Exhibit 10.44
CONSENT AND AGREEMENT
THIS CONSENT AND AGREEMENT (this "Consent"), dated as of
August 1, 1995, is executed by S.D. WARREN COMPANY, a Pennsylvania corporation
(the "Consenting Party"), in its capacity as Paper Mill Owner, MOBILE ENERGY
SERVICES COMPANY, L.L.C., an Alabama limited liability company (the
"Borrower")(which is an indirect wholly-owned subsidiary of The Southern
Company, a Delaware corporation ("Southern")), and BANKERS TRUST (DELAWARE), a
Delaware banking corporation, as Collateral Agent for the Secured Parties (as
hereinafter defined) (the "Collateral Agent").
A. The Borrower, Mobile Energy Services Holdings, Inc.
(formerly known as Mobile Energy Services Company, Inc.), an Alabama corporation
("Mobile Energy"), and First Union National Bank of Georgia, as trustee (in such
capacity, the "Taxable Trustee"), have entered into a Trust Indenture dated as
of August 1, 1995 (the "Taxable Indenture"), pursuant to which the Borrower (i)
is issuing its First Mortgage Bonds (the "Taxable Bonds"), the proceeds of which
will be used to (among other things) repay to Southern a portion of the amounts
advanced to pay certain costs associated with the acquisition of the Energy
Complex (as defined in the Master Operating Agreement (as hereinafter defined))
and (ii) may, from time to time, issue additional Senior Debt (as defined in the
Taxable Indenture).
B. The Borrower, Mobile Energy and The Industrial Development
Board of the City of Mobile, Alabama (the "Board") have entered into an Amended
and Restated Lease and Agreement dated as of August 1, 1995 with respect to part
of the Energy Complex, relating to The Industrial Development Board of the City
of Mobile, Alabama Solid Waste Revenue Refunding Bonds (Mobile Energy Services
Company, L.L.C. Project), Series 1995A (the "Tax-Exempt Bonds" and, together
with the Taxable Bonds, the "Bonds") to be issued for the benefit of the
Borrower pursuant to an Amended and Restated Indenture dated as of August 1,
1995 (the "Tax-Exempt Indenture" and, together with the Taxable Indenture, the
"Indentures") between the Board and First Union National Bank of Georgia, as
trustee (in such capacity, the "Tax-Exempt Trustee"). The proceeds of the Tax-
Exempt Bonds will be used to refinance the 1984 Tax-Exempt Bonds and to pay for
certain other costs.
C. The Borrower and Banque Paribas (together with any lender
that is or becomes a provider of the Working Capital Facility (as hereinafter
defined), the "Working Capital Facility Provider" and, together with the Taxable
Trustee and the Tax-Exempt Trustee, the "Secured Parties") have entered into a
Revolving Credit Facility dated as of August 1, 1995 and together with any
replacement working capital facility, the "Working Capital
Facility"), borrowings under which will be used to finance certain working
capital requirements of the Borrower.
D. The Consenting Party and Mobile Energy have entered into
(i) that certain Amended and Restated Master Operating Agreement dated as of
July 13, 1995 and effective as of December 12, 1994 (the "Master Operating
Agreement"); (ii) that certain Paper Mill Energy Services Agreement dated as of
December 12, 1994 (as amended by the First Amendment thereto dated as of July
13, 1995); (iii) that certain Paper Mill Environmental Indemnity Agreement (as
amended by the First Amendment thereto dated as of July 13, 1995); (iv) that
certain Water Procurement and Effluent Service Agreement dated as of December
12, 1994 (as amended by the First Amendment thereto dated as of July 13, 1995);
(v) those certain Easement Deeds to which the Consenting Party is a party dated
as of December 12, 1994; and (vi) that certain Common Services Agreement dated
as of December 12, 1994 (as amended by the First Amendment thereto dated as of
July 13, 1995 (collectively, as the same may be amended, waived or otherwise
modified, the "Contracts").
E. Pursuant to an Omnibus Deed, Bill of Sale, General
Assignment and Conveyance Agreement between Mobile Energy and the Borrower dated
as of July 14, 1995, Mobile Energy has assigned to the Borrower, and the
Borrower has assumed, all of Mobile Energy's rights and obligations under the
Contracts.
F. The Collateral Agent has been granted a security interest
in the Contracts and the Energy Complex for the benefit of the Secured Parties
pursuant to an Intercreditor and Collateral Agency Agreement dated as of August
1, 1995 by and among the Secured Parties, the Board, the Collateral Agent, the
Borrower and Mobile Energy (as the same may be amended, supplemented, waived or
otherwise modified, the "Intercreditor Agreement") and the other Financing
Documents (as defined in the Master Operating Agreement).
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The Consenting Party acknowledges the assignments referred
to in Recitals E and F above and hereby irrevocably consents to such
assignments, and each of the parties hereto agrees as follows:
(a) Definitions; Rules of Interpretation. Unless
otherwise defined herein, all terms used in this Consent shall have the meanings
given in Exhibit A to the Master Operating Agreement. Except as otherwise
expressly provided herein, the rules of interpretation set forth in said Exhibit
A shall apply to this Consent. The parties hereto acknowledge that the
Collateral Agent, acting on behalf of the Secured Parties, is a "Lender" within
the meaning of the Master Operating Agreement, and that, without the consent of
the parties hereto, no other Person (other than a secured Lender who executes a
counterpart of, or acknowledges to be
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bound by, this Consent) shall be deemed a Lender under the Contracts. Any such
Lenders shall coordinate so as not to give any conflicting instructions or
demands to the Consenting Party.
(b) Step-In Rights. The Mill Owners shall have the
right to exercise the Mill Owner Step-In Rights in accordance with Section
11.4(a)(ii) of the Master Operating Agreement. The Collateral Agent acknowledges
that (A) the Mill Owner Step-In Rights give the Mill Owners the right, under the
circumstances set forth in Section 11.4(a)(ii) of the Master Operating
Agreement, to, among other things, take possession of or obtain entry to the
Energy Complex and to assume and exercise operational control of the Energy
Complex and (B) in so assuming or exercising operational control of the Energy
Complex, the Mill Owners may exclude the Collateral Agent from assuming or
exercising operational control of the Energy Complex until such time as the
Collateral Agent shall have foreclosed upon the Energy Complex, subject to
Section 1(d) hereof.
The parties hereto agree that if the Mill Owners continue to exercise the Mill
Owner Step-In Rights at the end of the initial term of the Contracts, the
Borrower may not exercise the renewal term for the Contracts; provided that, if
the Mill Owners desire to continue their Mill Owner Step-in Rights, and if there
is any Original Debt (as hereinafter defined) outstanding under the Financing
Documents at the end of such initial term, a Master Operating Agreement Renewal
Term shall be deemed to be exercised, which such renewal term shall terminate on
the earlier of the expiration of such Master Operating Agreement Renewal Term
and the date no Original Debt remains outstanding without prejudice to the Mill
Owners' rights to terminate the Mill Owner Step-In Rights at any time pursuant
to the terms of the Contracts and to terminate or allow the Contracts to expire
in accordance with their terms (subject to the provisions of Section 1(e)
hereof). If at any time on or after December 16, 2019 the Mill Owners are
exercising the Mill Owner Step-In Rights at the time all Original Debt
outstanding has been repaid, the Mill Owners may, at the option of the Mill
Owners exercised in their sole and absolute discretion, elect to acquire all of
the Borrower's right, title and interest in and to the Energy Complex by written
notice delivered to the Borrower and the Lender, provided that in the event that
any of the Mill Owners exercises the foregoing option, the Borrower and the
Collateral Agent shall execute and deliver all agreements, instruments and other
documents, and shall take or cause to be taken such other actions as required
under applicable law, as shall be necessary to assign and transfer all of the
Borrower's right, title and interest in and to the Energy Complex to the Mill
Owners that elect to exercise said option; and provided, further, that such
option shall expire, if not theretofore exercised, immediately upon the
cessation of such Mill Owner Step-In Rights. "Original Debt" shall mean all
Indebtedness (as defined in Section 1(l) hereof) the aggregate scheduled annual
debt service for which in any year does not exceed that set forth on Schedule I
hereto. Without limiting the foregoing, "Original Debt" shall include
Indebtedness
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outstanding from time to time under the Working Capital Facility complying with
clause (b) of Section 1(l) hereof, provided that the limitations contained in
the preceding sentence regarding scheduled annual debt service on Original Debt
not exceeding the amount set forth on Schedule I hereto shall be determined
without regard to principal payments under the Working Capital Facility. For
purposes hereof, "debt service" means payments of principal, interest and other
payments, costs, fees and expenses under any Indebtedness.
Nothing in this Section 1(b) shall be deemed to limit or restrict any of the
other rights and remedies available to the Collateral Agent under the Financing
Documents (subject to the other terms and provisions hereof) and no provision of
any of the Financing Documents shall be deemed to limit or restrict any of the
other rights and remedies of the Consenting Party hereunder (subject to the
other terms and provisions hereof).
Notwithstanding any provision to the contrary set forth herein, the failure to
exercise any Mill Owner Step-In Rights shall not act as a waiver or release of
such Mill Owner Step-In Rights and the termination of the exercise of any Mill
Owner Step-In Rights shall not act as a waiver or release of any other Mill
Owner Step-In Rights that may arise after such termination; provided that no
provision in this Consent shall be deemed to permit the Mill Owners, upon
termination of Mill Owner Step-In Rights with respect to any Energy Complex
Triggering Event, to elect to exercise Mill Owner Step-In Rights with respect to
any Energy Complex Triggering Event that was in existence and of which the Mill
Owners were aware at the time of such termination, or otherwise to increase the
availability or scope of Mill Owner Step-In Rights beyond that specified in the
Master Operating Agreement and the other Contracts.
(c) Cure Rights and Payments. Subject to Section
1(b) hereof, the Collateral Agent shall be entitled to exercise all rights and
to cure any defaults of the Borrower under and strictly in accordance with the
terms of the Contracts (or as otherwise expressly provided in this Consent), and
the Consenting Party agrees to permit and accept such exercise and cure by the
Collateral Agent in accordance with their terms except as expressly provided
herein. The Consenting Party agrees to render all payments due by it to the
Borrower under the Contracts directly to the Collateral Agent, c/o Bankers Trust
Company, for deposit into the Borrower's Account No. 15351 maintained with
Bankers Trust Company, or to such other person and/or at such other address as
the Collateral Agent may from time to time specify in writing to the Consenting
Party. Upon receipt by the Consenting Party of notice from the Collateral Agent
that a Trigger Event (as defined in the Intercreditor Agreement as in effect on
the date hereof) has occurred, the Consenting Party agrees, subject to Section
1(b) hereof, to render all performance due by it under the Contracts and this
Consent to the Collateral Agent for the benefit of the Secured Parties. The
Borrower hereby acknowledges and agrees that payments
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made by the Consenting Party to the Collateral Agent in accordance with the
Collateral Agent's directions pursuant to this Section 1(c) and performance to
the Collateral Agent shall satisfy the Consenting Party's obligations to make
payments or to perform such obligations (as the case may be) to the Borrower in
accordance with the Contracts, and shall relieve the Consenting Party of all
liability with respect to such payments or performance. During the term of this
Consent, the Borrower hereby waives any right it may have to require that
payments be made or performance be rendered in any manner other than the manner
designated by the Collateral Agent pursuant to this Section 1(c).
(d) Foreclosure. (i) The Collateral Agent shall
not commence foreclosure proceedings upon the Energy Complex or the Contracts
without first providing the Consenting Party with fifteen (15) days advance
written notice thereof. Contemporaneously with or immediately following such
foreclosure upon the Contracts, the Collateral Agent shall notify the Consenting
Party that the Collateral Agent or a purchaser (either such person, in such
circumstance, constituting a "New Owner") has succeeded to the Borrower's
interest under the Contracts pursuant to documentation satisfactory to the
Consenting Party and the New Owner. At the time of foreclosure, the Collateral
Agent shall not make an assignment of the Contracts to a third party unless (i)
such third party assumes liability for all of the Borrower's and the Collateral
Agent's (as the case may be) obligations under the Contracts (including the
obligation to continue operation of the Energy Complex in accordance with the
terms of the Contracts) (provided that the New Owner need not assume obligations
under any Contract with respect to any Mill Owner as to which a Mill Owner Event
of Default has occurred and is continuing) pursuant to documentation
satisfactory to the Consenting Party in form and substance and (ii) such third
party is a Qualified Purchaser and has substantial expertise (or is controlled
or managed by, or has retained as an operator of the Energy Complex, a person
with substantial expertise) in operating and managing facilities similar to the
Energy Complex and there is a reasonable basis to conclude that the operations
at the Energy Complex will be conducted in accordance with Prudent Plant
Operating Standards following such assignment.
(ii) If the Collateral Agent determines that it wishes to foreclose
upon (or accept title in lieu of foreclosure to) the Energy Complex, the Lease,
the Supplementary Lease and the Easement Deeds but not to foreclose upon (or
accept title in lieu of foreclosure to) all of the other Contracts (other than
Contracts as to which a Mill Owner Event of Default has occurred and is
continuing), the Collateral Agent shall provide written notice to the Mill
Owners of such determination. The Mill Owners may elect by written notice to the
Collateral Agent within thirty (30) days of receipt of the foregoing notice (or
on the date that the Collateral Agent obtains title to the Energy Complex, if
later) to take possession of and operate the Energy Complex:
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(A) for a period of up to eighteen months, commencing
on the date of receipt by the Collateral Agent of the Mill Owners'
written notice of election (the "Limited Standstill Period"), provided
that, and for so long as, (1) during the Limited Standstill Period, the
Master Operating Agreement and the other Contracts shall remain in
effect and the Mill Owners shall operate the Energy Complex in
compliance with the standards set forth in the Contracts applicable to
the Mill Owner Step-In Rights (or, if the Energy Complex is not
operable, the Mill Owners shall use their good faith efforts to restore
the Energy Complex to operability) and no Liquidated Damages shall be
payable and (2) the Mill Owners and the Collateral Agent shall attempt
in good faith to negotiate in the interests of all such parties; or
(B) for an unlimited period, commencing on the date
of receipt by the Collateral Agent of the Mill Owners' written notice
of election (the "Unlimited Standstill Period"), provided that, and for
so long as, (1) any of (a) the second Demand Anniversary Date has not
occurred, (b) the annualized Demand Charge for the then current Demand
Period is set at a level equal to or greater than 77% of the Demand
Charge during the First Contract Year (the "Minimum Demand Charge") or
(c) if the provisions of clause (b) are not satisfied, the Mill Owners
commit to pay the Collateral Agent during the then current Demand
Period all amounts payable under the Contracts and agree that the
Demand Charge for the then current Demand Period shall be deemed to
equal the Minimum Demand Charge, (2) during the Unlimited Standstill
Period, the Master Operating Agreement and the other Contracts shall
remain in effect, and the Mill Owners shall operate the Energy Complex
in compliance with the standards set forth in the Contracts applicable
to the Mill Owner Step-In Rights and shall comply with all obligations
of the Mill Owners under the Contracts (including, without limitation,
the obligation to pay Demand Charges, subject to Demand Charge
Reductions), except that (i) all liabilities incurred in connection
with the operation of the Energy Complex during the Unlimited
Standstill Period (excluding debt service on the Original Debt
outstanding, but including, without limitation, rent, real estate taxes
and similar impositions that are otherwise payable by the lessee under
the Lease and the Supplementary Lease, operation and maintenance
expenses and capital expenditures, and all amounts payable to the Mill
Owners in reimbursement thereof) shall be expressly subordinated and
junior in right of payment to the payment of scheduled debt service on
Original Debt outstanding; (ii) except as provided in clause (iv) of
Section 1(d)(ii)(B)(2) hereof, no rights of set-off, counterclaim,
deduction or defense of any kind shall be exercised or asserted against
the Demand Charges and other amounts payable to the Collateral Agent
under the Contracts or payment thereof; (iii) no Liquidated Damages
shall be payable; and (iv) all amounts payable by the Mill Owners under
the Contracts in excess of the sum of (w) scheduled debt service
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on the Original Debt outstanding, (x) operation and maintenance
expenses, (y) capital expenditures and (z) amounts otherwise payable to
the Mill Owners pursuant to rights of set-off, counterclaim, deduction
or defense, shall be applied to redemption of the Original Debt
outstanding, which shall be redeemed in accordance with the terms
thereof to the extent of such available funds, and (3) the Mill Owners
and the Collateral Agent shall attempt in good faith to negotiate in
the interests of all such parties.
(iii) If at any time none of the conditions specified in Section
1(d)(ii)(B)(1) hereof is satisfied, the Collateral Agent shall have the right to
convert the Unlimited Standstill Period into a Limited Standstill Period, in
which case the Mill Owners' rights to enter into an Unlimited Standstill Period
shall terminate. If at any time any of the other conditions specified in Section
1(d)(ii)(A) or 1(d)(ii)(B) hereof is not satisfied, the Collateral Agent may
elect to terminate the Limited Standstill Period or the Unlimited Standstill
Period (as the case may be).
(iv) Upon termination (or, in the case of the Limited Standstill
Period, expiration) of the Limited Standstill Period or the Unlimited Standstill
Period (as the case may be), the New Owner may elect either to assume all of the
Contracts (other than obligations under any Contracts with respect to any Mill
Owner as to which a Mill Owner Event of Default has occurred and is continuing,
which the New Owner may either assume or not assume, at its option) or to
terminate all of the Contracts (other than, if the New Owner so elects, the
Lease, the Supplemental Lease and the Easement Deeds) and to dispose of the
Energy Complex in any manner that it chooses.
If the New Owner elects to assume the Contracts, the term of each Contract shall
be deemed to be extended by the term of the Limited Standstill Period if, at the
end of such Contract's term, any Original Debt is outstanding.
(v) The Borrower and the Collateral Agent acknowledge and agree that
(A) during the Limited Standstill Period or Unlimited Standstill Period, the
Mill Owners shall have the right and option to purchase the Energy Complex for a
purchase price equal to all outstanding principal and interest due and owing to
the Secured Parties in respect of the Original Debt outstanding and (B) at the
end of the initial term of the Lease, the Mill Owners shall have the right and
option to purchase the Energy Complex in accordance with Article 15 of the Lease
and, in each case, the Mill Owners shall acquire the Energy Complex free and
clear of all liens and encumbrances that at any time secured the repayment of
the Original Debt outstanding; provided that all Original Debt outstanding and
all other amounts payable to the Senior Secured Parties or the New Owner (as the
case may be) under the Contracts shall have been paid in full.
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(vi) Notwithstanding any provision in the Contracts or the arrangements
establishing the Mill Owner Maintenance Reserve Account to the contrary, the
Borrower agrees that in the event the Mill Owners are operating the Energy
Complex during the Limited Standstill Period or the Unlimited Standstill Period,
the Mill Owner Maintenance Reserve Account shall be available to the Mill Owners
(but not to the Collateral Agent) for the payment of operation, maintenance or
capital expenses.
(e) Termination/Transfer. (i) The Consenting
Party will not, without the prior written consent of the Collateral Agent, (A)
cancel or terminate any of the Contracts except as provided in the Contracts and
in accordance with Section 1(e)(ii) hereof, or consent to or accept any
cancellation or termination thereof by the Borrower, (B) sell, assign or
otherwise dispose of (by operation of law or otherwise) any part of its interest
in the Contracts, except as set forth in Article 15 of the Master Operating
Agreement, or (C) amend or modify the Contracts in any respect that may
reasonably be expected to have a material effect on the Borrower's rights or
obligations. The Consenting Party agrees to deliver duplicates or copies of all
(i) notices of default delivered under or pursuant to any of the Contracts to
the Collateral Agent promptly upon delivery thereof to the Borrower (and the
Consenting Party agrees that no such notice of default shall be effective until
received by Collateral Agent), and (ii) amendments to any of the Contracts that
in any respect may reasonably be expected to have a material effect on the
Borrower's rights or obligations (and the Consenting Party agrees that no such
amendment shall be effective until received by the Collateral Agent); provided,
that any failure by the Consenting Party to deliver to the Collateral Agent any
such duplicates or copies shall not subject the Consenting Party to any
liability whatsoever.
(ii) The Consenting Party will not terminate the Contracts or any of
its obligations thereunder on account of any default or breach of the Borrower
thereunder without (A) in the case of a default by the Borrower that is the
failure by the Borrower to pay amounts to the Consenting Party which are due and
payable under the Contracts, first providing to the Collateral Agent written
notice of such default and ninety (90) days from the date such notice is
delivered to the Collateral Agent to pay such amounts and (B) in the case of a
default that cannot be cured by the payment of money to the Consenting Party,
first providing to the Collateral Agent written notice of such default and a
reasonable opportunity (in any event at least ninety (90) days but no more than
one hundred eighty (180) days) to cure such breach or default so long as the
Collateral Agent or its designee shall have commenced to cure the breach or
default within such ninety-day period and thereafter diligently pursues such
cure to completion and continues to perform any monetary obligations of the
Borrower to the Consenting Party under the Contracts and all other obligations
of the Borrower under the Contracts are performed by the Borrower (or the
Collateral Agent on behalf of the Borrower) or with respect to any defaults that
are not susceptible of being cured by the Collateral Agent, to
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rectify to the Consenting Party's reasonable satisfaction the effect on the
Consenting Party of such default within such period. If possession of the Energy
Complex (by way of foreclosure proceedings or otherwise) is necessary to cure
such breach or default, the Collateral Agent or its successor, transferee or
assignee will be allowed a reasonable period to complete such proceedings or
otherwise accomplish such possession; provided, that in no event shall such
additional period exceed thirty (30) days. The Collateral Agent acknowledges and
agrees that during the foregoing time periods the Consenting Party shall be
entitled to exercise any set-off right which the Consenting Party may have
against the Borrower under the Contracts.
If the Collateral Agent or its successor, transferee or assignee is prohibited
by any court order or bankruptcy or insolvency proceedings from curing the
default or from commencing or prosecuting foreclosure proceedings, the foregoing
time periods shall be extended by the period of such prohibition. Subject to
Section 1(d) hereof, the Consenting Party consents to the transfer of the
Borrower's interest under the Contracts to the Collateral Agent for the benefit
of the Secured Parties or a purchaser or grantee at a foreclosure sale by
judicial or nonjudicial foreclosure and sale or by a conveyance by the Borrower
in lieu of foreclosure and agrees that upon such foreclosure, sale or
conveyance, the Consenting Party shall recognize the Collateral Agent or other
purchaser or grantee as the applicable party under the transferred Contracts
(provided that the Collateral Agent or such purchaser or grantee assumes the
obligations of the Borrower under the transferred Contracts as provided in
Section 1(d) hereof).
(f) Bankruptcy. In the event that any of the
Contracts is rejected by a trustee or debtor-in-possession in any bankruptcy or
insolvency proceeding, or if any of the Contracts is terminated for any reason
other than a default that could have been but was not cured by the Collateral
Agent as provided in Section 1(e)(ii) hereof, and if, within sixty (60) days
after such rejection or termination, the Collateral Agent or its successor,
transferee or assignee shall so request, the Consenting Party will execute and
deliver to the Collateral Agent or its successor, transferee or assignee for the
benefit of the Secured Parties a new Contract, which Contract shall be on
substantially the same terms and conditions as the original Contract for the
remaining term of the Contract before giving effect to such rejection or
termination (but in no event on less favorable terms and conditions as the
original Contract).
(g) Liability. (i) None of the Collateral Agent,
the Secured Parties or the holders of Bonds shall be liable for any of the
obligations or duties of the Borrower (including, without limitation, the
obligation to deliver title to the Energy Complex free of any lien upon the
exercise of a Repurchase Option (as defined in the Master Operating Agreement)
by the Consenting Party), unless and until the Collateral Agent or its successor
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expressly assumes the Contracts or any or all of such obligations
or duties.
(ii) In the event the Collateral Agent or its successor elects to
perform the Borrower's obligations under the Contracts or to enter into any new
Contract as provided in Section 1(d), 1(e)(ii) or 1(f) hereof, the Collateral
Agent, the Secured Parties and the holders of Bonds, and their successors, shall
have no liability to the Consenting Party for the performance of such
obligations, and the sole recourse of the Consenting Party in seeking the
enforcement of such obligations shall be to such parties' interest in the Energy
Complex.
(iii) It is expressly understood and agreed by the parties hereto that
this Consent has been executed by Bankers Trust (Delaware), not in its
individual capacity, but solely as Collateral Agent hereunder in the exercise of
the power and authority conferred and vested in it.
(h) Cure Duties; Assignment. In the event the
Collateral Agent or its successor, transferee or assignee succeeds to the
Borrower's interest under the Contracts, the Collateral Agent or its successor,
transferee or assignee shall cure any defaults of the Borrower existing under
the Contracts that are reasonably capable of being cured and, with respect to
any defaults that are not susceptible of being cured by the Collateral Agent,
shall rectify to the Consenting Party's reasonable satisfaction the effect on
the Consenting Party of such default within such period. The Collateral Agent
shall have the right to assign its interest in this Consent to any person or
entity to whom the Original Debt is transferred, provided such transferee
assumes the obligations of the Borrower (or the Collateral Agent, as the case
may be) under this Consent. Upon such assignment, the Collateral Agent and the
Secured Parties (including their agents and employees) shall be released from
any further liability under this Consent and the Contracts to the extent of the
interest assigned.
(i) Insurance Proceeds. The parties hereto
acknowledge and agree that the disposition of insurance proceeds with respect to
the Energy Complex is subject to the terms and conditions of Section 10.7 of the
Master Operating Agreement and this Section 1(i), and the Collateral Agent
acknowledges that the independent engineer under the Financing Documents shall
be required, if appropriate, to deliver to the Collateral Agent the certificate
contemplated by Section 3.10(c) of the Intercreditor Agreement (a copy of which
is attached as Exhibit A thereto), such certificate not to be unreasonably
withheld. Notwithstanding anything herein or in the Master Operating Agreement
to the contrary, the parties hereto acknowledge that until all Original Debt has
been paid in full, Casualty Proceeds and Eminent Domain Proceeds (each as
defined in the Intercreditor Agreement) will be disposed of pursuant to the
terms of Sections 3.10 and 6.2 of the Intercreditor Agreement, which provisions
shall not be amended,
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supplemented or otherwise modified, directly or indirectly, without the prior
written consent of the Consenting Party.
(j) Borrower Not to Cause Breach. The Borrower
hereby irrevocably waives any rights that it may have, including those arising
under any of the Contracts, to seek or compel the Consenting Party to act in a
manner that is inconsistent with this Consent while this Consent is in effect.
(k) Acknowledgment of Lien. The Consenting Party
hereby acknowledges that the Energy Complex is subject to the lien of the
Financing Documents. The Collateral Agent, the Secured Parties and the holders
of the Bonds have no obligation to release such lien until all obligations
secured thereby have been paid in full.
(l) Approval Rights; Additional Debt. The Borrower
and the Collateral Agent agree that they will not amend, modify, supplement or
provide waivers under the Financing Documents that would result in (A) the
scheduled annual debt service (as "debt service" is defined in Section 1(b)
hereof), except for principal payments under the Working Capital Facility, in
any year being greater than the scheduled annual debt service for such year as
set forth on Schedule I hereto, (B) the Working Capital Facility having terms
and conditions (including the maximum aggregate principal amount that can be
outstanding thereunder) inconsistent with those described in clause (a)(ii) of
the definition of "Permitted Indebtedness" contained in the Indenture (as such
definition is in effect as of the date hereof, provided that amendments to such
definition shall be permitted to reduce any payments of principal, interest or
other amount, that may be scheduled to become due in any month) or (C) any
modifications, direct or indirect, to the provisions of Sections 3.10 and 3.11
of the Intercreditor Agreement. This provision is not intended to apply to
consensual restructurings of Original Debt due to non-payment of Original Debt
that results in an accrual of past due scheduled annual debt service, and is not
intended to require the Collateral Agent or the Secured Parties to exercise
remedies. The Borrower agrees not to (and the Collateral Agent acknowledges that
the Borrower is not permitted to) (i) make, issue or cause to be suffered
secured Indebtedness that would result in the scheduled annual debt service in
any year, except for principal payments under the Working Capital Facility,
being greater than the scheduled annual debt service for such years as set forth
on Schedule I hereto, and (ii) issue unsecured Indebtedness that, when taken
together with all other Indebtedness, would exceed Original Debt in an amount
greater than $5,000,000 (in the aggregate) escalated at the rate of change in
the PPI. As a condition to the Borrower's issuance of any additional secured
Indebtedness, the Borrower shall cause the holder of any additional secured
Indebtedness to execute a counterpart of, or acknowledge to be bound by, this
Consent. "Indebtedness" shall mean at any date, without duplication, (a)(i) all
obligations of the Borrower for borrowed money, (ii) all obligations of the
Borrower evidenced by bonds, debentures, notes
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or other similar instruments, (iii) all obligations of the Borrower to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business and that mature not more than 180
days after the date originally incurred, (iv) the aggregate of all guarantee or
purchase obligations of the Borrower with respect to capital stock of any
person, including any capital stock of a consolidated subsidiary that is
required to be shown as a liability on a balance sheet of the Borrower, (v) the
aggregate of all redeemable shares of common or preferred stock of the Borrower,
(vi) all obligations of the Borrower, whether direct or contingent, matured or
unmatured, to reimburse banks in respect of drawings made under letters of
credit that are issued to secure or provide for the payment of Indebtedness of
the Borrower, (vii) foreign currency exchanges, (viii) currency and interest
rate swaps and similar derivatives, and (ix) commodities hedges and (b) in each
case to the extent, and only to the extent, such obligations (or the Borrower's
liability with respect thereto) are required to be shown as a liability on a
consolidated balance sheet of the Borrower prepared as of such date, (i) all
obligations of the Borrower as lessee under capital leases, (ii) all
Indebtedness of others secured by a lien on any asset of the Borrower, whether
or not such Indebtedness is assumed by the Borrower, and (iii) all Indebtedness
of others guaranteed by the Borrower. "Indebtedness" shall not include (i)
purchase money notes secured by equipment (but otherwise non-recourse to the
Borrower's other properties) that is not material to the operations of the
Energy Complex, (ii) financial instruments that could not reasonably be expected
to have a material adverse effect on the Borrower and (iii) the Borrower's
obligations (if any) in respect of the 1994 Bonds, the 1984 Taxable Lease
Agreement, the 1973 Tax- Exempt Lease Agreement and the 1976 Tax-Exempt Lease
Agreement, except for any refinancing by the Borrower of any such obligation.
(m) The Collateral Agent hereby acknowledges that
it has no lien on the Mill Owner Maintenance Reserve Account established
pursuant to the Mill Owner Maintenance Reserve Account Agreement dated as of
August 1, 1995 among the Borrower, Southern, S.D. Warren (in its capacity as the
owner and operator of the Paper Mill) and Scott (in its capacity as the owner
and operator of the Tissue Mill and the Pulp Mill) or any amounts on deposit
therein.
(n) Mill Owner Payment Default Cure Right. The
Mill Owners shall be entitled to cure any payment defaults of the Borrower under
and strictly in accordance with the terms of the Borrower's cure rights under
the Financing Documents. The Collateral Agent agrees to deliver to the Mill
Owners duplicates or copies of all notices of payment default delivered under or
pursuant to any of the Financing Documents to the Borrower, and the Collateral
Agent agrees that no notice of payment default shall be effective until received
by the Mill Owners; provided, that any failure by the Collateral Agent to
deliver to the Mill Owners any such duplicates or copies shall not subject the
Collateral Agent to any liability whatsoever; and provided, further, that the
Mill Owners shall be entitled to reimbursement for any amounts paid
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thereby to cure any payment default to the extent that such reimbursement is
made from funds that otherwise are permitted to be distributed to the equity
holders of the Borrower under the Financing Documents. The Borrower agrees to
provide each of the Mill Owners with one copy of the Financing Documents
(including any amendments or modifications thereto), as well as copies of all
notices of default from the Secured Parties, all material notices to bondholders
(including notices from the Secured Parties to the bondholders) and copies of
all financial statements provided to the Secured Parties.
(o) The Borrower hereby acknowledges and agrees to
the terms and conditions set forth in this Consent, and agrees that to the
extent any of the terms and conditions set forth herein are inconsistent with
the terms and conditions of the Project Documents, the terms and conditions of
this Consent shall control.
2. The Consenting Party hereby represents and warrants
that:
(a) The Consenting Party is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. The execution, delivery and performance by the
Consenting Party of the Contracts and this Consent have been duly authorized by
all necessary corporate action, and do not and will not require any further
consents or approvals which have not been obtained, or violate any provision of
the corporate charter or by-laws of the Consenting Party or any law, regulation,
order, judgment, injunction or similar matters or breach any agreement presently
in effect with respect to or binding on the Consenting Party or its properties
or result in, or require, the creation or imposition of any mortgage, deed of
trust, pledge, lien, security interest, charge or encumbrance of any nature that
could adversely affect the Consenting Party's ability to perform its obligations
under the Contracts or this Consent;
(b) This Consent and the Contracts have been duly
executed and delivered and are legal, valid and binding obligations of the
Consenting Party enforceable against the Consenting Party in accordance with
their respective terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights, and (ii) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(c) As of the date hereof, the Contracts are in
full force and effect and, except as described in Recital D above, have not been
amended, supplemented or otherwise modified, other than such amendments,
supplements and modifications as may have been agreed to by the Site Operating
Committee that do not materially affect the obligations of the Consenting Party
under the Contracts; and
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(d) Neither senior management of the Consenting
Party, nor the Paper Mill SOC Representative has actual knowledge of any facts
that would allow the Consenting Party to terminate this Consent or the
Contracts, and the Consenting Party has no present intention to deliver a notice
of default or a notice of termination thereunder; the consummation of any
transaction contemplated by this Consent to take place on the date hereof would
not allow the Consenting Party to terminate this Consent or the Contracts.
(e) The Consenting Party has no actual notice of
any assignment of any Contract (other than the assignment referred to in Recital
E above and the assignment contemplated by this Consent).
(f) The Consenting Party has not assigned,
transferred or hypothecated the Contracts or any interest therein.
3. All notices required or permitted hereunder shall be in
writing and shall be effective (a) upon receipt if hand delivered, (b) upon
telephonic verification of receipt if sent by telefacsimile and (c) if otherwise
delivered, upon the earlier of receipt or two (2) business days after being sent
by registered or certified mail, return receipt requested, with proper postage
affixed thereto, or by private courier or delivery service with charges prepaid,
and addressed as specified below:
If to the Consenting Party:
Attention:
S.D. Warren Company
225 Franklin Street
Boston, Massachusetts 02111
Telecopy No.: (617) 423-5451
Telephone No.: ________________
If to the Collateral Agent:
Attention:
Bankers Trust (Delaware)
c/o Bankers Trust Company
Four Albany Street, 4th Floor
New York, New York 10006
Telecopy No.: 212-250-6961
Telephone No.: 212-250-6826
If to the Borrower:
Attention:
Mobile Energy Services Company, L.L.C.
900 Ashwood Parkway, Suite 300
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Atlanta, Georgia 30338
Telecopy No.: 770-673-7781
Telephone No.: 770-392-7644
with a copy to:
Mobile Energy Services Company, L.L.C.
P.O. Box 2747
200 Bay Bridge Road
Mobile, Alabama 36652
Telecopy No.: 334-452-6337
Telephone No.: 334-330-3600
4. This Consent shall be binding upon and benefit the
successors and assigns of the Consenting Party, the Borrower, the Collateral
Agent, the Secured Parties and their respective successors, transferees and
assigns (including, without limitation, any entity that refinances all or any
portion of the obligations under the Financing Documents and that, if required
by Section 1(l) hereof, countersigns this Consent). The Consenting Party agrees
to confirm such continuing obligation in writing upon the reasonable request of
the Borrower, the Collateral Agent, the Secured Parties or any of their
respective successors, transferees or assigns. No termination, amendment,
variation or waiver of any provisions of this Consent shall be effective unless
in writing and signed by the Consenting Party, the Collateral Agent and, in the
case of a termination, amendment, variation, or waiver sought prior to a Trigger
Event, the Borrower. This Consent shall be governed by the laws of the State of
New York, without reference to principles of conflict of laws (other than
Section 5-1401 of the New York General Obligations Law).
5. If any term or provision hereof is declared by a court of
competent jurisdiction to be illegal, invalid or unenforceable for any reason
whatsoever, such illegality, invalidity or unenforceability shall not affect the
other terms and provisions hereof, which shall remain binding and enforceable,
and to the extent possible, all of such other provisions shall remain in full
force and effect.
6. This Consent may be executed in one or more duplicate
counterparts, and when executed and delivered by all the parties listed below,
shall constitute a single binding agreement.
7. Subject to the following Section 8, this Consent shall be
deemed to be terminated and of no further force and effect when the Consenting
Party receives written notice from the Borrower and the Collateral Agent stating
that no Original Debt is outstanding and all amounts owing to the Secured
Parties in respect of the Original Debt (including, without limitation,
principal, interest, fees and reimbursement obligations, whether upon maturity,
acceleration or otherwise) have been paid in full; provided, however, that the
obligations of the Borrower to provide the Consenting Party with copies of the
Borrower's financial
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statements as required under Section 1(n) shall survive the termination of this
Consent.
8. If at any time any payment in respect of Original Debt is
rescinded or must otherwise be restored or returned by the holder of such
Original Debt in connection with any bankruptcy, insolvency or other similar or
related proceeding, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower or
any substantial part of the Borrower's property, the rights and obligations of
the holder of such Original Debt under this Consent shall continue to be
effective, or be reinstated as of the time such payment in respect of Original
Debt is so rescinded or must otherwise be restored, as the case may be, all as
though such payment had not been made.
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IN WITNESS WHEREOF, the parties hereto by their officers
thereunto duly authorized, have duly executed this Consent as of the date set
forth below.
Dated as of: August 1, 1995
S.D. WARREN COMPANY, a Pennsylvania
corporation, in its capacity as
Paper Mill Owner
By: /s/
Name: Trevor L. Larkan
Title: Vice President and
Chief Financial Officer
BANKERS TRUST (DELAWARE), a Delaware
banking corporation, as Collateral
Agent
By: /s/
Name: James H. Stallkamp
Title: President
MOBILE ENERGY SERVICES COMPANY,
L.L.C., an Alabama limited liability
company, as Borrower
By: /s/
Name: Christopher J. Kysar
Title: Vice President
ACKNOWLEDGED:
MOBILE ENERGY SERVICES HOLDINGS, INC.,
an Alabama corporation
By: /s/
Name: Christopher J. Kysar
Title: Vice President
SCHEDULE I
Total Debt Service
(in thousands)
1995 40,500
1996 40,500
1997 40,000
1998 40,000
1999 39,500
2000 39,000
2001 38,500
2002 38,000
2003 37,500
2004 37,000
2005 36,500
2006 36,000
2007 35,500
2008 35,000
2009 34,500
2010 34,000
2011 33,500
2012 33,000
2013 32,500
2014 32,000
2015 31,500
2016 31,500
2017 35,000
2018 35,000
2019 through
January 3, 2020 35,000
thereafter 0