating for SEI
for delivery in Mobile, Alabama, then Mobile Energy agreed to either obtain a
release of SEI from all obligations under the turbine contract and the related
long term services agreement or indemnify SEI against any costs or liabilities
it incurred under those contracts.
(2) If Mobile Energy failed to exercise its option to purchase the
combustion turbine, then SEI and Southern Energy Resources could terminate the
Development Agreement, cease providing any services to be provided to Mobile
Energy related to the development of the Cogen Project and terminate any
contract either of them had entered into with any third party related to the
development of the Cogen Project, and Mobile Energy agreed to indemnify SEI and
Southern Energy Resources against any costs incurred under such contracts.
(3) Mobile Energy indemnified SEI, Southern Energy Resources and any of
their affiliates against any costs they incurred in performing development
services for the Cogen Project other than costs related to the combustion
turbine being manufactured by GE.
(4) Each of Mobile Energy, Holdings, SEI and Southern Energy Resources
agreed to indemnify each of the others, its affiliates, and its and its
affiliates' officers, directors, agents, employees, and representatives against
any costs, damages or liabilities incurred by or assessed against the
indemnified party due to or resulting from personal injury, bodily injury, death
or property damage suffered by a third party arising out of the negligence or
willful misconduct of the indemnifying party, its affiliates or any of their
officers, directors, agents, employees, contractors, guests, or representatives.
Amendment No. 1 to the Mobile Energy Cogeneration Development Agreement
provides for the following additional indemnity obligations:
(1) To the extent that personnel of Southern Energy Resources continued
to assist Mobile Energy with the development of the Cogen Project after August
11, 2000, Mobile Energy agreed to indemnify Southern Energy Resources against
any liability incurred by it arising out of or related to the provision of such
services not due to the gross negligence or willful misconduct of Southern
Energy Resources.
(2) If Mobile Energy exercised its option to purchase the combustion
turbine, Mobile Energy agreed to indemnify SEI from and against any costs or
liability incurred by SEI under the consent agreements establishing the terms
under which SEI could assign the turbine contract and the long term services
agreement to Mobile Energy.
(3) If Mobile Energy exercised its option to purchase the combustion
turbine and subsequently wished to sell the turbine to another party for
installation at a different location, then SEI agreed that if it did not consent
to such sale, it would repurchase the turbine and indemnify Mobile Energy for
all costs it incurred or for any liability arising under the turbine contact or
the long term services agreement.
(4) Mobile Energy agreed to terminate the Facility Operations and
Maintenance Agreement between it and Southern Energy Resources under which
Southern Energy Resources operates Mobile Energy's facilities by no later than
March 31, 2001, and to indemnify SERI against any liability arising under any
contracts entered into by Southern Energy Resources with third parties as
operator of such facilities.
(5) SEI and Southern Energy Resources agreed to indemnify Mobile Energy
and Holdings against any liability, claims, or losses of employees of Southern
Energy Resources arising out of Southern Energy Resource's pension plans for
unionized employees.
(6) Mobile Energy agreed to pay up to $2 million to Southern Energy
Resources to reimburse it for one half of the costs of a retention and severance
plan for Southern Energy Resources' employees performing services at Mobile
Energy's facilities, and SEI and Southern Energy Resources agreed to indemnify
Mobile Energy for any further claims, losses or liabilities associated with such
program once such amount has been paid by Mobile Energy.
(7) Mobile Energy agreed either to obtain the release of Southern from
its obligations under its guaranty of Mobile Energy's obligations under its
environmental indemnity agreement with each of the three mill owners and under
the mill owner maintenance reserve account agreement or to indemnify Southern
against any costs or liabilities it incurred related to such obligations.
(8) Mobile Energy and Holdings agreed to indemnify Southern for any
income taxes paid by Southern or its affiliates on taxable income generated by
Mobile Energy or Holdings in excess of Southern's excess loss account related to
its investment in Holdings or recognized by Mobile Energy or Holdings after the
tax on such excess loss account is triggered as a result of implementation of a
plan of reorganization for Mobile Energy and Holdings.
(9) Southern indemnified Mobile Energy and Holdings against any income
taxes that Mobile Energy or Holdings have to pay on taxable income of Mobile
Energy or Holdings that is recognized after Southern takes some action to
trigger the tax on its excess loss account where such action by Southern causes
the tax on such excess loss account to be triggered earlier than it would have
been as a result of implementation of a plan of reorganization for Mobile Energy
or Holdings.
