Exhibit B.7
Southern Energy, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
November ___, 1999
SE Finance Capital Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
ING (U.S.) Capital LLC, as Administrative Agent
on behalf of the Lenders under the Loan Agreement referred to below 00 Xxxx 00xx
Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
RE: Term Loan Agreement among SE Finance Capital Corporation ("SE
Capital"), as Borrower, the several lenders from time to time parties
thereto, ING (U.S.) Capital LLC, as Arranger, and ING (U.S.) Capital
LLC, as Administrative Agent (in this capacity, the "Agent"), dated as
of November ___, 1999 (the "Loan Agreement")
Ladies and Gentlemen:
Please be advised that Southern Energy, Inc. ("SEI") is, as of the date
hereof, a wholly-owned subsidiary of The Southern Company and the direct owner
of all the outstanding stock of SE Capital. This letter is being delivered to
you to satisfy the condition set forth in Section 4.1(a)(iv) of the Loan
Agreement and constitutes the "Keep Well Agreement" described therein. Except as
otherwise specified, capitalized terms used but not defined herein have the same
meanings as set forth in the Loan Agreement.
In consideration of the Lenders making loans pursuant to the Loan
Agreement (collectively, the "Loans") to SE Capital, which SEI agrees will be of
direct or indirect benefit to SEI, and other good and valuable consideration,
SEI, intending to be legally bound, hereby covenants and agrees that SEI will
make payments on behalf of SE Capital, as a contribution to its capital, in the
amount of any shortfall in the repayments due the Lenders under Schedule 2.3(a)
to the Loan Agreement, together with interest on the outstanding balance of the
Loans, to the extent such shortfall is attributable to a reduction for any
reason, including, without limitation, a change in law or regulation or an
amendment to the Allocation Agreement or procedures thereunder, in the payments
under the Allocation Agreement to SE Capital below those specified in Schedule
II to the Loan Agreement; provided, however, notwithstanding anything to the
contrary herein, no payments will be required to the extent that such shortfall
is caused by, with reference to the First New Lease Transaction, (a) an early
termination of any lease or sublease for any reason, or (b) the receipt of any
SLV Payment, indemnity payment or other payment under any of the Lease Documents
which has the effect of increasing the taxable income of DG Lease, Inc.
SEI further agrees that any payments required of it under this Keep
Well Agreement will be made by it to the Agent as directed for the account of SE
Capital for application to amounts payable by SE Capital to the Lenders under
the Loan Agreement by wire transfer of immediately available funds unless
otherwise directed in writing by SE Capital and the Agent.
SEI acknowledges and agrees that the occurrence of any one or more of
the following shall not alter or impair the liability of SEI hereunder:
(1) any amendment or modification of any provision of any of
the Loan Documents (other than to Schedule 2.3(a) of the Loan
Agreement) or any assignment or transfer of any Loan, including without
limitation the renewal or extension of the time of payment of any of
the Loans or the granting of time in respect of such payment thereof,
or of any furnishing or acceptance of any guarantee or any additional
security or any release of any security or guarantee so furnished or
accepted for any of the Loans;
(2) any waiver, consent, extension, granting of time,
forbearance, indulgence or other action or inaction under or in respect
of any of the Loan Documents, or any exercise or non-exercise of any
right, remedy or power in respect hereof or thereof;
(3) any bankruptcy, receivership, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or similar
proceedings with respect to SE Capital or any of its Subsidiaries; or
(4) the occurrence of any Default or Event of Default under,
or any misrepresentation in, any of the Loan Documents.
SEI hereby unconditionally waives any requirement that the Agent or any
Lender exhaust any right, power or remedy against SE Capital under any of the
Loan Documents or any other agreement or instrument referred to herein or
therein, or against any other Person under any guarantee of, or security for,
any of the obligations of SE Capital in respect of the Loans.
Inasmuch as any payments made by SEI under this Keep Well Agreement
will be contributions to the capital of SE Capital, SEI confirms and agrees that
it will not have any subrogation or other rights to reimbursement hereunder or
under the Loans. SEI agrees that its obligations hereunder shall be
automatically reinstated if and to the extent that for any reason any payment
(including payment in full) by SE Capital is rescinded or must be otherwise
restored by any Lender, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, all as though such amount had not been paid.
SEI represents that (a) it is duly organized, validly existing and in
good standing under the laws of the State of Delaware, (b) it has the corporate
power and authority, and the legal right, to own its property and to conduct the
business in which it is currently engaged, (c) to its knowledge, it is in
compliance with all Requirements of Law except to the extent that the failure to
comply would not, in the aggregate, have a Material Adverse Effect, (d) it has
the corporate power and authority to make, execute and deliver this Keep Well
Agreement, (e) it has taken all corporate action necessary to authorize the
execution, delivery and performance of this Keep Well Agreement and has duly
executed and delivered this Keep Well Agreement, (f) no consent or authorization
of, approval by, filing with, notice to or other act by or in respect of, any
Governmental Authority or other Person is required in connection with the
execution, delivery, performance, validity or enforceability of this Keep Well
Agreement which has not already been obtained, (g) this Keep Well Agreement is a
legal, valid and binding obligation of SEI, enforceable against SEI in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and to the effect of
general equitable principles, (h) the execution, delivery and performance by SEI
of this Keep Well Agreement will not violate the Certificate of Incorporation or
By-laws of SEI or any law or regulation or determination of any court or
arbitrator applicable to SEI, (i) SEI is not subject to any pending, or to its
knowledge, threatened litigation or arbitration proceeding that, if determined
adversely, would have a material adverse effect on its ability to perform under
the Keep Well Agreement, and (j) the execution, delivery and performance by SEI
of the Keep Well Agreement will not constitute a default under any material
contract or agreement to which SEI is a party.
SEI hereby irrevocably and unconditionally (a) submits for itself and
its property in any legal action or proceeding relating to this Keep Well
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof; (b) consents that any such
action or proceeding may be brought in such courts and waives any objection that
it may now or hereafter have to the venue of any such action or proceeding in
any such court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same; (c) agrees that service of
process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to SEI at its address set forth at the beginning hereof
to the attention of President or at such other address as SEI shall have
specified to the Agent in writing; (d) agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction; and (e) waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding referred to in this paragraph any special,
exemplary, punitive or consequential damages, other than, in the case of
punitive damages, with respect to any Lender which engages in willful
misconduct.
No failure to exercise nor any delay in exercising any right hereunder
shall operate as a waiver thereof nor shall any exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided herein are cumulative and not exclusive of any
other remedies provided by law.
This Keep Well Agreement may be modified or amended only with the
written consent of the Agent (acting at the direction of the Lenders).
This Keep Well Agreement shall be governed by and construed in
accordance with the laws of the State of New York and may be enforced only by SE
Capital, the Agent and the Lenders.
The express statements and agreements made by SEI in this Keep Well
Agreement constitute the sole and exclusive statements and agreements of SEI
with respect to the subject matter of this Keep Well Agreement or the Loan
Documents, and there are no representations, warranties, statements, covenants
or agreements made by SEI, express or implied, except as expressly set forth
herein. Without limiting the generality of the preceding sentence, nothing
contained in this Keep Well Agreement shall constitute a guarantee by SEI of any
of the obligations of SE Capital under any of the Loan Documents. This Keep Well
Agreement is intended to be solely for the benefit of SE Capital, the Agent and
the Lenders and is not intended to and shall not confer any rights or benefits
on any other party.
SOUTHERN ENERGY, INC.
By:
Title:
