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Exhibit No 4(c)-3
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BAY GAS STORAGE COMPANY, LTD.
To
REGIONS BANK
Trustee
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TRUST INDENTURE AND SECURITY AGREEMENT
Dated as of December 1, 2000
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Securing
Senior Secured Notes
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This instrument prepared by:
Xxxxx X. Xxxx
c/o Chapman and Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
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TABLE OF CONTENTS
SECTION HEADING PAGE
Parties...........................................................................................................1
Recitals..........................................................................................................1
ARTICLE ONE DEFINITIONS............................................................................3
ARTICLE TWO GENERAL PROVISIONS AS TO THE NOTES....................................................13
Section 2.01. General Designation, Form, Registration and Limitation in Amount of Notes.............13
Section 2.02. Execution of Notes....................................................................14
Section 2.03. Number and Designation of Notes.......................................................14
Section 2.04. Authentication and Delivery of Notes by Trustee.......................................14
Section 2.05. Notes Issuable in Series; Terms of Notes..............................................14
Section 2.06. Procedure for Creation of New Series of Notes.........................................15
Section 2.07. Equal Security of Notes...............................................................15
Section 2.08. Date of Notes and Interest............................................................15
Section 2.09. Note Register, Registrar and Transfer Agent...........................................15
Section 2.10. Transfer and Exchange of Notes; Charges Therefor; Ownership of Notes..................16
Section 2.11. Replacement Notes.....................................................................16
Section 2.12. Effect of Replacement.................................................................17
Section 2.13. Disposition of Surrendered Notes......................................................17
ARTICLE THREE SERIES 8.45% NOTES; ADDITIONAL NOTES..................................................17
Section 3.01. Series 8.45% Notes; Required Redemptions..............................................17
Section 3.02. Optional Redemption at Par............................................................18
Section 3.03. Optional Redemption with Premium......................................................18
Section 3.04. Redemption Upon Change of Control.....................................................20
Section 3.05. Place and Form of Payment on Series 8.45% Notes.......................................21
Section 3.06. Issuance of Additional Notes..........................................................21
Section 3.07. Supplemental Indentures...............................................................22
ARTICLE FOUR ACCOUNTS..............................................................................23
Section 4.01. Collection Account....................................................................23
Section 4.02. Use of Moneys in Collection Account Absent an Event of Default........................23
Section 4.03. Collections Upon an Event of Default..................................................23
ARTICLE FIVE COVENANTS OF THE COMPANY..............................................................24
Section 5.01. Payment...............................................................................24
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SECTION
Section 5.02. Compliance with Law...................................................................24
Section 5.03. Insurance.............................................................................25
Section 5.04. Maintenance of Properties.............................................................25
Section 5.05. Payment of Taxes and Claims...........................................................25
Section 5.06. Partnership Existence, etc............................................................25
Section 5.07. Nature of Business....................................................................26
Section 5.08. Transactions with Affiliates..........................................................26
Section 5.09. Limitations on Indebtedness; Repayment................................................26
Section 5.10. Debt Service Coverage Ratio...........................................................27
Section 5.11. Limitation on Liens...................................................................27
Section 5.12. Restricted Payments...................................................................28
Section 5.13. Investments...........................................................................28
Section 5.14. Mergers, Consolidations and Sales of Assets...........................................29
Section 5.15. Repurchase of Notes...................................................................30
Section 5.16. Reports and Rights of Inspection......................................................31
Section 5.17. Agreements Regarding Construction.....................................................33
Section 5.18. Additional Collateral Agreements......................................................33
Section 5.19. Warranty of Title and Further Assurances..............................................34
Section 5.20. Payment of Certain Charges............................................................35
Section 5.21. Appointment of Successor Trustee......................................................35
Section 5.22. Amendments to Collateral Agreements...................................................35
ARTICLE SIX NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.........................36
Section 6.01. Trustee to Maintain and Furnish Lists of Noteholders..................................36
Section 6.02. Opinions of Counsel to be Filed With Trustee..........................................36
ARTICLE SEVEN REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON EVENT OF DEFAULT...........................36
Section 7.01. Events of Default Defined; Acceleration of Maturity; Rescission and Annulment.........36
Section 7.02. Covenant to Make Payments upon Default................................................39
Section 7.03. Remedies in Case of Default...........................................................40
Section 7.04. Trustee's Powers......................................................................41
Section 7.05. Application of Moneys by Trustee......................................................41
Section 7.06. Limitation on Suits; Preservation of Rights to Payment and to Xxx.....................42
Section 7.07. Remedies Cumulative...................................................................43
Section 7.08. Rights of Noteholders to Direct Trustee; Waivers......................................43
Section 7.09. Notice by Trustee of Defaults.........................................................43
Section 7.10. Costs of Suit.........................................................................44
ARTICLE EIGHT THE TRUSTEE...........................................................................44
Section 8.01. Certain Duties and Responsibilities...................................................44
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SECTION
Section 8.02. Certain Rights of the Trustee.........................................................45
Section 8.03. Trustee Not Responsible for Certain Matters...........................................46
Section 8.04. Trustee's Relationship with Company...................................................46
Section 8.05. Trust Moneys..........................................................................46
Section 8.06. Trustee's Compensation................................................................46
Section 8.07. Reliance on Officers' Certificates by Trustee and Other Persons.......................47
Section 8.08. Corporate Trustee Required; Eligibility...............................................47
Section 8.09. Resignation and Removal of Trustee; Appointment of Successor..........................47
Section 8.10. Acceptance of Appointment by Successor................................................48
Section 8.11. Successor to Trustee..................................................................49
Section 8.12. Separate or Co-Trustee, Powers........................................................49
ARTICLE NINE CONCERNING THE NOTEHOLDERS............................................................50
Section 9.01. Evidence of Action....................................................................50
Section 9.02. Proof of Execution....................................................................50
Section 9.03. Effect of Actions by Holders of Notes.................................................50
ARTICLE TEN SUPPLEMENTAL INDENTURES...............................................................51
Section 10.01. Supplemental Indentures Without Consent of Noteholders................................51
Section 10.02. Modification of Indenture.............................................................51
Section 10.03. Effect of Supplemental Indentures.....................................................52
Section 10.04. Trust Indenture Act...................................................................52
Section 10.05. Notation of Changes on Notes..........................................................52
Section 10.06. Trustee's Reliance on Opinion of Counsel..............................................52
ARTICLE ELEVEN ENERGYSOUTH OPTION TO ASSUME OR EXCHANGE NOTES........................................53
Section 11.01. Option of EnergySouth.................................................................53
ARTICLE TWELVE REDEMPTION OF NOTES...................................................................54
Section 12.01. Redemption Price and Manner of Redemption.............................................54
Section 12.02. Selection of Notes to be Redeemed.....................................................55
Section 12.03. Notice of Redemption..................................................................55
Section 12.04. Payment of Redemption Price...........................................................56
Section 12.05. Notation on Note for Partial Redemption...............................................56
Section 12.06. Cancellation of Notes.................................................................56
ARTICLE THIRTEEN SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS.............................57
Section 13.01. Satisfaction and Discharge of Indenture...............................................57
Section 13.02. Funds Deposited for Payment of Notes..................................................58
Section 13.03. Moneys Held by Trustee................................................................58
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SECTION
ARTICLE FOURTEEN IMMUNITY OF LIMITED PARTNERS, INCORPORATORS, STOCKHOLDERS, OFFICERS, AND DIRECTORS....58
ARTICLE FIFTEEN MISCELLANEOUS PROVISIONS..............................................................59
Section 15.01. Certain Assignments of Notes..........................................................59
Section 15.02. Successors and Assigns................................................................59
Section 15.03. Board and Other Action................................................................59
Section 15.04. Surrender of Powers...................................................................59
Section 15.05. Notices...............................................................................59
Section 15.06. Alabama Law Applicable................................................................60
Section 15.07. Certificates to Trustee...............................................................60
Section 15.08. Payments Coming Due on Saturday, Sunday or Legal Holiday..............................61
Section 15.09. Trust Indenture Act...................................................................61
Section 15.10. Counterparts..........................................................................61
Section 15.11. Effect of Headings and Table of Contents..............................................61
Section 15.12. Acceptance of Trust by Trustee........................................................61
Section 15.13. Separability of Indenture Provisions..................................................61
Section 15.14 Waiver of Trial by Jury...............................................................61
Signature Page...................................................................................................62
ATTACHMENTS TO TRUST INDENTURE AND SECURITY AGREEMENT:
EXHIBIT A -- Form of Note
EXHIBIT B -- Schedule of Payments for Series 8.45% Notes
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TRUST INDENTURE AND SECURITY AGREEMENT
THIS TRUST INDENTURE AND SECURITY AGREEMENT, made and entered into as
of this first day of December, 2000, by and between Bay Gas Storage Company,
Ltd., an Alabama limited partnership having its principal place of business at
0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000 (the "Company"), and REGIONS BANK, an
Alabama banking corporation duly organized and existing under the laws of the
State of Alabama and having a place of business at 000 Xx. Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxx 00000, as Trustee (the "Trustee").
RECITALS:
WHEREAS, the Company deems it necessary from time to time to borrow
money for its partnership purposes and to issue its Notes therefor, and to
pledge, assign and grant liens upon and security interests in its property
hereinafter described to secure the payment of the Notes, and to that end has
authorized the issue hereunder of its Notes, from time to time, in one or more
series, all such Notes to be authenticated by the certificate of the Trustee.
WHEREAS, the Company proposes to create a series of Notes to be issued
hereunder promptly upon the execution and delivery hereof, to be known as Senior
Secured Notes, Series 8.45%, due December 1, 2017 (hereinafter referred to as
the "Series 8.45% Notes"), to be limited to $55,000,000 in aggregate principal
amount at any one time outstanding and to be substantially in the form set forth
in Exhibit A hereto.
WHEREAS, the Company represents that (A) it has all requisite
partnership authority under its Partnership Agreement and under all applicable
provisions of law (i) to create and issue the Series 8.45% Notes, (ii) to
execute and deliver this Indenture, and (iii) to grant a first priority lien on
and a security interest in the Collateral (hereinafter defined); (B) all
partnership action required for the due creation, issuance and delivery of the
Series 8.45% Notes and the due execution and delivery of this Indenture has been
duly and effectively taken; (C) when this Indenture has been executed as herein
provided, this Indenture will be a valid and legally binding instrument for the
purposes herein expressed; and (D) the Series 8.45% Notes, upon issuance thereof
in accordance with the terms of this Indenture, will be the legal, binding and
enforceable obligations of the Company entitled to the benefit of this Indenture
in accordance with their terms and the terms of this Indenture.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and of the consideration given to the Company by the holders of the
Notes issued pursuant hereto, and to secure the prompt payment of the principal
of and interest (and premium, if any) on the Series 8.45% Notes and such other
Notes as may at any time be issued and outstanding under this Indenture, in
accordance with the tenor thereof, and to declare the terms and conditions upon
which the Series 8.45% Notes and Notes of other series may be authenticated,
delivered and issued, and to secure the strict performance and observance of all
the obligations, covenants and conditions, present and future, direct and
indirect, contained in any Notes and in this Indenture and in consideration of
the purchase and acceptance of the Notes by the holders thereof, and of other
valuable consideration, the receipt whereof is hereby acknowledged, the Company
hereby
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agrees with the Trustee for the benefit of the holders of Notes as hereinafter
set forth, and the Company does hereby grant, sell, convey, assign and pledge
unto the Trustee, and its successor or successors in trust and to its assigns, a
continuing first priority security interest in and lien on the following
described property, rights and privileges (which collectively are hereinafter
called the "Collateral"):
(i) all of the right, title and interest of the Company in
and to, but not the duties or obligations under, the Collateral
Agreements as in effect from time to time and all renewals, extensions
and guaranties thereof, in every case whether now owned or hereafter
acquired, and including all rights and remedies of the Company under
and with respect to the Collateral Agreements, including the right to
receive payments due and payable thereunder to the Company and all
rights of the Company to assess and collect revenues, penalties,
service charges and other amounts under the Collateral Agreements and
to take such actions and initiate such proceedings, legal, equitable or
otherwise, to enforce collection of payments thereunder;
(ii) the Collection Account and all monies now or hereafter
paid or deposited or required to be paid or deposited therein and all
monies now or hereafter paid or deposited or required to be paid or
deposited with the Trustee pursuant to Article Four hereof or any other
term hereof or any term of the other Note Documents;
(iii) all additional property and agreements and any and all
other rights, interests and privileges that may from time to time be
pledged, assigned or granted to the Trustee as additional security for
the Notes (it is expressly contemplated that additional property and
agreements may hereafter be pledged, assigned or granted hereunder);
(iv) all books and records (including, without limitation,
credit files, computer programs, printouts and other computer materials
and records) pertaining to any of the foregoing; and
(v) all proceeds and avails of the foregoing.
TO HAVE AND TO HOLD the Collateral, including all of the property
hereinabove specifically described, unto the Trustee and its successor or
successors in trust forever;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the holders from time to time of the Notes that may be issued under
this Indenture and indentures supplemental hereto, and for the enforcement of
the payment of such Notes in accordance with their terms; it being intended and
declared that the lien and security of this Indenture as to all Notes to be
issued hereunder shall take effect from the day of the delivery hereof, without
regard to the time of the actual issue, sale, or disposition of the Notes and as
though upon said date, all of the Notes had been sold and delivered to and were
in the hands of bona fide purchasers thereof for value.
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UPON THE CONDITION that, until the occurrence of an Event of Default,
as defined in SECTION 7.01 hereof, the Company shall be entitled to possess and
use the Collateral, and to receive and use the revenues, issues, profits and
other income arising from the Collateral.
AND UPON THE TRUSTS and subject to the covenants and conditions
hereinafter set forth.
ARTICLE ONE
DEFINITIONS
For all purposes of this Indenture (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to the singular and plural
forms of any of the terms herein defined:
"Acceptable Parties" shall mean any party to a gas storage or
transportation contract with the Company if (a) such party has senior long-term
debt which is rated "BBB-" or better by Standard & Poor's Ratings Group, "Baa3"
or better by Xxxxx'x Investors Service, Inc. or an equivalent rating from
another nationally recognized credit rating agency, or (b) the obligations of
such party under the gas storage or transportation contracts with the Company
are unconditionally guaranteed by a Person meeting the requirements of clause
(a) of this definition, or (c) such party is acceptable to the Required Holders.
"Additional Cavities" shall mean Cavities in addition to the First
Cavity and the Second Cavity which may be developed for the storage of natural
gas pursuant to the Development Agreement.
"Additional Notes" shall have the meaning set forth in SECTION 3.06.
"Affiliate" shall mean any Person (other than a Subsidiary) (a) which
directly or indirectly through one or more intermediaries (including but not
limited to, all directors and officers of such Person) controls, or is
controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 5% or more of any class of the Voting Equity of the
Company or (c) 5% or more of the Voting Equity (or in the case of a Person which
is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of Voting Equity or equity interest, by contract or otherwise.
"Assignment Consent" shall mean with respect to any Collateral
Agreement a written instrument signed by the party to such Collateral Agreement
consenting to the assignment by the Company of its right, title and interest
therein to the Trustee in a form satisfactory to the Required Holders.
"Authorized Newspaper" shall mean The Wall Street Journal (all United
States editions) or if The Wall Street Journal ceases publication, any newspaper
printed in the English language,
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nationally known in the United States, and customarily published on each
Business Day of the year, whether or not such newspaper is published on
Saturdays, Sundays and legal holidays.
"Board of Directors" shall mean the Board of Directors of the General
Partner of the Company.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the General Partner to have been duly
adopted by the Board of Directors and to be in full force and effect, and
delivered to the Trustee.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in Mobile, Alabama or New York, New York are
required or authorized to be closed.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any person shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become due
under all Capitalized Leases under which such Person is a lessee would be
reflected as a liability on the balance sheet of such Person.
"Closing Date" shall mean the date on which this Indenture was
initially executed and delivered and the Series 8.45% Notes were issued
hereunder.
"Collateral" shall have the meaning stated in the fourth clause of the
Recitals hereof.
"Collateral Agreements" shall mean and include (a) the Gas Storage
Agreement dated February 26, 1992, between Mobile Gas Service Corporation and
the Company, (b) the Storage Service Agreement dated as of August 1, 2000,
between the Company and Southern Company Services, Inc., as agent for Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power
Company and Savannah Electric & Power Company, (c) the Transportation Agreement
dated April 8, 1999 between Alabama Power Company and the Company, as amended by
a letter dated July 19, 2000, (d) the Firm and Interruptible Storage Service
Agreement dated as of April 1, 1999 between the Company and Southern Company
Services, Inc., as agent for Alabama Power Company, Georgia Power Company, Gulf
Power Company, Mississippi Power Company and Savannah Electric and Power
Company, as amended by a letter dated July 19, 2000, (e) the Firm Intrastate
Transportation Agreement dated as of October 30, 2000 between Xxxx Gateway
Pipeline Company, Inc., and the Company, (f) all other material storage service
agreements and transportation service agreements entered into by the Company
with respect to the First Cavity, the Second Cavity and other future cavities
for the storage of gas and pipelines and pledged to the Trustee pursuant to
SECTION 5.18 of this Indenture, together, in all cases above, with all
amendments, supplements, modifications, renewals and replacements thereof.
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"Collection Account" shall have the meaning set forth in SECTION 4.01.
"Commencement Date" shall mean the Commencement Date as defined in
Section 2.1 of the Southern Company Contract which, as provided therein, is the
date specified in a written notice provided by the Company to the Shipper
thereunder on which the facilities to be constructed by the Company under such
Contract are operational and ready to receive gas for storage and otherwise
provide the Shipper with the services specified in such Contract.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, or if at any time hereafter such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act of 1939, then the body performing such duties on such date.
"Company" shall mean Bay Gas Storage Company, Ltd., an Alabama limited
partnership, and its permitted successors and assigns.
"Company Order" and "Company Request" mean, respectively, any written
order or request signed in the name of the Company by the General Partner's
President or a Vice President and by its Secretary or an Assistant Secretary or
its Treasurer or an Assistant Treasurer or its Controller or an Assistant
Controller.
"Consolidated Net Income" for any period shall mean the gross revenues
of the Company and its Subsidiaries for such period less all expenses and other
proper charges (including taxes on income), determined on a consolidated basis
after eliminating earnings or losses attributable to outstanding Minority
Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued prior
to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than a
Subsidiary), substantially all the assets of which have been acquired
in any manner by the Company or any Subsidiary, realized by such
corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Subsidiary) with which the Company or a Subsidiary shall have
consolidated or which shall have merged into or with the Company or a
Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an ownership
interest unless such net earnings shall have
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actually been received by the Company or such Subsidiary in the form
of cash distributions;
(g) any portion of the net earnings of any Subsidiary which
by reason of law, regulation or agreement is unavailable for payment of
dividends to the Company or any other Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over
the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities
of the Company or any Subsidiary; and
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been made
from income arising during such period.
"Contracting Party" means each Person which enters into a Collateral
Agreement with the Company from time to time.
"Debt Service Coverage Ratio" shall mean the ratio of (a) Net Income
Available for Fixed Charges to (b) the sum of Fixed Charges plus the aggregate
scheduled payments of principal of all Indebtedness (excluding the repayment
(including any premium) on the Closing Date of (i) the Company's 8.19% Senior
Secured Notes due 2014 and (ii) Indebtedness owing to Mobile Gas Service
Corporation incurred to finance base gas in connection with the construction of
the First Cavity).
"Default" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default as defined in SECTION 7.01.
"Development Agreement" shall mean the Cavity Development and Storage
Agreement between Xxxx Corporation and the Company dated January 14, 1992 and as
amended from time to time.
"EnergySouth" shall mean EnergySouth, Inc., an Alabama corporation.
"Environmental Laws" shall mean any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
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"Event of Default" has the meaning stated in SECTION 7.01.
"Expansion Project" shall mean a project involving the construction or
addition of Additional Cavities, pipeline or related facilities and which
requires the expenditure of at least $100,000 in the aggregate during any period
of 12 consecutive months.
"Facility" shall mean (a) the underground salt cavern developed
pursuant to the Development Agreement as the First Cavity for the storage of
natural gas, (b) the underground salt cavern to be developed pursuant to the
Development Agreement as the Second Cavity for the storage of natural gas, and
(c) each Additional Cavity, in all cases, together with and including the
pipeline and all related equipment necessary or useful to store, withdraw and
transport natural gas.
"First Cavity" shall mean the initial underground cavity developed for
the storage of natural gas pursuant to Section II of the Development Agreement.
"First Cavity Site" shall mean the site under which the First Cavity is
located, consisting of a tract of land of approximately 1.5 acres in Washington
County, Alabama.
"Fixed Charges" for any period shall mean the sum of the charges
described in the following three clauses determined on a consolidated basis,
without duplication, after eliminating charges attributable to outstanding
Minority Interests: (a) all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Subsidiaries, (b) all Interest
Charges on all Indebtedness (including the interest component of Rentals on
Capitalized Leases) of the Company and its Subsidiaries but excluding any
interest charges incurred by the Company and its Subsidiaries during such period
in connection with the financing of the development of one or more Additional
Cavities, which is capitalized in accordance with GAAP, and (c) dividends
payable on preferred stock of the Company and its Subsidiaries for such period.
"GAAP" shall mean generally accepted accounting principles at the time
in the United States.
"General Partner" shall mean the General Partner under the Partnership
Agreement at the time of reference.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing
(whether by reason of being a general partner of a partnership or otherwise) any
Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or obligation, (ii)
to maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (c) to lease property or to purchase Securities or other property
or services primarily for the purpose of
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assuring the owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or obligation, or (d)
otherwise to assure the owner of the Indebtedness or obligation of the primary
obligor against loss in respect thereof. For the purposes of all computations
made under this Indenture, a Guaranty in respect of any Indebtedness for
borrowed money shall be deemed to be Indebtedness equal to the principal amount
of such Indebtedness for borrowed money which has been guaranteed, and a
Guaranty in respect of any other obligation or liability or any dividend shall
be deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
"Guarantor Event of Default" shall mean any Event of Default described
in the following paragraphs of SECTION 7.01: (1) in paragraphs (f), (g), (h) or
(p), (2) in paragraph (i) with respect to a default on the part of EnergySouth,
or (3) in paragraphs (l), (m) or (n) which occurs with respect to EnergySouth.
"Guaranty" shall mean in the case of the Series 8.45% Notes, the
Guaranty Agreement dated as of December 1, 2000 of EnergySouth and in the case
of any other series of Notes any Guaranty Agreement pursuant to which
EnergySouth guarantees payment of such series of Notes.
"Guaranty Agreements" shall mean the Guaranty and any other guaranty
agreement of EnergySouth pursuant to which EnergySouth guaranties the payment of
any series of Additional Notes.
"Indebtedness" of any Person shall mean and include all obligations of
such Person (other than trade payables, accrued expenses, deferred taxes and
income taxes) which in accordance with GAAP shall be classified upon a balance
sheet of such Person as indebtedness of such Person (including without
limitation, all current maturities of long term indebtedness), and in any event
shall include (whether or not characterized by GAAP as indebtedness) all (a)
obligations of such Person for borrowed money or which has been incurred in
connection with the acquisition of property or assets, (b) obligations secured
by any Lien upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations, (c)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (d) Capitalized Rentals and (e) Guaranties of obligations
of others of the character referred to in this definition.
"Indenture" shall mean this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
"Institutional Holder" shall mean any insurance company, bank, savings
and loan association, trust company, investment company, charitable foundation,
employee benefit plan (as defined in ERISA) or other institutional investor or
financial institution.
"Interest Charges" for any period shall mean all interest on any
particular Indebtedness as determined in accordance with GAAP.
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"Investment" shall mean any direct or indirect purchase or other
acquisition of stock or other securities of or any partnership interest in any
other Person, any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by such
Person to any other Person, including all Indebtedness and accounts receivable
from such other Person which are not current assets or did not arise from sales
to such other Person in the ordinary course of business, and any direct or
indirect purchase or acquisition by such Person of any assets other than assets
used in the ordinary course of business.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Indenture, the Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the property
has been retained by or vested in some other Person for security purposes and
such retention or vesting shall constitute a Lien.
"Make-Whole Amount" has the meaning set forth in SECTION 3.03.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, or (b) the ability of the
Guarantor to perform its obligations under the Guaranty, (c) the ability of the
Company to perform its obligations under the Indenture, the Note Purchase
Agreements and the Notes, or (d) the validity or enforceability of any Guaranty,
this Indenture or the Notes.
"Minority Interests" shall mean any of the following which are not
owned by the Company and/or any of its Subsidiaries (a) any shares of stock of
any class of a Subsidiary (other than directors' qualifying shares as required
by law), or (b) if a Subsidiary is not a corporation, any equity interest of
such Subsidiary. Minority Interests shall be valued (i) by valuing Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater, and (ii) by
valuing Minority Interests constituting common stock at the book value of
capital and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the foregoing
method of valuing Minority Interests in preferred stock and (iii) if the
Subsidiary is not a corporation, by valuing Minority Interests constituting
equity interest at the book value applicable thereto, such book value being
determined by subtracting total liabilities of the Subsidiary from its total
assets.
"Net Income Available for Fixed Charges" for any period shall mean the
sum of (a) Consolidated Net Income during such period plus (to the extent
deducted in determining
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Consolidated Net Income), (b) depreciation and amortization expense, (c) all
provisions for any Federal, state or other income taxes made by the Company and
its Subsidiaries during such period and (d) Fixed Charges of the Company and its
Subsidiaries during such period.
"Note" or "Notes" shall mean any Note or Notes that may be issued and
delivered under this Indenture and supplements hereto.
"Noteholder" or "holder of Notes," or other similar term, when used
with respect to any Note, shall mean the Person in whose name such Note is
registered in the Note Register.
"Note Documents" shall mean the Note Purchase Agreements, the Notes,
the Guaranty Agreements, this Indenture and each other document executed in
connection with or relating to any of the foregoing.
"Note Purchase Agreements" shall mean those certain Note Purchase
Agreements dated as of December 1, 2000 pursuant to which the Series 8.45% Notes
were issued and sold and other note purchase agreements pursuant to which
Additional Notes may be issued.
"Note Register" and "Note Registrar" shall have the respective meanings
stated in SECTION 2.09. The term Note Registrar shall include any co-registrar
of the Notes named pursuant to such Section and the term Note Register shall
include any duplicate kept by such co-registrar as required by such Section.
"Officers' Certificate" shall mean a certificate signed by the
President or a Vice President and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
the General Partner.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who must be satisfactory to the Trustee and who may be counsel for the
Company.
"Outstanding" when used with respect to Notes shall mean, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except:
(a) Notes theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation and those portions of the principal of
Notes that have been paid;
(b) Notes for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee in
trust for the holders of such Notes; provided, that, if such Notes are
to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(c) Notes alleged to have been destroyed, lost or stolen that
have been replaced as provided in SECTION 2.11;
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provided, however, that in determining whether the holders of the requisite
principal amount of Notes Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, the Guarantor or any other obligor upon the Notes or any Affiliate
of the Company, the Guarantor or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the Trustee knows to be so
owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Company, the Guarantor or any other
obligor upon the Notes or any Affiliate of the Company, the Guarantor or such
other obligor.
"Partnership Agreement" shall mean the Limited Partnership Agreement
dated December 5, 1991 between MGS Storage Services, Inc., as General Partner
and MGS Energy Services, Inc., as Limited Partner, as amended from time to time.
"Person" shall mean an individual, partnership, company, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"Private Placement Memorandum" shall have the meaning set forth in
SECTION 5.07.
"Projected Debt Service Coverage Ratio" shall mean for any fiscal year
the ratio of (a) Projected Net Income Available for Fixed Charges for such
fiscal year to (b) the sum of Projected Fixed Charges plus the aggregate
projected scheduled payments of principal of all Indebtedness during such fiscal
year.
"Projected Fixed Charges" for any period shall mean the sum of the
projected charges, taking into account without limitation the proposed Expansion
Project, described in the following three clauses determined on a consolidated
basis, without duplication, after eliminating charges attributable to
outstanding Minority Interests: (a) all projected Rentals (other than Rentals on
Capitalized Leases) payable during such period by the Company and its
Subsidiaries, (b) all projected Interest Charges on all Indebtedness (including
the interest component of Rentals on Capitalized Leases) of the Company and its
Subsidiaries but excluding any interest charges incurred by the Company and its
Subsidiaries during such period in connection with the financing of the
development of one or more Additional Cavities, which is capitalized in
accordance with GAAP, and (c) projected dividends payable on preferred stock of
the Company and its Subsidiaries for such period. For purposes hereof,
"Projected Fixed Charges" shall be calculated by a senior financial officer of
the Company in good faith, shall be based upon reasonable assumptions which
shall be articulated in writing in reasonable detail to the Trustee and the
Noteholders.
"Projected Net Income Available for Fixed Charges" for any period shall
mean the sum of (a) projected Consolidated Net Income during such period plus
(to the extent deducted in determining Consolidated Net Income), (b) projected
depreciation and amortization expense, (c) all projected provisions for any
Federal, state or other income taxes made by the Company and its Subsidiaries
during such period and (d) Projected Fixed Charges of the Company and its
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Subsidiaries during such period; provided, that with respect to storage and
transportation contracts entered into for Expansion Projects, the Company shall
only be permitted to include projected Consolidated Net Income from such
contracts which are with Acceptable Parties. For purposes hereof, "Projected Net
Income Available for Fixed Charges" shall be calculated by a senior financial
officer of the Company in good faith, shall be based upon reasonable assumptions
which shall be articulated in writing in reasonable detail to the Trustee and
the Noteholders.
"Rentals" shall mean and include as of the date of any determination
thereof the sum of (a) all fixed payments (including as such all payments which
the lessee is obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company or a Subsidiary, as lessee or
sublessee under a lease of real or personal property, having a remaining term in
excess of one year from the end of the lessor's most recently completed fiscal
year, plus (b) all amounts required to be paid under a lease with such a
remaining term by the Company or a Subsidiary (whether or not designated as
rents or additional rents) on account of maintenance, ordinary repairs,
insurance, taxes, assessments and similar charges to the extent such amounts are
payable to the lessor or a Person designated by the lessor. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Required Holders" shall mean, at any time, the holders of at least 51%
in principal amount of the Notes at the time Outstanding.
"Responsible Officer," when used with respect to the Trustee, shall
mean any Vice President or any officer in the Corporate Trust Department and
when used with respect to EnergySouth or the General Partner, shall mean,
respectively, the President, any Vice President, Secretary, Treasurer or other
senior financial officer thereof.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Second Cavity" shall mean the second underground cavity to be
developed for the storage of natural gas pursuant to Section II of the
Development Agreement.
"Second Cavity Site" shall mean the site under which the Second Cavity
is initially to be located, consisting of a tract of land of approximately 1.5
acres in Washington County, Alabama.
"Southern Company" shall mean Southern Company Services, Inc., an
Alabama corporation.
"Southern Company Contract" shall mean the Storage Service Agreement
dated as of August 1, 2000 between the Company and Southern Company, as agent
for Alabama Power Company, Georgia Power Company, Gulf Power Company,
Mississippi Power Company and Savannah Electric and Power Company.
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"Subsidiary" shall mean any Person (a) which is organized under the
laws of the United States or any State thereof, Canada or any province thereof
or the Commonwealth of Puerto Rico; (b) which conducts substantially all of its
business and has substantially all of its assets within the United States,
Canada or the Commonwealth of Puerto Rico; and (c) of which (i) if such Person
is a corporation, at least 51% (by number of votes) of the Voting Equity is
beneficially owned, directly or indirectly, by the Company and/or one or more
Wholly-owned Subsidiaries, or (ii) if such Person is a partnership, at least 51%
of the partnership interests of the partnership including the interest of the
general partner is owned or controlled by the Company and/or one or more
Wholly-owned Subsidiaries, or (iii) if such Person is any other business entity,
at least 51% of the voting power of the securities entitled to elect a majority
of the managers, directors or other Persons performing similar functions is
owned or controlled by the Company and/or one or more Wholly-owned Subsidiaries.
"Trustee" shall mean Regions Bank, Mobile, Alabama, until a successor
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Trustee shall mean such successor Trustee.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939 as in
force at the date of execution of this Indenture, or, if this Indenture is first
qualified under the Trust Indenture Act after such date of execution, as in
force at the date of such qualification.
"Voting Equity" shall mean Securities, partnership interests,
membership interests or other equity interests of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) or if the Subsidiary is not a
corporation, all equity interest and all Indebtedness, shall be owned by the
Company and/or one or more of its Wholly-owned Subsidiaries.
ARTICLE TWO
GENERAL PROVISIONS AS TO THE NOTES
Section 2.01. General Designation, Form, Registration and Limitation in
Amount of Notes. The Notes issued under this Indenture shall be designated
generally as the Company's Senior Secured Notes, with the Notes of each series
to be designated in such distinctive manner as the Board of Directors may
determine. All Notes to be secured hereby shall be registered notes without
coupons. Such Notes and the Trustee's certificate of authentication to be
endorsed on all Notes shall be substantially in the form set forth in Exhibit A
attached hereto and made a part hereof, subject only to such variations,
additions, substitutions and omissions as are required or permitted by this
Indenture. The definitive Notes shall be printed, typed, lithographed or
engraved or produced by any combination of these methods, or may be produced in
any other
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manner permitted by the rules of any national securities exchange, all as
determined by the officers executing such Notes, as evidenced by their execution
of such Notes.
The aggregate principal amount of Notes that may be executed and
delivered and be Outstanding under this Indenture is not limited, except as may
be provided in SECTION 3.06 hereof and except as may be limited by law.
Section 2.02. Execution of Notes. All Notes to be secured hereby shall
be signed by the President or a Vice President of the General Partner, and the
seal of the General Partner shall be thereto affixed and attested by the General
Partner's Secretary or an Assistant Secretary, which seal and any one of which
signatures may be facsimiles. In case any officer who shall sign or seal or
whose facsimile signature has been placed upon a Note shall cease to be such
officer before the Notes so signed or sealed shall have been actually
authenticated and delivered by the Trustee, such Note may, nevertheless, upon
the request of the General Partner, be issued, authenticated and delivered as
though such person had not ceased to be an officer of the General Partner. Any
Note secured hereby may be signed or sealed by any person who may be an officer
of the Company at the time of such signing or sealing, although such person may
not have been such officer at the date of such Note.
Section 2.03. Number and Designation of Notes. Notes authenticated under
this Indenture shall bear such letters, numbers or other identification marks as
may be determined by the Company and approved by the Trustee and may contain
therein or have imprinted thereon such legend or legends as may be required in
order to comply with any law or with any rules or regulations made pursuant
thereto or with the rules of any national securities exchange.
Section 2.04. Authentication and Delivery of Notes by Trustee. All
Notes, when executed by the Company, shall be delivered to the Trustee to be
authenticated by it and the Trustee shall authenticate and deliver the same only
as provided in this Indenture; provided, however, notwithstanding any other
provision hereof, after execution and delivery of this Indenture and upon
execution by the Company of the Series 8.45% Notes and delivery thereof to the
Trustee, the Trustee, without any further action being required on the part of
the Company, shall authenticate and deliver such Notes as may be directed by
Company Order. Only such Notes as shall bear thereon the certificate of the
Trustee, duly signed, shall be secured by this Indenture, or entitled to any
lien or benefit hereunder, and such certificate of the Trustee upon any such
Note executed on behalf of the Company shall be conclusive evidence, and the
only evidence, that the Note so authenticated has been duly issued hereunder and
that the holder thereof is entitled to the benefits of the trust hereby created.
Section 2.05. Notes Issuable in Series; Terms of Notes. The Company may
issue Additional Notes pursuant to the provisions of SECTION 3.06. The terms of
the Series 8.45% Notes shall be as specified in Article Three hereof. The Notes
of any series issued pursuant to SECTION 3.06 may (a) be of such denomination or
denominations, (b) bear such rate of interest, payable on such interest payment
dates, (c) mature at such time, and in the case of Notes of serial maturities,
at such times, (d) contain such provisions as to payment of, or payment without
deduction for, or reimbursement for, any tax or taxes, (e) contain such
provisions respecting any sinking, amortization, improvement, renewal or other
analogous fund for the exclusive benefit of
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any one or more series, (f) be redeemable at such price or prices and upon such
terms, (g) be payable and subject to registration and transfer at such place or
places, and (h) contain such other provisions not inconsistent with the terms of
this Indenture, all as may be specified in such Notes and in the Board
Resolutions and the supplemental indenture providing for the creation and
issuance of such series; provided that any covenants added by supplemental
indenture for any new series of Notes shall also be for the benefit of all other
Notes outstanding from time to time under the Indenture. All Notes of any one
series shall be identical in all respects, except that they may differ as to
denomination and date.
Section 2.06. Procedure for Creation of New Series of Notes. Whenever
the Company shall determine to create a new series of Notes secured by this
Indenture, it shall file with the Trustee a Board Resolution describing such
series, and shall execute, acknowledge and deliver a supplemental indenture
likewise describing such series, stating the amount of additional Notes to be
issued pursuant thereto and containing such other provisions as may be necessary
or appropriate, and thereafter Notes of such series may be issued from time to
time subject to the conditions and provisions of this Indenture.
Section 2.07. Equal Security of Notes. No series of Notes issued
hereunder shall have any preference as to the security afforded by this
Indenture over any other series of Notes issued or to be issued hereunder, and
no Note of any series shall have any such preference over any other Note of the
same or any other series; provided, however, that the Notes of different series
may contain terms and conditions that differ from Notes of other series in the
respects set forth in SECTION 2.05 hereof; and provided, further, that the
Company may authorize, execute and deliver indentures supplemental to this
Indenture for the purposes set forth in Subsection (b) of SECTION 11.01 hereof.
Section 2.08. Date of Notes and Interest. All Notes issued under this
Indenture shall bear interest from, and shall be dated as of, the interest
payment date next preceding the date on which the same shall be authenticated by
the Trustee, or, if such date of authentication shall be an interest payment
date, such Notes shall bear interest from and shall be dated as of such interest
payment date, or if such date of authentication shall be a date prior to the
first interest payment date for the Notes of the series being authenticated,
such Notes shall bear interest from, and shall be dated as of, the commencement
of the first interest period for such series, which may be the date of initial
issuance of such Notes (except that Series 8.45% Notes initially issued
hereunder shall be dated and bear interest as provided in Article Three hereof);
provided, however, that if at the time of authentication of any Note of any
series, interest is in default on Outstanding Notes of such series, such Notes
shall bear interest from, and shall be dated as of, the interest payment date
for such series to which interest has previously been paid or made available for
payment on Outstanding Notes of such series.
Section 2.09. Note Register, Registrar and Transfer Agent. The Company
hereby constitutes and appoints the Trustee as Note Registrar and transfer agent
for the purpose of registering and transferring Notes entitled to be so
registered or transferred and the Company shall keep or cause to be kept at the
corporate trust office of the Trustee in Mobile, Alabama, books for the
registration and transfer of Notes issued hereunder (the "Note Register")
showing, among other things, all original issuances and subsequent transfers of
Notes.
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The Company, by Board Resolution, may name such co-registrars and
co-transfer agents of the Notes as the Company deems appropriate and shall cause
to be kept at the principal office of each such co-registrar or co-transfer
agent a duplicate of the Note Register.
Section 2.10. Transfer and Exchange of Notes; Charges Therefor;
Ownership of Notes. Any Note may be transferred or exchanged upon surrender
thereof to the Trustee, at its corporate trust office in Mobile, Alabama,
accompanied by such duly executed instruments of transfer or exchange as may be
reasonably required by the Company and the Trustee, and thereupon the Company
shall issue in the name of the transferee or transferees or in the name of the
person making the transfer or exchange, as the case may be, and the Trustee
shall authenticate and deliver a new Note or Notes of the same series and
maturity, in authorized denominations, for a like aggregate principal amount.
Unless otherwise provided in the supplemental indenture creating the
particular series of Notes, upon every transfer of Notes as permitted in this
Section, the Company shall make no service charge against any holder of a Note
or his transferee for any transfer, but the Company may require, as a condition
to such transfer, the payment of a sum sufficient to reimburse it for any stamp
tax or other governmental charge that may be imposed thereon, which sum shall be
paid by the party requesting such transfer; provided, however, that the Company
will pay any stamp tax or other governmental charge that may be imposed in
connection with such transfer to the extent that such tax or charge exceeds the
sum of $2 for each $10,000 in principal amount of the Notes so transferred.
The Company shall not be required to make any transfer or transfers of
any Note or Notes during the ten days next preceding any date on which either
interest is to be paid thereon or Notes of the same series are to be selected
for redemption, nor may transfer be required with respect to any Notes that have
been called for redemption or that have matured.
The person in whose name any Note shall be registered shall for all the
purposes of this Indenture be regarded as the owner thereof, and the payment of
or on account of the principal of or interest (and premium, if any) on such Note
shall be made only to such registered holder or upon his order. All payments so
made shall be valid and effectual to satisfy and discharge the liability upon
such Note to the extent of the sum or sums so paid.
Section 2.11. Replacement Notes. In case any Note issued hereunder shall
be mutilated, lost, stolen or destroyed, the Company may, in its discretion,
issue and deliver and the Trustee shall authenticate a new Note of like tenor,
effect and date:
(a) in lieu of and substitution for, and upon surrender and
cancellation of, the mutilated Note, or
(b) in lieu of and substitution for the Note so lost, stolen
or destroyed, upon receipt of evidence satisfactory to the Company and
the Trustee of the loss, theft or destruction of such Note, and upon
receipt also of indemnity satisfactory to each of them; provided, that
in the case of an Institutional Holder, its own unsecured agreement of
indemnity shall be sufficient.
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Subject to the provisions of SECTION 8.01 hereof, the Trustee shall
incur no liability for anything done by it pursuant to this Section. Any Note
issued pursuant to this Section shall constitute an original contractual
obligation on the part of the Company and shall be secured equally and ratably
with all other Notes issued hereunder and then Outstanding. Any such replacement
Note may bear such endorsement as may be prescribed by the Company with the
approval of the Trustee.
Section 2.12. Effect of Replacement. Each Note delivered pursuant to any
provision of this Indenture in substitution for the whole or any part, as the
case may be, of one or more other Notes shall carry all of the rights to
interest accrued and unpaid, and to accrue, that were carried by the whole or
such part, as the case may be, of such one or more other Notes, and,
notwithstanding anything contained in this Indenture, such Note shall bear such
date that neither gain nor loss in interest shall result from such substitution.
Section 2.13. Disposition of Surrendered Notes. All Notes surrendered
for payment, redemption, transfer or replacement, if surrendered to the Trustee,
shall be promptly cancelled by it, and, if surrendered to the Company, shall be
delivered to the Trustee for cancellation and shall be promptly cancelled by the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Notes previously authenticated and delivered hereunder that the Company may have
acquired in any manner whatsoever and all Notes so delivered shall be promptly
cancelled by the Trustee. Upon cancellation by the Trustee of any Notes pursuant
to this Section the Trustee shall promptly notify the Company thereof in writing
and such Notes shall thereafter be disposed of as directed by a Company Order.
ARTICLE THREE
SERIES 8.45% NOTES; ADDITIONAL NOTES
Section 3.01. Series 8.45% Notes; Required Redemptions. There is hereby
created under the Indenture a series of Notes entitled Senior Secured Notes,
Series 8.45%, due December 1, 2017 (the "Series 8.45% Notes"). The aggregate
principal amount of Series 8.45% Notes that may be issued shall be limited to
Fifty-Five Million Dollars ($55,000,000), exclusive of Series 8.45% Notes issued
under SECTIONS 2.10, 2.11, 10.05 AND 12.04. The Series 8.45% Notes shall be
registered Notes without coupons, issued initially in minimum denominations of
$1,000,000 and any multiple of $100,000 in excess thereof and numbered A-1 and
upward, and thereafter issued in denominations of not less than $1,000,000 or
any multiple of $100,000 in excess thereof, except that, if necessary to enable
the transfer by a Noteholder of its entire holding of Series 8.45% Notes, one
such Note may be issued in a denomination of less than $1,000,000.
Each of the Series 8.45% Notes initially issued hereunder shall be
dated the date of the initial issuance thereof and otherwise shall be dated and
shall bear interest as provided in SECTION 2.08. The Series 8.45% Notes shall be
due December 1, 2017 and shall bear interest on their unpaid principal amounts
from their dates until paid at the rate of 8.45% per annum payable quarterly on
March 1, June 1, September 1 and December 1 in each year (each such date being a
"Payment Date") commencing on the first March 1, June 1, September 1 or December
1 next following the date of initial issuance thereof, with principal payable in
installments as hereinafter
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provided, and at the rate of 10.45% per annum on any overdue principal, premium,
if any, and (to the extent legally enforceable) on any overdue installment of
interest. Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months. The Series 8.45% Notes shall be subject to required
prepayments in the principal amounts specified in the Schedule of Payments set
forth in Exhibit B hereto which reflects the amortization schedule of the Series
8.45% Notes initially issued under this Indenture. Any remaining unpaid
principal shall be paid on the date of maturity of the Series 8.45% Notes,
December 1, 2017.
Any redemption of less than all of the Series 8.45% Notes pursuant to
SECTION 3.03 shall be deemed to be applied to principal payments due on the
Series 8.45% Notes in inverse order of their scheduled maturities.
Section 3.02. Optional Redemption at Par. In the event that the Facility
is destroyed or rendered unuseable as a result of the occurrence of a casualty
or natural disaster and the problem cannot be remedied within 6 months after
such occurrence, the Company shall have the right within 6 months of the
occurrence of such event to redeem all of the Notes at a redemption price equal
to the principal amount thereof plus accrued interest thereon to the date of
redemption. The Company shall exercise the aforesaid right by sending a written
notice to each of the Noteholders and the Trustee in accordance with SECTION
12.03.
Section 3.03. Optional Redemption with Premium. The Series 8.45% Notes
shall, upon compliance by the Company with the provisions of Article Twelve of
this Indenture and in the manner and upon the terms therein provided, be
redeemable at the option of the Company, either as a whole or in part (but if in
part then in a minimum amount equal to the lesser of $5,500,000 or the principal
balance of the Notes then outstanding) at any time at a redemption price equal
to the principal amount of the Series 8.45% Notes to be redeemed, together with
interest accrued thereon, if any, to the date fixed for redemption plus a
premium equal to the Make-Whole Amount determined three Business Days prior to
the date fixed for redemption, provided, that the Company shall furnish notice
to the Trustee and to each holder of the Series 8.45% Notes by telecopy or other
same-day communication, on a date at least two Business Days prior to the date
fixed for redemption of the Series 8.45% Notes of the premium, if any,
applicable to such redemption and the calculations in reasonable detail, used to
determine the amount of any such premium. As used herein the following terms
have the meanings set forth:
The term "Make-Whole Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal; provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid or redeemed pursuant to
SECTION 3.03 or which has become or is declared to be immediately due
and payable pursuant to SECTION 7.01, as the context requires.
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"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice
and at a discount factor (applied on the same periodic basis as that on
which interest on the Notes is payable) equal to the Reinvestment Yield
with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, 0.50% per annum over the yield to maturity
implied by (a) the yields reported, as of 10:00 A.M. (New York City
time) on the third Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "Page
PX1" of the Bloomberg Financial Markets Services Screen (or, if not
available, any other national recognized trading screen reporting
on-line intraday trading in the U.S. Treasury securities) for actively
traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the third Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" shall mean, with respect to any
Called Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (a) such Called Principal into
(b) the sum of the products obtained by multiplying (i) the principal
component of each Remaining Scheduled Payment with respect to such
Called Principal by (ii) the number of years (calculated to the nearest
one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date; provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date.
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"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be
prepaid or redeemed pursuant to SECTION 3.03 or has become or is
declared to be immediately due and payable pursuant to SECTION 7.01, as
the context requires.
Section 3.04. Redemption Upon Change of Control. In the event that any
Change of Control (as hereinafter defined) shall occur or the Company shall have
knowledge of any proposed Change of Control that is reasonably likely to occur,
the Company will give written notice (the "Company Notice") of such fact in the
manner provided in SECTION 15.05 hereof to the Trustee and the holders of the
Series 8.45% Notes. The Company Notice shall be delivered promptly upon receipt
of such knowledge by the Company and in any event no later than three Business
Days following the occurrence of any Change of Control. The Company Notice shall
(1) describe the facts and circumstances of such Change of Control in reasonable
detail, (2) make reference to this SECTION 3.04 and the right of the holders of
the Series 8.45% Notes to require prepayment of the Notes on the terms and
conditions provided for in this SECTION 3.04, (3) offer in writing to prepay the
Series 8.45% Notes then Outstanding, together with accrued interest to the date
of prepayment, but without premium, and (4) specify a date for such prepayment
(the "Change of Control Prepayment Date"), which Change of Control Prepayment
Date shall be not more than 90 days nor less than 30 days following the date of
such Company Notice. Each holder of the then Outstanding Series 8.45% Notes
shall have the right to accept such offer and require prepayment of the Notes
held by such holder in full by written notice to the Company (a "Noteholder
Notice") given not later than 20 days after receipt of the Company Notice and a
failure by a holder to respond to such offer shall be deemed to constitute a
rejection of such offer by such holder. The Company shall on the Change of
Control Prepayment Date prepay in full all of the Series 8.45% Notes held by
holders which have so accepted such offer of prepayment, provided that the
obligation of the Company to prepay the Notes pursuant to the requirements of
this SECTION 3.04 is subject to the actual occurrence of the Change of Control
giving rise to the Company Notice. In the event that such Change of Control does
not occur on the date specified for prepayment, the prepayment shall be deferred
until and shall be made on the date on which such Change of Control occurs. The
prepayment price of the Series 8.45% Notes payable upon the occurrence of any
Change of Control shall be an amount equal to 100% of the outstanding principal
amount of the Series 8.45% Notes so to be prepaid and accrued interest thereon
to the date of such prepayment, but without premium. For purposes hereof,
The term "Acquiring Person" shall mean a "person" or "group of
persons" within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, provided that
notwithstanding the foregoing, "Acquiring Person" shall not be deemed
to include any member of the Control Group unless such member has,
directly or indirectly, disposed of, sold or otherwise transferred to,
or encumbered, restricted (whether by means of voting trust agreement
or otherwise) or voted for the benefit of, an Acquiring Person all or
any portion of the Voting Equity of the Guarantor, directly or
indirectly owned or controlled by such member, in which event such
member of the Control Group shall be deemed to constitute an Acquiring
Person to the extent of the Voting Equity of the Guarantor owned or
controlled by such member.
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The term "Change of Control" shall mean the earliest to occur
of: (a) the date an Acquiring Person becomes, directly or indirectly,
the beneficial owner of more than 50% of the Voting Equity of the
Guarantor then outstanding, or (b) the date of a merger between the
Guarantor and any other Person, a consolidation of the Guarantor with
any other Person or an acquisition of any other Person by the
Guarantor, if immediately after such event, the Acquiring Person shall
hold more than 50% of the Voting Equity of the Guarantor outstanding
immediately after giving effect to such merger, consolidation or
acquisition, or (c) the date on which both (i) the Guarantor owns less
than 75% of the Voting Equity of the Company and (ii) the book value of
the Guarantor's Investment in the Company at the end of any fiscal
quarter is less that the book value of the Guarantor's Investment in
the Company at the end of the fiscal quarter immediately preceding the
date on which the Guarantor ceased to own 75% or more of the Company's
Voting Equity.
The term "Control Group" shall mean and includes each of the
senior officers of the Guarantor and each member of the board of
directors of the Guarantor as of the date this Indenture was originally
executed and delivered.
Section 3.05. Place and Form of Payment on Series 8.45% Notes. The
principal of and premium (if any) and interest on Series 8.45% Notes (subject to
any agreement entered into pursuant to SECTION 5.01 hereof) shall be payable at
the corporate trust office of the Trustee in Mobile, Alabama, in coin or
currency of the United States of America that at the time of such payment is
legal tender for the payment of public and private debts.
Section 3.06. Issuance of Additional Notes. (a) In addition to the
Series 8.45% Notes, whose authentication and delivery is provided for in SECTION
3.01, the Company may, at any time and from time to time execute and deliver to
the Trustee for authentication additional Notes ("Additional Notes"), provided
that Additional Notes shall only be issued for the purpose of financing
Expansion Projects, and at the time of incurrence of such Indebtedness and after
giving effect to the application of the proceeds thereof:
(i) the Projected Debt Service Coverage Ratio for the fiscal
year in which the Additional Notes are being issued and for each fiscal
year thereafter in which Notes are scheduled to remain Outstanding
shall not be less than 1.25 to 1.00;
(ii) the aggregate principal amount of Additional Notes
incurred with respect to an Expansion Project does not exceed the
projected cost of such Expansion Project;
(iii) an Assignment Consent shall have been executed by the
party to each storage or transportation contract entered into for the
Expansion Project; and
(iv) no Default or Event of Default exists.
(b) The Additional Notes delivered pursuant to this SECTION 3.06 shall
be authenticated and delivered by the Trustee upon Company Order, dated as of
the date of authentication and delivery of Additional Notes then being applied
for, accompanied by the following:
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(i) A Board Resolution authorizing the issuance of a
specified principal amount of Additional Notes of one or more
designated series;
(ii) An Officers' Certificate, dated the date of
authentication of Additional Notes, stating that (i) no Default or
Event of Default exists hereunder, (ii) demonstrating in reasonable
detail that all conditions precedent set forth in this Indenture
(including this SECTION 3.06) relating to the authentication and
delivery of such Additional Notes have been complied with;
(iii) An opinion of Counsel, dated not more than five days
before the date of authentication of Additional Notes:
(1) specifying the certificates or other evidence
that will be sufficient to show or provide compliance with the
requirements, if any, of any tax or recording or filing law
applicable to the issuance of the Additional Notes, or stating
that there are no such legal requirements;
(2) specifying the certificates or other evidence
that will be sufficient to show the authorization or approval
of, or consent to, the issuance by the Company of the
Additional Notes, by any Federal, state or other governmental
regulatory agency at the time having jurisdiction in the
premises, or stating that no such authorization, approval or
consent is required;
(3) stating that the Additional Notes have been duly
authorized and, when executed by the Company, authenticated
and delivered by the Trustee and issued by the Company, upon
payment therefor, will be valid and binding obligations of the
Company and entitled to the benefits of and secured by the
lien of this Indenture equally and ratably with all other
Notes hereby secured, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors'
rights generally, and general principles of equity (regardless
of whether the application of such principles is considered in
a proceeding in equity or at law); and
(4) stating that the documents and other items that
have been or are therewith delivered to the Trustee conform to
the requirements of this Indenture, and that, upon the basis
of the Company Order and the accompanying documents or other
items specified in this Article, all conditions precedent
specified in this Indenture relating to the Additional Notes
have been complied with, and the Additional Notes may be
lawfully authenticated and delivered under this Article.
(iv) A supplemental indenture providing for the creation and
issuance of the Additional Notes and stating the maximum principal
amount thereof, and otherwise meeting the requirements of SECTION 3.07.
Section 3.07. Supplemental Indentures. Each supplemental indenture
required by SECTION 3.06 shall be properly executed on its behalf by the
appropriate officers of the Company,
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acceptable in form and content to the Trustee, and shall subject to the lien of
this Indenture all Collateral described in the Granting Clauses acquired by the
Company after the date of this Indenture, and not previously described in any
previously executed and delivered supplemental indenture, specifically
describing all additional Collateral Agreements included in such Collateral.
ARTICLE FOUR
ACCOUNTS
Section 4.01. Collection Account. (a) The Company shall open and
maintain an account with Regions Bank, designated Account Number 0000000000 (the
"Collection Account"), for the receipt of all payments made with respect to the
Collateral Agreements. The Collection Account shall relate solely to the
Collateral Agreements and funds in such account shall not be commingled with any
other moneys of the Company or its Subsidiaries. Pursuant to this Indenture, the
Company has granted to the Trustee for the benefit of the Noteholders a first
priority lien on and security interest in the Collection Account. The Company
shall keep and maintain the Collection Account and all moneys from time to time
in the Collection Account free and clear of all liens, claims and encumbrances
other than the Lien of this Indenture.
(b) Whether or not an Event of Default has occurred hereunder, the
Company shall instruct all parties to the Collateral Agreements to remit all
payments in respect of the Collateral Agreements to the Collection Account
and/or shall itself upon receipt immediately endorse and deposit all payments
received in respect of the Collateral Agreements (in whatever form) into the
Collection Account.
Section 4.02. Use of Moneys in Collection Account Absent an Event of
Default. Until such time as an Event of Default shall have occurred and be
continuing and the Trustee shall have delivered the written notices pursuant to
the provisions of SECTION 4.03(a)(III), the Company shall retain the right to
invoice and pursue collection of all amounts payable under the Collateral
Agreements and may use the revenues deposited into the Collection Account to
carry on its business in accordance with sound business practice.
Section 4.03. Collections Upon an Event of Default. (a) Upon the
occurrence of any Event of Default hereunder, the Trustee shall (i) establish a
remittance account in the name and under the sole custody and control of the
Trustee at a commercial bank selected by the Required Holders (the "Remittance
Account"), (ii) deliver a written notice to each party to each Collateral
Agreement which provides that pursuant to the Assignment Consent signed by each
party, the Trustee directs that all future payments due and payable to the
Company pursuant to such Collateral Agreement shall be paid directly to the
Trustee for deposit into the Remittance Account and (iii) deliver to the bank at
which the Collection Account has been established, a written notice stating that
any monies in the Collection Account or received in the future by such bank for
deposit therein shall be forwarded to the Trustee for deposit in the Remittance
Account. The Trustee shall have power to receipt for, xxx for, compound and give
acquittance for any or all amounts due or to become due under the Collateral
Agreements, and in the discretion of the
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Trustee file any claim or take any other action or proceeding which the Trustee
may deem necessary or appropriate to protect and realize upon the Trustee's
security interest therein.
(b) Any proceeds of the Collateral transmitted to or otherwise received
by the Trustee pursuant to the provisions of this SECTION 4.03 shall be
deposited in the Remittance Account and administered by the Trustee as herein
provided, and the Company acknowledges that the Remittance Account is solely
subject to the Trustee's control and maintenance and that the Company does not
have any right, title or interest in the Remittance Account or any amounts at
any time standing to the credit thereof. The Trustee may apply all or any part
of any proceeds of the Collateral deposited in the Remittance Account to the
payment of the obligations under this Indenture and the Notes, such applications
to be made in such amounts, in such manner and order and at such intervals as
the Required Holders may from time to time in their discretion direct the
Trustee.
ARTICLE FIVE
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees for the benefit of the holders
of the Notes and their successors in interest that, so long as any Notes remain
Outstanding:
Section 5.01. Payment. The Company will duly and punctually pay or cause
to be paid the principal of (and premium, if any) and interest on the Notes at
the times and places and in the manner specified in the Notes and herein.
Notwithstanding the above or any other provisions of this Indenture or any Note
issued hereunder, the Company may enter into an agreement with the holder of any
Note providing for the payment to such holder, without presentation or surrender
of such Note, of the principal of (and premium, if any) and interest on such
Note or any part thereof at a place other than as designated herein or in such
Note, and for the making of notation of principal payments on such Note by such
holder. The Trustee is authorized to consent to any such agreement and shall not
be liable or responsible to any such holder or to the Company for any act or
omission on the part of the Company or any holder of a Note in connection with
any such agreement. The Company covenants that, if the Trustee shall be
responsible therefor, the Company will deposit with the Trustee, at its
corporate trust office in Mobile, Alabama, an amount of money sufficient to make
such payments of principal (and premium, if any) and interest on the Notes, such
deposit to be made with the Trustee not later than one Business Day before the
date such payment or payments are due. All amounts so deposited shall be held in
trust for the accounts of the holders of the obligations due on such date and
shall be applied to the payment thereof.
Section 5.02. Compliance with Law. The Company will and will cause each
of its Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in
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effect such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 5.03. Insurance. The Company will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Notwithstanding any of the foregoing provisions to the contrary, the
Company shall at all times comply with the insurance coverage requirements
contained in Section 4.04 of the Development Agreement.
Section 5.04. Maintenance of Properties. The Company will and will cause
each of its Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
Section shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that such
discontinuance would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company will at all times cause
the Collateral to be maintained and preserved.
Section 5.05. Payment of Taxes and Claims. The Company will and will
cause each of its Subsidiaries to file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
Section 5.06. Partnership Existence, etc. The Company will at all times
preserve and keep in full force and effect its partnership existence under the
laws of the State of Alabama, and its qualified status in any state in which it
may engage in business. The Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries (unless
merged into the Company or a Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise
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could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Section 5.07. Nature of Business. Neither the Company nor any Subsidiary
will engage in any business except the business engaged in on the date of the
Indenture and such businesses as are ancillary, incidental or necessary to the
ongoing business of the Company and its Subsidiaries and its present and future
Affiliates as presently conducted or as conducted from time to time, provided
that in any event after giving effect thereto the general nature of the
business, taken on a consolidated basis, which would then be engaged in by the
Company and its Subsidiaries would not be substantially changed from the general
nature of the business of the Company and its Subsidiaries as described in the
Confidential Placement Memorandum dated October 2000 prepared by the Company,
EnergySouth and Banc One Capital Markets, Inc. (the "Private Placement
Memorandum").
Section 5.08. Transactions with Affiliates. The Company will not and
will not permit any Subsidiary to enter into directly or indirectly any
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would be obtainable in a comparable arm's-length transaction with a Person
not an Affiliate, provided that there shall be excluded from the foregoing
restriction contained in this SECTION 5.08 all management and executive
benefits, compensation and agreements approved in good faith by the Board of
Directors of the General Partner and disclosed by the Company to regulatory
authorities to the extent required by applicable law.
Section 5.09. Limitations on Indebtedness; Repayment. (a) The Company
will not, and will not permit any Subsidiary to, create, assume or incur or in
any manner be or become liable in respect of any Indebtedness, except:
(i) Indebtedness evidenced by the Series 8.45% Notes;
(ii) Additional Notes issued by the Company under and in
compliance with SECTION 3.06 of this Indenture;
(iii) Additional Indebtedness incurred by the Company, provided
that the aggregate amount of any such Indebtedness so incurred shall
not exceed $10,000,000 at any one time outstanding; and
(iv) Advances made by EnergySouth to the Company for working
capital purposes ("Working Capital Advances"), provided that such
advances (1) shall be unsecured and repayment thereof shall be
subordinated to repayment of the Notes and (2) may not be repaid if
after giving effect thereto an Event of Default shall have occurred
which shall then be continuing.
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(b) Any corporation which becomes a Subsidiary after the date hereof
shall for all purposes of this SECTION 5.09 be deemed to have created, assumed
or incurred at the time it becomes a Subsidiary all Indebtedness of such
corporation existing immediately after it becomes a Subsidiary.
Section 5.10. Debt Service Coverage Ratio. The Company will not at any
time permit the Debt Service Coverage Ratio for each period of four consecutive
fiscal quarters ended December 31, 2000 and thereafter to be less than 1.15 to
1.00.
Section 5.11. Limitation on Liens. The Company will not, and will not
permit any Subsidiary to, create or incur, or suffer to be incurred or to exist,
any Lien on its or their property or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom, or transfer any property for
the purpose of subjecting the same to the payment of obligations in priority to
the payment of its or their general creditors, or acquire or agree to acquire,
or permit any Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) the Lien of the Indenture, including Liens arising in
connection with the issuance of Additional Notes pursuant to SECTION
3.06 hereof;
(b) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required by
SECTION 5.05 hereof;
(c) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary shall at
any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal
or proceeding for review shall have been secured;
(d) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens) and
Liens to secure the performance of bids, tenders or trade contracts, or
to secure statutory obligations, surety or appeal bonds or other Liens
of like general nature incurred in the ordinary course of business and
not in connection with the borrowing of money which, in the aggregate,
do not have a Material Adverse Effect; provided in each case, the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(e) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Subsidiaries or which customarily
exist on properties of corporations engaged in similar activities and
similarly situated and
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which do not in any event materially impair their use in the operation
of the business of the Company and its Subsidiaries; and
(f) Liens, in addition to those described in the preceding
paragraphs of this SECTION 5.11, given to secure the payment of
Indebtedness permitted within the limitations of SECTION 5.09 for the
purchase price incurred in connection with the acquisition or
improvement of fixed assets useful and intended to be used in carrying
on the business of the Company or a Subsidiary, including Liens
existing on such fixed assets at the time of acquisition thereof or at
the time of acquisition by the Company or a Subsidiary of any business
entity then owning such fixed assets, whether or not such existing
Liens were given to secure the payment of the purchase price of the
fixed assets to which they attach so long as they were not incurred,
extended or renewed in contemplation of such acquisition or
improvement, provided that (i) the Lien shall attach solely to the
fixed assets acquired, improved or purchased and (ii) at the time of
acquisition or improvement of such fixed assets, the aggregate amount
remaining unpaid on all Indebtedness secured by Liens on such fixed
assets whether or not assumed by the Company or a Subsidiary shall not
exceed an amount equal to 100% of the lesser of the total purchase
price or fair market value at the time of acquisition or improvement of
such fixed assets (as determined in good faith by the Board of
Directors).
Section 5.12. Restricted Payments. The Company will not take any of the
following actions if after giving effect thereto either (a) any Event of Default
shall have occurred and be continuing or (b) the Debt Service Coverage Ratio for
the 12 months preceding the date of the proposed action was less than 1.25 to
1.00:
(i) Make any distributions, either in cash or property, on
any partnership interests of the Company;
(ii) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any partnership interests of the Company or
any rights or options to purchase or acquire any partnership interests
of the Company;
(iii) Make any other payment or distribution, either directly
or indirectly or through any Subsidiary, in respect of any partnership
interests of the Company; or
(iv) Make any Investment in minority interests of any Person
for the express purpose of developing any Expansion Project.
Section 5.13. Investments. The Company will not, and will not permit
any Subsidiary to, make any Investments, other than:
(a) Investments in existence as of the Closing Date and
described in a certificate delivered pursuant to the Note Purchase
Agreement;
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(b) Investments by the Company and its Subsidiaries in and to
Subsidiaries, including any Investment in a corporation or a
partnership which, after giving effect to such Investment, will become
a Subsidiary;
(c) subject to the limitations of SECTION 5.12(IV), Investments
in minority interests of Persons for the express purpose of developing
any Expansion Project;
(d) Investments in commercial paper maturing in 270 days or
less from the date of acquisition which, at the time of acquisition by
the Company or any Subsidiary, is accorded an A-1 rating or better by
Standard & Poor's Ratings Group or a Prime-1 rating or better by
Xxxxx'x Investors Service, Inc. or an equivalent rating from any other
nationally recognized credit rating agency;
(e) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case,
maturing in 12 months or less from the date of acquisition thereof;
(f) Investments in demand deposits, time deposits and
certificates of deposit maturing within one year from the date of
acquisition thereof, issued by a commercial bank having capital,
surplus and undivided profits aggregating at least $500,000,000 and
whose long-term certificates of deposit are, at the time of acquisition
of any such Investments by the Company or a Subsidiary, rated A- or
better by Standard & Poor's Ratings Group or A3 or better by Xxxxx'x
Investors Service, Inc. or an equivalent rating from any other
nationally recognized credit rating agency; and
(g) Investments in repurchase agreements having terms of not
less than 30 days, fully secured by underlying securities of the type
specified in paragraph (e) of this SECTION 5.13 entered into with a
depository institution or trust company acting as principal described
in clause (f) of this SECTION 5.13.
For purposes of this SECTION 5.13 at any time when a corporation or a
partnership becomes a Subsidiary, all Investments of such corporation or
partnership, as the case may be, at such time shall be deemed to have been made
by such corporation or partnership, as a Subsidiary, at such time.
Section 5.14. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Subsidiary to, (i) consolidate with or
be a party to a merger with any other corporation or (ii) sell, lease or
otherwise dispose of the assets of the Company and its Subsidiaries other than
sales of assets in the ordinary course of Business; provided, however, that:
(1) any Subsidiary may merge or consolidate with or into the
Company or any other Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the surviving
or continuing corporation;
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(2) the Company may consolidate or merge with any other entity
if (A) the Company shall be the surviving or continuing entity, (B) at
the time of such consolidation or merger and after giving effect
thereto (x) no Default or Event of Default shall have occurred or be
continuing and (y) the Company would be able to incur an additional
$1.00 of Additional Notes under the provisions of SECTION 5.09(a)(2);
(3) any Subsidiary may sell, lease or otherwise dispose of all
or any substantial part of its assets to the Company or a Wholly-owned
Subsidiary;
(4) the Company may sell or otherwise dispose of assets which a
senior financial officer of the Company determines in good faith have
become worn out, obsolete, unserviceable or are unnecessary in the
business operations of the Company and its Subsidiaries;
(5) the foregoing provisions of paragraph (a) of this SECTION
5.14 shall not in any way limit or restrict sales, transfers or other
dispositions permitted in paragraph (d) of this SECTION 5.14; and
(b) The Company will not permit any Subsidiary to issue or sell any
shares of stock of any class (including as "stock" for the purposes of this
SECTION 5.14 any warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into stock) or if the
Subsidiary is not a corporation, any of the equity interest of such Subsidiary
to any Person other than the Company or a Wholly-owned Subsidiary, except for
the purpose of qualifying directors.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Subsidiary (except to qualify directors) or in the case
of a Subsidiary which is not a corporation, any equity interest or any
Indebtedness of any Subsidiary, and will not permit any Subsidiary to sell,
transfer or otherwise dispose of (except to the Company or a Wholly-owned
Subsidiary) any shares of stock or in the case of a Subsidiary which is not a
corporation, any equity interest or any Indebtedness of any other Subsidiary.
(d) Notwithstanding any of the foregoing provisions of this SECTION
5.14 to the contrary but subject to the provisions of SECTION 3.04, EnergySouth
and its Subsidiaries (as defined in the Guaranty for the Series 8.45% Notes) may
at any time sell, transfer or otherwise dispose of Partnership Interests in the
Company (as defined in the Partnership Agreement), provided, that after giving
effect thereto EnergySouth and its Subsidiaries shall own at least 51% of the
Partnership Interests in the Company and MGS Storage Services Inc. shall be the
General Partner of the Company and a Wholly-owned Subsidiary of EnergySouth.
Section 5.15. Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may repurchase or make any
offer to repurchase any Notes unless an offer has been made to repurchase Notes,
pro rata, from all holders of the Notes at the same time and upon the same
terms. In case the Company repurchases or otherwise acquires any Notes, such
Notes shall immediately thereafter be cancelled and no Notes shall be issued in
substitution therefor.
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Section 5.16. Reports and Rights of Inspection. The Company will
furnish (in duplicate if requested) to each Institutional Holder of the Notes
then outstanding:
(a) Quarterly Statements. As soon as available and in any
event within 45 days after each of the first, second and third
quarterly accounting periods in each fiscal year of the Company, copies
of consolidated and consolidating balance sheets of the Company and its
Subsidiaries as of the end of such quarterly accounting period and
consolidated and consolidating statements of income and of cash flows
of the Company and its Subsidiaries for the portion of such fiscal year
ended with the last day of such quarterly accounting period, all in
reasonable detail prepared in accordance with GAAP and stating in
comparative form the consolidated and consolidating figures for the
corresponding date and period in the previous fiscal year and prepared
and certified as complete and correct by the principal financial
officer of the Company, subject, however, to year-end audit
adjustments.
(b) Annual Statements. As soon as available and in any event
within 90 days after the end of each fiscal year of the Company,
(i) copies of consolidated and consolidating balance
sheets of the Company and its Subsidiaries as of the end of
such fiscal year and consolidated and consolidating statements
of income, common stockholders' equity and of cash flows of
the Company and its Subsidiaries for such fiscal year, all in
reasonable detail prepared in accordance with GAAP and in each
case setting forth in comparative form the consolidated and
consolidating figures as of the end of and for the previous
fiscal year and accompanied by a report thereon of a firm of
independent public accountants of recognized national standing
selected by the Company to the effect that the consolidated
financial statements present fairly, in all material respects,
the consolidated financial position of the Company and its
Subsidiaries as of the end of the fiscal year being reported
on and the consolidated results of the operations and cash
flows for said year in conformity with generally accepted
accounting principles and that the audit of such financial
statements by such accountants has been conducted in
accordance with generally accepted auditing standards, and
(ii) a report of such independent public accountants
with respect to the financial statements specified in the
foregoing clause (i) stating that in making the examination
necessary for their report on such financial statements such
accountants have obtained no knowledge of any Default or Event
of Default in the performance of any covenants under the
Indenture, or, if they shall have obtained knowledge of any
such Default or Event of Default, specifying the same and the
nature thereof;
(c) Officer's Certificates. Concurrently with furnishing the
above financial statements in paragraphs (a) and (b) above, a
certificate of the principal financial officer of the General Partner
setting forth: (i) the information and computations (in sufficient
detail) required in order to establish whether the Company was in
compliance with the
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requirements of SECTIONS 5.07 through 5.15 at the end of the period
covered by the financial statements then being furnished, and (ii)
whether there existed as of the date of such financial statements and
whether, to the best of such officer's knowledge, there exists on the
date of the certificate or existed at any time during the period
covered by such financial statements any Default or Event of Default
under the Indenture or, if there shall be any Default or Event of
Default, specifying the same, and the nature thereof, of which the
signer of such certificate may have knowledge;
(d) Notice of Default. As promptly as practicable (but in any
event not later than 15 days) after any Responsible Officer of the
General Partner obtains knowledge of the occurrence of any Event of
Default, which has not been remedied under the Indenture, a certificate
of the President or any Vice President of the General Partner
describing the same and stating the date of commencement thereof, what
action the Company proposes to take with respect thereto and the
estimated date when the same will be remedied;
(e) Audit Reports. Promptly after the receipt thereof by the
Company, copies of any audits submitted to the Company or any of its
Subsidiaries by independent accountants in connection with each annual,
special or interim audit of the accounts of the Company or any of its
Subsidiaries made by such accountants, together with copies of any
reports, schedules and other information furnished to the Board of
Directors by such accountants in connection therewith;
(f) SEC and Other Reports. Promptly after the same are
available, copies of all such proxy statements, financial statements
and reports as the Company or any of its Subsidiaries shall send or
make available generally to its stockholders (other than any such
statement or report of a Subsidiary made available solely to the
Company), and copies of all such regular and periodic reports as the
Company or any Subsidiary may be required to file with the Securities
and Exchange Commission or any similar or corresponding governmental
commission, department or agency substituted therefor, or with any
securities exchange;
(g) List of ERISA Plans. Promptly after request by any
Institutional Holder of the Notes, or by any prospective purchaser of
any of the Notes from any Institutional Holder, a list identifying all
employee benefit plans with respect to which the Company, EnergySouth
or any other party obligated to pay the Notes is a party in interest
within the meaning of the Employee Retirement Income Security Act of
1974, as amended, or any rule or regulation issued thereunder;
(h) Notices Regarding Construction Completion. Promptly upon
completion of Phase I construction of the Second Cavity, written
notification of the date on which such construction was completed,
including a copy of the written notice delivered to Southern Company
pursuant to Section 2.1 of the Southern Company Contract certifying the
date which is the Commencement Date;
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(i) Requested Information. Such other information relating to
the financial condition of the Company and its Subsidiaries (if any) as
any Institutional Holder may from time to time reasonably request; and
(j) Annual Report to Trustee. Within 120 days after the end
of each fiscal year, the Company will deliver to the Trustee copies of
the Officers' Certificate referred to in SECTION 5.16(c) and the
accountants' certificate referred to in SECTION 5.16(b)(II).
Without limiting the foregoing, the Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(x) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(y) Default -- if a Default or Event of Default then exists,
at the expense of the Company to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
Section 5.17. Agreements Regarding Use of Proceeds and Construction. (a)
The Company agrees to use all proceeds from the sale of the Series 8.45% Notes
only for the purposes set forth in the Private Placement Memorandum including,
without limitation, the payment of amounts due on the Notes.
(b) The Company agrees that it will complete construction of the
facilities required to be constructed by it under the Southern Company Contract
on or before the date required thereunder and agrees that the Commencement Date
will occur no later than December 20, 2002, or if force majeure is applicable
(as contemplated in the Southern Company Contract) then such Commencement Date
shall occur no later than June 20, 2003.
Section 5.18. Additional Collateral Agreements. The Company agrees that
each material storage service agreement and transportation service agreement
entered into by the Company with respect to the Facility from and after the
Closing Date shall constitute a Collateral Agreement hereunder and, within 5
Business Days of the execution and delivery of each such additional agreement,
the Company will:
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(a) furnish notice to the Trustee and the Noteholders,
including a copy of such additional agreement certified as true,
correct and complete by a Responsible Officer of the General Partner;
(b) after the filing thereof, provide copies of all
applications to the Alabama Public Service Commission (and each other
regulatory authority, to the extent applicable), and, promptly upon
issuance, copies of the related orders of such authorities and all
amendments to any such applications or orders, authorizing the
execution and delivery of such additional agreement, certified as true,
correct and complete by a Responsible Officer of the General Partner;
(c) amend each Uniform Commercial Code financing statement
filed in connection with this Indenture in order to evidence the first
priority security interest and lien on each such agreement created by
this Indenture;
(d) cause to be executed and delivered an Assignment Consent
by the Contracting Party to such additional agreement and an opinion of
counsel of such Contracting Party to the effect that such additional
agreement has been duly authorized, executed and delivered by the
Contracting Party and is enforceable against the Contracting Party in
accordance with its terms; and
(e) execute, acknowledge and deliver any and all such further
instruments and take such further acts as the Trustee may reasonably
require in connection with such additional Collateral Agreement.
Section 5.19. Collateral Free and Clear and Further Assurances. The
Company warrants that the Collateral on the date hereof is free and clear of any
security interest, lien, charge or encumbrance thereon or affecting the title
thereto except for liens to be released prior to or concurrently with the
execution and delivery of this Indenture, and that, upon the release of such
liens and the due execution and delivery of this Indenture and the filing of a
UCC-1 financing statement with the Alabama Secretary of State, this Indenture
will constitute a perfected first lien thereon.
The Company will from time to time execute, acknowledge and deliver any
and all such further assurances, conveyances, indentures supplemental hereto or
assignments of property hereafter acquired by the Company as are required by the
terms of this Indenture or as the Trustee may reasonably require to subject the
property which is intended to be subject to the lien of this Indenture to the
lien hereof.
Without limiting the foregoing, the Company will, at its own expense,
cause to be filed and recorded in such manner and in such places any financing
statements and continuation statements required by law to be so filed and
recorded in order to fully preserve and protect the rights of the Trustee as
secured party under this Indenture and promptly after filing or recording any
such statement the Company will provide the Trustee with a copy thereof.
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Section 5.20. Payment of Certain Charges. In the event of the failure of
the Company in any respect to comply with the covenants contained in SECTION
5.03, 5.04 or 5.05 hereof or to keep the Collateral free of liens and other
charges, the Trustee or any Noteholder shall have the right (without prejudice
to any other rights arising by reason of such Default) to withdraw moneys from
the Collection Account or to advance or expend moneys for the purpose of
performing such covenants on behalf of the Company. The Company shall be
immediately notified of any such advance. All sums so advanced for any of the
aforesaid purposes shall at once be repayable by the Company, shall bear
interest at the Prime Rate plus one percent per annum until paid, and shall be
secured hereby having the benefit of the lien hereby created in priority to the
Notes. The "Prime Rate" shall mean the rate of interest published in the Wall
Street Journal from time to time as the "prime rate" or the equivalent.
Section 5.21. Appointment of Successor Trustee. So long as no Default or
Event of Default shall have occurred and be continuing, the Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint a
Trustee in the manner and in conformity with the requirements specified in
SECTION 8.09 hereof, so that there shall at all times be a Trustee hereunder.
Section 5.22. Amendments to Collateral Agreements. The Company will not
waive, modify or amend any of the provisions of any Collateral Agreement without
first obtaining the prior written consent thereto of the Required Holders,
provided that (a) without such prior written consent, the Company may amend the
Firm Intrastate Transportation Agreement dated as of October 30, 2000 between
the Company and Xxxx Gateway Pipeline Company, Inc. ("Xxxx") in connection with
the exercise by Xxxx of its option to contract for additional firm natural gas
transportation pursuant to the Transportation and Storage Option Agreement dated
as of October 30, 2000 between the Company and Xxxx; and
(b) without such prior written consent, the Company may enter into any
other amendment or modification to a Collateral Agreement if such amendment or
modification (i) does not result in any reduction in the payments required to be
made to the Company under such Collateral Agreement, (ii) does not result in any
extension for the time of payment under such Collateral Agreement, and (iii) the
terms of such Collateral Agreement, after giving effect to any such amendment or
modification, are otherwise no less favorable to the Company than the terms of
such Collateral Agreement immediately prior to such amendment or modification.
In addition to the foregoing, in connection with any amendment or modification
to a Collateral Agreement which increases the storage or transportation services
to be provided by the Company, the Company shall obtain from the Contracting
Party an amendment to the related Assignment Consent to assure the continuing
and complete lien created under this Indenture on such Collateral Agreement and
the amounts payable by the Contracting Party thereunder unless the existing
Assignment Consent expressly contemplates that the consent to assignment
provided thereunder applies equally to all amendments and supplements to the
related Collateral Agreement.
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A copy of each waiver, modification or amendment to any Collateral
Agreement and each other document required by this SECTION 5.22 shall, promptly
upon execution, be delivered by the Company to the Trustee.
ARTICLE SIX
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Trustee to Maintain and Furnish Lists of Noteholders. The
Trustee covenants and agrees that it will, in connection with its duties as Note
Registrar and transfer agent pursuant to SECTION 2.09, maintain a list, in such
form as the Trustee may reasonably determine to be appropriate, containing the
names and addresses of all of the holders of Notes and the respective series,
unpaid principal amounts and number of Notes held by each such holder. The list
of Noteholders referred to in this SECTION 6.01 shall at all reasonable times be
open for inspection by any Noteholder or the Company. Upon request by any
Noteholder or the Company, the Trustee shall promptly (and in no event later
than the second Business Day following a request) furnish such Person, at the
expense of such Person, a copy of such list of Noteholders.
Section 6.02. Opinions of Counsel to be Filed With Trustee. The Company
covenants and agrees:
(a) to file with the Trustee, within 120 days after execution
and delivery of this Indenture and of each supplemental indenture, an
Opinion of Counsel either stating that in the opinion of such counsel
this Indenture and each supplemental indenture effectively creates the
lien intended to be created thereby; and
(b) to file with the Trustee on May 30 in each year,
beginning with the year 2001, an Opinion of Counsel, dated within 30
days of such date of such year, either stating that in the opinion of
such counsel such action has been taken with respect to the filing and
continuation of Uniform Commercial Code financing statements or other
instruments of further assurance as are necessary to maintain the
security interest created by and the lien of this Indenture, and
reciting the details of such action, or stating that in the opinion of
such counsel no such action is necessary to maintain such lien.
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
Section 7.01. Events of Default Defined; Acceleration of Maturity;
Rescission and Annulment. In case one or more of the following events (herein
called Events of Default) shall have occurred and be continuing for any reason
whatsoever (and whether such occurrence shall be voluntary or involuntary or
come about or be effected by operation of law or otherwise), that is to say:
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(a) default in the payment of any interest on any Note for
more than five days after the same becomes due and payable; or
(b) default in the payment of the principal of (and premium,
if any, on) any Note as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration, or as otherwise
herein provided; or
(c) default in the payment of any sinking fund installment
provided for in this Indenture or in any Note as and when the same
shall become due and payable; or
(d) default in the observance or performance of the
covenants, conditions or agreements on the part of the Company
contained in SECTIONS 5.07 through 5.14, 5.17 through 5.19 or 5.22; or
(e) default on the part of the Company in the performance of
any other of the covenants or agreements on the part of the Company in
any Notes or in this Indenture contained and continuance of such
default for a period of 30 days after the earlier of (i) the date any
Responsible Officer of the General Partner first became aware of such
default or (ii) the date on which written notice specifying such
default, stating that such notice is a Notice of Default hereunder, and
requiring the same to be remedied, shall have been given to EnergySouth
and the Company by the Trustee, or to EnergySouth, the Company and the
Trustee by any holder of any Note at the time Outstanding; or
(f) (i) default by EnergySouth in the payment of any amount
due under a Guaranty or (ii) any Guaranty of Notes of any series by
EnergySouth shall cease to be in full force and effect for any reason
whatsoever, including, without limitation, a determination by any
governmental authority of competent jurisdiction that such Guaranty is
invalid, void or unenforceable or the Guarantor shall contest or deny
in writing the validity or enforceability of any of its obligations
under any Guaranty; or
(g) default in the observance of the covenants, conditions or
agreements on the part of EnergySouth contained in a Guaranty of Notes
of any series which are designated as significant financial covenants
("Significant Financial Covenants") in the Indenture or Supplemental
Indenture under which such Notes are issued, the Significant Financial
Covenants for the Series 8.45% Notes being hereby designated to be
Sections 6.1 through 6.6 of the Guaranty for the Series 8.45% Notes; or
(h) default on the part of EnergySouth in the performance of
any other of the covenants or agreements on the part of EnergySouth in
a Guaranty contained and continuance of such default for a period of 30
days after the earlier of (i) the date any Responsible Officer of
EnergySouth first became aware of such default or (ii) the date on
which written notice specifying such default, stating that such notice
is a Notice of Default hereunder, and requiring the same to be
remedied, shall have been given to EnergySouth and the Company by the
Trustee, or to EnergySouth, the Company and the Trustee by the holder
of any Note at the time Outstanding; or
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(i) default on the part of the Company in the observance of
any of the material covenants, conditions or agreements contained in
any Collateral Agreement; or
(j) default on the part of the Company in the payment of the
principal of or interest on any Indebtedness of the Company for
borrowed money in an aggregate amount in excess of $2,500,000, if and
when the same shall become due and payable by the lapse of time, by
declaration, or call for redemption or otherwise, and such default
shall continue beyond the period of grace, if any, allowed with respect
thereto; or
(k) default on the part of the Company in the performance of
any of the covenants or agreements on the part of the Company in any
indenture, agreement or other instrument under which any Indebtedness
of the Company for borrowed money may be issued and such default or
event shall continue for a period of time sufficient to permit the
acceleration of the maturity of any Indebtedness of the Company
outstanding thereunder in an aggregate amount in excess of $2,500,000;
or
(l) the entry of a decree or order by a court having
jurisdiction in the premises (i) adjudging the Company or EnergySouth a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of the
Company or EnergySouth or any of the Indebtedness of the Company or
EnergySouth under any bankruptcy, insolvency or similar law, or (ii)
appointing, on the ground of insolvency or bankruptcy, a receiver,
liquidator, trustee or assignee in bankruptcy or insolvency of the
Company or EnergySouth or of any substantial part of its property, or
for the winding up or liquidation of its affairs, and the continuance
of such decree or order unvacated and unstayed for a period of 30 days;
or
(m) the Company or EnergySouth shall institute proceedings to
be adjudicated a voluntary bankrupt or insolvent, or shall consent to
the filing of a bankruptcy proceeding or insolvency proceeding against
it, or shall file a petition or answer or consent seeking
reorganization under any bankruptcy, insolvency or similar law, or
shall consent to the filing of any such petition, or shall consent to
the appointment on the ground of insolvency or bankruptcy of a receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of it
or of any substantial part of its property, or shall make a general
assignment for the benefit of creditors or shall admit in writing its
inability to pay its debts generally as they become due; or
(n) if final judgment for the payment of money in excess of
$2,500,000 shall be entered against the Company or EnergySouth and such
judgment shall remain unsatisfied and the execution thereof shall
remain unstayed for a period of 60 days after the entry of such
judgment and receipt of actual notice thereof by the Company or
EnergySouth, as the case may be, or such judgment shall remain
unsatisfied for a period of 60 days after termination of any stay of
execution thereon entered within such sixty day period; or
(o) if any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company in connection with
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the consummation of the issuance and delivery of any Notes of any
series to any holder thereof or furnished by the Company pursuant
hereto, is untrue in any material respect as of the date of the
issuance or making thereof; or
(p) if any representation or warranty made by EnergySouth in
any statement or certificate furnished by EnergySouth in connection
with the delivery of any Guaranty of any series to any Noteholder is
untrue in any material respect as of the date of the issuance or making
thereof;
then, in the case any Event of Default described in paragraphs (a) through (k),
inclusive, and (n) through (p), inclusive, has happened and is continuing, the
Trustee may, if it shall have knowledge of the Event of Default, and if directed
by the holders of not less than 25% in aggregate principal amount of the Notes
then Outstanding hereunder shall, declare the entire unpaid principal amount of
all Notes, plus (x) all accrued and unpaid interest thereon and (y) the
Make-Whole Amount determined in respect of such principal amount (to the full
extent permitted by applicable law) to be due and payable immediately, by notice
in writing to the Company and, upon any such declaration, the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. When any Event of Default
described in paragraph (l) or (m) has occurred, then the entire unpaid principal
amount of all Notes, plus (x) all accrued and unpaid interest thereon and (y)
the Make-Whole Amount determined in respect of such principal amount (to the
full extent permitted by applicable law) shall immediately become due and
payable without presentment, demand or notice of any kind. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
The holders of more than 75% in aggregate principal amount of the Notes
at the time Outstanding hereunder may, by written instrument filed with the
Company and the Trustee, rescind and annul any declaration accelerating the
maturity of the Notes pursuant to SECTION 7.01 and the consequences thereof;
provided, however, that at the time such declaration is annulled and rescinded
no judgment or decree has been entered for the payment of any monies due
pursuant to the Notes or this Indenture, all arrears of principal, premium, if
any, and interest on all the Notes and expenses of the Trustee and of the
holders of the Notes shall be paid or shall be provided for by deposit with the
Trustee of a sum sufficient to pay the same and no other Default or Event of
Default shall have occurred and be continuing. In case of any such annulment or
rescission the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder respectively.
Section 7.02. Covenant to Make Payments upon Default. The Company
covenants that if the principal and interest on any Note shall have become due
and payable by reason of the exercise by the Trustee of the right of
acceleration as stated in SECTION 7.01 hereof, then, upon demand of the Trustee,
the Company will promptly pay to the Trustee, for the benefit of the holders of
the Notes, the whole amount that then shall become due and payable on all such
Notes
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for principal (and premium, if any) or interest, or both, as the case may be,
with interest upon the overdue principal (and premium, if any) and (to the
extent that payment of such interest is enforceable under applicable law and if
provided for in the Notes) upon overdue installments of interest at the rate or
rates expressed in the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under SECTION 8.06. The Trustee in its discretion
may exercise in addition all other rights and powers described herein or
otherwise available at law as it may deem best for the protection and
enforcement of the interest and rights of the Trustee and of the holders of the
Notes then Outstanding.
Section 7.03. Remedies in Case of Default. In case the Company shall
fail to comply with the provisions of SECTION 7.02, the Trustee may and, if
directed by the holders of a majority in aggregate principal amount of the Notes
Outstanding, shall:
(a) subject to applicable regulatory requirements, personally
or by agents or attorneys (i) collect and receive all earnings,
revenues, issues, profits and income from the Collateral or any part
thereof (and for such purpose the Company does hereby irrevocably
constitute and appoint the Trustee its true and lawful attorney-in-fact
for it and in its name, place and stead to receive, collect and give
receipt for all of the foregoing, the Company irrevocably acknowledging
that any payment made to the Trustee hereunder shall be a good receipt
and acquittance against the Company to the extent so made), (ii) apply
the net proceeds arising from any such collection of the Collateral as
provided in SECTION 7.05 hereof. The right to collect the revenues,
issues and profits thereof, shall be in addition to all other rights or
remedies of the Trustee hereunder or afforded by law, and may be
exercised concurrently therewith or independently thereof. The expenses
(including any reasonable receiver's fees, counsel fees, costs and
agent's compensation) incurred pursuant to the powers therein
contained, which the Company promises to pay upon demand together with
interest at the Prime Rate as defined in SECTION 5.20, shall be secured
hereby. The Trustee shall not be liable to account to the Company for
any action taken pursuant hereto other than to account for any revenues
actually received by the Trustee;
(b) proceed to protect and enforce its rights by a suit or
suits in equity or at law, or for the specific performance of any
covenant or agreement contained herein or in the Notes or in the
Collateral Agreements, or in aid of the execution of any power herein
or therein granted, or for the enforcement of any other appropriate
legal or equitable remedy; or
(c) make demand upon EnergySouth for payment of amounts
payable under any Guaranty.
The Trustee shall have any and all rights and remedies (including,
without limitation, extra judicial power of sale) provided to a secured party by
the Alabama Uniform Commercial Code (the "Uniform Commercial Code") with respect
to any and all of the Collateral which is governed by the Uniform Commercial
Code. Any requirement of said Code for reasonable notification shall be met by
mailing written notice to the Company at its address set forth in
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SECTION 15.05 at least 21 days prior to the sale or other event for which such
notice is required. The proceeds of any sale or realization upon any such
property shall be applied to the payment of the Notes, after first deducting
therefrom any expenses for retaking, selling and otherwise disposing of said
property, including reasonable attorneys' fees and legal expenses incurred by
the Trustee in connection therewith.
Section 7.04. Trustee's Powers. The Trustee shall have all the powers,
rights and privileges as may be required and reasonably necessary to perform,
accomplish and comply with the duties, obligations and undertakings required or
permitted by this Indenture to be made, kept and performed by the Trustee.
Further, in case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition, or other
similar judicial proceedings affecting the Company, any other obligor on the
Notes, or the creditors or property of either, the Trustee shall have power to
intervene in such proceedings and take any action therein that may be permitted
by the court and shall be entitled to file such proofs of claim and other papers
and documents as may be necessary or advisable in order to have the claims of
the Trustee and of the Noteholders allowed in any judicial proceeding relative
to the Company, or any other obligor on the Notes, or its creditors or its
property, for the entire amount due and payable by the Company or such other
obligor under the Indenture at the date of institution of such proceedings and
for any additional amount that may become due and payable by the Company or such
other obligor after such date, and to collect and receive any moneys or other
property payable or deliverable on any such claim, and to distribute the same
after the deduction of the amount payable to the Trustee under SECTION 8.06; and
any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Noteholders to make such payments to the Trustee, and,
in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due to it under
SECTION 8.06.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the pro rata benefit of the holders of the
Notes then Outstanding issued under the terms of this Indenture and supplements
thereto.
In case of a Default or Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Section 7.05. Application of Moneys by Trustee. Any moneys collected by
the Trustee pursuant to this Article Seven shall be applied in the order
following at the date or dates fixed by
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the Trustee and, in case of the distribution of such moneys on account of
principal (or premium, if any) or interest:
First: To the payment of costs and expenses of collection,
and of all amounts payable to the Trustee under SECTION 8.06;
Second: In case the principal of any of the Outstanding Notes
shall not have become due, to the payment of interest thereon, in the
order of maturity of the installments of such interest, with interest
(if such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate per annum expressed in the Notes,
such payments to be made ratably to the persons entitled thereto,
without discrimination or preference;
Third: In case the principal of any of the Outstanding Notes
shall have become due, by acceleration or otherwise, to the payment of
the whole amount then owing and unpaid upon the Notes for principal
(and premium, if any) and interest, with interest on the overdue
principal (and premium, if any) and (if such interest has been
collected by the Trustee) upon overdue installments of interest at the
rate per annum expressed in the Notes; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Notes, then to the payment of such principal (and premium, if any) and
interest, without preference or priority, ratably according to the
aggregate of such principal (and premium, if any) and accrued and
unpaid interest; and
Fourth: To the payment of the remainder, if any, to the
Company, its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same, or as a court of competent jurisdiction
may direct.
Section 7.06. Limitation on Suits; Preservation of Rights to Payment and
to Xxx. (a) No holder of any Note shall have any right by virtue or by availing
of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law against the Company, upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder against the Company, unless
(i) such holder previously shall have given to the Trustee
written notice of Default and of the continuance of the Event of
Default therein specified, as hereinbefore provided;
(ii) the holders of not less than 25% in principal amount of
the Notes then Outstanding shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder;
(iii) the parties making such request shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby; and
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(iv) the Trustee for 10 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such
action, suit or proceeding;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Note with every other taker and holder and the Trustee that
no one or more holders of Notes shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb, or
prejudice the rights of the holders of any other Notes, or to obtain or seek to
obtain priority over or preference to any other such holder or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Notes.
(b) Notwithstanding any other provisions of this Indenture, however,
the right of any holder of any Note to receive payment of the principal of
(including any sinking fund payment due thereon) and premium, if any, and
interest on such Note, on or after the due date (or sinking fund payment dates)
expressed in such Note, or to institute suit for the enforcement of any such
payment on or after such dates, shall not be impaired or affected without the
consent of such holder.
Section 7.07. Remedies Cumulative. All powers and remedies given by this
Article Seven to the Trustee or to the Noteholders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the holders of the
Notes, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or any holder of any Note to exercise any right
or power accruing upon any Default or Event of Default shall impair any such
right or power, or shall be construed to be a waiver of any such Default or
Event of Default or any acquiescence therein; and, subject to the provision of
SECTION 7.06, every power and remedy given by this Article Seven or by law to
the Trustee or to the Noteholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Noteholders.
Section 7.08. Rights of Noteholders to Direct Trustee; Waivers. The
Required Holders shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. The Required Holders may on behalf
of the holders of all of the Notes waive any Default or Event of Default and its
consequences, except a Default in the payment of the principal of (including any
sinking fund payment), or premium or interest on, any of the Notes as and when
the same shall become due by the terms of such Notes, or a call for redemption,
which may be waived only by written consent of each holder of any Note so in
Default. In the case of any waiver accomplished pursuant to this SECTION 7.08,
such Default shall cease to exist and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose hereof, and the Company,
the Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
Section 7.09. Notice by Trustee of Defaults. The Trustee shall, within
five Business Days after the occurrence of an Event of Default of which it shall
have knowledge, give to the
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Noteholders, notice of all Defaults known to the Trustee, transmitted by
telecopy and confirmed by overnight courier to all Noteholders as their names
and addresses appear on the Note Register, unless such Defaults shall have been
cured before the giving of such notice.
Section 7.10. Costs of Suit. The Company, the Trustee and each holder of
any Note, by his acceptance thereof, agree that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken or omitted by
it as Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
SECTION 7.10 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Noteholder or group of Noteholders holding in the aggregate
more than 25% in principal amount of the Notes Outstanding, or to any suit
instituted by any Noteholder for the enforcement of the payment of the principal
of (or premium, if any) or interest on any Note, on or after the respective due
dates expressed in such Note.
ARTICLE EIGHT
THE TRUSTEE
Section 8.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default of which the Trustee shall have
knowledge,
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise thereof, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
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(i) This Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Required Holders relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture; and
(iv) Whether or not an Event of Default shall have occurred,
no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable ground for
believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
Section 8.02. Certain Rights of the Trustee. Subject to and except as
otherwise provided in SECTION 8.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, note,
debenture, coupon, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Company Order or
Company Request and any resolution of the Board of Directors of the
General Partner shall be sufficiently evidenced to the Trustee by a
Board Resolution;
(c) The Trustee may consult with counsel and the advice or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Noteholders pursuant to the provisions of
this Indenture, unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby; subject to the
provisions of SECTION 8.01(c)(4), nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the continuance of
an Event of Default, to exercise such of the rights and powers vested
in it by this Indenture, and to use the same degree of care and skill
in their exercise, as a
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prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture; and
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 8.03. Trustee Not Responsible for Certain Matters. The recitals
contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of any
indenture supplemented hereto or of any Note. The Trustee shall not be
accountable for the use of or application by the Company of any Notes or of the
proceeds of any Notes or for the use or application of any Trust Moneys paid
over by the Trustee in accordance with any provision of this Indenture. The
Trustee shall not be deemed to have knowledge of any Default or Event of Default
unless and until a Responsible Officer shall have actual knowledge thereof or
the Trustee shall have received written notice thereof from the holder of any
Note or the Company.
Section 8.04. Trustee's Relationship with Company. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company with the same rights it would have if it
were not the Trustee.
Section 8.05. Trust Moneys. All moneys received by the Trustee hereunder
shall, until applied as herein provided, be held in trust by the Trustee for the
purposes for which they were received but need not be segregated from other
funds except to the extent required herein or by law. The Trustee shall be under
no liability for interest on any such moneys except such as it may agree with
the Company to pay thereon. Except during the continuance of an Event of
Default, all interest so agreed to be paid on any such moneys shall be paid from
time to time upon Company Order.
Section 8.06. Trustee's Compensation. The Company covenants and agrees
to pay to the Trustee from time to time reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it hereunder, and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the expenses and
disbursements of the Trustee's counsel and of all persons not regularly in its
employ) except any such expense, disbursement, or advances as may arise from the
Trustee's negligence or bad faith. The Company also covenants to indemnify the
Trustee for, and to hold the Trustee harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Trustee and
arising out of or in connection with the acceptance or administration of this
trust, including
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the costs and expenses of defending itself against any claim of liability in
connection with the performance of its duties or exercise of its rights
hereunder. The obligations of the Company under this SECTION 8.06 to compensate
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured under this Indenture by a lien prior to that of the
Notes upon all property and funds held or collected by the Trustee as such.
Section 8.07. Reliance on Officers' Certificates by Trustee and Other
Persons. Except as otherwise provided in SECTION 8.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the Trustee. The
agents and representatives of the Trustee and any experts or counsel whose
opinions are required or permitted to be delivered to the Trustee for any
purpose hereunder shall likewise be fully warranted in relying and acting upon
the existence of any matters proved or established by any such certificate
delivered to any such expert or counsel (unless other evidence in respect
thereof be herein specifically described).
Section 8.08. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder that shall be a company organized and doing
business under the laws of the State of Alabama or of the United States of
America authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $250,000,000 subject to supervision or
examination by federal or state authority. If such company publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
SECTION 8.08, the combined capital and surplus of such company shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in SECTION 8.09.
Section 8.09. Resignation and Removal of Trustee; Appointment of
Successor. (a) The Trustee or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Company and the Noteholders. Upon
receiving the notice of resignation of the Trustee, the Company, if no Default
or Event of Default shall have occurred which shall then be continuing, shall
promptly appoint a successor trustee by a Board Resolution or otherwise the
Required Holders shall promptly appoint a successor trustee by an instrument in
writing, in duplicate in either case, one copy of which shall be delivered to
the resigning Trustee and one copy to the successor Trustee. If no instrument of
acceptance by a successor Trustee shall have been delivered to the resigning
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee, or any Noteholder who has been a bona fide
holder of a Note or Notes for at least six months may, subject to the provisions
of SECTION 7.10, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor Trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.
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(b) If at any time any of the following shall occur:
(i) the Trustee shall cease to be eligible in accordance with
the provisions of SECTION 8.08 and shall fail to resign after written
request therefor by the Company or by any such Noteholder; or
(ii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company, if no Default or Event of Default shall
have occurred which shall then be continuing, may remove the Trustee and appoint
a successor Trustee by Company Order in duplicate, one copy of which shall be
delivered to the Trustee so removed and one copy to the successor Trustee, or,
subject to the provisions of SECTION 7.10, any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon after such notice, if any, as it may deem proper remove the
Trustee and appoint a successor Trustee.
(c) The Required Holders may at any time remove the Trustee for cause
or without cause and without notice and appoint a successor Trustee.
(d) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Section shall become effective until the
acceptance of appointment by the successor Trustee as provided in SECTION 8.10.
Section 8.10. Acceptance of Appointment by Successor. Every successor
Trustee appointed as provided in SECTION 8.09 shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, duties
and obligations of the retiring Trustee hereunder, with like effect as if
originally named as Trustee herein; but, nevertheless, on the written request of
the Company or of the successor Trustee, the retiring Trustee shall, upon
payment of any amounts then due it pursuant to any of the provisions hereof,
execute and deliver an instrument transferring to such successor Trustee all the
estates, properties, rights, powers and trusts of the retiring Trustee and shall
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder, subject nevertheless to its liens, if
any, provided for in SECTIONS 5.20 and 8.06 hereof. Upon request of any such
successor Trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor Trustee
all such estates, properties, rights, powers and trusts.
No successor Trustee shall accept appointment as provided in this
SECTION 8.10 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of SECTION 8.08.
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Section 8.11. Successor to Trustee. Any company into which the Trustee
may be merged or with which it may be consolidated, or any company resulting
from any merger or consolidation to which the Trustee shall be a party, or any
company succeeding to all or substantially all of the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
company shall be eligible under the provisions of SECTION 8.08 without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 8.12. Separate or Co-Trustee, Powers. At any time or times, for
the purposes of conforming to any legal requirements, restrictions or conditions
in any state in which any part of the Collateral may be located, the Company and
the Trustee shall have power to appoint, and, upon the request of the Trustee,
the Company shall for such purpose join with the Trustee in the execution,
delivery and performance of any instruments and agreements necessary or proper
to appoint, another company or one or more persons, approved by the Trustee, to
act either as separate trustee or trustees or as co-trustee or co-trustees
jointly with the Trustee of all or any part of the Collateral.
Such separate trustee or trustees or co-trustee or co-trustees shall
have such powers and duties as shall be conferred or imposed by the terms of its
or their appointment; but every such separate trustee or co-trustee shall, to
the extent permitted by law, be appointed subject to the following provisions
and conditions, namely:
(a) Notes issued hereunder shall be authenticated and
delivered, and all powers, duties, obligations and rights conferred
upon the Trustee in respect of the custody of all obligations and other
securities and of all cash pledged or deposited hereunder shall be
exercised, solely by the Trustee or its successor in the trust
hereunder, and any moneys at any time coming into the hands of any such
separate trustee or trustees or co-trustee or co-trustees shall be at
once paid over to the Trustee or its successor in the trust hereunder;
(b) No power shall be exercised hereunder by any such
separate trustee or trustees or co-trustee or co-trustees except
jointly or with the consent in writing of the Trustee or its successor
in the trust hereunder;
(c) The Company and the Trustee or its successor in the trust
hereunder, at any time by an instrument in writing executed by them
jointly, may remove any separate trustee or co-trustee appointed under
this SECTION 8.12, and may likewise and in like manner appoint a
successor to such separate trustee or co-trustee so removed or who
shall resign or become incapable of acting, anything herein contained
to the contrary notwithstanding; and
(d) Any notice, request or other writing delivered solely to
the Trustee or its successor in the trust hereunder shall be deemed to
have been delivered to all of the trustees as effectually as if
delivered to each of them.
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ARTICLE NINE
CONCERNING THE NOTEHOLDERS
Section 9.01. Evidence of Action. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by an
instrument or any number of instruments of similar tenor executed by such
Noteholders in person or by agent or proxy appointed in writing.
Section 9.02. Proof of Execution. (a) Subject to the provisions of
SECTION 8.01, proof of the execution of any instrument by a Noteholder or his
agent or proxy and proof of the holding by any person of any of the Notes shall
be sufficient if made in the following manner:
The fact and date of the execution by any such person of any
instrument may be proved by (i) the certificate of any notary public,
or other officer of any jurisdiction within the United States of
America authorized to take acknowledgments of deeds to be recorded in
such jurisdiction, that the person executing such instruments
acknowledged to him the execution thereof, or (ii) an affidavit of a
witness to such execution sworn to before any such notary or other such
officer, or (iii) the guarantee of the signature of such person by any
trust company, commercial bank or member of a national stock exchange.
Where such execution is by an officer of a company or association or a
member of a partnership on behalf of such company, association or
partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority.
The fact and date of the execution of any such instrument and
the amount and numbers or other designations of Notes held by the
person so executing such instrument may also be proved in any other
manner that the Trustee may deem sufficient, and the Trustee may
require such additional proof of any matter referred to in this SECTION
9.02 as it shall deem necessary.
(b) The ownership of any Note shall be proved by the Note Register.
Section 9.03. Effect of Actions by Holders of Notes. At any time prior
to (but not after) the evidencing to the Trustee, as provided in SECTION 9.01,
of the taking of any action by the holders of Notes, any holder of a Note or
Notes who has consented to such action may, by filing written notice with the
Trustee, and upon proof of holding as provided in SECTION 9.02, revoke such
action so far as concerns such Note or Notes. Except as aforesaid, any such
action taken by the holder of any Note shall be conclusive and binding upon such
holder and upon all future holders and owners of the same Note, and of any Note
issued upon the transfer thereof or in exchange therefor or in place thereof, in
respect of anything done or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not any notation in regard thereto is made upon
such Note.
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ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent of Noteholders. In
addition to any supplemental indenture otherwise authorized by this Indenture,
the Company, when authorized by a Board Resolution, and the Trustee from time to
time and at any time, may, without the consent of the holders of any Note, enter
into an indenture or indentures supplemental hereto, in form satisfactory to the
Trustee, for one or more of the following purposes:
(a) to add to the covenants of the Company and to the
conditions, limitations and restrictions on the authorized amount,
terms or purposes of issue, authentication and delivery of the Notes or
any series of Notes, such further covenants, restrictions, conditions
or provisions for the protection of the holders of the Notes or any
series of Notes, or to surrender any right or power herein conferred on
the Company;
(b) to provide for the creation of any series of Additional
Notes, pursuant to the provisions of SECTION 3.06 hereof; and
(c) to modify, eliminate or add to the provisions of this
Indenture to the extent necessary to effect the qualification of this
Indenture under the Trust Indenture Act as that Act, or any similar
federal statute enacted in lieu thereof, is in effect at the time of
the entering into any such supplemental indenture.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Section 10.02. Modification of Indenture. With the consent (evidenced as
provided in SECTION 9.01) of the Required Holders, the Company, when authorized
by a Board Resolution, and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Notes; except that no such
supplemental indenture shall, without the consent of the holder of each
Outstanding Note adversely affected thereby, (a) extend the stated maturity of
the principal of, or any installment of interest on, any Note, or reduce the
principal amount thereof or the interest thereon or any premium payable upon the
redemption thereof, or extend the time or reduce the amount of any sinking fund
payments in respect thereof, or (b) reduce the aforesaid percentage in principal
amount of Notes, the holders of which are required to consent to any such
supplemental indenture, or (c) modify any of the provisions of this SECTION
10.02 or SECTION 7.01 or 7.08.
Upon the request of the Company, accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the
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Trustee of evidence of the consent of Noteholders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless any such supplemental indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion (but shall not be obligated to) enter into such supplemental
indenture; provided, however, that the Trustee shall be so obligated with
respect to a supplemental indenture entered into under Subsections (a) or (c) of
SECTION 10.01, notwithstanding any such effect.
It shall not be necessary for the consent of Noteholders under this
SECTION 10.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 10.03. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article Ten, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company, and every
holder of Notes theretofore or thereafter authenticated and delivered hereunder
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments; and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 10.04. Trust Indenture Act. Every supplemental indenture executed
pursuant to this Article Ten shall conform to the requirements of the Trust
Indenture Act, as in effect at the time of execution of such supplemental
indenture, if this Indenture shall then be qualified under that Act.
Section 10.05. Notation of Changes on Notes. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Ten may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Company's
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated and
delivered by the Trustee in exchange for the Outstanding Notes.
Section 10.06. Trustee's Reliance on Opinion of Counsel. In executing any
supplemental indenture permitted by this Article Ten, the Trustee shall be
entitled to receive and (subject to SECTION 8.01) shall be entitled to rely
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by, and conforms to, the terms of this
Article Ten.
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ARTICLE ELEVEN
ENERGYSOUTH OPTION TO ASSUME OR EXCHANGE NOTES
Section 11.01. Option of EnergySouth. (a) Upon the occurrence of either
of the following two events (an "Option Event"): (x) an Event of Default shall
occur which shall be continuing or (y) the Company in an instrument in writing
to the Trustee, EnergySouth and each Noteholder shall determine in good faith
that the gas storage or gas transportation operations of the Facility have
become permanently uneconomic, EnergySouth at any time thereafter and so long as
no Guarantor Event of Default shall have occurred which shall then be continuing
and, if the Option Event shall be an Event of Default, such Event of Default
shall be continuing, shall have the right to either:
(i) assume the Notes (an "Assumption"); or
(ii) exchange the Notes (an "Exchange") for Notes of
EnergySouth containing the same terms (other than the obligor) as the
Notes replaced (the "Replaced Notes").
EnergySouth may elect to exercise the aforesaid right for either Option Event
(an Assumption or Exchange being an "Obligation Transfer") by delivery of
written notice (an "Obligation Transfer Notice") to the Trustee, the Company and
each Noteholder at least 60 days and not more than 90 days prior to the date on
which the Exchange or Assumption shall occur (the "Obligation Transfer Date")
and if EnergySouth makes the aforesaid election, it shall consummate the
Obligation Transfer on the Obligation Transfer Date but only if it complies with
conditions specified in paragraph (b) of this SECTION 11.01. EnergySouth shall
agree in any such Obligation Transfer Notice to pay the expenses of any counsel
engaged by the Noteholders in connection with any such election whether or not
consummated. The Obligation Transfer Notice shall (i) describe whether the
Obligation Transfer will be an Assumption or an Exchange, (ii) make reference to
this SECTION 11.01, and (iii) specify the Obligation Transfer Date.
(b) If EnergySouth exercises its option described in the preceding
paragraph (a), it shall consummate the related Obligation Transfer only if prior
to the Obligation Transfer Date it delivers to the Trustee:
(i) an indenture supplemental hereto in form and substance
satisfactory to the Trustee and the Noteholders executed by both the
Company and EnergySouth which provides:
(A) an undertaking by EnergySouth to ensure the
performance and observance of every covenant and condition of
this Indenture to be performed or observed by the Company
(other than the covenants of the Company in SECTIONS 5.10,
5.12, 5.13 and 5.16(a), (b) and (c) (the "Specified
Covenants"), which Specified Covenants shall be deleted) and
(1) if the Obligation Transfer is an Assumption, the
assumption by EnergySouth of the due and punctual payment of
the principal of (and premium, if any) and interest on all the
Notes or (2) if the Obligation Transfer is an Exchange,
provisions pursuant to which holders of the
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new notes of EnergySouth (the "New Notes") shall be secured by
the lien of the Indenture in the same manner and to the same
extent as the Replaced Notes immediately prior to the
Obligation Transfer Date;
(B) upon the occurrence of such Obligation Transfer
the release of the Company from all obligations under the
Indenture and the Notes and if the Obligation Transfer is an
Exchange, the cancellation of the Replaced Notes; and
(C) other changes in the Indenture to reflect the
corporate form of EnergySouth;
(ii) a Board Resolution requesting the foregoing, together
with appropriate corporate showings from EnergySouth;
(iii) any approval of the Alabama Public Service Commission
needed for any of the foregoing matters; and
(iv) an Opinion of Counsel dated the Obligation Transfer Date
stating that the assumption of the Notes by EnergySouth or in the case
of an Exchange, the New Notes, are valid and binding obligations of
EnergySouth enforceable in accordance with their terms and entitled to
the benefits and secured by the lien of the Indenture equally and
ratably, the other undertakings of EnergySouth described in the
preceding provisions hereof are valid and binding, and enforceable
against EnergySouth and such other matters as shall be reasonably
requested by the holders of the Notes.
(c) Upon the consummation of an Obligation Transfer, the Replaced
Notes, if any, shall be cancelled, the Event of Default, if any, which resulted
in the Obligation Transfer if such Event of Default arose from a breach of a
Specified Covenant shall be deemed to be cured and the New Notes, if any, shall
be delivered to the Noteholders in exchange for their Replaced Notes; provided,
that in any event the lien of the Indenture on the Collateral shall remain in
place.
(d) Whether or not EnergySouth exercises its option described in
SECTION 11.01(a), the Guaranty and any other guaranty issued by EnergySouth
under any other Guaranty Agreement shall continue to remain in full force and
effect.
ARTICLE TWELVE
REDEMPTION OF NOTES
Section 12.01. Redemption Price and Manner of Redemption. The redemption
price and the terms, place and manner of redemption of the Notes shall be as
stated in the respective Notes and shall also be governed by this Article
Twelve, except as may otherwise be provided for the redemption of Notes in
SECTION 3.01 or SECTION 3.04 hereof, with respect to the Series 8.45% Notes, and
in any supplemental indenture creating any other series of Notes, with respect
to such
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other series, and in any agreement filed with the Trustee in accordance
with the provisions of SECTION 5.01.
Section 12.02. Selection of Notes to be Redeemed. If less than all of the
Notes are to be redeemed, the Company shall select the particular series of
Notes which are to be redeemed, either in whole or in part, and the principal
amount of Notes which are to be redeemed, by written notice mailed to the
Trustee at least 20 days in advance of the date fixed for the mailing of the
notice of redemption.
If less than all of the Notes of any series Outstanding hereunder are
to be redeemed, the particular Notes to be redeemed shall be selected not more
than 60 days prior to the redemption date by the Trustee from the Outstanding
Notes of such series not previously called for redemption by prorating, as
nearly as may be, the principal amount of Notes of such series to be redeemed
among the registered holders of Notes of the series according to the respective
aggregate principal amounts of Notes of such series held by such holders;
provided, however, that, if a written consent of all the registered holders of
Notes of the series is filed with the Trustee specifying some other method of
selecting the Notes of such series to be redeemed, such selection shall be made
by the Trustee in accordance therewith.
Section 12.03. Notice of Redemption. In case the Company shall desire to
exercise such right to redeem all, or, as the case may be, any part of the Notes
in accordance with the right reserved so to do, or is required hereunder to
redeem all or any part of the Notes, it shall give written notice of such
redemption to holders of the Notes to be redeemed in whole or in part as
hereinafter in this SECTION 12.03 provided. Written notice of such redemption
shall also be given the Trustee and shall be accompanied by an Officers'
Certificate and, in the case of redemption other than through any mandatory
sinking fund, a Board Resolution calling for redemption of the Notes referred to
in such notice.
Notice of redemption to holders of Notes to be redeemed in whole or in
part shall be given by sending, by certified mail, a notice of such redemption
not less than 30 days and not more than 60 days before the date fixed for
redemption to such holders at their last addresses as they shall appear upon the
registration books. Any notice that is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give notice
or any defect in the notice to the holder of any Notes designated for redemption
in whole or in part shall not affect the validity of the proceedings for the
redemption of any other Notes.
Each such notice of redemption shall specify the date fixed for
redemption, the redemption price at which Notes are to be redeemed, and shall
state that payment of the redemption price of the Notes to be redeemed will be
made at the corporate trust office of the Trustee upon presentation and
surrender of such Notes, that interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that interest thereon will cease
to accrue at the close of business on the date fixed for redemption. If less
than all the Notes of a series are to be redeemed, the notice which relates to
each Note shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon surrender
of such Note, a new Note in principal amount equal to the unredeemed portion
thereof
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will be issued or, at the option of the holder, such Note may be presented for
notation thereon of the payment, as of the redemption date, of the redeemed
portion of the principal thereof.
Section 12.04. Payment of Redemption Price. If the giving of notice of
redemption shall have been completed as above provided, the Notes or portions of
Notes specified in such notice shall become due and payable on the date and at
the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption. In such case and if
moneys in the necessary amount to pay such Notes or portions of Notes at the
redemption price, together with interest thereon to the date fixed for
redemption, shall prior to the date fixed for redemption have been deposited in
trust with the Trustee, interest on such Notes or portions of Notes shall cease
to accrue on and after the date fixed for redemption. Interest on Notes or
portions of Notes called for redemption as aforesaid shall cease to accrue on
and after the date fixed for redemption, in any event, irrespective of whether
or not any such deposit in trust or setting aside and segregation in trust shall
have been made, except with respect to any Note or portion thereof so called for
redemption on which the Company shall default in the payment of the redemption
price, together with interest accrued thereon to the date fixed for redemption.
On presentation and surrender of such Notes on or after the date fixed for
redemption at the place of payment specified in the notice, such Notes shall be
paid and redeemed at the applicable redemption price, together with interest
accrued thereon to the date fixed for redemption.
Upon presentation of any Note which is redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Note or Notes in principal
amount equal to the unredeemed portion of the Note so presented or, at the
option of the holder, the same may be presented for notation thereon of the
payment, as of the date fixed for redemption, of the redeemed portion of the
principal thereof.
Section 12.05. Notation on Note for Partial Redemption. Notwithstanding
the provisions of SECTIONS 12.03 and 12.04, in the event of the payment of a
portion of any Note, the Trustee shall not require the presentation of such Note
for purposes of noting such payment thereon if the Company or the Trustee has
obtained from the holder of such Note a written undertaking from such Noteholder
that such holder will not sell, transfer or otherwise dispose of any Note so
partially paid without first either (a) endorsing on such Note the amount of
principal paid thereon and the last date to which interest has been paid or (b)
presenting such Note to the Trustee in exchange for a new Note pursuant to
SECTION 2.10.
Section 12.06. Cancellation of Notes. All Notes redeemed and paid under
this Article Twelve shall, except as provided in SECTION 12.05, be cancelled by
the Trustee and a certificate as to such cancellation shall be delivered by the
Trustee to the Company.
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ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
Section 13.01. Satisfaction and Discharge of Indenture. If at any time
(a) either:
(i) there shall have been cancelled by the Trustee or
delivered to the Trustee for cancellation all Notes theretofore
authenticated and delivered (other than any Notes that are asserted to
have been destroyed, lost or stolen and that shall have been replaced
as provided in SECTION 2.12, or paid, or Notes for whose payment money
has theretofore been deposited in trust with the Trustee or segregated
and held in trust by the Company, and thereafter repaid to the Company
or discharged from such trust as provided in SECTION 13.03), or
(ii) all such Notes not theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one
year, or have been or are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company has deposited or caused to be deposited
with the Trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all such Notes not theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied with; and
(d) the Company has delivered an Opinion of Counsel stating that the
documents and other items that have been or are therewith delivered to the
Trustee conform to the requirements of this Indenture, and that, upon the basis
of the Company Request and the accompanying documents and items specified in
this Section, all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied with,
then, upon Company Request authorized by Board Resolution, this Indenture and
the lien, rights and interests hereby created shall cease to be of further
effect, and the Trustee, at the cost and expense of the Company, shall execute
and deliver proper instruments acknowledging satisfaction of and discharging
this Indenture. Forthwith upon such execution and delivery the estate, right,
title and interest of the Trustee in and to all securities, cash (except cash
deposited pursuant to this Section) and other personal property held by it as
part of the Collateral shall cease to be of further effect and the Trustee shall
transfer, deliver and pay the same to the Company.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under SECTION 8.06 shall survive.
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Section 13.02. Funds Deposited for Payment of Notes. All moneys deposited
with the Trustee pursuant to SECTION 13.01 shall be held in trust and shall be
available for immediate payment to the holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the Trustee.
Section 13.03. Moneys Held by Trustee. Any moneys deposited with the
Trustee or then held by the Company in trust for the payment of the principal of
(and premium, if any) or interest on any Note that are not applied but remain
unclaimed by the holder of such Note for six years after the date upon which the
principal of (and premium, if any) or interest on such Note shall have
respectively become due and payable shall, subject to applicable escheat laws,
be repaid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and thereupon the Trustee shall be released
from all further liability with respect to such moneys, and the holder of such
Note entitled to receive such payment shall thereafter look only to the Company
for the payment thereof; nevertheless, the Trustee, before being required to
make any such repayment, may at the expense of the Company either mail to each
Noteholder affected, at the address shown in the Note Register, or cause to be
published once a week for two successive weeks (in each case on any regular
Business Day) in an Authorized Newspaper a notice that such moneys have not been
so applied and that after a date named therein any unclaimed balance of said
moneys then remaining will be returned to the Company.
ARTICLE FOURTEEN
IMMUNITY OF LIMITED PARTNERS, INCORPORATORS, STOCKHOLDERS,
OFFICERS, AND DIRECTORS
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Note or for any claim based thereon or otherwise in respect
thereof, shall be had against any limited partner or any incorporator,
stockholder, officer or director, past, present, or future, of the Company, the
General Partner or any limited partner, or of any predecessor or successor
company, either directly or through the Company or any such predecessor or
successor company, whether by virtue of any constitution, statute, or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely partnership obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the limited partners,
incorporators, stockholders, officers, or directors of the Company, the General
Partner or any limited partner or of any predecessor or successor company, or
any of them, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Notes or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against every such limited partner, incorporator, stockholder, officer or
director, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Notes or implied therefrom, is hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issuance of such Notes. Notwithstanding any language
of this Article Fourteen, or of any other provision of this Indenture or of the
Notes to the contrary, no such waiver, release, or exemption
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from individual liability of any limited partner, incorporator, stockholder,
officer or director, past, present or future, of the Company or the General
Partner, or of any predecessor or successor company, shall apply with respect to
any claim based on fraud, misrepresentation or gross negligence.
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
Section 15.01. Certain Assignments of Notes. In the event that a holder
of a Note of any series shall assign such Note without transferring ownership
thereof on the Note Register in accordance with SECTION 2.10 hereof, this
Indenture shall secure payment of such Note for the benefit of such registered
holder, equally and ratably with all present and future holders of Notes issued
hereunder, and not for the benefit of any such assignee.
Section 15.02. Successors and Assigns. All the covenants and agreements
in this Indenture contained by or in behalf of the Company shall bind its
successors and assigns, whether so expressed or not.
Section 15.03. Board and Other Action. Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by
any board, committee, or officer of the General Partner shall and may be done
and performed with like force and effect by the corresponding board, committee,
or officer of any company that shall at the time be the lawful sole successor of
the Company.
Section 15.04. Surrender of Powers. The Company by Board Resolution may
surrender any of the powers reserved to the Company and thereupon such power so
surrendered shall terminate.
Section 15.05. Notices. All notices and communications provided for
hereunder shall be in writing and sent (a) by telefacsimile if the sender on the
same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), or (b) by registered or certified mail with
return receipt requested (postage prepaid), or (c) by a recognized overnight
delivery service (with charges prepaid). Any such notice must be sent:
(i) if to a Noteholder or its nominee, to such Noteholder or
nominee at the address specified for such communications in Schedule I
to the Note Purchase Agreement, or at such other address as such
Noteholder shall have specified to the Trustee and the Company in
writing,
(ii) if to the Company,
(1) if by overnight delivery service, at 0000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attention: Chief
Financial Officer, or
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(2) if by mail, at X.X. Xxx 0000, Xxxxxx, Xxxxxxx
00000, Attention: Chief Financial Officer,
or at such other address as the Company shall have specified to the
Trustee and each Noteholder in writing,
(iii) if to EnergySouth,
(1) if by overnight delivery service, at 0000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attention: Chief
Financial Officer, or
(2) if by mail, at X.X. Xxx 0000, Xxxxxx, Xxxxxxx
00000, Attention: Chief Financial Officer,
or at such other address as EnergySouth shall have specified to the
Trustee and each Noteholder in writing, and
(iv) if to the Trustee, to the Trustee at 000 Xx. Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attention: Corporate Trust Department,
or at such other address as the Trustee shall have specified to the
Company, EnergySouth and each Noteholder in writing.
Notices under this SECTION 15.05 will be deemed given only when actually
received.
Section 15.06. Alabama Law Applicable. This Indenture and each Note shall
be governed by and construed in accordance with the laws of the State of
Alabama.
Section 15.07. Certificates to Trustee. Upon any application or demand by
the Company to the Trustee to take any action under any of the provisions of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel, based on such application
and the accompanying documents and other items required by this Indenture, all
such conditions precedent have been complied with, except that in the case of
any such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture shall include: (a) a statement that each person making such
certificate or opinion has read such covenant or condition; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion whether such covenant or condition has been complied with; and
(d) a statement whether, in the opinion of such person, such condition or
covenant has been complied with.
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Section 15.08. Payments Coming Due on Saturday, Sunday or Legal Holiday.
In any case where the date of maturity of interest or principal of the Notes or
the date of redemption of any Note shall be a Saturday or a Sunday or a legal
holiday in Mobile, Alabama, or a day on which banking institutions in such city
are authorized by law to close, then payment of interest or principal (and
premium, if any) may be made in such city on the next succeeding day not a
Saturday, Sunday or legal holiday or a date on which banking institutions are
authorized by law to close, with the same force and effect as if made on the
nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.
Section 15.09. Trust Indenture Act. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture that is required to be included in this
Indenture by any of Sections 310 through 317, inclusive, of the Trust Indenture
Act, such required provision shall control.
Section 15.10. Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 15.11. Effect of Headings and Table of Contents. The Article,
Section and Subsection headings contained in this Indenture and the Table of
Contents are for convenience only and shall not be deemed to affect the meaning
or construction of any of the provisions hereof.
Section 15.12. Acceptance of Trust by Trustee. The Trustee hereby accepts
the trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
Section 15.13. Separability of Indenture Provisions. In case any one or
more of the provisions contained in this Indenture or in the Notes shall for any
reason be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions hereof and thereof shall
not in any way be affected or impaired in any way.
Section 15.14 Waiver of Trial by Jury. EACH PARTY HEREBY IRREVOCABLY
WAIVES TO THE EXTENT PERMITTED BY LAW ITS RIGHT TO A JURY TRIAL IN ANY SUIT,
ACTION OR PROCEEDING ARISING AS A RESULT OF OR RELATED TO THE TRANSACTIONS
CONTEMPLATED BY THIS INDENTURE.
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IN WITNESS WHEREOF, BAY GAS STORAGE COMPANY, LTD. has caused this
Indenture to be signed in its partnership name by the President or a Vice
President of its General Partner and its seal to be hereunto affixed and
attested by the Secretary of its General Partner, and Regions Bank, as Trustee,
has caused this Indenture to be signed in its corporate name by its Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary, as of the day and year first above written.
BAY GAS STORAGE COMPANY, LTD.
By MGS STORAGE SERVICES, INC.,
Its General Partner
By: /s/ XXXXXX X. XXXX
---------------------------
Name: Xxxxxx X. Xxxx
Title: President
[SEAL]
ATTEST:
/s/ G. XXXXX XXXXXXX, XX.
-----------------------------------
Its Secretary
REGIONS BANK, Trustee
By: /s/ XXXXX X. XXXXXXXX, XX.
---------------------------------
Name: Xxxxx X. Xxxxxxxx Xx.
Title: Senior Vice President and
Trust Officer
[CORPORATE SEAL]
ATTEST:
/s/ XXXXXXX X. XXXX
----------------------------------------------
Its Vice President and Corporate Trust Officer
-------------------------------------------
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STATE OF ALABAMA )
) SS
COUNTY OF MOBILE )
I, Xxx XxXxxxx, a Notary Public in and for the County and State
aforesaid, do hereby certify that Xxxxxx X. Xxxx, personally known to me to be
the same person whose name is, as President of MGS Storage Services, Inc. an
Alabama corporation, as the General Partner of Bay Gas Storage Company, Ltd.,
subscribed to the foregoing instrument, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the instrument, he
as such officer and with full authority, executed the same voluntarily for and
as the act of said General Partner.
Given under my hand and notarial seal this 18th day of
December, 2000.
/s/ XXX XXXXXXX
-------------------------------------
Notary Public
(SEAL)
Commission expires:
March 27, 2004
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STATE OF ALABAMA )
) SS
COUNTY OF MOBILE )
I, Xxx XxXxxxx, a Notary Public in and for the County and State
aforesaid, do hereby certify that Xxxxx X. Xxxxxxxx, Xx. and Xxxxxxx X. Xxxx,
whose names as Senior Vice President and Trust Officer and Vice President and
Corporate Trust Officer, respectively, of REGIONS BANK, an Alabama banking
corporation, as Trustee, are signed to the foregoing Trust Indenture and
Security Agreement and who are known to me, acknowledged before me on this day
that, being informed of the contents of said Trust Indenture and Security
Agreement they, as such officers and with full authority, executed the same
voluntarily for and as the act of said REGIONS BANK, acting solely in its
capacity as Trustee as aforesaid.
Given under my hand and notarial seal this 18th day of December, 2000.
/s/ XXX XXXXXXX
-------------------------------------
Notary Public
(SEAL)
Commission expires:
March 27, 2004
70
[FORM OF NOTE]
BAY GAS STORAGE COMPANY, LTD.
Senior Secured Note, Series _____ % due _____________
No.
FOR VALUE RECEIVED, BAY GAS STORAGE COMPANY, LTD. a limited partnership
organized and existing under the laws of the State of Alabama (hereinafter
called the Company, which term shall include any successor company as defined in
the Indenture hereinafter referred to), hereby promises to pay to
or registered assigns, on
the sum of
DOLLARS
($_________) in coin or in currency of the United States of America that at the
time of payment is legal tender for the payment of public and private debts, and
to pay to the registered owner hereof interest thereon from the date hereof, at
the rate of ______ per cent (___%) per annum (computed on the basis of a 360-day
year of twelve consecutive 30-day months), in like coin or currency, payable
[insert frequency] on ____________ and ______________ in each year, until the
principal hereof shall be paid. Payments of principal, premium and interest are
to be made at the corporate trust office of the Trustee in Mobile, Alabama;
provided that principal, premium and interest may be paid as otherwise provided
by an agreement between the Company and the registered holder which is permitted
by the Indenture (as hereinafter defined).
This Note is one of an authorized issue of Notes of the Company known
as its Senior Secured Notes, not limited in aggregate principal amount except as
provided in the Indenture hereinafter mentioned, all issued and to be issued in
one or more series under and equally and ratably secured (except as any sinking,
amortization, improvement, renewal or other analogous fund, established in
accordance with the provisions of the Indenture hereinafter referred to, may
afford additional security for the Notes of any particular series) by a Trust
Indenture and Security Agreement (hereinafter called Original Indenture)
executed by the Company to Regions Bank (herein called the Trustee) dated as of
December 1, 2000 [reference to supplemental indentures] (the Original Indenture,
as so supplemented and amended, is hereinafter referred to as the Indenture) to
which Indenture reference is hereby made for a description of the property
pledged, the nature and extent of the security, the terms and conditions upon
which the Notes are and are to be secured and the rights of the holders or
registered owners thereof and of the Trustee in respect of such security. As
provided in the Indenture, such Notes may be issued in series, for various
principal sums, may bear different dates and mature at different times, may bear
interest at different rates and may otherwise vary as in the Indenture provided
or permitted.
EXHIBIT A
(to Trust Indenture)
71
This Note is one of the notes described in the Indenture and designated
therein as the Senior Secured Notes, Series _____% due _______________________
(hereinafter referred to as the Series ______ Notes).
Subject to the provisions of the Indenture, all Series _____ Notes are
subject to mandatory redemption as hereinafter provided:
Subject to the provisions of the Indenture, all Series __________ Notes
are subject to redemption at the option of the Company, as a whole or in part at
any time or from time to time [on or after ______________, 19___] at the
following price:
together in any case with interest accrued thereon to the date of redemption
[prohibitions, if any, on refunding]. If this Note is called for redemption and
payment duly provided, this Note shall cease to bear interest from and after the
date fixed for such redemption.
Upon any partial redemption of this Note, the registered holder hereof
at such holder's option may either (a) surrender this Note to the Trustee in
exchange for one or more new Series ______ Notes, of authorized denominations,
registered in the name of such holder, in an aggregate principal amount equal to
the principal amount remaining unpaid upon this Note, or (b) submit this Note to
the Trustee for notation hereon of the payment of the portion of the principal
hereof paid upon such redemption. Notwithstanding the foregoing, the registered
holder shall not be required to surrender this Note for exchange or present this
Note to the Trustee for noting such payments thereon if, pursuant to SECTION
12.05 of the Indenture, the registered holder has delivered to the Company or
the Trustee a written undertaking regarding acts to be taken in connection with
any transfer or disposal of the Notes as provided in said SECTION 12.05.
As provided in the Indenture, (a) with the consent (evidenced as
provided in SECTION 9.01 of the Indenture) of the Required Holders, such changes
in, additions to or eliminations from the Indenture as such holders and the
Company may deem necessary or advisable may be made by supplemental indenture;
provided that no such change shall be made without the consent of the holder of
each Outstanding Note that is adversely affected that would (i) extend the
stated maturity of the principal of, or any installment of interest on, any
Note, or (ii) reduce the principal amount thereof or the interest thereon or any
premium payable upon the redemption thereof, or (iii) extend the time or reduce
the amount of any sinking fund payment in respect thereof, or (iv) reduce the
percentage of the principal amount of Notes the consent of the holders of which
is required for the authorization of any such change, addition or elimination,
or (v) modify certain other provisions of the Indenture, and (b) with the
consent of the Required Holders, compliance with certain covenants and
conditions of the Indenture may be waived.
A-2
72
In case an Event of Default (as defined in the Indenture) shall occur
and be continuing, the principal of all the Notes outstanding may be declared
and may become due and payable in the manner and with the effect provided in the
Indenture.
This Note is a registered Note without coupons and is transferable by
the registered holder thereof in person or by the duly authorized attorney of
such holder on the Note Register to be kept for the purpose at the office of the
Trustee as Note Registrar and transfer agent for the Notes, in Mobile, Alabama.
Upon surrender of this Note accompanied by written instruments of transfer in
form approved by the Trustee, duly executed by the registered holder in person
or by such attorney, and upon cancellation hereof, one or more new Notes of the
same series and maturity, in authorized denominations, in an aggregate principal
amount equal to the principal amount remaining unpaid upon this Note, shall be
issued to the transferee in exchange herefor, as provided in the Indenture. The
Company and the Trustee may deem and treat the person in whose name this Note is
registered on the Note Register as the absolute owner hereof (whether or not
this Note shall be overdue) for the purpose of receiving payment hereon, and on
account hereof and for all other purposes.
No recourse shall be had for the payment of the principal of or
interest on this Note, or in respect of this Note or the Indenture, against any
limited partner or any incorporator, stockholder, officer or director, past,
present, or future, of the Company, the General Partner or any limited partner,
or of any predecessor or successor company, either directly or through the
Company or any such predecessor or successor company, whether by virtue of any
constitution, statute, or rule of law, or by the enforcement of any assessment
or penalty or otherwise, any and all such liability of limited partners,
incorporators, stockholders, officers and directors being released by the holder
hereof by the acceptance of this Note and being likewise waived and released by
the terms of the Indenture. Notwithstanding any provision of the Indenture or of
this Note to the contrary, no such waiver, release, or exemption from individual
liability of any limited partner, incorporator, stockholder, officer or
director, past, present or future, of the Company or the General Partner, or of
any predecessor or successor company, shall apply with respect to any claim
based on fraud, misrepresentation or gross negligence.
This Note shall not be valid or become obligatory for any purpose until
the certificate endorsed hereon shall be signed by the Trustee under the
Indenture.
A-3
73
IN WITNESS WHEREOF, BAY GAS STORAGE COMPANY, LTD. has caused these
presents to be signed in its name by the President or a Vice President of its
General Partner, and its seal to be affixed hereto and attested by the Secretary
or an Assistant Secretary of its General Partner.
Dated:
BAY GAS STORAGE COMPANY, LTD.
By MGS STORAGE SERVICES, INC.,
its General Partner
By
----------------------------
[Vice] President
[SEAL]
ATTEST:
---------------------------------
[Assistant] Secretary
A-4
74
[TRUSTEE'S CERTIFICATE TO BE ENDORSED ON ALL NOTES]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series designated herein,
described in the within-mentioned Indenture.
REGIONS BANK, as Trustee
By
------------------------------
Authorized Officer
75
SCHEDULE OF PAYMENTS
FOR SERIES 8.45% NOTES
EXHIBIT B
(to Trust Indenture)
