Exhibit 4.3
EXECUTION COPY
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INDENTURE ESCROW AND SECURITY AGREEMENT
THIS INDENTURE ESCROW AND SECURITY AGREEMENT (this "Agreement"), dated as
of July 2, 2001, is by and among MISSION ENERGY HOLDING COMPANY, a Delaware
corporation (the "Company"), WILMINGTON TRUST COMPANY, as the Trustee under the
Indenture (as defined below) (the "Trustee"), and WILMINGTON TRUST COMPANY, as
Indenture Escrow Agent (in such capacity, together with its successors in such
capacity, the "Indenture Escrow Agent"). Capitalized terms used herein and not
otherwise defined have the meanings assigned to them in the Indenture.
WITNESSETH:
WHEREAS, the Company and Trustee have entered into an Indenture dated as of
the date hereof (as amended and supplemented from time to time, the "Indenture")
pursuant to which the Company may issue up to $900,000,000 of its 13.50% Senior
Secured Notes due 2008 (as amended, supplemented and exchanged from time to
time, collectively, the "Securities");
WHEREAS, the Company has agreed to grant to the Trustee on behalf of itself
and on behalf of the Holders of the Securities, the Paying Agent and the
Indenture Escrow Agent (the "Indenture Secured Parties") a security interest in
the Account (as defined below) and all funds and securities contained therein;
WHEREAS, the Company has agreed to place in escrow the Initial Escrow
Amount (as defined below), to be held pursuant to the terms of this Agreement
and the Indenture;
WHEREAS, the Indenture Escrow Agent has established an escrow account with
the Indenture Escrow Agent in the State of New York, number 55562-0, in the name
of the Company (the "Account"); and
WHEREAS, the Company and the Indenture Escrow Agent are entering into this
Agreement to provide for the control of the Account and to perfect the security
interest of the Trustee, for the benefit of the Indenture Secured Parties, in
the Account and all funds and securities contained therein as more fully
described in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follow for the
express benefit of the Trustee on behalf of the Indenture Secured Parties:
1. Initial Escrow Amount; Interest; Investment of Funds
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(a) Deposit of Initial Escrow Amount by the Company. On the date
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hereof, the Company shall deliver to the Indenture Escrow Agent, from a
portion of the net proceeds from the sale of the Securities, cash in an
amount so as to be, together with any interest thereon, sufficient to pay
the first four scheduled cash interest payments on the Securities. As of
the date hereof, the parties agree that such amount shall be equal to
$210,938,232.11 (the "Initial Escrow Amount"). Following the investment of
the Initial Escrow Amount, (A) if the Trustee (as defined in the Indenture)
receives a written calculation from a representative of the Initial
Purchasers that the actual rate of return is such that there are excess
funds in the Account, the Trustee shall instruct the Indenture Escrow Agent
no later than two business days after its receipt of such determination to
transfer such excess funds to the Company, and (B) if the Trustee receives
a written calculation from a representative of the Initial Purchasers that
the actual rate of return is such that there are insufficient funds in the
Account, the Trustee shall notify the Company no later than two business
days after its receipt of such determination and the Company shall deposit
such additional funds to the Account. The computations of the
representative of the Initial Purchasers pursuant hereto shall be binding
on the Company, absent manifest error.
(b) Investment of Funds in Account. Funds deposited in the Account
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shall be invested and reinvested only upon the following terms and
conditions:
(i) Acceptable Investments. All funds deposited or held in the
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Account at any time shall be invested by the Indenture
Escrow Agent in U.S. Government Securities (as defined
below) in accordance with the Company's written instructions
from time to time to the Indenture Escrow Agent; provided,
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however, that the Company shall only designate investment of
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funds in U.S. Government Securities maturing in an amount
sufficient to and/or generating interest income sufficient
to, when added to the balance of funds held in the Account,
provide for the payment of interest on the outstanding
Securities on the Interest Payment Date beginning on and
including January 15, 2002 and through and including the
Interest Payment Date on July 15, 2003; provided, further,
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however, that any such written instruction shall specify the
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particular investment to be made, shall state that such
investment is authorized to be made hereby and in particular
satisfies the requirements of the preceding proviso, shall
contain the certification referred to in Section 1(b)(ii),
and shall be executed by any officer of the Company;
provided, further, however, that the Company may from time
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to time substitute additional funds consisting of cash or
Cash Equivalents for some or all of the U.S. Government
Securities then contained in the Account provided that (i)
the cash or Cash Equivalents have a fair market value equal
to or greater than the U.S. Government Securities so
replaced, (ii) the Company provides the certification
required by Section 1(b)(ii) and certifies that the
foregoing clause (i) has been complied with and provides an
Opinion of Counsel, dated the date of the replacement, which
opinion shall meet the requirements of Section 314(b) of the
Trust Indenture Act of
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1939, as amended, and shall otherwise comply with the
Indenture and (iii) the cash and Cash Equivalents are
promptly invested in U.S. Government Securities in
accordance with this Section 1(b)(i). All U.S. Government
Securities shall be assigned to and held in the possession
of, or, in the case of U.S. Government Securities maintained
in book-entry form with the Federal Reserve Bank,
transferred to a book-entry account in the name of the
Indenture Escrow Agent, for the benefit of the Trustee and
the ratable benefit of the Indenture Secured Parties, except
that U.S. Government Securities maintained in book-entry
form with the Federal Reserve Bank shall be transferred to a
book-entry account in the name of the Indenture Escrow Agent
at the Federal Reserve Bank that includes only U.S.
Government Securities held by the Indenture Escrow Agent for
its customers and segregated by separate recordation in the
books and records of the Indenture Escrow Agent. As used
herein, U.S. Government Securities shall mean securities
that are (a) direct obligations (or certificates
representing an ownership interest in such obligations) of
the United States of America (including any agency or
instrumentality thereof) the payment of which the full faith
and credit of the United States of America is pledged, (b)
obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the
United States of America or (c) obligations of a Person the
payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America,
which, in each case, are not callable or redeemable at the
issuer's option, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S.
Government Securities or a specific payment of principal of
or interest on any such U.S. Government Securities held by
such custodian for the account of the holder of such
depository receipt; provided that (except as required by
law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect
of the U.S. Government Securities or the specific payment of
principal of or interest on the U.S. Government Securities
evidenced by such depository receipt.
(ii) Security Interest in Investments. No investment of funds
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in the Account shall be made unless the Company has
certified to the Indenture Escrow Agent and the Trustee
that, upon such investment, the Trustee will have a first
priority perfected security interest in the applicable
investment for the benefit of the Indenture Secured Parties.
On the date of this Agreement, and on each anniversary
thereof unless the balance of the Available Funds (as
defined below) shall have been reduced to zero, each of the
Trustee and the Indenture Escrow Agent
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shall receive an Opinion of Counsel, dated each such date as
applicable, which opinion shall meet the requirements of
Section 314(b) of the Trust Indenture Act of 1939, as
amended, and shall otherwise comply with the Indenture. As
used herein, "Available Funds" shall mean (A) the sum of (i)
the Initial Escrow Amount and any funds deposited pursuant
to Section 1(a)(B) and (ii) interest earned on the funds in
the Account (including holdings of U.S. Government
Securities), less (B) the aggregate disbursements previously
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made pursuant to this Agreement.
(iii) Principal and Interest. All principal and interest earned on
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funds invested in U.S. Government Securities shall be
deposited in the Account as additional Collateral (as
defined below) for the benefit of the Trustee and the
ratable benefit of the Indenture Secured Parties and shall
be reinvested in accordance with Section 1(b)(i) hereof.
(iv) Limitation on Indenture Escrow Agent's Responsibilities. The
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Indenture Escrow Agent's sole responsibilities under this
Section 1(b) shall be (A) to retain possession of
certificated U.S. Government Securities and to be the
registered or designated owner of U.S. Government Securities
which are not certificated, if any, (B) to follow the
Company's written instructions given in accordance with
Section 1(b)(i), (C) to invest and reinvest funds pursuant
to this Section 1(b), (D) to maintain possession of, and
dominion and control over, the Account and the funds and
U.S. Government Securities therein, unless and until such
funds are permitted to be released or disbursed in
accordance with the terms of this Agreement and (E) to use
reasonable efforts to reduce to cash such U.S. Government
Securities as may be required to fund any disbursement or
payment in accordance with Section 1(a)(A) or Section 10. In
connection with clause (A) above, the Indenture Escrow Agent
will maintain continuous possession in the State of New York
of certificated U.S. Government Securities and cash included
in the Collateral and will cause uncertificated U.S.
Government Securities, if any, to be registered in the book-
entry system of, and transferred to an account of the
Indenture Escrow Agent or a sub-agent of the Indenture
Escrow Agent at, the Federal Reserve Bank of New York.
Except as provided in Section 6, the Indenture Escrow Agent
shall have no other responsibilities with respect to
perfecting or maintaining the perfection of the Indenture
Escrow Agent's security interest in the Collateral and shall
not be required to file any instrument, document or notice
in any public office at any time or times. In connection
with clause (E) above, and subject to the following sentence
and except as otherwise provided in Section 10, the
Indenture Escrow Agent shall not be required to reduce to
cash any U.S. Government Securities to fund any disbursement
or payment in accordance with Section 1(a)(A) or Section 10
in the absence of written instructions signed by an officer
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of the Company specifying the particular investment to
liquidate. If no such written instructions are received, the
Indenture Escrow Agent shall liquidate those U.S. Government
Securities having the lowest interest rate per annum or if
none such exist, those having the nearest maturity.
(v) Manner of Investment. Funds deposited in the Account shall
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be invested in a manner such that there will be sufficient
funds available without any further investment by the
Company to cover all interest due on the outstanding
Securities, as such interest becomes due, for each Interest
Payment Date occurring from the date of this Agreement and
ending on (and including) July 15, 2003, provided that such
investments shall have such maturities and/or interest
payment dates such that funds will be available with respect
to each such Interest Payment Date no later than the time
the Indenture Escrow Agent is required to distribute such
funds to the Trustee pursuant to Section 10(a). The
Indenture Escrow Agent shall have no responsibility for
determining whether funds held in the Account shall have
been invested in such a manner so as to comply with the
requirements of this clause (v).
2. Release of Amounts in Account. The Indenture Escrow Agent shall hold
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all amounts in the Account in escrow pursuant to this Agreement until authorized
hereunder to deliver any or all of such amounts to the Company in accordance
with the requirements of Section 1(a)(A) or Section 10 hereof or to the Trustee
in accordance with Section 6 hereof.
3. Certain Additional Agreements. The Company and the Trustee shall, upon
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request by the Indenture Escrow Agent, execute and deliver to the Indenture
Escrow Agent such additional written instructions and certificates hereunder as
may be reasonably required by the Indenture Escrow Agent to give effect to the
provisions of Sections 1 and 2 hereof.
4. The Account.
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(a) THE PARTIES AGREE AND REPRESENT THAT (A) THE ACCOUNT HAS BEEN
ESTABLISHED IN THE NAME OF THE COMPANY AS RECITED ABOVE, (B) THE ACCOUNT IS
AN ACCOUNT AS TO WHICH FINANCIAL ASSETS ARE OR MAY BE CREDITED AND THE
ACCOUNT IS A SECURITIES ACCOUNT, (C) THE ACCOUNT HAS NO FINANCIAL ASSETS
WHICH ARE REGISTERED IN THE NAME OF THE COMPANY, PAYABLE TO ITS ORDER, OR
SPECIALLY ENDORSED TO IT, WHICH HAVE NOT BEEN ENDORSED TO THE INDENTURE
ESCROW AGENT OR IN BLANK.
(b) THE INDENTURE ESCROW AGENT AGREES AND REPRESENTS THAT (A) THIS
AGREEMENT IS THE VALID AND LEGALLY BINDING OBLIGATION OF THE INDENTURE
ESCROW AGENT, (B) EXCEPT FOR THE CLAIMS AND INTERESTS OF THE TRUSTEE FOR
THE BENEFIT OF THE INDENTURE SECURED PARTIES AND THE CLAIMS AND INTERESTS
OF THE
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COMPANY IN THE ACCOUNT, THE INDENTURE ESCROW AGENT DOES NOT KNOW OF ANY
CLAIM TO OR INTEREST IN THE ACCOUNT OR IN ANY FINANCIAL ASSET CONTAINED
THEREIN, (C) THE INDENTURE ESCROW AGENT SHALL, SUBJECT TO THE TERMS OF THIS
AGREEMENT, TREAT THE COMPANY AS ENTITLED TO EXERCISE THE RIGHTS THAT
COMPRISE ANY FINANCIAL ASSET CREDITED TO THE ACCOUNT AND (D) ALL PROPERTY
DELIVERED TO THE INDENTURE ESCROW AGENT FOR DEPOSIT TO THE ACCOUNT WILL
PROMPTLY BE CREDITED TO THE ACCOUNT. THE INDENTURE ESCROW AGENT WILL TREAT
ALL PROPERTY HELD BY IT IN THE ACCOUNT AS FINANCIAL ASSETS UNDER ARTICLE 8
OF THE UNIFORM COMMERCIAL CODE OF THE STATE OF NEW YORK (THE "CODE"),
PROVIDED, HOWEVER, IN THE EVENT THAT, BY REASON OF MANDATORY PROVISIONS OF
LAW, ANY OR ALL OF THE PERFECTION OR PRIORITY OF THE SECURITY INTEREST IN
ANY COLLATERAL IS GOVERNED BY THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN A
JURISDICTION OTHER THAN THE STATE OF NEW YORK, THE TERM "CODE" SHALL MEAN
THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN SUCH OTHER JURISDICTION FOR
PURPOSES OF THE PROVISIONS HEREOF RELATING TO SUCH PERFECTION OR PRIORITY
AND FOR PURPOSES OF DEFINITIONS RELATED TO SUCH PROVISIONS, AND ANY
REFERENCE TO ANY SECTION OF THE CODE HEREIN SHALL BE A REFERENCE TO SUCH
SECTION AS IT IS MODIFIED AND AMENDED FROM TIME TO TIME AND TO ANY
SUCCESSOR SECTION.
5. No Withdrawals. The Indenture Escrow Agent shall neither accept nor
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comply with any order from the Company withdrawing any assets from the Account
nor deliver any such assets to the Company, except in the circumstances
described in Section 10(b), 10(c) or 10(d) hereof, as applicable, and only if
the requirements to such transfer set forth in Section 10(b), 10(c) or 10(d), as
applicable, have been satisfied.
6. Grant of Security Interest; Priority of Security Interest.
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(a) The Company hereby grants to the Trustee for the benefit of the
Indenture Secured Parties, to secure all obligations and indebtedness of
the Company under the Securities, a first priority security interest in the
Account and all funds and securities contained therein and any and all
proceeds of the foregoing (the "Collateral"). The Indenture Escrow Agent
consents to such security interest. The Indenture Escrow Agent hereby
waives and releases all liens, encumbrances, claims and rights of setoff
the Indenture Escrow Agent may have against the Account or any and all
funds and securities contained in the Account and agrees that it will not
assert any such lien, encumbrance, claim or right or the priority thereof
against the Account or any funds or securities contained in the Account.
The Indenture Escrow Agent will not agree with any third party that the
Indenture Escrow Agent will comply with orders concerning the Account
originated by such third party without the prior written consent of the
Trustee and the Company. The Company represents and warrants that, except
for the security interest granted to the Trustee for the benefit of the
Indenture Secured Parties hereby, the
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Company owns the Collateral free and clear of any and all liens,
encumbrances and claims of others.
(b) The Company and the Trustee hereby irrevocably instruct the
Indenture Escrow Agent to, and the Indenture Escrow Agent shall, (i) (A)
maintain sole dominion and control over funds and U.S. Government
Securities in the Account for the benefit of the Trustee for the benefit of
the Indenture Secured Parties to the extent specifically required herein,
(B) maintain, or cause its agent within the State of New York to maintain,
possession of all certificated U.S. Government Securities purchased
hereunder that are physically possessed by the Indenture Escrow Agent in
order for the Trustee for the benefit of the Indenture Secured Parties to
enjoy a continuous perfected first priority security interest therein under
the law of the State of New York (the Company hereby agreeing that in the
event any certificated U.S. Government Securities are in the possession of
the Company or a third party, the Company shall undertake to deliver all
such certificates to the Indenture Escrow Agent), (C) take all steps
specified by the Company pursuant to paragraph (a) above to cause the
Trustee for the benefit of the Indenture Secured Parties to enjoy a
continuous perfected first priority security interest under the New York
Uniform Commercial Code and any applicable law of the State of New York in
all Collateral consisting of securities entitlements including, as
applicable, all U.S. Government Securities purchased hereunder that are not
certificated, if any, and (D) maintain the Collateral free and clear of all
liens, encumbrances and claims against the Indenture Escrow Agent of any
nature now or hereafter existing in favor of anyone other than the Trustee
for the benefit of the Indenture Secured Parties; (ii) promptly notify the
Trustee if the Indenture Escrow Agent receives written notice that any
person other than the Trustee has a lien, encumbrance or claim upon any
portion of the Collateral; and (iii) in addition to disbursing amounts held
in escrow pursuant to any order given to it by the Trustee pursuant to
Section 1(a)(A) or Section 10, upon receipt of written notice from the
Trustee of the acceleration of the maturity of the Securities, and
direction from the Trustee to disburse all Available Funds to the Trustee,
as promptly as practicable, disburse all funds held in the Account to the
Trustee and transfer title to all U.S. Government Securities held by the
Indenture Escrow Agent hereunder to the Trustee. The lien and security
interest provided for by this Section 6 shall automatically terminate and
cease to exist, and shall not extend or apply to, and the Trustee shall
have no security interest in, any funds disbursed by the Indenture Escrow
Agent to the Company pursuant to this Agreement to the extent not
inconsistent with the terms hereof. Notwithstanding any other provisions
contained in this Agreement, the Indenture Escrow Agent shall act solely as
the Trustee's agent in connection with its duties under this Section 6.
The Indenture Escrow Agent shall not have any right to receive compensation
from the Trustee and shall have no authority to obligate the Trustee or to
subordinate, compromise or pledge its security interest hereunder.
Accordingly, the Indenture Escrow Agent is hereby directed to cooperate
with the Trustee in the exercise of its rights in the Collateral provided
for herein.
(c) Any money and U.S. Government Securities collected by the Trustee
pursuant to Section 6(b)(iii) shall be applied as provided in Section 1307
of the Indenture. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after the
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91st day after payment in full of all the obligations under the Indenture
shall be paid over as provided in Section 10(d).
(d) The Company hereby appoints the Trustee as its attorney-in-fact
with full power of substitution , upon an Event of Default as defined in
the Indenture, to do any act which the Company is obligated hereto to do,
and the Trustee may exercise such rights as the Company might exercise with
respect to the Collateral and take any action in the Company's name to
protect the Trustee's security interest hereunder. In addition to the
rights provided under Section 6(b)(iii) hereof, upon an Event of Default
and for so long as such Event of Default continues, the Trustee may
exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party under the Code or other applicable law, and
the Trustee may also upon obtaining possession of the Collateral as set
forth herein, without notice to the Company except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the Trustee's
offices or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Trustee may deem commercially reasonable. The
Company acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were
a public sale. The Company agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days' notice to the Company of the
time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Trustee shall
not be obligated to make any sale regardless of notice of sale having been
given. The Trustee may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned.
7. Statements, Confirmations and Notices of Adverse Claims. The Indenture
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Escrow Agent will send copies of all statements, confirmations and other
correspondence concerning the Account simultaneously to the Company and the
Trustee at the addresses set forth in Section 11(f) of this Agreement. If any
person asserts in writing any lien, encumbrance or adverse claim against the
Account or in any financial asset carried therein, the Indenture Escrow Agent
will promptly notify the Company and Trustee thereof.
8. Indenture Escrow Agent.
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(a) The Indenture Escrow Agent, in its capacity as such, shall have
no duties or responsibilities, including, without limitation, a duty to
review or interpret the Indenture, except those expressly set forth herein.
Except for this Agreement, the Indenture Escrow Agent, in its capacity as
such, is not a party to, or bound by, any agreement that may be required
under, evidenced by, or arise out of the Indenture.
(b) If the Indenture Escrow Agent shall be uncertain as to its duties
or rights hereunder or shall receive instructions from any of the
undersigned with respect to the Account, which, in its opinion, are in
conflict with any of the provisions of this Agreement, it shall be entitled
to refrain from taking any action until it shall be directed otherwise in
writing by a joint written instruction of the Company and the Trustee or by
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order of a court of competent jurisdiction. The Indenture Escrow Agent
shall be protected in acting upon any notice, request, waiver, consent,
receipt or other document reasonably believed by the Indenture Escrow Agent
to be signed by the proper party or parties and shall not be liable with
respect to any action taken or omitted to be taken by it in accordance with
any instruction received by it hereunder.
(c) The Indenture Escrow Agent, in its capacity as such, shall not be
liable for any error or judgment or for any act done or step taken or
omitted by it in good faith or for any mistake of fact or law, or for
anything that it may do or refrain from doing in connection herewith,
except for its own gross negligence or willful misconduct, and the
Indenture Escrow Agent shall have no duties to anyone except the Company
and the Trustee and their respective successors and permitted assigns.
(d) The Indenture Escrow Agent may consult legal counsel in the event
of any dispute or question as to the construction of this Agreement, or the
Indenture Escrow Agent's duties hereunder, and the Indenture Escrow Agent
shall incur no liability and shall be fully protected with respect to any
action taken or omitted in good faith in accordance with the opinion and
instructions of counsel.
(e) In the event of any disagreement between the undersigned or any
of them, and/or any other person, resulting in adverse claims and demands
being made in connection with or for the Account, the Indenture Escrow
Agent shall be entitled at its option to refuse to comply with any such
claim or demand, so long as such disagreement shall continue, and in so
doing the Indenture Escrow Agent shall not be or become liable for damages
or interest to the undersigned or any of them or to any person named herein
for its failure or refusal to comply with such conflicting or adverse
demands. The Indenture Escrow Agent shall be entitled to continue so to
refrain and refuse so to act until all differences shall have been resolved
by agreement and the Indenture Escrow Agent shall have been notified
thereof in writing signed by the Company and the Trustee. In the event of
such disagreement which continues for ninety (90) days or more, the
Indenture Escrow Agent in its discretion may, but shall be under no
obligation to, file a suit in interpleader for the purpose of having the
respective rights of the claimants adjudicated and may deposit with the
court all documents and property held hereunder. The Company agrees to pay
all reasonable out-of-pocket costs and expenses incurred by the Indenture
Escrow Agent in such action, including reasonable attorneys' fees and
disbursements.
(f) The Indenture Escrow Agent is hereby indemnified by the Company
from all losses, costs and expenses of any nature incurred by the Indenture
Escrow Agent arising out of or in connection with this Agreement or with
the administration of its duties hereunder, unless such losses, costs or
expenses shall have been caused by the Indenture Escrow Agent's willful
misconduct or gross negligence. Such indemnification shall survive the
resignation or removal of the Indenture Escrow Agent and the termination of
this Agreement until extinguished by any applicable statute of limitations.
(g) The Indenture Escrow Agent, in its capacity as such, does not
have any interest in the Account or any funds or securities deposited
hereunder but is serving as
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escrow holder only and having only possession thereof. This paragraph shall
survive notwithstanding any termination of this Agreement or the
resignation of the Indenture Escrow Agent.
(h) The Indenture Escrow Agent (and any successor Indenture Escrow
Agent) may at any time resign as such by giving written notice of its
resignation to the parties hereto at least thirty (30) days prior to the
date specified for such resignation to take effect. The Indenture Escrow
Agent may be removed at any time by act of the Trustee. Upon the effective
date of such resignation or removal of the Indenture Escrow Agent, all
funds and securities in the Account shall be delivered by it to such
successor Indenture Escrow Agent or as otherwise shall be instructed in
writing by the Company and the Trustee, whereupon the Indenture Escrow
Agent shall be discharged of and from any and all further obligations
arising in connection with this Agreement. If at that time the Indenture
Escrow Agent has not received such instruction, the Indenture Escrow
Agent's sole responsibility after that time shall be to safekeep the
Account and all funds and securities contained therein until receipt of a
designation of successor Indenture Escrow Agent, or a joint written
instruction as to disposition of the Account and all funds and securities
contained therein by the Company and the Trustee or a final order of a
court of competent jurisdiction mandating disposition of the Account and
all funds and securities contained therein. If the Indenture Escrow Agent
is removed or resigns, the Company, by a Board Resolution, shall promptly
appoint a successor Indenture Escrow Agent.
(i) The Indenture Escrow Agent hereby accepts its appointment and
agrees to act as Indenture Escrow Agent under the terms and conditions of
this Agreement and acknowledges receipt of the Initial Escrow Amount. The
Company agrees to pay to the Indenture Escrow Agent as payment in full for
its services hereunder the Indenture Escrow Agent's compensation as
mutually agreed by the parties hereto. The Company further agrees to
reimburse the Indenture Escrow Agent for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Indenture
Escrow Agent in the performance of its duties hereunder (including
reasonable fees, and out-of-pocket expenses and disbursements, of its
counsel). The obligations of the Company under the preceding two sentences
shall survive the resignation or removal of the Indenture Escrow Agent and
the termination of this Agreement until extinguished by any applicable
statute of limitations.
9. Tax Reporting. The Company shall be responsible for reporting all
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items of income, gain, expense and loss recognized in the Account.
10. Interest Payments; Partial Release; Termination; Remedies.
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(a) Immediately prior to or on each of the first four scheduled
Interest Payment Dates for the Securities, the Company shall either (i)
deposit with the Trustee cash from funds other than those contained in the
Account in an amount that is sufficient to pay the interest then due or
(ii) direct the Trustee to issue a release order to the Indenture Escrow
Agent providing for the release from the Account of cash sufficient to pay
the interest on the Securities then due as directed; provided, however,
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that if the Company fails to effect either of options (i) or (ii) in this
Section 10(a) by 10:00 A.M.
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New York time on the applicable Interest Payment Date, the Trustee shall
direct the Indenture Escrow Agent to liquidate investments (to the extent
required), and disburse to the Trustee the amounts required to be paid on
the Securities as interest with respect to such applicable Interest Payment
Date. The Trustee shall incur no liability arising out of its choice of
investments to be liquidated pursuant to this Section 10(a).
(b) If the Company has exercised the option set forth in clause (i)
of Section 10(a), the Trustee promptly shall direct the Indenture Escrow
Agent to transfer, and the Indenture Escrow Agent promptly shall transfer,
an amount equal to such amount deposited with the Trustee (the "Release
Amount") to the Company to an account in the name of the Company or its
designee as designated by the Company or its authorized representative.
Concurrent with such transfer of the Release Amount, the security interest
in the amounts so transferred shall be released and terminated without
further notice, agreement or other action by any party hereto.
(c) If at any time, provided that at such time an Event of Default is
not continuing, the amount of funds and securities in the Account exceeds
the amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants selected by the Company, to pay in full the
first four scheduled interest payments on the Securities not theretofore
paid (the amount of such excess referred to as the "Excess Amount"), and
upon receipt of such public accountant's opinion and written direction from
the Company, the Trustee promptly shall direct the Indenture Escrow Agent
to transfer, and the Indenture Escrow Agent promptly shall transfer, an
amount equal to the Excess Amount to the Company to an account in the name
of the Company or its designee as designated by the Company or its
authorized representative. Concurrent with such transfer of the Excess
Amount, the security interest in the amount so transferred shall be
released and terminated without further notice, agreement or other action
by any party hereto.
(d) After such time as the first four scheduled interest payments on
the Securities have been made in a timely manner, the Trustee promptly
shall direct the Indenture Escrow Agent to transfer, and the Indenture
Escrow Agent promptly shall transfer, any and all remaining funds and
securities in the Account and any proceeds thereof to the Company to an
account in the name of the Company or its designee as designated by the
Company or its authorized representative and to take such other steps as
the Company may request to vest full ownership and control of the Account
in the Company. Concurrent with such transfer, the security interest in the
Account and the amount so transferred shall be released and terminated
without further notice, agreement or other action by any party hereto.
(e) THE RIGHTS AND POWERS GRANTED HEREIN TO TRUSTEE HAVE BEEN GRANTED
IN ORDER TO PERFECT ITS SECURITY INTEREST IN THE ACCOUNT, ARE POWERS
COUPLED WITH AN INTEREST AND WILL NEITHER BE AFFECTED BY THE BANKRUPTCY OR
INSOLVENCY OF THE COMPANY NOR BY THE LAPSE OF TIME. THE OBLIGATIONS OF THE
INDENTURE ESCROW AGENT UNDER SECTIONS 4, 5, 6 AND 7 ABOVE SHALL CONTINUE IN
EFFECT UNTIL THE SECURITY INTEREST OF THE TRUSTEE IN
11
THE ACCOUNT HAS BEEN TERMINATED PURSUANT TO THE TERMS OF THIS AGREEMENT AND
THE TRUSTEE HAS NOTIFIED THE INDENTURE ESCROW AGENT OF SUCH TERMINATION IN
WRITING. UPON RECEIPT OF SUCH NOTICE, (I) THE OBLIGATIONS OF THE INDENTURE
ESCROW AGENT UNDER SECTIONS 4, 5, 6 AND 7 ABOVE WITH RESPECT TO THE
OPERATION AND MAINTENANCE OF THE ACCOUNT AFTER THE RECEIPT OF SUCH NOTICE
SHALL TERMINATE, (II) THE TRUSTEE SHALL HAVE NO FURTHER RIGHT TO ORIGINATE
ORDERS CONCERNING THE ACCOUNT AND (III) THE INDENTURE ESCROW AGENT SHALL
PROMPTLY TAKE SUCH STEPS AS THE COMPANY MAY REQUEST TO VEST FULL OWNERSHIP
AND CONTROL OF THE ACCOUNT IN THE COMPANY, INCLUDING, BUT NOT LIMITED TO,
TRANSFERRING ALL OF THE FUNDS AND SECURITIES AND ALL PROCEEDS THEREOF TO
ANOTHER ACCOUNT IN THE NAME OF THE COMPANY OR ITS DESIGNEE AS DESIGNATED BY
THE COMPANY OR ITS AUTHORIZED REPRESENTATIVE.
11. Miscellaneous.
-------------
(a) Entirety. This Agreement represents the entire agreement of the
--------
parties hereto with respect to the subject matter herein, and supersedes
all prior agreements and understandings, oral or written, if any, including
any correspondence relating thereto or the transactions contemplated
herein.
(b) Waivers, Amendments, Etc. Except as expressly, provided hereby,
-------------------------
the terms of this Agreement may be waived, altered, amended, modified,
changed, discharged or terminated only by an instrument in writing duly
executed by each of the parties hereto, subject to compliance with the
provisions of the Indenture.
(c) Severability. If any provision hereof is illegal, invalid or
------------
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in order to carry out
the intentions of the parties hereto as nearly as may be possible and (ii)
the illegality, invalidity or unenforceability of any provision in any
jurisdiction shall not affect the illegality, validity or enforceability of
such provision in any other jurisdiction.
(d) Successors. This Agreement shall be binding upon the Company, its
----------
successors and assigns and shall inure, together with the rights and
remedies hereunder, to the benefit of the Indenture Escrow Agent and its
successors and assigns and to the Trustee and its successors and assigns
for the benefit of the Indenture Secured Parties; provided, however, that
-------- -------
the Company may not assign its rights or delegate its duties hereunder
without first filing with the Indenture Escrow Agent a certificate of the
Company that such assignment or transfer is permitted by the Indenture.
(e) Rules of Construction. In this Agreement, words in the singular
---------------------
number include the plural, and in the plural include the singular; words of
the masculine gender include the feminine and the neuter, and when the
sense so indicates words of the neuter
12
gender may refer to any gender and the word "or" is disjunctive but not
exclusive. The captions and section numbers appearing in this Agreement are
inserted only as a matter of convenience. They do not define, limit or
describe the scope or intent of the provisions of this Agreement. Except as
otherwise defined or capitalized herein, all terms herein shall have the
meanings ascribed thereto in Article 8 of the Code.
(f) Notices. All notices, requests, consents and other communications
-------
provided for herein (including, without limitation, any modifications of,
or waivers or consents under, this Agreement) shall be given or made in
writing (including, without limitation, by facsimile) delivered to the
intended recipient at the address below or, as to any party, at such other
address as shall be designated by such party in a notice to the other
party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
facsimile or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
If to the Company:
Mission Energy Holding Company
000 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to the Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
If to the Indenture Escrow Agent:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
13
Facsimile: (000) 000-0000
The Company, the Trustee or the Indenture Escrow Agent by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
(g) Further Assurances. At any time and from time to time, upon the
------------------
request of the Trustee or the Indenture Escrow Agent and at the sole
expense of the Company, the Company will promptly and duly execute and
deliver such further instruments and documents and take such further
actions as the Trustee or the Indenture Escrow Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including without
limitation, the filing of any financing statements under the Code (or
similar laws) in effect with respect to the security interests granted
hereby.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart. It shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
(i) Governing Law; Submission to Jurisdiction; Venue. (a) THIS
------------------------------------------------
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT
TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER
THAN NEW YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION. Any legal
action or proceeding with respect to this Agreement or transactions
contemplated hereby may be brought in the courts of the State of New York,
or of the United States for the Southern District of New York, and, by
execution and delivery of this Agreement, the Company hereby irrevocably
submits, for itself and in respect of its property, generally and
unconditionally, to the non-exclusive jurisdiction of such courts. The
Company further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to it at the address above pursuant to Section 11(f) hereof, such service
to become effective thirty (30) days after such mailing. Nothing herein
shall affect the right of the Indenture Escrow Agent to serve process in
any other manner permitted by law or to commence legal proceedings or to
otherwise proceed against the Company in any other jurisdiction.
(j) Headings. The headings of sections and subsections hereof are
--------
provided for convenience only and shall not in any way affect the meaning
or construction of any provision of this Agreement.
14
IN WITNESS WHEREOF, the parties hereto have caused this Indenture Escrow
and Security Agreement to be duly executed as of the day and year first above
written.
MISSION ENERGY HOLDING COMPANY
By:/s/ XXXXXXXX X. XXXXXX, XX.
_________________________________
Name: Xxxxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY
as Indenture Escrow Agent
By:/s/ XXXXX X. XXXXX
_________________________________
Name: Xxxxx X. Xxxxx
Title: Authorized Signer
WILMINGTON TRUST COMPANY
As Trustee
By:/s/ XXXXX X. XXXXX
_________________________________
Name: Xxxxx X. Xxxxx
Title: Authorized Signer
(Indenture Escrow and Security Agreement)
S-1
