Exhibit B-6
AMENDMENT NO. 1 TO
MESC COGENERATION DEVELOPMENT AGREEMENT
This Amendment No. 1 to MESC Cogeneration Development Agreement (the
"Amendment") is made and entered into as of the 11th day of August, 2000 by
and among Southern Energy Resources, Inc., a Delaware corporation ("SERI"),
Southern Energy, Inc., a Delaware corporation ("SEI"), Mobile Energy
Services Company, L.L.C., an Alabama limited liability company ("MESC"),
and Mobile Energy Services Holdings, Inc., an Alabama corporation
("MESH").
R E C I T A L S
WHEREAS, the parties hereto are Parties to the MESC Cogeneration
Development Agreement, dated as of February 9, 2000 (the "Development
Agreement"; capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Development Agreement);
WHEREAS, the parties hereto have been performing under the Development
Agreement; and
WHEREAS, the Parties desire to amend the terms of the Development
Agreement as provided herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL COVENANTS AND
AGREEMENTS CONTAINED HEREIN, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED BY THE PARTIES HERETO,
THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:
1. Effective Date. This Amendment shall be effective on the first date (the
"Amendment Effective Date") that (i) the Bankruptcy Court has issued an order
approving the terms hereof that is final and non-appealable, unless such
condition is otherwise waived in writing by the parties hereto, (ii) the GE
Turbine Consent Agreement (as hereinafter defined) has been executed and
delivered by SEI and GE and the GE LTSA Consent Agreement (as hereinafter
defined) has been executed and delivered by SEI and GEII (as hereinafter
defined), unless such condition is otherwise waived in writing by the parties
hereto, and (iii) the Releases of Southern Parties (as hereinafter defined) and
the Releases of MESC/Bondholder Parties (as hereinafter defined) have been
delivered; provided, however, that this Amendment shall be terminated and of no
force and effect if the Amendment Effective Date does not occur on or before
September 30, 2000, which date may be extended by the mutual written agreement
of the Parties. Except where this Amendment expressly provides for a change made
by this Amendment to a right or obligation of a Party under the Development
Agreement to be applied to such right or obligation as of a date prior to the
Amendment Effective Date, all changes made by this Amendment to the terms of the
Development Agreement shall be effective as of the Amendment Effective Date.
Notwithstanding this Section 1 or any other provision of this Amendment or the
Development Agreement, SEI and SERI agree that from the date of this Amendment
and until the earlier of (i) the Amendment Effective Date, (ii) the entry of a
ruling by the Bankruptcy Court finding that the Amendment should not be
approved, or (ii) September 30, 2000, they will not exercise any right they may
have under the Development Agreement to (a) terminate the Development Agreement
or (b) collect payment of the Equity Option Fee.
2. Definitions Restated. The following capitalized terms are defined,
or if used in the Development Agreement are hereby redefined, to have the
meanings set forth below:
"Affiliate" means, as to any Person (other than an individual), any
other Person (other than an individual) that, directly or indirectly through one
or more intermediaries, Controls, is Controlled by or is under common Control
with such Person; provided that if, after the Amendment Effective Date, Southern
should no longer Control SEI and its subsidiaries, then for purposes of the
Development Agreement the Affiliates of SEI and SERI shall continue thereafter
to include Southern and its subsidiaries and the Affiliates of Southern shall
include SEI and its subsidiaries.
"Bondholders" means all current holders of the Bonds.
"Bonds" means collectively the Taxable Bonds and the Tax Exempt Bonds.
"Cogen Project Financing" means financing provided by one or more banks
or other financial institutions to MESH, MESC or the Cogen Subsidiary or to a
third party, if such third party owns or will own all or any substantial part of
the Cogen Facility, to fund all or a substantial portion of the costs of
development, construction and installation of the Cogen Facility; provided that
Cogen Project Financing does not include the Bonds, any restructured debt
obligations of MESC or MESH issued under a Plan of Reorganization for MESH or
MESC, or any refinancing or restructuring of the Bonds or such restructured debt
obligations.
"Cogen Subsidiary" means an entity formed in accordance with Section
2.13 to develop the Cogen Project and/or to own the Cogen Facility.
"Confirmation Order" means, with respect to MESC, an order of the
Bankruptcy Court approving a Plan of Reorganization for MESC, which order has
become effective, and, with respect to MESH, an order of the Bankruptcy Court
approving a Plan of Reorganization for MESH, which order has become effective.
"Contract Price" has the meaning given to it in the ▇▇ ▇▇▇▇▇ Turbine
Contract.
"GEII" means General Electric International, Inc.
"▇▇ ▇▇▇▇▇ LTSA" means the Long Term Service Agreement for Combined
Cycle Generating Unit at MESC Electric Generating Plant entered into between SEI
and GEII effective as of March 26, 1999.
"▇▇ ▇▇▇▇▇ Turbine" means the GE7FA turbine being manufactured by GE for
SEI and currently scheduled for delivery to SEI at Mobile, Alabama in June 2001.
"▇▇ ▇▇▇▇▇ Turbine Contract" means the Agreement for the Purchase and
Sale of Equipment dated as of May 22, 2000, between SEI and GE for turbine "6A."
"GE LTSA Consent Agreement" means a Consent Agreement to be entered
into between SEI and GEII, subject to the negotiation of mutually agreeable
terms, that will set out the terms and conditions under which the Cogen LTSA may
be assigned by SEI to MESC.
"GE Turbine Consent Agreement" means a Consent Agreement to be entered
into between SEI and GE, subject to the negotiation of mutually agreeable terms,
that will set out the terms and conditions under which the ▇▇ ▇▇▇▇▇ Turbine
Contract may be assigned by SEI to MESC.
"MESC O&M Agreement" means the Facility Operations and Maintenance
Agreement dated December 12, 1994, as amended, between SERI and MESC.
"Plan Confirmation Date" means the date the Confirmation Order for MESC
becomes effective.
"Security Agreements" means mortgages, other security agreements,
collateral assignment of project documents and related consents, and other
similar agreements and consents, in form and substance reasonably satisfactory
to Southern, SEI and SERI, executed by MESC, the Cogen Subsidiary and any
assignee of MESC or the Cogen Subsidiary pursuant to Section 4.6, as the case
may be, granting the Security Interests to Southern, SERI, SEI and, if
appropriate, SERI's Affiliates. Each of Southern, SEI and SERI hereby agree that
Security Agreements containing substantially the same terms, conditions and
provisions, modified as appropriate to reflect changes since 1995 or to reflect
the transactions contemplated by this Agreement, as the mortgages, other
security agreements and similar agreements and consents delivered to the
Collateral Agent as security for the Senior Debt (but conveying Security
Interests which are senior in priority to the liens and security interests held
by the Collateral Agent) shall be reasonably satisfactory to them.
"Security Interests" shall mean a first priority lien (subject to liens
permitted under the Security Agreements, if any) on and security interest in (i)
with respect to MESC and the Cogen Subsidairy, all real and personal property
(including any leasehold and easement interest in real property) of MESC and the
Cogen Subsidiary, and (ii) with respect to an assignee of MESC or the Cogen
Subsidiary pursuant to Section 4.6, the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine
Contract, the ▇▇ ▇▇▇▇▇ LTSA, and the Cogen Facility or any alternative facility
in which the ▇▇ ▇▇▇▇▇ Turbine will be used, and, in each case, except as
otherwise contemplated by Section 6.1(a) of the Development Agreement, as
amended, senior to all other liens and security interests on such assets
securing obligations of MESC, the Cogen Subsidiary or an assignee of MESC or the
Cogen Subsidiary pursuant to Section 4.6, including any Senior Debt. The
Security Interests shall be authorized, granted and effectuated pursuant to (a)
during the period beginning on the date hereof and ending immediately prior to
the Confirmation Order for MESC becoming effective, an order of the Bankruptcy
Court approving such first priority lien and security interest, and (b) during
the period beginning immediately prior to the Confirmation Order for MESC
becoming effective and thereafter, the Security Agreements and the Senior Debt
Intercreditor and Subordination Agreements.
"Senior Debt Intercreditor and Subordination Agreements" mean
intercreditor and subordination agreements and other similar agreements and
consents, in form and substance reasonably satisfactory to Southern, SEI and
SERI, executed by MESC, the Collateral Agent, the Taxable Bond Indenture
Trustee, the Tax-Exempt Bond Indenture Trustee and all other necessary parties
to effectuate the subordination of MESC's obligations (and the obligations of
the Cogen Subsidiary, if created, and of any assignee of MESC or the Cogen
Subsidiary pursuant to Section 4.6) to the holders of the Senior Debt (and their
respective successors and assigns) and the subordination of the liens and
security interests held by such parties to the obligations described in, and
Security Interests granted to, Southern, SEI and SERI pursuant to this
Agreement. Such debt subordination shall provide that the Senior Debt shall be
subordinate to the prior payment in full of all obligations of MESC (and the
obligations of the Cogen Subsidiary, if created, and of any assignee of MESC or
the Cogen Subsidiary pursuant to Section 4.6) now or hereafter existing under
this Agreement, including (i) the reimbursement of all Development Costs, (ii)
the repayment of all Cogen Development Advances made to MESC by SERI or an
Affiliate of SERI, (iii) the payment of the GE Turbine Costs payable hereunder
and (iv) the indemnification obligations hereunder of MESC, the Cogen
Subsidiary, or any assignee of MESC or the Cogen Subsidiary pursuant to Section
4.6.
3. Termination of Development Services; Cooperation.
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(a) Effective as of the Amendment Effective Date: (i) except for SERI's
obligations under Section 2.3 and Section 2.5(b) of the Development Agreement as
such obligations apply to the ▇▇ ▇▇▇▇▇ Turbine, SERI's obligations to perform
Development Services set forth in Article II of the Development Agreement will
terminate; provided that the provisions of clauses (a) and (b) of Section 2.12
of the Development Agreement shall not apply as a result of such termination;
and (ii) SERI's authority to act as MESC's agent pursuant to Section 2.10 of the
Development Agreement shall terminate and SERI shall assign to MESC any
contracts, applications or other documents SERI has executed in its own name
pursuant to Section 2.10 of the Development Agreement. SEI and SERI will prepare
and provide to MESC prior to August 20, 2000, a list of all material contracts,
applications and other documents that each of SERI, SEI, or any of their
Affiliates, has entered into, as of July 31, 2000, related to the Cogen Project,
in its own name or in the name of MESC, and, upon agreement by MESC to the
contents of such list, such list shall be attached to this Amendment as Schedule
1. The list will identify which contracts will be assigned to MESC or MESH or
terminated.
(b) MESC agrees that if it determines to proceed with the development
of all or any part of the Cogen Project or any similar project, SERI will not be
obligated under the Development Agreement to provide MESC any services required
in the development of the Cogen Project or any other project; provided that,
from the date of this Agreement through entry of the Confirmation Order for
MESC, SERI will continue to provide reasonable cooperation and assistance to
MESC in the development of the Cogen Project and in the restructuring of MESC
and MESH; which obligation to provide reasonable cooperation and assistance is
not intended to impose on SERI the obligations previously imposed on SERI by
Section 2.9 of the Development Agreement, which obligations are terminated by
the first sentence of Section 3(a) of the Amendment. From the date of this
Amendment through September 30, 2000, SERI will make its personnel available to
assist MESC with these services and to transition to a new manager for MESH and
MESC. MESC hereby agrees to (i) reimburse SERI for any reasonable costs and
expenses incurred by it (including personnel costs, allocated overheads
calculated at a multiple of ten percent (10%) of direct personnel costs, and
travel expenses), provided that such reimbursement shall occur on the earlier of
(x) the Plan Confirmation Date or (y) July 31, 2001, (ii) indemnify SERI for any
liability incurred by it (not due to the gross negligence or willful misconduct
of SERI) and (iii) waive any claims against SERI, in each case to the extent
arising out of or related to the provision of such assistance and cooperation.
(c) Notwithstanding any other provision of this Section 3 of the
Amendment, from the date of this Amendment, SERI will continue to arrange for
the letters of credit to be provided to the contractor providing the heat
recovery steam generator (the "HRSG"), which is part of the Cogen Facility,
under the terms of the Letter of Credit Procurement Agreement, executed as of
March 15, 2000 (the "LC Procurement Agreement"), which requires MESC to provide
cash collateral to SERI to support MESC's obligation to reimburse SERI with
respect to all amounts drawn under the letters of credit or costs incurred by
SERI with respect to such letters of credit. MESC will use commercially
reasonable efforts to arrange for substitute letters of credit to be provided
directly by it to the contractor for the HRSG, including obtaining any
Bankruptcy Court approvals required by the financial institution issuing the
letters of credit, and the termination of the letters of credit provided by
SERI. In any event, no later than the earlier of (i) July 31, 2001, or (ii) the
sixtieth (60th) day after the Plan Confirmation Date, MESC will obtain the
termination of any letters of credit or other credit support that SERI has
provided to secure MESC's obligations to the HRSG contractor. Upon the
termination of all letters of credit provided by SERI under the LC Procurement
Agreement, the funds deposited by MESC with SERI to cover any reimbursement
obligations of SERI to the issuer of the letters of credit shall be returned to
MESC, except to the extent such letters of credit have been drawn upon by the
HRSG contractor, SERI has had to make payments to the issuer of such letters of
credit under the terms of the relevant issuance agreement, or SERI has incurred
other costs to which it is entitled to reimbursement under the LC Procurement
Agreement.
4. Deletion and Substitution of Section 2.13. Section 2.13 of the
Development Agreement is hereby deleted in its entirety and the
following is substituted therefor:
2.13 Formation of Cogen Subsidiary. If MESC and the
Lender Representative, with the approval of Southern and SERI
(unless Southern, SEI and their Affiliates no longer own any
interest in MESC and MESH), agree to the formation of a Cogen
Subsidiary that will be owned in whole or in part by MESC or
MESH, MESC may assign its rights under this Agreement to such
Cogen Subsidiary and the Cogen Subsidiary shall assume MESC's
obligations hereunder and shall secure its obligations
hereunder as provided in Section 6.1. In such an event, (i)
MESC shall not be released from any obligations hereunder,
(ii) MESC and the Cogen Subsidiary shall be jointly and
severally liable for all obligations of MESC and the Cogen
Subsidiary hereunder, and (iii) Southern, SEI and SERI shall
continue to retain a security interest in the assets of MESC
in accordance with Section 6.1.
5. Deletion of Section 2.15 of the Development Agreement. Section
2.15 of the Development Agreement is hereby deleted in its entirety.
6. Termination of Funding Obligations; Deferral of Certain Payments. The SERI
Funding Obligation shall terminate effective as of July 31, 2000. To the extent
MESC is required to pay any amounts under the Development Agreement, the
obligation by MESC to pay such amounts shall be suspended under the Development
Agreement until the earlier of July 31, 2001, or the Plan Confirmation Date, at
which time such amounts shall be due and payable with interest accrued at the
Interest Rate from the date the amounts would have been due and payable without
such suspension until actually paid by MESC; provided that this suspension of
MESC's payment obligations shall not apply to amounts (i) ordinarily invoiced on
a monthly basis under the MESC O&M Agreement, (ii) required to be paid to
satisfy the MESC Transfer Obligations, (iii) owed by MESC under the LC
Procurement Agreement, or (iv ) required to be paid earlier under the terms of
this Amendment. SEI and SERI shall prepare and provide to MESC prior to August
20, 2000, a list which identifies (i) all unreimbursed Development Costs
incurred through July 31, 2000, and (ii) all unpaid Cogen Development Advances
by SERI or its Affiliates pursuant to Section 3.1(b) of the Development
Agreement, in each case together with accrued but unpaid interest as of July 31,
2000, and sets forth a good faith estimate of all additional amounts and
interest that will accrue through August 31, 2000. Upon agreement by MESC to the
contents of such list, such list shall be attached to this Amendment as Schedule
2
7. Restatement of Paragraph (iii) of the Definition of "Senior Debt
Intercreditor and Subordination Agreements". Paragraph (iii)
of the definition of Senior Debt Intercreditor and Subordination
Agreements is hereby restated to read as follows:
(iii) the payment of the GE Turbine Costs payable hereunder and
8. Turbine Transfer.
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(a) Section 4.1 of the Development Agreement is hereby deleted
in its entirety and the following is substituted therefor:
4.1 ▇▇ ▇▇▇▇▇ Turbine Contract. SEI is a party to the
▇▇ ▇▇▇▇▇ Turbine Contract, pursuant to which GE is to
manufacture and deliver to SEI in Mobile, Alabama, the ▇▇
▇▇▇▇▇ Turbine. Upon execution and delivery of the GE Turbine
Consent Agreement, the ▇▇ ▇▇▇▇▇ Turbine Contract will be
assignable by SEI to MESC (or an assignee of MESC under
Section 4.6) or the Cogen Subsidiary in accordance with the
terms of the GE Turbine Consent Agreement; provided, however,
that there can be no assurances that GE and SEI will be able
to agree upon the terms of and will execute and deliver the GE
Turbine Consent Agreement.
(b) Section 4.2 of the Development Agreement is hereby deleted in its
entirety and the following substituted therefor:
4.2 GE Long-Term Services Agreement. SEI is a party
to the ▇▇ ▇▇▇▇▇ LTSA, pursuant to which SEI may direct GE to
perform long term services for the ▇▇ ▇▇▇▇▇ Turbine. Upon
execution and delivery of the GE LTSA Consent Agreement, the
▇▇ ▇▇▇▇▇ LTSA will be assignable by SEI to MESC (or an
assignee of MESC under Section 4.6) or the Cogen Subsidiary in
accordance with the terms of the GE LTSA Consent Agreement;
provided, however, that there can no assurances that GEII and
SEI will be able to agree upon the terms of and will execute
and deliver the GE LTSA Consent Agreement.
(c) Section 4.3 of the Development Agreement is hereby deleted in its
entirety. From and after the Amendment Effective Date, the Parties shall have
the following responsibilities and obligations regarding the ▇▇ ▇▇▇▇▇ Turbine,
the ▇▇ ▇▇▇▇▇ Turbine Contract and ▇▇ ▇▇▇▇▇ LTSA:
(1) Provided that (i) on or before December 31, 2000, MESC
notifies SEI in writing that MESC (or an assignee of MESC under Section
4.6) or the Cogen Subsidiary desires to obtain the ▇▇ ▇▇▇▇▇ Turbine,
(ii) MESC (or an assignee of MESC under Section 4.6) or the Cogen
Subsidiary satisfies the MESC Transfer Obligations within two (2)
business days of written notice from SEI to MESC that SEI has paid GE
the Contract Price and (iii) SEI's assignment and delegation of its
rights and obligations under the ▇▇ ▇▇▇▇▇ Turbine Contract and ▇▇ ▇▇▇▇▇
LTSA to MESC (or an assignee of MESC under Section 4.6) or the Cogen
Subsidiary will not violate the terms of either the GE Turbine Consent
Agreement or the GE LTSA Consent Agreement, then SEI hereby agrees to
assign and delegate to MESC (or an assignee of MESC under Section 4.6)
or the Cogen Subsidiary, as applicable, and MESC (or an assignee of
MESC under Section 4.6) or the Cogen Subsidiary, as applicable, will
assume, all of SEI's rights and obligations with respect to the ▇▇
▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract, and the ▇▇ ▇▇▇▇▇ LTSA
effective upon the date on which MESC (or an assignee of MESC under
Section 4.6) or the Cogen Subsidiary, as applicable, has satisfied the
requirements of clauses (i), (ii) and (iii) of this Section 8(c)(1) of
the Amendment (such date, the "Turbine Transfer Date"); provided that
the Turbine Transfer Date shall not occur until after title to the ▇▇
▇▇▇▇▇ Turbine has vested in SEI under the terms of the ▇▇ ▇▇▇▇▇ Turbine
Contract and SEI has paid GE the Contract Price.
(2) SEI shall be responsible for and pay all GE Turbine Costs
until the Turbine Transfer Date, at which time MESC (or an assignee of
MESC under Section 4.6) or the Cogen Subsidiary, as applicable, shall
reimburse SEI for all such GE Turbine Costs (including the Contract
Price) incurred by SEI through the Turbine Transfer Date and shall
assume the obligation to pay all GE Turbine Costs from and after the
Turbine Transfer Date and MESC shall either (x) obtain from GE a
release of SEI from all obligations of SEI to GE under the ▇▇ ▇▇▇▇▇
Turbine Contract, the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement,
and the GE LTSA Consent Agreement or (y) indemnify SEI from and against
any and all costs, liability and expense arising from the ▇▇ ▇▇▇▇▇
Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇ ▇▇▇▇▇ LTSA, the GE
Turbine Consent Agreement, and the GE LTSA Consent Agreement and
provide security for such indemnity as provided in Section 6.1.
(3) SEI shall retain title to the ▇▇ ▇▇▇▇▇ Turbine until all
of SEI's rights with respect thereto are transferred to MESC (or an
assignee of MESC under Section 4.6) or the Cogen Subsidiary, as
applicable, on the Turbine Transfer Date.
(4) In the event of (i) prior to the satisfaction of the MESC
Transfer Obligations, an Event of Default by MESC or MESH, (ii) the
failure of MESC to deliver to SEI the notice specified in clause (i) of
Section 8(c)(1) on or before December 31, 2000, (iii) the failure of
MESC to satisfy the MESC Transfer Obligations within two (2) business
days of the delivery to MESC by SEI of written notice that SEI has paid
the Contract Price to GE, or (iv) a waiver by MESC of its rights to the
▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract, and the ▇▇ ▇▇▇▇▇ LTSA
under Section 26 of this Amendment, any and all rights of MESC (or an
assignee of MESC under Section 4.6) or the Cogen Subsidiary with
respect to the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract and the
▇▇ ▇▇▇▇▇ LTSA shall terminate, and MESC shall not have any
responsibility for any GE Turbine Costs.
(5) MESC may assign its rights under this Amendment to the ▇▇
▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract, and the ▇▇ ▇▇▇▇▇ LTSA,
and MESC (or an assignee of MESC under Section 4.6) or the Cogen
Subsidiary may assign its rights under the ▇▇ ▇▇▇▇▇ Turbine Contract
and the ▇▇ ▇▇▇▇▇ LTSA, only in accordance with Section 4.6 of the
Development Agreement and only where such assignment is consistent with
the terms of the GE Turbine Consent Agreement and the GE LTSA Consent
Agreement.
(6) Prior to a termination of MESC's rights with respect to
the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract and the ▇▇ ▇▇▇▇▇
LTSA under this Section 8(c) of the Amendment, SEI shall not amend the
▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent
Agreement or the GE LTSA Consent Agreement, or waive any of the
provisions thereof, without the written consent of MESC. Subsequent to
any transfer or assignment of the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇
Turbine Contract and the ▇▇ ▇▇▇▇▇ LTSA to MESC (or an assignee of MESC
under Section 4.6) or the Cogen Subsidiary, the ▇▇ ▇▇▇▇▇ Turbine
Contract, the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement and the
GE LTSA Consent Agreement may not be amended in any way adverse to SEI
and the term of any of such agreements may not be extended, in each
case without the written consent of SEI so long as SEI has any
remaining obligations to GE under the ▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇
▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement or the GE LTSA Consent
Agreement.
(7) Prior to August 20, 2000, SEI shall prepare and provide to
MESC a list of all GE Turbine Costs accrued as of July 31, 2000, along
with a good faith estimate of all GE Turbine Costs expected to be
accrued through December 31, 2000, which estimate will not be binding.
Upon agreement by MESC to such list and good faith estimate, they shall
be attached to this Amendment as Schedule 3.
9. Deletion of Sections 4.4 and 4.5 of the Development Agreement.
Each of Section 4.4 and Section 4.5 of the Development Agreement is
hereby deleted in its entirety.
10. Deletion and Substitution of Section 4.6. Section 4.6 of the
Development Agreement is hereby deleted in its entirety and the
following is substituted therefor:
4.6 Transfer of ▇▇ ▇▇▇▇▇ Turbine Prohibited. Except
as part of a (i) sale of all of MESC's or the Cogen
Subsidiary's assets, (ii) sale to a third party, or (iii)
collateral assignment or transfer to a secured lender of MESC
or the Cogen Subsidiary pursuant to the terms of the relevant
security documents, neither MESC nor the Cogen Subsidiary may
assign, sell, or otherwise transfer the ▇▇ ▇▇▇▇▇ Turbine, the
▇▇ ▇▇▇▇▇ Turbine Contract or the ▇▇ ▇▇▇▇▇ LTSA; provided that
any such sale, transfer or assignment of the ▇▇ ▇▇▇▇▇ Turbine,
the ▇▇ ▇▇▇▇▇ Turbine Contract or the ▇▇ ▇▇▇▇▇ LTSA must comply
with and shall be subject to the terms of the GE Turbine
Consent Agreement, the GE LTSA Consent Agreement, the ▇▇ ▇▇▇▇▇
Turbine Contract and the ▇▇ ▇▇▇▇▇ LTSA; and provided further,
that in the case of a sale under clause (i) or (ii) prior to
the installation of the ▇▇ ▇▇▇▇▇ Turbine at the Site (as
defined in the Master Operating Agreement), the purchaser of
MESC's or the Cogen Subsidiary's assets or of the turbine, as
applicable, shall be prohibited from installing the ▇▇ ▇▇▇▇▇
Turbine at any location outside of the Site (as defined in the
Master Operating Agreement) without SEI's written consent;
provided, further, that if SEI does not give its consent to
any such installation within ten business days of a request
therefor, SEI shall purchase the ▇▇ ▇▇▇▇▇ Turbine for the
amount of all GE Turbine Costs paid to GE through such date
and shall assume the obligations of MESC, the Cogen Subsidiary
or any assignee of MESC under this Section 4.6, as applicable,
under the ▇▇ ▇▇▇▇▇ Turbine Contract and the ▇▇ ▇▇▇▇▇ LTSA, and
indemnify them from any liability arising under such
contracts. No assignment, sale or other transfer by MESC or
the Cogen Subsidiary of the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇
Turbine Contract or the ▇▇ ▇▇▇▇▇ LTSA shall in any way limit,
modify, or otherwise affect the rights granted to or remedies
of SEI and SERI hereunder or relieve MESC, the Cogen
Subsidiary or any assignee of MESC or the Cogen Subsidiary
under Section 4.6 of any of their obligations hereunder;
provided that, if SEI has been reimbursed for all GE Turbine
Costs incurred by SEI and GE has released SEI from all
obligations of SEI to GE under the ▇▇ ▇▇▇▇▇ Turbine Contract,
the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement and the GE
LTSA Consent Agreement, then any such assignment, sale or
other transfer to a third party (other than the Cogen
Subsidiary) shall be made free and clear of all liens,
security interests or other encumbrances of SEI, SERI,
Southern and any of their Affiliates; provided, further, that
if SEI has not been reimbursed for all GE Turbine Costs
incurred by SEI or GE has not released SEI from all
obligations of SEI to GE under the ▇▇ ▇▇▇▇▇ Turbine Contract,
the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement and the GE
LTSA Consent Agreement, then, in connection with such
assignment, sale or transfer, the third party assignee shall
provide SEI with a Security Interest in the ▇▇ ▇▇▇▇▇ Turbine,
▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇ ▇▇▇▇▇ Turbine LTSA, and the
Cogen Facility or any alternative facility in which the ▇▇
▇▇▇▇▇ Turbine will be used, as provided in Section 6.1. The
prohibitions on transfer of the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇
Turbine Contract or the ▇▇ ▇▇▇▇▇ LTSA imposed by this Section
4.6 shall survive the expiration or termination of this
Agreement.
11. Deletion and Substitution of Section 5.1. Section 5.1 of the
Development Agreement is hereby deleted in its entirety and the
following is substituted therefor:
5.1 Invoice for Development Costs. SERI shall invoice MESC
Monthly for all Development Costs payable by MESC in
accordance with Section 3.1. Such invoice shall be paid by
MESC within twenty (20) days after receipt.
12. Deletion and Substitution of Section 5.2. Section 5.2 of the
Development Agreement is hereby deleted in its entirety and the
following is substituted therefor:
5.2 Deferred Costs. SERI shall provide MESC on a monthly
basis a statement of the outstanding amount of the
Development Costs accrued but not paid by MESC and of the GE
Turbine Costs accrued.
13. Deletion and Substitution of Section 5.3. Section 5.3 of the Development
Agreement is hereby deleted in its entirety and the following is
substituted therefor:
5.3 SEI Turbine Costs. Provided that all MESC
Transfer Obligations are satisfied on or before the Turbine
Transfer Date and SEI's rights and obligations with respect to
the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract, and the
▇▇ ▇▇▇▇▇ LTSA are assigned to MESC (or an assignee of MESC
under Section 4.6) or the Cogen Subsidiary, MESC shall
reimburse SEI for all SEI Turbine Costs (including the
Contract Price) on or before the Turbine Transfer Date.
14. Deletion of Section 5.4; Termination of Obligation to Pay Equity Option
Fee. Section 5.4 of the Development Agreement is hereby deleted in its
entirety, and MESC's obligation to pay SEI the Equity Option Fee is hereby
terminated.
15. Deletion and Substitution of Section 6.1(a). Section 6.1(a) of the
Development Agreement is hereby deleted in its entirety and the following
is substituted therefor:
As security for timely performance of all
obligations of MESC and the Cogen Subsidiary to SEI, SERI and
Southern (and, if appropriate, SERI's other Affiliates) under
this Agreement or any agreement entered into, or any indemnity
delivered, pursuant to the terms of this Agreement, including
(i) the reimbursement of all Development Costs, (ii) the
repayment of all Cogen Development Advances made to MESC by
SERI or an Affiliate of SERI, (iii) the payment of the GE
Turbine Costs payable hereunder, (iv) the payment of any other
amounts owed to SEI or SERI hereunder, (v) the payment of any
amounts owed to SERI under the LC Procurement Agreement and
(vi) MESC's or the Cogen Subsidiary's indemnification
obligations hereunder, SEI, SERI and Southern shall be granted
the Security Interests. SERI and SEI shall (and SEI shall
cause Southern or any of SERI's other Affiliates, as
applicable, to) subordinate their respective Security
Interests to any security interest and/or lien securing the
Cogen Project Financing by entering into a subordination
agreement (the "Cogen Lender Consent") in form and substance
reasonably satisfactory to Southern, SERI, SEI, MESC, the
Lender Representative and the applicable lender or lenders
providing the Cogen Project Financing; provided that the
aggregate amount of any Cogen Project Financing to which such
Security Interests are subordinated shall not exceed seventy
nine million two hundred thousand dollars ($79,200,000). If
SEI has been reimbursed for all GE Turbine Costs incurred by
SEI and GE has released SEI from all obligations of SEI to GE
under the ▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇ ▇▇▇▇▇ LTSA, the GE
Turbine Consent Agreement and the GE LTSA Consent Agreement,
then any assignment, sale or other transfer of the ▇▇ ▇▇▇▇▇
Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract or the ▇▇ ▇▇▇▇▇ LTSA to
a third party (other than the Cogen Subsidiary) permitted by
the terms of the Development Agreement, as amended hereby,
shall be made free and clear of all liens, security interests
or other encumbrances of SEI, SERI, Southern and any of their
Affiliates. If SEI has not been reimbursed for all GE Turbine
Costs incurred by SEI or GE has not released SEI from all
obligations of SEI to GE under the ▇▇ ▇▇▇▇▇ Turbine Contract,
the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement and the GE
LTSA Consent Agreement, then any assignment, sale or other
transfer of the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine
Contract or the ▇▇ ▇▇▇▇▇ LTSA to a third party (other than the
Cogen Subsidiary) permitted by the terms of the Development
Agreement, as amended hereby, shall be made subject to such
third party granting to SEI a Security Interest in the ▇▇
▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇ ▇▇▇▇▇
LTSA and the Cogen Facility or any other facility in which the
▇▇ ▇▇▇▇▇ Turbine is to be used in connection with such
assignment, sale or transfer. With respect to MESC's or the
Cogen Subsidiary's indemnity obligations under Article XVI
hereof, the Security Interests shall secure only those
indemnification claims asserted within two (2) years after the
termination of Development Services. With respect to all other
indemnities of MESC or the Cogen Subsidiary (or, in the event
of an assignment under Section 4.6, the third party assignee)
in favor of SERI, SEI, and Southern, as applicable, which are
secured by the Security Interests, such indemnities shall
continue to be secured by the Security Interests until such
time as the underlying obligations are satisfied, or
alternatively, until such time as SERI, SEI or Southern, as
applicable, receives a release reasonably acceptable to it of
all liability to which the applicable indemnity would apply.
The provisions of this Section 6.1(a) shall survive the
expiration or termination of this Agreement.
16. Deletion and Substitution of Article VII. Article VII of the Development
Agreement is hereby deleted in its entirety and the following is
substituted therefor:
ARTICLE VII
MESC OBLIGATIONS AND TRANSFER CONDITIONS
7.1 Conditions to Transfer. As a condition
to SEI's obligation to transfer the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇
▇▇▇▇▇ Turbine Contract and ▇▇ ▇▇▇▇▇ LTSA to MESC on the
Turbine Transfer Date or any time prior thereto, MESC shall
satisfy the MESC Transfer Obligations.
7.2 MESC Transfer Obligations. As used
herein, the "MESC Transfer Obligations" are:
(a) MESC (or an assignee of MESC under Section 4.6)
or the Cogen Subsidiary shall reimburse SEI for all GE Turbine
Costs (including the Contract Price) paid or incurred by SEI
through the date on which the transfer is to be made, together
with accrued but unpaid interest.
(b) All of SEI's contractual rights and obligations
under the ▇▇ ▇▇▇▇▇ Turbine Contract and the ▇▇ ▇▇▇▇▇ LTSA
shall be assigned to or assumed by MESC (or an assignee of
MESC under Section 4.6) or the Cogen Subsidiary, and MESC
shall either (x) obtain from GE a release of SEI from all
obligations to GE under the ▇▇ ▇▇▇▇▇ Turbine Contract, the ▇▇
▇▇▇▇▇ LTSA, the GE Turbine Consent Agreement, and the GE LTSA
Consent Agreement or (y) indemnify SEI from and against any
and all costs, liability and expense arising from the ▇▇ ▇▇▇▇▇
Turbine Contract, the ▇▇ ▇▇▇▇▇ LTSA, the GE Turbine Consent
Agreement, and the GE LTSA Consent Agreement and provide
security for such indemnity as provided in Section 6.1.
(c) MESC (or an assignee of MESC under Section 4.6)
or the Cogen Subsidiary shall assume all of SERI's, and, where
appropriate, all of SERI's Affiliates', contractual
obligations under each contract with a third party to which
SERI, or any of its Affiliates, is a party relating to the
Cogen Project as set forth on Schedule 1, and MESC shall
either (x) obtain from each such third party a release of SERI
and its Affiliates from all obligations to such third party
under such contract or (y) indemnify SERI and its Affiliates
for all such contractual obligations and provide security for
such indemnity as provided in Section 6.1. If MESC fails to
comply with the foregoing with respect to any third-party
contract, SERI or its Affiliate, as the case may be, may
terminate such contract and MESC shall reimburse SERI or its
Affiliate, as the case may be, for any cancellation costs
(other than SEI Turbine Cancellation Costs) imposed as a
result of such termination.
(d) MESC shall have paid SEI the amount
specified in Section 26 of this Amendment.
17. Deletion of Article VIII and Article IX. Article VIII and Article IX of the
Development Agreement are hereby deleted in their entirety. Southern, SEI and
their Affiliates shall have no obligation to make any additional investment in
MESC, MESH, the Cogen Project, or the Cogen Subsidiary or to fund in any way all
or any part of the Cogen Project or the Cogen Facility. The Confirmation Orders
for MESH and MESC shall result in a termination of any ownership interests held
in MESH and MESC by Southern, SEI and their Affiliates (other than MESH) without
replacement of such ownership interests by any new ownership interests; provided
that if MESC cannot qualify (i) as an exempt wholesale generator ("EWG") under
section 32 of the Public Utility Holding Company Act ("PUHCA"), or (ii) as a
qualifying cogeneration facility ("QF") under sections 201 and 210 of the Public
Utility Regulatory Policies Act of 1978 ("PURPA"), then Southern shall have the
right but not the obligation to continue to own the voting securities of MESH
upon such terms as it may agree to.
18. Deletion of Article X. Article X of the Development Agreement is
hereby deleted in its entirety. Upon the Amendment Effective Date, the O&M
Agreement will terminate.
19. Additional Releases.
-------------------
(a) Within three (3) business days of the Bankruptcy Court issuing an
order approving the terms of the Amendment, MESC shall deliver to the Southern
Parties releases, substantially in the form attached hereto as Attachment A, by
MESC, MESH, the Taxable Bond Indenture Trustee, the Tax Exempt Bond Trustee, the
Collateral Agent for the Senior Debt, Franklin Advisors, Inc. and CS First
Boston, in favor of the Southern Parties (such releases, the "Releases of
Southern Parties"). The Releases of Southern Parties shall be effective upon the
Amendment Effective Date.
(b) Within three business days of the Bankruptcy Court issuing an order
approving the terms of the Amendment, SERI shall deliver to MESC, MESH, the
Taxable Bond Indenture Trustee, the Tax Exempt Bond Indenture Trustee, the
Collateral Agent, Franklin Advisors, Inc. and CS First Boston (collectively, the
"MESC/Bondholder Parties") a release, substantially in the form attached hereto
as Attachment B, by the Southern Parties in favor of the MESC/Bondholder Parties
(such release, the "Releases of MESC/Bondholder Parties"). The Releases of
MESC/Bondholder Parties shall be effective upon the Amendment Effective Date.
After the Releases of MESC/Bondholder Parties become effective, SEI and SERI
hereby acknowledge and agree that they do not have and will not assert any
claims against MESC or MESH in the bankruptcy proceeding (except claims arising
out of or under the terms of the Development Agreement, as amended by this
Amendment, the MESC O&M Agreement, or the LC Procurement Agreement).
(c) The changes made to the terms of the Development Agreement by this
Amendment do not affect the validity of the releases delivered to Southern, SERI
and SEI under the terms of Article XI of the Development Agreement prior to its
amendment by this Amendment. MESH and MESC acknowledge and agree that (i) SEI
and SERI have satisfied their obligations under Section 4.3 and Section 4.5(b)
of the Development Agreement as those sections were in effect prior to the
Amendment Effective Date and (ii) the Releases are valid and enforceable
according to their terms.
20. Deletion and Substitution of Section 11.2.
(a) Section 11.2 of the Development Agreement is hereby
deleted in its entirety and the following substituted therefor:
11.2 Southern Parties' Representation and Warranty. Each of SEI and
SERI hereby represents and warrants to MESC and MESH that,
except as set forth on Exhibit I hereto, (i) none of the
Southern Parties owes any amounts to MESC and/or MESH, and
(ii) there are no guaranties provided by any Southern Party to
MESC and MESH.
(b) Exhibit I to the Development Agreement is hereby deleted in its
entirety and Exhibit I attached to this Amendment is substituted therefor.
21. Deletion and Substitution of Section 14.1(a). Section 14.1(a) of
the Development Agreement is hereby
deleted in its entirety and the following is substituted therefor:
(a) such Party shall fail to pay in full any amounts
owed hereunder when due and such failure continues for fifteen
(15) days after notice is received by the owing Party from the
Party to whom the amount is owed that the amount is past due.
22. Deletion and Substitution of Section 14.1(d). Clause (d) of
Section 14.1 of the Development Agreement is hereby deleted in its entirety and
the following is substituted therefor:
(d) (i) with respect to MESC, MESH and Cogen
Subsidiary, if the Releases or the Releases of Southern
Parties shall for any reason cease to be valid and enforceable
or if MESC, MESH, Cogen Subsidiary or any holder of Senior
Debt that has executed a Release or a Release of Southern
Parties shall challenge the validity or enforceability of any
of the Releases or of the Releases of Southern Parties, or
(ii) with respect to the Southern Parties, if the Releases of
MESC/Bondholder Parties shall for any reason cease to be valid
and enforceable or any Southern Party shall challenge the
validity or enforceability of any of the Releases of
MESC/Bondholder Parties; or
23. Deletion and Substitution of Section 14.1(e). Clause (e) of Section
14.1 of the Development Agreement is hereby deleted in its entirety and the
following is substituted therefor:
(e) with respect to MESC, MESH and Cogen Subsidiary,
if a Security Interest shall cease to be valid and enforceable
except in accordance with this Agreement, or if MESC, MESH,
Cogen Subsidiary or any holder of Senior Debt that has
executed a Release or a Release of Southern Parties shall
challenge the validity or enforceability of the Security
Interests for any reason other than that the Southern Parties
are obligated to release such Security Interests under the
terms of this Agreement.
24. Termination of MESC O&M Agreement.
(a) On the earlier of (i) July 31, 2001 or (ii) the Plan Confirmation
Date, MESC shall pay SERI four hundred fifty six thousand three hundred seventy
three dollars ($456,373) in full satisfaction of the amounts owed to SERI under
the Operations and Maintenance Agreement dated as of December 12, 1994 (as
amended, the "MESC O&M Agreement") through July 31, 2000, whether arising prior
to or after the filing of MESC's bankruptcy petition. SERI shall prepare a list
and attach the list to this Amendment as Schedule 4 prior to August 20, 2000,
which list identifies all amounts owed by MESC to SERI as of July 31, 2000,
under the MESC O&M Agreement (but excluding any amounts for employee severance
or retention, which are addressed in Section 25 of this Amendment).
(b) On or before March 31, 2001, MESC shall (i) terminate the MESC O&M
Agreement, (ii) pay SERI all remaining amounts owed by MESC to SERI under that
agreement (but excluding any amounts for employee severance or retention, which
are addressed in Section 25 of this Amendment and any amounts to be paid under
Section 24(a) of this Amendment) and any amounts accrued but not yet due and
payable, and (iii) either (1) obtain releases of SERI from any third-parties to
contracts SERI has entered into as operator under the MESC O&M Agreement other
than agreements related to SERI's employees providing services under the MESC
O&M Agreement, or (2) indemnify SERI from all liability arising out of such
third-party contracts. Upon termination of the MESC O&M Agreement, Southern,
SEI, SERI, and their Affiliates other than MESC and MESH shall have no
obligation to provide any personnel to MESC or MESH or to staff MESC or MESH in
any way. Upon termination of the MESC O&M Agreement, Southern, SEI, SERI and
their Affiliates (other than MESH or MESC) shall have no obligation to fund in
any way the ongoing operations of MESH or MESC (except as provided in Section 3
of this Amendment).
(c) SEI and SERI will defend, indemnify and hold MESC and MESH harmless
from and against all claims, demands, losses, liabilities and expenses
(including reasonable attorney's fees) of employees of SERI that arise out of
obligations of SERI or MESC under SERI's existing or prior-existing pension
plans for SERI's unionized employees. This indemnity obligation imposed upon SEI
and SERI by this Section 24(c) of the Amendment applies only to claims, demands,
losses, liabilities and expenses of employees of SERI that arise under such
existing or prior existing pension plans for SERI's unionized employees and does
not apply to any other claims, demands, losses, liabilities or expenses of
employees of SERI asserted against MESC. The Parties do not intend this Section
24(c) of the Amendment to affect the charges imposed on MESC under the MESC O&M
Agreement by SERI to recover the costs of benefits, including pension benefits,
for the personnel who perform the services provided by SERI to MESC under the
MESC O&M Agreement, nor does the indemnity provided by this Section 24(c) of the
Amendment apply to such charges.
25. MESC Retention and Severance Program.
(a) On the earlier of (i) the Plan Confirmation Date or (ii) July 31,
2001, MESC will pay SERI an amount equal to one-half of the costs incurred
through such date under the MESC Retention and Severance Program (as defined
below) and after such date MESC shall continue to reimburse SERI for one half of
any additional costs incurred under that program as such costs are incurred;
provided, however, that the amount payable by MESC pursuant to this Section
25(a) of the Amendment shall not exceed in the aggregate two million dollars
($2,000,000). The "MESC Retention and Severance Program" means the retention and
severance program to be developed and implemented by SERI for SERI's union and
non-union employees providing services to MESC under the MESC O&M Agreement, the
terms and conditions of which shall be determined by SERI in its sole
discretion. Nevertheless, SERI agrees to keep MESC informed of the details of
the development and implementation of the MESC Retention and Severance Program
and to allow MESC to provide non-binding suggestions to SERI for SERI to
consider prior to implementing the MESC Retention and Severance Program. SERI
and MESC shall mutually develop a release to be executed by employees of SERI
who receive payments under the MESC Retention and Severance Program, which
release shall be attached to this Amendment as Schedule 5. SERI also agrees to
provide MESC with access at reasonable times to, and the right to copy, records
maintained by SERI in connection with the MESC Retention and Severance Program.
(b) Once MESC has paid SERI an aggregate amount equal to $2 million to
reimburse SERI for costs under the MESC Retention and Severance Program in
accordance with Section 25(a) of this Amendment, SEI and SERI will thereafter
defend, indemnify and hold MESC harmless from and against all further claims,
demands, losses, liabilities and expenses (including reasonable attorney's fees)
of employees of SERI that arise out of obligations of SERI or MESC under the
MESC Retention and Severance Program.
26. Turbine Option Fee. On or before the earlier of (i) the Plan Confirmation
Date, (ii) July 31, 2001, or (iii) the Turbine Transfer Date, MESC will pay SEI
two million nine hundred thousand dollars ($2,900,000); provided, however, that
if, on or before August 31, 2000, MESC provides written notice to SEI, consented
to by the Lender Representative, that MESC waives all its rights to the ▇▇ ▇▇▇▇▇
Turbine, the ▇▇ ▇▇▇▇▇ Turbine Contract and the ▇▇ ▇▇▇▇▇ LTSA, then MESC's
obligation to pay SEI under this Section 26 of the Amendment shall be reduced to
one million four hundred fifty thousand dollars ($1,450,000); provided further
that if, after August 31, 2000 but on or before September 30, 2000, MESC
provides written notice to SEI, consented to by the Lender Representative, that
MESC waives all its rights to the ▇▇ ▇▇▇▇▇ Turbine, the ▇▇ ▇▇▇▇▇ Turbine
Contract or the ▇▇ ▇▇▇▇▇ LTSA, then MESC's obligation to pay SEI under this
Section 26 of the Amendment shall be reduced to two million dollars
($2,000,000).
27. Project Document Indemnity. On or before the Amendment Effective Date, MESC
will either (i) deliver to SEI an indemnity in favor of Southern, in a form
reasonably satisfactory to SEI, for any costs Southern incurs under (and
provide security for such indemnity as provided in Section 6.1 of the
Development Agreement, as amended by this Amendment), or (ii) deliver to
SEI releases, in a form reasonably satisfactory to SEI, executed by KCTC
and S.D. ▇▇▇▇▇▇ Alabama, LLC terminating, and releasing Southern from, all
obligations of Southern under, (A) the Mill Owner Maintenance Reserve
Account Agreement (the "Mill Owner Maintenance Reserve Account Agreement")
dated August 1, 1995, among MESC, Southern, KCTC (as successor to ▇▇▇▇▇
Paper Company) and S. D. ▇▇▇▇▇▇ Alabama, L.L.C. (as assignee of S. D. ▇▇▇▇▇▇
Company), and (B) the Environmental Guaranty (the "Environmental Guaranty")
dated December 12, 1994, made by Southern to KCTC (as successor to ▇▇▇▇▇ Paper
Company) and S. D. ▇▇▇▇▇▇ Alabama, L.L.C. (as assignee of S. D. ▇▇▇▇▇▇
Company). SEI agrees to prepare, negotiate with MESC, and attach to this
Amendment as Schedule 6, prior to August 20, 2000, a form of the indemnity
referred to in clause (i) of this Section 27 of this Amendment that is
reasonably acceptable to it.
28. Excess Loss Account.
(a) On or before the Amendment Effective Date, MESC and MESH shall
deliver to SEI an indemnity in favor of Southern, in a form reasonably
satisfactory to SEI, indemnifying and holding Southern (and its Affiliates)
harmless for any income taxes (including any penalties or interest determined to
be due) that Southern (or its Affiliates) has to pay on any taxable income
generated by MESH and MESC in any tax period (or portion thereof) after December
31, 1999 in which MESH or MESC is included in Southern's consolidated tax return
in excess of the amount of Southern's excess loss account with respect to its
investment in MESH at the beginning of the tax period in which such taxable
income is recognized; provided that the amount of Southern's excess loss account
at the beginning of the year 2000 shall be reduced by any payment made by
Southern under Section 31 of this Amendment; provided further that if an
obligation of Southern to pay income tax on the amount of its excess loss
account with respect to its investment in MESH is triggered, then MESC and MESH
will indemnify and hold Southern (and its Affiliates) harmless for any income
taxes (including any penalties or interest determined to be due) Southern (or
its Affiliates) has to pay on taxable income of MESH or MESC recognized on or
after the triggering of such obligation except where Southern pays such income
taxes, or is otherwise liable for such income taxes, pursuant to Section 28(b)
of this Amendment. SEI agrees to prepare, negotiate with MESC, and attach to
this Amendment as Schedule 7, prior to August 20, 2000, a form of the indemnity
referred to in the immediately preceding sentence of this Section 28(a) of the
Amendment that is reasonably acceptable to it. Also attached hereto as Schedule
8 is a good faith estimate by SEI of the amount of such excess loss account as
of December 31, 1999, and a good faith projection of changes expected to occur
in such amount through December 31, 2000, which estimate and projection will not
be binding. The parties hereto acknowledge that (x) the estimates and
projections set forth on Schedule 8 are subject to significant uncertainties and
contingencies, many of which are beyond SEI's control, (y) no assurances can be
given that the projections will be realized and (z) no representation or
warranty is made as to the accuracy of the estimates and projections.
(b) On or before the Amendment Effective Date, SEI shall cause Southern
to deliver to MESC and MESH an indemnity in favor of MESC and MESH, in a form
reasonably satisfactory to MESC and MESH, indemnifying and holding MESC and MESH
harmless for any federal income taxes (including any penalties or interest
determined to be due) that MESC or MESH has to pay on any taxable income
recognized by MESH and MESC after the triggering of Southern's obligation to pay
income tax on the amount of its excess loss account with respect to its
investment in MESH where, and only where, such triggering occurs due to actions
taken by the Southern Parties, or any of their Affiliates (other than MESH or
MESC) and such actions (i) are not part of or do not result from this Amendment
becoming effective or compliance with its terms, the implementation of a Plan of
Reorganization for MESC or MESH, or a liquidation of MESC or MESH, (ii) are not
otherwise approved by the Bankruptcy Court (unless such approval resulted from a
motion or other petition filed by Southern, SEI, SERI, MESC or MESH, and was
opposed by the Lender Representative), and (iii) are not consented to in writing
by the Lender Representative; provided that this indemnity obligation shall not
apply where such triggering of Southern's excess loss account with respect to
its investment in MESH results from actions taken by MESH, MESC, the Bankruptcy
Court, the Bondholders, the Collateral Agent, the Taxable Bond Indenture
Trustee, or the Tax Exempt Bond Indenture Trustee; provided further that such
indemnity shall apply only to federal income taxes (including any penalties or
interest determined to be due) owed with respect to taxable income of MESC and
MESH recognized after such triggering of Southern's excess loss account and
prior to the earlier of (x) a deconsolidation of MESH and MESC from the Southern
consolidated tax return as a result of the implementation of a Plan of
Reorganization for or the liquidation of MESC or MESH or (y) July 31, 2001; and
provided further that the aggregate liability of Southern to MESC and MESH under
such indemnity shall be limited to an amount equal to the federal income tax
applicable to the amount of Southern's excess loss account at the time it was
triggered.
(c) Any payments required to be made on the indemnities set forth in
this Section 28 of the Amendment shall be made on an after-tax basis.
29. Tax Allocation Agreement. MESH shall reject the Tax Allocation Agreement in
its bankruptcy proceeding with such rejection to be effective as of January 14,
1999. MESH hereby agrees to irrevocably waive any right to any amounts owed it
under the Tax Allocation Agreement and release Southern, SEI, SERI and their
Affiliates from any claims it may have under the Tax Allocation Agreement, in
each case now or through the date the rejection of the Tax Allocation Agreement
becomes effective. SEI and SERI hereby agree, and agree to cause their
Affiliates, to irrevocably waive any right to any amount owed them under the Tax
Allocation Agreement and release MESH and MESC from any claim any of them may
have under the Tax Allocation Agreement, in each case now, or through the date
the rejection of the Tax Allocation Agreement becomes effective. The Parties
shall cooperate in seeking any approvals required under PUHCA to effectuate such
waivers.
30. Tax Sharing Account. On or before the Amendment Effective Date, SEI will
cause Southern to consent to an order of the Bankruptcy Court authorizing MESC
to use the two million one hundred thousand dollars ($2,100,000) held by MESH in
its tax sharing account to fund development of the Cogen Project.
31. Maintenance Plan Funding Subaccount. On the date the Releases of Southern
Parties become effective, SEI shall cause Southern to pay to the Collateral
Agent, and release any claims Southern may have to, the two million seven
hundred thousand dollars ($2,700,000) that is subject to dispute under the
Maintenance Plan Funding Subaccount Southern Guaranty Agreement; provided,
however, that such payment shall be subject to the condition that Southern will
simultaneously receive a release from the Collateral Agent of any further
liability under the Maintenance Plan Funding Subaccount Southern Guaranty
Agreement.
32. HRSG Redeployment. If MESC determines not to develop the Cogen Project or
otherwise no longer needs the ▇▇ ▇▇▇▇▇ Turbine in connection with the Cogen
Project, then, if requested to do so by MESC in writing on or before January 31,
2001 (which request shall include a description of MESC's cost for the HRSG
equipment), SEI shall use commercially reasonable efforts to utilize the HRSG
equipment on another project being developed by SEI or its Affiliates (other
than Affiliates that are not subsidiaries of SEI); provided, however, that SEI
shall have no obligation to utilize the HRSG equipment on another project being
developed by SEI or its Affiliates (other than Affiliates that are not
subsidiaries of SEI) unless such use is the lowest cost alternative available to
SEI. In the event SEI determines that it is able to utilize any of the HRSG
equipment, it shall give MESC written notice of the portion of the HRSG
equipment it wishes to utilize and an estimate of the cost of reconfiguring such
HRSG equipment for use at another location. If MESC continues to desire to have
SEI utilize the HRSG, then MESC shall within ten (10) days of receiving such
notice and estimate from SEI notify SEI in writing of the cost incurred by MESC
for that portion of the HRSG equipment, together with supporting documentation.
SEI shall notify MESC in writing within ten (10) days of its receipt of such
notice from MESC whether SEI is willing to purchase the HRSG equipment at such
cost. If SEI notifies MESC that it is willing to purchase the HRSG equipment,
then within ten (10 days) of SEI's delivery of such notice (A) MESC shall
transfer the HRSG equipment that SEI, or an Affiliate of SEI, is able to utilize
to SEI, and (B) SEI shall pay MESC the cost of such HRSG equipment (as indicated
by MESC) minus any reasonable costs expected to be incurred by SEI or its
Affiliates in having the HRSG equipment reconfigured for use at the alternative
location as estimated by SEI. MESC may, at its option, dispose of any HRSG
equipment that has not been sold to SEI and retain the proceeds for its own
account.
33. Transfers of MESC Assets. Except for transfers to be made under the
Settlement Agreement or transfers to KCTC of facilities in MESC's existing South
Power House, MESC shall not (i) sell, transfer, assign, dividend, distribute or
otherwise dispose of its Number 8 Recovery Boiler or any of its other equipment
or facilities having a book value or fair market value in excess of five hundred
thousand dollars ($500,000) until after the date on which Southern's ownership
interests in MESH (and indirectly in MESC) terminate without replacement of such
ownership interests by any new ownership interests or (ii) enter into a binding
agreement to sell, transfer, assign, dividend, distribute or otherwise dispose
of any such equipment or facilities described in clause (i) that is not
conditioned upon Southern's, SEI's and their Affiliates' ownership interests in
MESH and MESC having been terminated without replacement by any other ownership
interests in MESC or MESH before the date on which such sale, transfer,
assignment, dividend, distribution or other disposition will occur.
34. No Waiver. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any party under the Development Agreement or
constitute a waiver of any provision of the Development Agreement.
35. Indemnities. With respect to (i) all indemnities of MESC or the Cogen
Subsidiary in favor of SERI, SEI, Southern and/or their Affiliates and (ii) all
indemnities of Southern, SEI or SERI in favor of MESC and/or MESH set forth in
this Amendment or in the Development Agreement, as amended by this Amendment,
such indemnities shall survive the expiration or termination of the Development
Agreement. In any provision of the Development Agreement or this Amendment where
a Party has the option to provide an indemnity in the place of a release of
liability, such Party shall have the right at any time to provide a release
satisfactory to the receiving Party in the exercise of its reasonable discretion
despite having previously provided an indemnity, and such indemnity shall
terminate and have no force or effect upon delivery of such release.
36. Ratification of Development Agreement. The Development Agreement, as
amended by this Amendment, shall remain in full force and effect and is
hereby ratified and confirmed by the parties.
37. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, PROVIDED THAT ANY CONFLICT
OF LAWS RULE OF THE STATE OF NEW YORK THAT WOULD REQUIRE REFERENCE TO THE LAWS
OF ANY OTHER STATE SHALL BE DISREGARDED.
38. Entire Agreement. THE DEVELOPMENT AGREEMENT (INCLUDING THE EXHIBITS AND
SCHEDULES THERETO), AS AMENDED BY THIS AMENDMENT, EMBODIES THE ENTIRE AGREEMENT
AND UNDERSTANDING AMONG THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF
AND SUPERSEDES ALL PRIOR PROPOSALS, AGREEMENTS AND UNDERSTANDINGS RELATING TO
SUCH SUBJECT MATTER.
39. Counterparts. This Amendment may be executed in two or more counterparts,
any of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same Amendment.
Any signature page of any such counterpart, or any facsimile transmission
thereof, may be attached or appended to any other counterpart to complete a
fully executed counterpart of this Amendment, and any facsimile transmission of
any signature of a party shall be deemed an original and shall bind such party.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective duly authorized officers as of the date and
year first above written.
SOUTHERN ENERGY RESOURCES, INC.
By:
Its:
SOUTHERN ENERGY, INC.
By:
Its:
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By:
Its:
MOBILE ENERGY SERVICES HOLDING, INC.
By:
Its:
Agreed and accepted:
CIBC WORLD MARKETS, INC.,
as Lender Representative
By:
Its:
Schedule 1
Material Contracts, Applications and Other Documents
(To Be Attached)
Schedule 2
Unpaid Development Costs, Cogen Development Advances
And Other Amounts
(To Be Attached)
Schedule 3
GE Turbine Costs
(To Be Attached)
Schedule 4
MESC O&M Costs
(To Be Attached)
Schedule 5
SERI Employee Release
(To Be Attached)
Schedule 6
Form of MESC Project Document Indemnity to Southern
(To Be Attached)
Schedule 7
Form of MESC Excess Loss Account Indemnity to Southern
(To Be Attached)
Schedule 8
MOBILE ENERGY SERVICES HOLDINGS
EXCESS LOSS ACCOUNT
Estimated as of August 9, 2000
Plan Approved 2000 Plan Approved 2001
------------------ -----------------
ELA as of 12/31/99 (40,590,000) (40,590,000)
Plus: Estimated Taxable Loss 2000 (27,474,273) (1) (27,474,273)
Minus: Capital Contribution from Southern
(Maintenance Guarantee) 2,700,000 2,700,000
Est. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Settlement 30,500,000
Est. FMV of Pulpco Option 11,972,100 -----------
----------
Estimated ELA as of 12/31/00 (22,892,173) (65,364,273)
Minus: Est. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Settlement 30,500,000
Est. FMV of Pulpco Option 11,972,100
------------
(22,892,173)
(1) Based on 6 months actual and 6 months projected. Does not include any severance cost.
Exhibit I
$1,341,316 is owed to MESH pursuant to the Tax Allocation Agreement for tax
benefits recognized in 1998, while MESH owes Southern and its affiliates
$1,560,281 for taxes paid by Southern on taxable income recognized by MESC in
1999.
Pursuant to the Mill Owner Maintenance Reserve Account Agreement, dated as of
August 1, 1995 (the "MOMRA Agreement"), by and among Mobile Energy Services
Company, LLC, The Southern Company, ▇▇▇▇▇ Paper Company (both in its capacity as
the owner of the Pulp Mill and as the owner of the Tissue Mill) and S.D. ▇▇▇▇▇▇
Company, Southern agreed to make deposits, in an amount not to exceed $2,000,000
in the aggregate, into a Mill Owner Maintenance Reserve Account, upon the
receipt of notice from the Mill Owners. Amounts on deposit in the Mill Owner
Maintenance Reserve Account are disbursed at the instructions of the Mill Owners
and are to be applied to the certain expenses of MESC. Please note that,
notwithstanding the inclusion of this disclosure with respect to the MOMRA
Agreement, SEI and SERI do not consider Southern's obligations under the MOMRA
Agreement to be a guaranty "provided to MESC."
Attachment A
Form of Releases of Southern Parties
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000 (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, MESC, on behalf of itself and its predecessor and
successor companies, and their respective assigns, does hereby release and
forever discharge (i) MESH, SERI, SEI and The Southern Company (collectively,
the "Southern Parties"), (ii) the Southern Parties' respective affiliated,
related, parent, predecessor, successor, and subsidiary companies past and
present other than MESC or MESH (the "Southern Parties' Affiliates"), (iii) the
Southern Parties' (other than MESH's) and the Southern Parties Affiliates'
respective shareholders, officers, directors, agents, employees, attorneys,
advisors, insurers, heirs and assigns (the "Southern Related Parties"), and (iv)
any individuals or entities (other than MESH) that were members, officers,
directors, agents, employees, attorneys, advisors, insurers, heirs and assigns
of MESC or MESH (the "MESC Related Parties") from any and all claims, actions,
causes of action, losses, damages, rights, suits, and demands whatsoever, in law
or equity, known or unknown, fixed or contingent, liquidated or unliquidated,
arising prior to the effective date of the Amendment and arising from or
relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in
that certain Intercreditor and Collateral Agency Agreement,
dated August 1, 1995, to which MESC and MESH are parties (as
supplemented, amended, modified or restated through the date
hereof, the "Intercreditor Agreement")) and certain related
assets from ▇▇▇▇▇ Paper Company in 1994 and the transfer by
MESH of its assets to MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent (as defined in the Intercreditor
Agreement), to the Indenture Trustee (as defined in the
Intercreditor Agreement), to the Tax-Exempt Indenture Trustee
(as defined in the Intercreditor Agreement), or to the
Working Capital Facility Provider (as defined in the
Intercreditor Agreement);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that MESC may have to challenge the
compensation to be paid or the expenses to be reimbursed to any attorney or
advisor in MESC's or MESH's pending Chapter 11 cases. Furthermore, nothing
herein shall be construed as releasing MESC or MESH from any obligations that
either of them may have regarding the payment of principal, interest, default
interest, or other sums with respect to the First Mortgage Bonds and/or the IDB
Bonds, or from any other obligations that MESC, MESH or either of them may owe
under the Intercreditor Agreement or under the indentures for the First Mortgage
Bonds and/or the IDB Bonds.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by MESC in connection with the
Development Agreement. This Release may not be modified or amended except in a
writing signed by MESC, with such Bankruptcy Court approval as may be needed.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of MESC.
WHEREFORE MESC, acting through its duly authorized representative, has
executed this Release on this ___ day of __________, 2000.
MOBILE ENERGY SERVICES COMPANY L.L.C.
By: _________________________
Name:
Title:
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000, (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, Bankers Trust (Delaware), as collateral agent
under that certain Intercreditor and Collateral Agency Agreement, dated August
1, 1995 (as supplemented, amended, modified or restated through the date hereof,
the "Intercreditor Agreement") (Bankers Trust (Delaware) in such capacity, the
"Collateral Agent"), on behalf of itself and its predecessor and successor
companies, and their respective assigns, does hereby release and forever
discharge (i) SERI, SEI and The Southern Company (collectively, the "Southern
Parties"), (ii) the Southern Parties' respective affiliated, related, parent,
predecessor, successor, and subsidiary companies past and present other than
MESC or MESH (the "Southern Parties' Affiliates"), (iii) the Southern Parties'
and the Southern Parties Affiliates' respective shareholders, officers,
directors, agents, employees, attorneys, advisors, insurers, heirs and assigns
(the "Southern Related Parties"), and (iv) any individuals or entities (other
than MESH) that were members, officers, directors, agents, employees, attorneys,
advisors, insurers, heirs and assigns of MESC or MESH (the "MESC Related
Parties") from any and all claims, actions, causes of action, losses, damages,
rights, suits, and demands whatsoever, in law or equity, known or unknown, fixed
or contingent, liquidated or unliquidated, arising prior to the effective date
of the Amendment and arising from or relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in the
Intercreditor Agreement) and certain related assets from
▇▇▇▇▇ Paper Company in 1994 and the transfer by MESH of its
assets to MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent, to the Indenture Trustee (as defined in
the Intercreditor Agreement), to the Tax-Exempt Indenture
Trustee (as defined in the Intercreditor Agreement), or to
the Working Capital Facility Provider (as defined in the
Intercreditor Agreement);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that the Collateral Agent may have to
challenge the compensation to be paid or the expenses to be reimbursed to any
attorney or advisor in MESC's or MESH's pending Chapter 11 cases. Furthermore,
nothing herein shall be construed as releasing MESC or MESH from any obligations
that either of them may have regarding the payment of principal, interest,
default interest, or other sums with respect to the First Mortgage Bonds and/or
the IDB Bonds, or from any other obligations that MESC, MESH or either of them
may owe under the Intercreditor Agreement or under the indentures for the First
Mortgage Bonds and/or the IDB Bonds, including, without limitation, any fees and
expenses (including legal fees and expenses) owed thereunder.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by the Collateral Agent in
connection with the Development Agreement. This Release may not be modified or
amended except in a writing signed by the Collateral Agent.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of the Collateral Agent.
WHEREFORE the Collateral Agent, acting through its duly authorized
representative, has executed this Release on this ___ day of _________, 2000.
BANKERS TRUST (DELAWARE)
By: _________________________
Name:
Title:
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000 (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, MESH, on behalf of itself and its predecessor and
successor companies, and their respective assigns, does hereby release and
forever discharge (i) SERI, SEI and The Southern Company (collectively, the
"Southern Parties"), (ii) the Southern Parties' respective affiliated, related,
parent, predecessor, successor, and subsidiary companies past and present other
than MESC or MESH (the "Southern Parties' Affiliates"), (iii) the Southern
Parties' and the Southern Parties Affiliates' respective shareholders, officers,
directors, agents, employees, attorneys, advisors, insurers, heirs and assigns
(the "Southern Related Parties"), and (iv) any individuals or entities (other
than MESH) that were members, officers, directors, agents, employees, attorneys,
advisors, insurers, heirs and assigns of MESC or MESH (the "MESC Related
Parties") from any and all claims, actions, causes of action, losses, damages,
rights, suits, and demands whatsoever, in law or equity, known or unknown, fixed
or contingent, liquidated or unliquidated, arising prior to the effective date
of the Amendment and arising from or relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in
that certain Intercreditor and Collateral Agency Agreement,
dated August 1, 1995, to which MESC and MESH are parties (as
supplemented, amended, modified or restated through the date
hereof, the "Intercreditor Agreement")) and certain related
assets from ▇▇▇▇▇ Paper Company in 1994 and the transfer by
MESH of its assets to MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent (as defined in the Intercreditor
Agreement), to the Indenture Trustee (as defined in the
Intercreditor Agreement), to the Tax-Exempt Indenture Trustee
(as defined in the Intercreditor Agreement), or to the
Working Capital Facility Provider (as defined in the
Intercreditor Agreement);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that MESH may have to challenge the
compensation to be paid or the expenses to be reimbursed to any attorney or
advisor in MESC's or MESH's pending Chapter 11 cases. Furthermore, nothing
herein shall be construed as releasing MESC or MESH from any obligations that
either of them may have regarding the payment of principal, interest, default
interest, or other sums with respect to the First Mortgage Bonds and/or the IDB
Bonds, or from any other obligations that MESC, MESH or either of them may owe
under the Intercreditor Agreement or under the indentures for the First Mortgage
Bonds and/or the IDB Bonds.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by MESH in connection with the
Development Agreement. This Release may not be modified or amended except in a
writing signed by MESH, with such Bankruptcy Court approval as may be needed.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of MESH.
WHEREFORE MESH, acting through its duly authorized representative, has
executed this Release on this ___ day of _________, 2000.
MOBILE ENERGY SERVICES HOLDINGS, INC.
By: _________________________
Name:
Title:
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000, (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, CS First Boston, in its capacity solely as a
holder of certain of the 8.665% First Mortgage Bonds due 2017 issued by MESC
and/or certain of the 6.95% Solid Waste Revenue Refunding Bonds (Mobile Energy
Services Company, L.L.C. Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (the "Bondholder"), on behalf
of itself and its predecessor and successor companies, and their respective
assigns, does hereby release and forever discharge (i) SERI, SEI and The
Southern Company (collectively, the "Southern Parties"), (ii) the Southern
Parties' respective affiliated, related, parent, predecessor, successor, and
subsidiary companies past and present other than MESC or MESH (the "Southern
Parties' Affiliates"), (iii) the Southern Parties' and the Southern Parties
Affiliates' respective shareholders, officers, directors, agents, employees,
attorneys, advisors, insurers, heirs and assigns (the "Southern Related
Parties"), and (iv) any individuals or entities (other than MESH) that were
members, officers, directors, agents, employees, attorneys, advisors, insurers,
heirs and assigns of MESC or MESH (the "MESC Related Parties") from any and all
claims, actions, causes of action, losses, damages, rights, suits, and demands
whatsoever, in law or equity, known or unknown, fixed or contingent, liquidated
or unliquidated, arising prior to the effective date of the Amendment and
arising from or relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in
that certain Intercreditor and Collateral Agency Agreement,
dated August 1, 1995, to which MESC and MESH are parties (as
supplemented, amended, modified or restated through the date
hereof, the "Intercreditor Agreement")) and certain related
assets from ▇▇▇▇▇ Paper Company in 1994 and the transfer by
MESH of its assets to MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent (as defined in the Intercreditor
Agreement), to the Indenture Trustee (as defined in the
Intercreditor Agreement), to the Tax-Exempt Indenture Trustee
(as defined in the Intercreditor Agreement), or to the
Working Capital Facility Provider (as defined in the
Intercreditor Agreement);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that the Bondholder may have to challenge
the compensation to be paid or the expenses to be reimbursed to any attorney or
advisor in MESC's or MESH's pending Chapter 11 cases. Furthermore, nothing
herein shall be construed as releasing MESC or MESH from any obligations that
either of them may have regarding the payment of principal, interest, default
interest, or other sums with respect to the First Mortgage Bonds and/or the IDB
Bonds, or from any other obligations that MESC, MESH or either of them may owe
under the Intercreditor Agreement or under the indentures for the First Mortgage
Bonds and/or the IDB Bonds, including, without limitation, any fees and expenses
(including legal fees and expenses) owed thereunder.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by the Bondholder in connection
with the Development Agreement. This Release may not be modified or amended
except in a writing signed by the Bondholder.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of the Bondholder.
WHEREFORE the Bondholder, acting through its duly authorized
representative, has executed this Release on this ____ day of _________, 2000.
CS FIRST BOSTON
By: _________________________
Name:
Title:
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000 (as amended, the "Development Agreement"), by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, Franklin Advisors, Inc., in its capacity solely as
a holder of certain of the 8.665% First Mortgage Bonds due 2017 issued by MESC
and/or certain of the 6.95% Solid Waste Revenue Refunding Bonds (Mobile Energy
Services Company, L.L.C. Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (the "Bondholder"), on behalf
of itself and its predecessor and successor companies, and their respective
assigns, does hereby release and forever discharge (i) SERI, SEI and The
Southern Company (collectively, the "Southern Parties"), (ii) the Southern
Parties' respective affiliated, related, parent, predecessor, successor, and
subsidiary companies past and present other than MESC or MESH (the "Southern
Parties' Affiliates"), (iii) the Southern Parties' and the Southern Parties
Affiliates' respective shareholders, officers, directors, agents, employees,
attorneys, advisors, insurers, heirs and assigns (the "Southern Related
Parties"), and (iv) any individuals or entities (other than MESH) that were
members, officers, directors, agents, employees, attorneys, advisors, insurers,
heirs and assigns of MESC or MESH (the "MESC Related Parties") from any and all
claims, actions, causes of action, losses, damages, rights, suits, and demands
whatsoever, in law or equity, known or unknown, fixed or contingent, liquidated
or unliquidated, arising prior to the effective date of the Amendment and
arising from or relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in
that certain Intercreditor and Collateral Agency Agreement,
dated August 1, 1995, to which MESC and MESH are parties (as
supplemented, amended, modified or restated through the date
hereof, the "Intercreditor Agreement")) and certain related
assets from ▇▇▇▇▇ Paper Company in 1994 and the transfer by
MESH of its assets to MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent (as defined in the Intercreditor
Agreement), to the Indenture Trustee (as defined in the
Intercreditor Agreement), to the Tax-Exempt Indenture Trustee
(as defined in the Intercreditor Agreement), or to the
Working Capital Facility Provider (as defined in the
Intercreditor Agreement);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that the Bondholder may have to challenge
the compensation to be paid or the expenses to be reimbursed to any attorney or
advisor in MESC's or MESH's pending Chapter 11 cases. Furthermore, nothing
herein shall be construed as releasing MESC or MESH from any obligations that
either of them may have regarding the payment of principal, interest, default
interest, or other sums with respect to the First Mortgage Bonds and/or the IDB
Bonds, or from any other obligations that MESC, MESH or either of them may owe
under the Intercreditor Agreement or under the indentures for the First Mortgage
Bonds and/or the IDB Bonds, including, without limitation, any fees and expenses
(including legal fees and expenses) owed thereunder.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by the Bondholder in connection
with the Development Agreement. This Release may not be modified or amended
except in a writing signed by the Bondholder.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of the Bondholder.
WHEREFORE the Bondholder, acting through its duly authorized
representative, has executed this Release on this ____ day of __________, 2000.
FRANKLIN ADVISORS, INC.
By: _________________________
Name:
Title:
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000, (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, First Union National Bank, successor by merger to
First Union National Bank of Georgia, as trustee under that certain Amended and
Restated Trust Indenture, dated August 1, 1995 by and between the Industrial
Development Board of the City of Mobile, Alabama, and First Union National Bank
(as supplemented, amended, modified or restated through the date hereof, the
"Tax Exempt Trust Indenture") (First Union National Bank in such capacity, the
"Tax Exempt Indenture Trustee"), on behalf of itself and its predecessor and
successor companies, and their respective assigns, does hereby release and
forever discharge (i) SERI, SEI and The Southern Company (collectively, the
"Southern Parties"), (ii) the Southern Parties' respective affiliated, related,
parent, predecessor, successor, and subsidiary companies past and present other
than MESC or MESH (the "Southern Parties' Affiliates"), (iii) the Southern
Parties' and the Southern Parties Affiliates' respective shareholders, officers,
directors, agents, employees, attorneys, advisors, insurers, heirs and assigns
(the "Southern Related Parties"), and (iv) any individuals or entities (other
than MESH) that were members, officers, directors, agents, employees, attorneys,
advisors, insurers, heirs and assigns of MESC or MESH (the "MESC Related
Parties") from any and all claims, actions, causes of action, losses, damages,
rights, suits, and demands whatsoever, in law or equity, known or unknown, fixed
or contingent, liquidated or unliquidated, arising prior to the effective date
of the Amendment and arising from or relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in the
Tax Exempt Trust Indenture) and certain related assets from
▇▇▇▇▇ Paper Company in 1994 and the transfer by MESH of its
assets to MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent (as defined in the Tax Exempt Trust
Indenture), to the Indenture Trustee (as defined in the Tax
Exempt Trust Indenture), to the Tax-Exempt Indenture Trustee,
or to the Working Capital Facility Provider (as defined in
the Tax Exempt Trust Indenture);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that the Tax Exempt Indenture Trustee may
have to challenge the compensation to be paid or the expenses to be reimbursed
to any attorney or advisor in MESC's or MESH's pending Chapter 11 cases.
Furthermore, nothing herein shall be construed as releasing MESC or MESH from
any obligations that either of them may have regarding the payment of principal,
interest, default interest, or other sums with respect to the First Mortgage
Bonds and/or the IDB Bonds, or from any other obligations that MESC, MESH or
either of them may owe under the Intercreditor Agreement or under the indentures
for the First Mortgage Bonds and/or the IDB Bonds, including, without
limitation, any fees and expenses (including legal fees and expenses) owed
thereunder.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by the Tax Exempt Indenture Trustee
in connection with the Development Agreement. This Release may not be modified
or amended except in a writing signed by the Tax Exempt Indenture Trustee.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of the Tax Exempt Indenture Trustee.
WHEREFORE the Tax Exempt Indenture Trustee, acting through its duly
authorized representative, has executed this Release on this ____ day of
___________, 2000.
FIRST UNION NATIONAL BANK, successor
by merger to FIRST UNION NATIONAL
BANK OF GEORGIA, as trustee under
the Tax Exempt Trust Indenture
By: _________________________
Name:
Title:
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000, (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, First Union National Bank, successor by merger to
First Union National Bank of Georgia, as trustee under that certain Trust
Indenture, dated August 1, 1995 (as supplemented, amended, modified or restated
through the date hereof, the "Trust Indenture") (First Union National Bank in
such capacity, the "Indenture Trustee"), on behalf of itself and its predecessor
and successor companies, and their respective assigns, does hereby release and
forever discharge (i) SERI, SEI and The Southern Company (collectively, the
"Southern Parties"), (ii) the Southern Parties' respective affiliated, related,
parent, predecessor, successor, and subsidiary companies past and present other
than MESC or MESH (the "Southern Parties' Affiliates"), (iii) the Southern
Parties' and the Southern Parties Affiliates' respective shareholders, officers,
directors, agents, employees, attorneys, advisors, insurers, heirs and assigns
(the "Southern Related Parties"), and (iv) any individuals or entities (other
than MESH) that were members, officers, directors, agents, employees, attorneys,
advisors, insurers, heirs and assigns of MESC or MESH (the "MESC Related
Parties") from any and all claims, actions, causes of action, losses, damages,
rights, suits, and demands whatsoever, in law or equity, known or unknown, fixed
or contingent, liquidated or unliquidated, arising prior to the effective date
of the Amendment and arising from or relating to:
(a) any dividend or distribution, repayment of debt, or other
transfer of funds directly or indirectly to any of the
Southern Parties prior to the effective date of the
Development Agreement from MESC or MESH, including, without
limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(b) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(c) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and (y) that certain Maintenance Plan
Funding Subaccount Southern Guaranty Agreement, dated August
1, 1995, entered into by The Southern Company;
(d) the purchase by MESH of the Energy Complex (as defined in the
Trust Indenture) and certain related assets from ▇▇▇▇▇ Paper
Company in 1994 and the transfer by MESH of its assets to
MESC in 1995;
(e) any filings or disclosures made by MESC or MESH with the
Securities and Exchange Commission (the "SEC"), any
allegation that additional filings or disclosures should have
been made by MESC or MESH with the SEC, or any other claim
related to securities issued by MESC or MESH or the IDB Bonds
and based upon federal or state securities laws;
(f) any filings, disclosures, or certificates made by MESC, MESH,
SERI, or any of their directors, officers, or employees to
the Collateral Agent (as defined in the Trust Indenture), to
the Indenture Trustee, to the Tax-Exempt Indenture Trustee
(as defined in the Trust Indenture), or to the Working
Capital Facility Provider (as defined in the Trust
Indenture);
(g) any acts or omissions of the Southern Parties, the Southern
Parties' Affiliates, the Southern Related Parties, or the
MESC Related Parties related to (1) the closure of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Tissue Company's ("KCTC") pulp mill in
Mobile, Alabama, (2) the pursuit of claims or potential
claims against KCTC, (3) the management of MESC or MESH with
respect to any of the items identified in paragraphs (a)
through (h) of this Release, (4) the retention of advisors
to MESH or MESC, (5) efforts to develop new business
opportunities for MESC after KCTC's announcement of its
intent to close its pulp mill in Mobile, Alabama, (6) the
filing of bankruptcy petitions by MESC or MESH, (7) the
restructuring of MESC or MESH, (8) the possible investment
of additional equity in MESH or MESC by any of the Southern
Parties, (9) efforts of MESC to obtain a right to purchase
the KCTC pulp mill or certain of its assets; (10) the
administration of or negotiation of revisions to MESC's
contracts with KCTC or S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (or its
affiliates), (11) efforts to develop a new cogeneration
facility to be owned by MESC (or a subsidiary of MESC), (12)
the design, procurement, and installation of the number 7
turbine by MESC, (13) any agreements entered into by MESC or
SERI with labor unions representing the workers operating
MESC's facilities, and (14) SEI's, SERI's, MESH's or MESC's
performance or failure to perform any obligation under the
Development Agreement to be performed prior to the effective
date of the Amendment;
(h) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(i) except as hereinafter provided, any claims asserted against
Southern, SERI, or SEI by MESC or MESH in their bankruptcy
proceedings (if any) and any claims that could have been
asserted by MESH or MESC against Southern, SEI or SERI in
such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claim, demand, action or cause of action that is based on claims of
actual fraud, except that the Release shall apply (i) to claims of securities
fraud under state or federal law, and (ii) claims of fraudulent conveyance,
fraudulent transfer, wrongful payments of dividends or distributions, or breach
of fiduciary duty under state or federal law. In addition, nothing herein shall
be construed as releasing any right that the Indenture Trustee may have to
challenge the compensation to be paid or the expenses to be reimbursed to any
attorney or advisor in MESC's or MESH's pending Chapter 11 cases. Furthermore,
nothing herein shall be construed as releasing MESC or MESH from any obligations
that either of them may have regarding the payment of principal, interest,
default interest, or other sums with respect to the First Mortgage Bonds and/or
the IDB Bonds, or from any other obligations that MESC, MESH or either of them
may owe under the Intercreditor Agreement or under the indentures for the First
Mortgage Bonds and/or the IDB Bonds, including, without limitation, any fees and
expenses (including legal fees and expenses) owed thereunder.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by the Indenture Trustee in
connection with the Development Agreement. This Release may not be modified or
amended except in a writing signed by the Indenture Trustee.
The undersigned represents that (s)he has full authority to execute
this Release on behalf of the Indenture Trustee.
WHEREFORE the Indenture Trustee, acting through its duly authorized
representative, has executed this Release on this ___ day of ___________, 2000.
FIRST UNION NATIONAL BANK, successor
by merger to FIRST UNION NATIONAL
BANK OF GEORGIA, as trustee under
the Trust Indenture
By: _________________________
Name:
Title:
Attachment B
Form of Releases of MESC/ Bondholder Parties
RELEASE
In consideration of the provisions of that certain Amendment No. 1 to
MESC Cogeneration Development Agreement, dated as of _______ ___, 2000 (the
"Amendment"), amending that certain MESC Cogeneration Development Agreement,
dated as of February 9, 2000, (as amended, the "Development Agreement") by and
among Southern Energy Resources, Inc. ("SERI"), Southern Energy Inc. ("SEI"),
Mobile Energy Services Company, L.L.C. ("MESC") and Mobile Energy Services
Holdings, Inc. ("MESH"), and in consideration of the transactions contemplated
by the Development Agreement, each of SERI, SEI and The Southern Company
("Southern" and, together with SERI and SEI, the "Southern Parties"), on behalf
of itself and its predecessor and successor companies, and their respective
assigns, does hereby release and forever discharge (i) (1) MESC, (2) MESH, (3)
CS First Boston, in its capacity solely as a holder of certain of the 8.665%
First Mortgage Bonds due 2017 issued by MESC and/or certain of the 6.95% Solid
Waste Revenue Refunding Bonds (Mobile Energy Services Company, L.L.C. Project)
Series 1995 due 2020 issued by the Industrial Development Board of the City of
Mobile, Alabama ("CS First Boston"), (4) Franklin Advisors, Inc., in its
capacity solely as a holder of certain of the 8.665% First Mortgage Bonds due
2017 issued by MESC and/or certain of the 6.95% Solid Waste Revenue Refunding
Bonds (Mobile Energy Services Company, L.L.C. Project) Series 1995 due 2020
issued by the Industrial Development Board of the City of Mobile, Alabama
("Franklin Advisors"), (5) Bankers Trust (Delaware), as collateral agent under
that certain Intercreditor and Collateral Agency Agreement, dated August 1, 1995
(as supplemented, amended, modified or restated through the date hereof, the
"Intercreditor Agreement") (Bankers Trust (Delaware) in such capacity, the
"Collateral Agent"), (6) First Union National Bank, successor by merger to First
Union National Bank of Georgia, as trustee under that certain Amended and
Restated Trust Indenture, dated August 1, 1995 by and between the Industrial
Development Board of the City of Mobile, Alabama, and First Union National Bank
with respect to certain 6.95% Solid Waste Revenue Refunding Bonds (Mobile Energy
Services Company, L.L.C. Project) Series 1995 due 2020 (as supplemented,
amended, modified or restated through the date hereof, the "Tax Exempt Trust
Indenture") (First Union National Bank in such capacity, the "Tax Exempt
Indenture Trustee"), and (7) First Union National Bank, successor by merger to
First Union National Bank of Georgia, as trustee under that certain Trust
Indenture, dated August 1, 1995 with respect to certain 8.665% First Mortgage
Bonds due 2017 issued by MESC (as supplemented, amended, modified or restated
through the date hereof, the "Trust Indenture") (First Union National Bank in
such capacity, the "Indenture Trustee") (the parties listed in the foregoing
clauses (1) through (7) being referred to collectively herein as the
"Non-Southern Parties"), (ii) the Non-Southern Parties' respective affiliated,
related, parent, predecessor, successor, and subsidiary companies past and
present (the "Non-Southern Parties' Affiliates"), and (iii) the Non-Southern
Parties' and the Non-Southern Parties' Affiliates' respective shareholders,
officers, directors, agents, employees, attorneys, advisors, insurers, heirs and
assigns (the "Non-Southern Related Parties"), from any and all claims, actions,
causes of action, losses, damages, rights, suits, and demands whatsoever, in law
or equity, known or unknown, fixed or contingent, liquidated or unliquidated,
arising prior to the effective date of the Amendment and arising from or
relating to:
(a) any payment, loan, or other transfer of funds made by or on
behalf of the Southern Parties (or any of them) to MESC,
MESH, the Collateral Agent, the Indenture Trustee or the Tax
Exempt Indenture Trustee ;
(b) except as hereinafter provided, any services, equipment or
property provided by the Southern Parties (or any of them)
to MESC or MESH;
(c) except as hereinafter provided, any debt incurred by MESC or
MESH pursuant to any agreement with the Southern Parties;
(d) any repayment of debt, or other transfer of funds directly or
indirectly to any of the Non-Southern Parties prior to the
effective date of the Amendment from MESC or MESH, including,
without limitation, any claim based on fraudulent conveyance,
fraudulent transfer, preferential payments, the approval or
payment of distributions or dividends, or breach of fiduciary
duty, in each case under state or federal law;
(e) (x) the issuance of (1) the $255,210,000 principal amount of
8.665% First Mortgage Bonds due 2017 issued by MESC (such
First Mortgage Bonds, the "First Mortgage Bonds") or (2) the
$85,000,000 principal amount of 6.95% Solid Waste Revenue
Refunding Bonds (Mobile Energy Services Company, L.L.C.
Project) Series 1995 due 2020 issued by the Industrial
Development Board of the City of Mobile, Alabama (such Solid
Waste Revenue Refunding Bonds, the "IDB Bonds") and (y) the
entry by MESC into the Amended and Restated Lease and
Agreement dated August 1, 1995, among MESC, MESH and the
Industrial Revenue Board of the City of Mobile;
(f) the performance by the Collateral Agent of any of its duties
and responsibilities under the Intercreditor Agreement;
(g) the performance by the Indenture Trustee and/or the Tax
Exempt Indenture Trustee of any of the duties and
responsibilities under the Trust Indenture and/or the Tax
Exempt Trust Indenture;
(h) (x) that certain Debt Service Reserve Account Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and any payments made pursuant thereto, and
(y) that certain Maintenance Plan Funding Subaccount Southern
Guaranty Agreement, dated August 1, 1995, entered into by The
Southern Company, and any payments made pursuant thereto;
(i) any acts or omissions of the Non-Southern Parties, the
Non-Southern Parties' Affiliates, or the Non- Southern
Related Parties related to (1) the closure of ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Tissue Company's ("KCTC") pulp mill in Mobile, Alabama, (2)
the pursuit of claims or potential claims against KCTC, (3)
the management of MESC or MESH with respect to any of the
items identified in paragraphs (a) through (k) of this
Release, (4) the retention of advisors to MESH or MESC, (5)
efforts to develop new business opportunities for MESC after
KCTC's announcement of its intent to close its pulp mill in
Mobile, Alabama, (6) the restructuring of MESC or MESH, (7)
the possible investment of additional equity in MESH or MESC
by any of the Southern Parties, (8) efforts of MESC to
obtain a right to purchase the KCTC pulp mill or certain of
its assets; (9) the administration of or negotiation of
revisions to MESC's contracts with KCTC or S.D. ▇▇▇▇▇▇
Alabama, L.L.C.(or its affiliates), (10) efforts to develop
a new cogeneration facility to be owned by MESC (or a
subsidiary of MESC), (11) the design, procurement, and
installation of the number 7 turbine by MESC, and (12)
MESC's or MESH's performance or failure to perform any
obligation under the Development Agreement to be performed
prior to the effective date of the Amendment;
(j) that certain Income Tax Allocation Agreement, dated as of
December 29, 1981, as further amended, among The Southern
Company and certain of its subsidiaries; and
(k) except as hereinafter provided, any claims asserted by
Southern, SERI, or SEI in the bankruptcy proceedings of MESH
or MESC or any claims that could have been asserted by
Southern, SERI or SEI in such bankruptcy proceedings.
Notwithstanding any of the foregoing, nothing herein shall be deemed to
release any claims of the Southern Parties that arise under, relate to, or are
to be paid under (i) the terms of the Development Agreement (or any indemnity
agreement provided for in the Development Agreement), (ii) the Letter of Credit
Procurement Agreement executed as of March 15, 2001 between MESC and SERI, (iii)
the terms of the Facility Operations and Maintenance Agreement between MESC (as
assignee of MESH) and SERI dated December 12, 1994, as amended; (iv) the Mill
Owner Maintenance Reserve Account Agreement dated August 1, 1995, among MESC,
KCTC (as successor to ▇▇▇▇▇ Paper Company), and S.D. ▇▇▇▇▇▇ Alabama, L.L.C. (as
assignee of S.D. ▇▇▇▇▇▇ Company), or (v ) the Environmental Guaranty dated
December 12, 1994, made by Southern to KCTC (as successor to ▇▇▇▇▇ Paper
Company) and S.D. ▇▇▇▇▇▇ Alabama L.L.C. (as assignee of S.D. ▇▇▇▇▇▇ Company).
Furthermore, nothing herein shall be deemed to release any claim, demand, action
or cause of action that is based on claims of actual fraud, except that the
Release shall apply (i) to claims of securities fraud under state or federal
law, and (ii) claims of fraudulent conveyance, fraudulent transfer, wrongful
payments of dividends or distributions, or breach of fiduciary duty under state
or federal law. In addition, nothing herein shall be construed as releasing any
right that the Southern Parties may have to challenge the compensation to be
paid or the expenses to be reimbursed to any attorney or advisor in MESC's or
MESH's pending Chapter 11 cases.
This Release shall not become effective unless and until the U.S.
Bankruptcy Court for the Southern District of Alabama has issued an order
approving the terms of the Amendment and such order has become effective.
This Release shall be governed by, and construed in accordance with the
laws of the State of New York, without giving effect to its conflict of law
rules.
This Release supersedes any and all prior negotiations and sets forth
the full scope of the releases being granted by the Southern Parties in
connection with the Development Agreement. This Release may not be modified or
amended except in a writing signed by the particular Southern Party that is to
be bound by the modification or amendment.
Each of the undersigned represents that (s)he has full authority to
execute this Release on behalf of the respective Southern Party.
WHEREFORE each of Southern, SERI and SEI, acting through its duly
authorized representative, has executed this Release on this ____ day of
_________, 2000.
THE SOUTHERN COMPANY
By: _________________________
Name:
Title:
SOUTHERN ENERGY RESOURCES, INC.
By: _________________________
Name:
Title:
SOUTHERN ENERGY, INC.
By: _________________________
Name:
Title: