B IS INCURRING A DEFAULT RATE OF
INTEREST (INCLUDING ALL PAYMENTS FOR WHICH THE DUE DATE HAS OCCURRED WITHOUT
PAYMENT IN FULL);
(C)
THIRD, TO THE PAYMENT OF ANY AMOUNT DUE
(WHETHER FOR PRINCIPAL OR INTEREST) ON THE LOANS AND ANY SG EXPOSURE FEE AND
THIRD PARTY EXPOSURE FEES, IN EACH CASE, WHERE THE RELATED GAS SWAP SETTLEMENT
DATE HAS OCCURRED;
(D)
FOURTH, TO THE PAYMENT OF ANY OTHER AMOUNT DUE
WHERE THE RELATED SETTLEMENT DATE HAS OCCURRED;
(E)
FIFTH, TO FUND THE DIVIDEND OR DISTRIBUTION
OF AMOUNTS NECESSARY TO MAKE INTERCOMPANY LOANS TO MX ELECTRIC OR MX CANADA
PERMITTED HEREUNDER;
(F)
SIXTH, TO THE OPERATING ACCOUNT, IN THE
AMOUNTS DETERMINED IN ACCORDANCE WITH CLAUSE (C)(III) OF THIS PART 11;
(G)
SEVENTH, TO PAY ANY AMOUNT DUE AND PAYABLE
PURSUANT TO A REQUIRED PURCHASE AND TO PAY ANY OTHER AMOUNT REQUIRED FOR THE
DISCHARGE OF ISDA OBLIGATIONS;
(H)
EIGHTH, IF FUNDS ARE TO BE USED FOR ANY OTHER
PURPOSE, SUCH FUNDS SHALL BE RELEASED ONLY UPON THE APPROVAL OF PARTY A; AND
(I)
NINTH, AFTER THE DISCHARGE OF ISDA
OBLIGATIONS, TO PARTY B.
Party A shall apply any and all amounts due to Party A from funds in the Party A
Sub Account from time to time and in the order of priorities set forth above.
(E)
SWAP NOTE SUB ACCOUNT.
THE SWAP NOTE SUB
ACCOUNT SHALL BE IN THE NAME OF PARTY A.
FUNDS IN THE SWAP NOTE SUB ACCOUNT
(OTHER THAN ANY FUNDS DEPOSITED PURSUANT TO PART 13(A)(X)(F)) SHALL BE
TRANSFERRED TO THE PARTY A SUB ACCOUNT AS PROVIDED IN PART 10(A)(IV) AND
PART 10(B)(VI).
ANY FUNDS IN THE SWAP NOTE SUB ACCOUNT DEPOSITED PURSUANT TO
PART 13(A)(X)(F) SHALL BE RELEASED IN THE FOLLOWING ORDER OF PRIORITY:
first, to pay any amount required for the Discharge of ISDA Obligations that has
not been satisfied in full from funds deposited in the Party A Sub Account and
released in accordance with clauses (d)(A) through (G), inclusive; and
second, after the Discharge of ISDA Obligations, to Party B.
Party A shall apply any and all amounts due Party A from funds in the Swap Note
Sub Account from time to time in the accordance with the above.
(F)
REPLACEMENT CUSTODIAL ACCOUNT.
IF AT ANY
TIME THE ROYAL BANK OF SCOTLAND PLC'S CREDIT RATING FALLS BELOW BBB- FROM S&P OR
BAA3
FROM MOODY'S, THEN PARTY B MAY REQUIRE THAT PARTY A TRANSFER THE PARTY A
38
SUB ACCOUNT AND THE SWAP NOTE SUB ACCOUNT TO A QUALIFIED CUSTODIAN PURSUANT TO A
CUSTODIAL AGREEMENT IN FORM AND SUBSTANCE ACCEPTABLE TO PARTY A.
FOR THE
AVOIDANCE OF DOUBT, FOLLOWING ANY SUCH TRANSFER OF THE PARTY A SUB ACCOUNT AND
THE SWAP NOTE SUB ACCOUNT, THE TERMS OF SUCH CUSTODIAL AGREEMENT GOVERNING THE
DISBURSEMENT OF FUNDS FROM SUCH TRANSFERRED ACCOUNTS SHALL BE CONSISTENT WITH
PART 11(D) AND PART 11(E), RESPECTIVELY.
(G)
OTHER ACCOUNTS.
(I)
PARTY B AND EACH SPECIFIED ENTITY OF
PARTY B (OTHER THAN MX ELECTRIC (AS PERMITTED PURSUANT TO THE TERMS