EXHIBIT 4.9(a)
S&S DRAFT 12/17/00
Initial Maximum Principal Amount of Lessor Notes Secured for Purposes of
Section 7-102 of the Real Property Article of the
Maryland Annotated Code: $ ___________
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INDENTURE OF TRUST, MORTGAGE
AND SECURITY AGREEMENT
(L1)
Dated as of December 19, 2000
between
DICKERSON OL1 LLC
and
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Lease Indenture Trustee
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Dickerson Base-Load Units 1, 2 and 3
Coal-Fired Electric Generating Units
Land Located in Montgomery County, Maryland
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................ 6
SECTION 2. THE LESSOR NOTES........................................................... 6
Section 2.1 Limitation on Lessor Notes............................................ 6
Section 2.2 Initial Lessor Notes.................................................. 7
Section 2.3 Execution and Authentication of Lessor Notes.......................... 7
Section 2.4 Issuance and Terms of the Initial Lessor Notes........................ 7
Section 2.5 Payments from Indenture Estate Only; No Personal Liability of the
Owner Lessor, the Owner Participant or the Lease Indenture
Trustee............................................................... 8
Section 2.6 Method of Payment..................................................... 9
Section 2.7 Application of Payments............................................... 10
Section 2.8 Registration, Transfer and Exchange of Lessor Notes................... 10
Section 2.9 Mutilated, Destroyed, Lost or Stolen Lessor Notes..................... 11
Section 2.10 Optional Purchase upon Lease Event of Default......................... 11
Section 2.11 Redemption of Lessor Notes............................................ 12
Section 2.12 Assumption of Lessor Notes............................................ 14
Section 2.13 Subsequent Lessor Notes............................................... 16
Section 2.14 Payment of Expenses on Transfer....................................... 17
Section 2.15 Restrictions of Transfer Resulting from Federal Securities Laws;
Legend................................................................ 17
Section 2.16 Security for and Parity of Lessor Notes............................... 18
Section 2.17 Acceptance of the Lease Indenture Trustee............................. 18
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
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FROM INDENTURE ESTATE...................................................... 18
Section 3.1 Distribution Prior to Lease Indenture Event of Default................ 18
Section 3.2 Payments Following Event of Loss or Other Early Termination........... 19
Section 3.3 Payments After Lease Indenture Event of Default....................... 20
Section 3.4 Certain Payments...................................................... 21
Section 3.5 Other Payments........................................................ 22
Section 3.6 Manner of Payment to the Owner Lessor................................. 22
Section 3.7 Investment of Amounts Held by Lease Indenture Trustee................. 23
Section 3.8 Establishment of the Lease Indenture Trustee's Account; and Lien
and Security Interest; Etc............................................ 23
Section 3.9 The Account Bank; Limited Rights of the Owner Lessor.................. 24
SECTION 4. COVENANTS OF THE OWNER LESSOR; LEASE INDENTURE
EVENTS OF DEFAULT; REMEDIES................................................ 26
Section 4.1 Covenants of the Owner Lessor......................................... 26
Section 4.2 Lease Indenture Events of Default..................................... 27
Section 4.3 Certain Rights to Cure................................................ 28
Section 4.4 Remedies.............................................................. 30
Section 4.5 Taking Possession of Indenture Estate................................. 32
Section 4.6 Remedies Cumulative................................................... 34
Section 4.7 Discontinuance of Proceedings......................................... 34
Section 4.8 Waiver of Past Defaults............................................... 34
Section 4.9 Waiver of Stay, Extension, Moratorium Laws; Equity of
Redemption............................................................ 34
Section 4.10 No Action Contrary to the Facility Lessee's Rights Under the
Facility Lease........................................................ 35
SECTION 5. DISCLAIMER OF REPRESENTATIONS; NO SEGREGATION OF
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MONEYS; FURTHER ASSURANCES; CERTAIN RIGHTS................................. 35
Section 5.1 No Representations or Warranties as to the Property Interest.......... 35
Section 5.2 No Segregation of Moneys; No Interest................................. 36
Section 5.3 Further Assurances; Financing Statements.............................. 36
Section 5.4 Certain Rights of Owner Lessor and Owner Participant.................. 36
SECTION 6. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS........................................................ 39
Section 6.1 Supplements and Amendments to this Indenture and the Other
Documents:............................................................ 39
Section 6.2 Documents Furnished to Holders........................................ 41
Section 6.3 Lease Indenture Trustee Protected..................................... 41
SECTION 7. MISCELLANEOUS.............................................................. 42
Section 7.4 Termination of Indenture.............................................. 42
Section 7.2 Governing Law; Counterparts........................................... 42
Section 7.3 No Legal Title to Indenture Estate in Holders......................... 43
Section 7.4 Sale of Indenture Estate by Lease Indenture Trustee Is Binding........ 43
Section 7.5 Indenture for Benefit of the Owner Lessor, the Owner Participant,
any OP Guarantor, the Facility Lessee and the Holders................. 43
Section 7.6 Notices............................................................... 43
Section 7.7 Severability.......................................................... 44
Section 7.8 No Oral Modifications or Continuing Waivers........................... 44
Section 7.9 Successors and Assigns................................................ 44
Section 7.10 Headings.............................................................. 44
Section 7.11 Normal Commercial Relations........................................... 44
Section 7.12 Waiver of Setoff...................................................... 45
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Section 7.13 Concerning the Owner Manager.......................................... 45
Section 7.14 Required Holders; Etc................................................. 45
Section 7.15 The Lease Indenture Trustee........................................... 45
Section 7.16 Maximum Secured Obligations........................................... 51
Section 7.17......................................................................... 52
Exhibits
Exhibit A Description of Facility
Exhibit B Description of Facility Site
Exhibit C Form of Initial Lessor Notes
Exhibit D Form of Certificate of Authentication
Schedule
Schedule I Terms of Initial Lessor Notes
Schedule II Lease Indenture Trustee's Account Number
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EXHIBIT 4.9(a)
INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT(L1)
This INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT (L1) (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof, this "Indenture"), dated as of December 19, 2000, between
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DICKERSON OL1 LLC, a Delaware limited liability company created for the benefit
of the Owner Participant referred to below, as grantor (the "Owner Lessor"), and
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STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, as
grantee (the "Lease Indenture Trustee").
-----------------------
WITNESSETH:
WHEREAS, the Owner Lessor and Southern Energy Mid-Atlantic, LLC (the
"Facility Lessee") will enter into that certain Facility Lease Agreement (L1),
dated as of December 19, 2000 (as amended, supplemented or otherwise modified
from time to time in accordance with the provisions thereof, the "Facility
--------
Lease"), pursuant to which the Owner Lessor will lease to the Facility Lessee
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and the Facility Lessee will lease from the Owner Lessor for a term of years the
Owner Lessor's undivided interest equal to the Undivided Interest Percentage in
and to the Dickerson base-load units 1, 2 and 3 (the "Facility") with the right
--------
to nonexclusive possession thereof (the "Undivided Interest");
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WHEREAS, the Facility Lessee will lease a corresponding interest equal to
the Undivided Interest Percentage in and to the Facility Site with the right to
nonexclusive possession thereof and will grant certain non-exclusive easements
(such undivided leasehold interest, together with such non-exclusive easements,
the "Ground Interest") to the Owner Lessor and the Owner Lessor simultaneously
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therewith will sublease the Ground Interest back to the Facility Lessee;
WHEREAS, the Facility is more particularly described in Exhibit A attached
hereto and made a part hereof and is located on the Facility Site, which,
together with certain easements, are more particularly described in Exhibit B
attached hereto and made a part hereof;
WHEREAS, the Owner Lessor was authorized and directed in the LLC Agreement
(L1), effective as of December 15, 2000 (as amended, supplemented or otherwise
modified from time to time in accordance with the provisions thereof, the
"Lessor LLC Agreement"), between Wilmington Trust Company, as independent
--------------------
manager, and SEMA OP3 LLC (the "Owner Participant"), a copy of which is recorded
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contemporaneously herewith, to execute and deliver this Indenture and the Short
Form Indenture;
WHEREAS, in connection with the transactions contemplated by the Lessor LLC
Agreement, the Owner Lessor entered into the Participation Agreement;
WHEREAS, the Owner Lessor, pursuant to the Facility Deed and Bill of Sale,
will purchase the Undivided Interest from Potomac Electric Power Company
("Pepco") and concurrently therewith will lease such Undivided Interest to the
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Facility Lessee pursuant to the Facility Lease;
WHEREAS, in accordance with this Indenture, the Owner Lessor will execute
and deliver the Initial Lessor Notes, the proceeds of which will be used by the
Owner Lessor to finance a portion of the Purchase Price, and will grant to the
Lease Indenture Trustee the liens and security interests herein provided;
WHEREAS, this Indenture is regarded as a mortgage under the laws of the
State of Maryland and as a security agreement under the Uniform Commercial Code
of the State of New York; and
WHEREAS, the Owner Lessor and the Lease Indenture Trustee desire to enter
into this Indenture, to, among other things, provide for (a) the issuance by the
Owner Lessor of the Lessor Notes, and (b) the conveyance and assignment by the
Owner Lessor to the Lease Indenture Trustee, as part of the Indenture Estate, of
the Undivided Interest, the Ground Interest, the Owner Lessor's interest as
tenant under the Facility Site Lease, the Owner Lessor's interest as landlord
and sublandlord under the Facility Lease and the Facility Site Sublease,
respectively, the Owner Lessor's interest under the Participation Agreement and
all payments and other amounts received or receivable hereunder or thereunder in
accordance herewith (excluding Excepted Payments and except as otherwise
provided herein or therein) as security for, inter alia, the Owner Lessor's
obligations to and for the benefit of the Holders and for the benefit and
security of such Holders.
GRANTING CLAUSE:
NOW, THEREFORE, to secure the prompt payment of the principal of and
interest on, and all other amounts due with respect to, the Lessor Notes from
time to time outstanding hereunder, which Lessor Notes are secured in the
initial maximum principal amount of $_______ for purposes of Section 7-102 of
the Real Property Article of the Maryland Annotated Code, all other amounts
owing hereunder by the Owner Lessor and the performance and observance by the
Owner Lessor of all the agreements, covenants and provisions contained in the
Operative Documents, and the prompt payment of all amounts from time to time due
or to become due from the Owner Lessor to the Lease Indenture Trustee or the
Holders under any of the Operative Documents (collectively, the "Lessor Secured
--------------
Obligations"), and for the uses and purposes and subject to the terms and
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provisions hereof, and in consideration of the premises and of the covenants
herein contained, and of the acceptance of the Lessor Notes by the Holders
thereof, and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Owner Lessor does hereby grant, bargain, sell,
assign, transfer, convey, mortgage, pledge and warrant, unto and for the
security and benefit of, the Lease Indenture Trustee acting for and on behalf of
itself and the Holders from time to time, a first priority security interest in
and mortgage lien on all estate, right, title and interest now held or hereafter
acquired by the Owner Lessor in, to and under the following described property,
rights, interests and privileges, whether now or hereafter acquired, other than
Excepted Payments (such property, rights, interests and privileges as are
conveyed pursuant to this granting clause, but excluding Excepted Payments and
the rights to enforce and collect the sums as set forth herein, being
hereinafter referred to as the "Indenture Estate"):
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(1) the Undivided Interest, the Owner Lessor's interest in any
Components; the Owner Lessor's interest in any Improvements; the Facility
Site Lease and the Ground
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Interest thereunder; the Facility Lease and all payments of any kind by the
Facility Lessee thereunder (including Rent); the Facility Site Sublease and
the Sublease Ground Interest thereunder and all payments of any kind by the
Facility Lessee thereunder; Owner Lessor's interest in all tangible
property located on or at or attached to the Facility Land that an interest
in such tangible property arises under applicable real estate law
("fixtures"); the Facility Deed, the Bill of Sale, the Ownership and
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Operation Agreement, the Shared Facilities Agreement, the Qualifying Credit
Support, the Conditional Indemnity Agreement, the Indemnity Mortgage and
all and any interest in any property now or hereafter granted to the Owner
Lessor pursuant to any provision of the Facility Site Lease, Facility Lease
or the Facility Site Sublease; and each other Operative Document to which
the Owner Lessor is a party (the Undivided Interest, the Owner Lessor's
interest in any Components, the Owner Lessor's interest in any fixtures,
Improvements and the Ground Interest are collectively referred to as the
"Property Interest" and the documents specifically referred to above in
-----------------
this paragraph (1) are collectively referred to as the "Indenture Estate
----------------
Documents"), including, without limitation, (x) all rights of the Owner
---------
Lessor or the Facility Lessee (to the extent assigned by the Facility
Lessee to the Owner Lessor) to receive any payments or other amounts or to
exercise any election or option or to make any decision or determination or
to give or receive any notice, consent, waiver or approval or to make any
demand or to take any other action under or in respect of any such
document, to accept surrender or redelivery of the Property Interest or any
part thereof, as well as all the rights, powers and remedies on the part of
the Owner Lessor or the Facility Lessee (to the extent assigned by the
Facility Lessee to the Owner Lessor), whether acting under any such
document or by statute or at law or in equity or otherwise, arising out of
any Lease Default or Lease Event of Default and (y) any right to
restitution from the Facility Lessee, any sublessee or any other Person in
respect of any determination of invalidity of any such document;
(2) all rents, royalties, issues, profits, revenues, proceeds,
damages, claims and other income from the property described in this
Granting Clause, including, without limitation, all payments or proceeds
payable to the Owner Lessor as the result of the sale of the Property
Interest or the lease or other disposition of the Property Interest, and
all estate, right, title and interest of every nature whatsoever of the
Owner Lessor in and to such rents, issues, profits, revenues and other
income and every part thereof (the "Revenues");
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(3) all condemnation proceeds with respect to the Property Interest
or any part thereof (to the extent of the Owner Lessor's interest therein),
and all proceeds (to the extent of the Owner Lessor's interest therein) of
all insurance maintained pursuant to Section 11 of the Facility Lease or
otherwise;
(4) all other property of every kind and description and interests
therein now held or hereafter acquired by the Owner Lessor pursuant to the
terms of any Operative Document, wherever located;
(5) all damages resulting from breach (including, without limitation,
breach of warranty or misrepresentation) or termination of any of the
Indenture Estate
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Documents or arising from bankruptcy, insolvency or other similar
proceedings involving any party to the Indenture Estate Documents; and
(6) all proceeds of the foregoing;
BUT EXCLUDING from the Indenture Estate all Excepted Payments, any and all
rights to enforce and collect the same, and SUBJECT TO the rights of the Owner
Lessor and the Owner Participant hereunder.
Concurrently with the delivery hereof, the Owner Lessor is delivering to
the Lease Indenture Trustee on behalf of itself and the other Holders from time
to time the original executed counterpart of the Facility Lease to which a
chattel paper receipt is attached.
TO HAVE AND TO HOLD the Indenture Estate and all parts, rights, members and
appurtenances thereof, to the use, benefit and on behalf of the Lease Indenture
Trustee and the successors and permitted assigns of the Lease Indenture Trustee
(a) in fee simple, forever, as to all parts thereof constituting real property
other than the Ground Interest, and (b) with respect to the Ground Interest, for
a term of years pursuant to the Facility Site Lease.
This Indenture is intended to constitute a mortgage under the laws of the
State of Maryland and a security agreement as required under the Uniform
Commercial Code of the State of New York. This Indenture is given to secure the
payment and performance of the Lessor Secured Obligations.
PROVIDED, HOWEVER, that if the principal, interest and any other amounts
due in respect of all the Lessor Notes, all other amounts due the Holders at the
time and in the manner required hereby and by the Lessor Notes, the Facility
Lease and the Participation Agreement (but not including Excepted Payments) and
any other Lessor Secured Obligations shall have been paid, then this Indenture
shall be surrendered and cancelled and upon such surrender and cancellation the
rights hereby and thereby granted and assigned shall terminate and cease and the
Lease Indenture Trustee shall take such actions as are required to be taken by
it pursuant to and as directed under Section 7.1.
Subject to the terms and conditions hereof, the Owner Lessor does hereby
irrevocably constitute and appoint the Lease Indenture Trustee the true and
lawful attorney of the Owner Lessor (which appointment is coupled with an
interest) with full power (in the name of the Owner Lessor or otherwise) to ask,
require, demand and receive any and all moneys and claims for moneys (in each
case, including, without limitation, insurance and requisition proceeds to the
extent of the Owner Lessor's interest therein but excluding in all cases
Excepted Payments) due and to become due under or arising out of the Indenture
Estate Documents and all other property which now or hereafter constitutes part
of the Indenture Estate and, to endorse any checks or other instruments or
orders in connection therewith and to file any claims or to take any action or
to institute any proceedings (other than in connection with the enforcement or
collection of Excepted Payments) which the Lease Indenture Trustee may deem to
be necessary or advisable. Pursuant to the Facility Lease, the Facility Lessee
is directed to make all payments of Rent required to be paid or deposited with
the Owner Lessor (other than Excepted Payments) and all
4
other amounts which are required to be paid to or deposited with the Owner
Lessor pursuant to the Facility Lease (other than Excepted Payments) directly to
the Lease Indenture Trustee at such address or addresses as the Lease Indenture
Trustee shall specify, for application as provided in this Indenture. Further,
the Owner Lessor agrees that promptly on receipt thereof, it will transfer to
the Lease Indenture Trustee any and all moneys from time to time received by it
constituting part of the Indenture Estate, whether or not expressly referred to
in the immediately preceding sentence, for distribution pursuant to this
Indenture.
It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Owner Lessor shall remain liable under the Indenture Estate
Documents to perform all of the obligations assumed by it thereunder, all in
accordance with and pursuant to the terms and provisions thereof, and the Lease
Indenture Trustee and the Holders shall have no obligation or liability under
any term or provision thereof by reason of or arising out of the assignment
hereunder, nor shall the Lease Indenture Trustee or the Holders be required or
obligated in any manner, except as herein expressly provided, to perform or
fulfill any obligations of the Owner Lessor under or pursuant to any of the
Indenture Estate Documents to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim or take any action to collect or enforce the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
The Owner Lessor agrees that at any time and from time to time, upon the
written request of the Lease Indenture Trustee (acting on the instruction of any
Holder) or any Holder, the Owner Lessor will promptly and duly execute and
deliver or cause to be duly executed and delivered any and all such further
instruments and documents necessary to obtain the full benefits of the
assignment hereunder and of the rights and powers herein granted; provided,
--------
however, that the Owner Lessor shall have no obligation to execute or deliver or
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to cause to be executed or delivered any further instruments or documents that
would give the Lease Indenture Trustee or the Holders greater rights and powers
than the rights and powers of the Owner Lessor which have been granted herein or
intended to be granted herein.
The Owner Lessor does hereby warrant and represent that it has not
assigned, pledged or granted a lien or security interest in, to or under, and
hereby covenants that, so long as this Indenture shall remain in effect and the
Lien hereof shall not have been released pursuant to Section 7.1 hereof, it will
not assign, pledge or grant a lien or security interest in any of its estate,
right, title or interest in, to or under, the Indenture Estate to anyone other
than the Lease Indenture Trustee for the benefit of the Holders. The Owner
Lessor hereby further covenants that with respect to its estate, right, title
and interest in, to or under the Indenture Estate, it will not, except as
provided in this Indenture and except as to Excepted Payments, (i) accept any
payment from the Facility Lessee or any sublessee or enter into any agreement
amending, modifying or supplementing any of the Indenture Estate Documents,
execute any waiver or modification of, or consent under, the terms of any of the
Indenture Estate Documents or revoke or terminate any of the Indenture Estate
Documents, (ii) settle or compromise any claim arising under any of the
Indenture Estate Documents, or (iii) submit or consent to the submission of any
dispute, difference or other matter arising under or in respect of any of the
Indenture Estate Documents to arbitration thereunder.
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Except as provided herein, the Owner Lessor hereby ratifies and confirms
its obligations under the Indenture Estate Documents and does hereby agree that
it will not take or omit to take any action, the taking or omission of which
might result in an alteration or impairment of any of the Indenture Estate
Documents or of any of the rights created by any such Indenture Estate Document
or the assignment (subject to the previous paragraph) hereunder.
The Lease Indenture Trustee, for itself and its successors and permitted
assigns, hereby agrees that it shall hold the Indenture Estate, in trust for the
benefit and security of (i) the Holders of the Lessor Notes from time to time
outstanding, without any priority of any one Lessor Note over any other except
as herein otherwise expressly provided and (ii) the Lease Indenture Trustee, and
for the uses and purposes and subject to the terms and provisions set forth in
this Indenture.
Accordingly, the Owner Lessor, for itself and its successors and permitted
assigns, agrees that all Lessor Notes are to be issued and delivered and that
all property subject or to become subject hereto is to be held subject to the
further covenants, conditions, uses and trusts hereinafter set forth, and the
Owner Lessor, for itself and its successors and permitted assigns, hereby
covenants and agrees with the Lease Indenture Trustee, for the benefit and
security of the Holders from time to time of the Lessor Notes from time to time
outstanding and to protect the security of this Indenture, and the Lease
Indenture Trustee agrees to accept the trusts and duties hereinafter set forth,
as follows:
SECTION 1. DEFINITIONS
Unless otherwise defined herein (including Annex A hereto), each
capitalized term used in this Indenture and not otherwise defined herein shall
have the respective meaning set forth in Appendix A to the Participation
Agreement (L1) dated as of December 18, 2000 (as amended, supplemented or
otherwise modified from time to time in accordance with the provisions thereof,
the "Participation Agreement") among the Facility Lessee, the Owner Manager, the
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Owner Lessor, the Owner Participant, the Lease Indenture Trustee, and State
Street Bank and Trust Company of Connecticut, National Association, as Pass
Through Trustees, unless the context hereof shall otherwise require. The
general provisions of Appendix A to the Participation Agreement shall apply to
terms used in this Indenture and specifically defined herein.
SECTION 2. THE LESSOR NOTES
Section 2.1 Limitation on Lessor Notes
No Lessor Notes may be issued under the provisions of, or become secured
by, this Indenture except in accordance with the provisions of this Section 2.
The aggregate principal amount of the Lessor Notes which may be authenticated
and delivered and outstanding at any one time under this Indenture shall be
limited to the aggregate principal amount of the Initial Lessor Notes issued on
the Closing Date to the Pass Through Trustees plus the aggregate principal
amount of Additional Lessor Notes issued pursuant to Section 2.13 hereof.
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Section 2.2 Initial Lessor Notes
There are hereby created and established hereunder three series of Lessor
Notes consisting of the Series A Lessor Notes, the Series B Lessor Notes and the
Series C Lessor Notes, each in substantially the form set forth in Exhibit C to
this Indenture and each such series in the aggregate principal amount, having
installments payable on the dates and in the amounts and having the final
maturity date and interest rate set forth in Schedule I to this Indenture
(respectively, the "Series A Lessor Notes", the "Series B Lessor Notes" and the
--------------------- ---------------------
"Series C Lessor Notes", collectively, the "Initial Lessor Notes" or,
--------------------- --------------------
individually, an "Initial Lessor Note"). If the Initial Lessor Notes are
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initially issued after December 31, 2000, the amount of principal installments
payable on each Payment Date may be adjusted at such time of issuance but such
adjustment shall not (a) change the average life of the Series A Certificates
issued under the Pass Through Trust Agreement A between SEMA and the Pass
Through Trustee, (b) increase the average life of the Series B Certificates or
Series C Certificates issued under the Pass Through Trust Agreement B and Pass
Through Trust Agreement C, respectively, between SEMA and the Pass Through
Trustee, by more than 0.5 years or (c) extend the final maturity date of any
Initial Lessor Note.
Section 2.3 Execution and Authentication of Lessor Notes
Each Lessor Note issued hereunder shall be executed and delivered on behalf
of the Owner Lessor by one of its authorized signatories, be in fully registered
form, be dated the date of original issuance of such Lessor Note and be in
denominations of not less than $1,000. Any Lessor Note may be signed by a
Person who, at the actual date of the execution of such Lessor Note, is an
authorized signatory of the Owner Lessor although at the nominal date of such
Lessor Note such Person may not have been an authorized signatory of the Owner
Lessor. No Lessor Note shall be secured by or be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears
thereon a certificate of authentication substantially in the form set forth in
Exhibit D to this Indenture (or in the appropriate form provided for in any
supplement hereto executed pursuant to Section 2.13 hereof), executed by the
Lease Indenture Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Lessor Note shall be conclusive evidence
that such Lessor Note has been duly authenticated and delivered hereunder. The
Lease Indenture Trustee shall authenticate and deliver the Initial Lessor Notes
for original issue in the respective aggregate principal amounts specified in
Schedule I to this Indenture, upon a written order of the Owner Lessor signed on
its behalf by the Owner Manager. The Lease Indenture Trustee shall authenticate
and deliver Subsequent Lessor Notes, upon a written order of the Owner Lessor
executed on its behalf by the Owner Manager and satisfaction of the conditions
specified in Section 2.13 hereof. Such order shall specify the principal amount
of the Subsequent Lessor Notes to be authenticated and the date on which the
original issue of Subsequent Lessor Notes is to be authenticated.
Section 2.4 Issuance and Terms of the Initial Lessor Notes
(a) There shall be issued to each Pass Through Trustee the related Initial
Lessor Note, dated the Closing Date. The aggregate amount of the Initial Lessor
Notes shall be in the principal amount equal to the aggregate principal amount
of the Lessor Notes purchased by the
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Pass Through Trustees from the Owner Lessor pursuant to Section 2.1(c) of the
Participation Agreement.
(b) The principal of each series of Initial Lessor Notes shall be due and
payable in installments on the respective dates (each such date a "Payment
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Date") and in the respective amounts set forth in Schedule I to this Indenture.
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Such Schedule I hereto to the contrary notwithstanding, the last installment of
principal of each Initial Lessor Note shall be equal to the then unpaid balance
of the principal of such Initial Lessor Note. Each Initial Lessor Note shall
bear interest on the principal from time to time outstanding, from and including
the date of issuance thereof (computed on the basis of a 360-day year of twelve
30-day months) until paid in full at the rate set forth in such Initial Lessor
Note and Schedule I hereto. Each Initial Lessor Note shall accrue additional
interest under the circumstances and at the rate per annum set forth in the
third paragraph of each Initial Lessor Note. Interest on each Initial Lessor
Note shall be due and payable in arrears semi-annually commencing on June 30,
2001, and on each June 30 and December 30 thereafter (each such date, an
"Interest Payment Date") until paid in full. If any day on which principal,
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premium (including, without limitation, Make-Whole Premium), if any, or interest
on the Initial Lessor Notes is payable is not a Business Day, payment thereof
shall be made on the next succeeding Business Day with the same effect as if
made on the date on which such payment was due.
(c) Interest (computed on the basis of a 360-day year of twelve 30-day
months) on any overdue principal and, to the extent permitted by Requirements of
Law, on overdue interest or Make-Whole Premium shall be paid on demand at the
Overdue Rate.
Section 2.5 Payments from Indenture Estate Only; No Personal Liability of
the Owner Participant or the Lease Indenture Trustee
Except as may otherwise specifically be provided in this Indenture or in
the Participation Agreement, all payments to be made by the Lease Indenture
Trustee in respect of the Lessor Notes or under this Indenture shall be made
only from the Indenture Estate, and the Owner Lessor shall have no obligation
for the payment thereof except to the extent that there shall be sufficient
income or proceeds from the Indenture Estate to make such payments in accordance
with the terms of Section 3 hereof, and the Owner Participant shall not have any
obligation for payments in respect of the Lessor Notes or under this Indenture.
The Lease Indenture Trustee and each Holder, by its acceptance thereof, agrees
that it will look solely to the income and proceeds from the Indenture Estate to
the extent available for distribution to the Lease Indenture Trustee or such
Holder, as the case may be, as herein provided and that, except as expressly
provided in this Indenture or the Participation Agreement, (x) none of the Owner
Participant, the Equity Investor, the Trust Company or the Lease Indenture
Trustee, or any Affiliate of any thereof, shall be personally liable to such
Holder or the Lease Indenture Trustee for any amounts payable hereunder, under
such Lessor Note or for any performance to be rendered under any Indenture
Estate Document or for any liability under any Indenture Estate Document, and
(y) such amounts shall be non-recourse to the assets of each of the Owner
Participant, the Equity Investor, the Trust Company or the Lease Indenture
Trustee, or any Affiliate of any thereof. Without prejudice to the foregoing,
the Owner Lessor will duly and punctually pay or cause to be paid the principal
of, premium (including, without limitation, Make-Whole Premium), if any, and
8
interest on all Lessor Notes according to their terms and the terms of this
Indenture. Nothing contained in this Section 2.5 limiting the liability of the
Owner Lessor shall derogate from the right of the Lease Indenture Trustee and
the Holders to proceed against the Indenture Estate to secure and enforce all
payments and obligations due hereunder and under the Indenture Estate Documents
and the Lessor Notes.
In the event the Lease Indenture Trustee shall not receive the full amount
of interest, principal and Make-Whole Premium due on the Initial Lessor Notes on
any Interest Payment Date or Payment Date, the Lease Indenture Trustee shall
make a demand under the Qualifying Credit Support in accordance with the terms
thereof for an amount equal to the lesser of the amount of such deficiency and
the amount available under the Qualifying Credit Support. The Lease Indenture
Trustee shall make such other demand under the Qualifying Credit Support as may
be permitted thereunder.
In furtherance of the foregoing, to the fullest extent permitted by law,
each Holder (and each assignee of such Person), by its acceptance thereof,
agrees, as a condition to its being secured under this Indenture, that neither
it nor the Lease Indenture Trustee will exercise any statutory right to negate
the agreements set forth in this Section 2.5.
Nothing herein contained shall be interpreted as affecting the
representations, warranties or agreements of the Owner Lessor expressly made in
its individual capacity set forth in the Participation Agreement or the Lessor
LLC Agreement.
Section 2.6 Method of Payment
(a) The Owner Lessor shall maintain an office or agency where Lessor Notes
may be presented for payment (the "Paying Agent"). The Owner Lessor may
------------
have one or more additional paying agents. The term "Paying Agent" includes any
------------
additional paying agent. The Owner Lessor initially appoints the Lease
Indenture Trustee as Paying Agent in connection with the Lessor Notes.
(b) The Owner Lessor shall deposit with the Lease Indenture Trustee a
sum sufficient to pay such principal and interest when so becoming due. The
Owner Lessor shall require each Paying Agent (other than the Lease Indenture
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Lease Indenture Trustee all money held by the Paying
Agent for the payment of principal of or interest on the Lessor Notes and shall
notify the Lease Indenture Trustee of any default by the Owner Lessor in making
any such payment.
(c) The principal of, premium (including, without limitation, Make-Whole
Premium), if any, and interest on each Lessor Note shall be paid by the Lease
Indenture Trustee in Dollars from amounts available in the Indenture Estate on
the dates provided in the Lessor Notes by mailing a check for such amount,
payable in New York Clearing House funds, to each Holder at the last address of
each such Holder appearing on the Note Register, or by whichever of the
following methods shall be specified by notice from a Holder to the Lease
Indenture Trustee: (i) by crediting the amount to be distributed to such Holder
to an account maintained by such Holder with the Lease Indenture Trustee, (ii)
by making such payment to such Holder in immediately
9
available funds at the Lease Indenture Trustee Office, or (iii) in the case of
the Initial Lessor Notes and, in the case of other Lessor Notes, if such Holder
of such other Lessor Notes is the Pass Through Trustee, or a bank or other
institutional investor, by transferring such amount in immediately available
funds for the account of such Holder to the banking institution having bank wire
transfer facilities as shall be specified by such Holder, such transfer to be
subject to telephonic confirmation of payment. Any payment made under any of the
foregoing methods shall be made without any presentment or surrender of such
Lessor Note, unless otherwise specified by the terms of such Lessor Note, except
that, in the case of the final payment in respect of any Lessor Note, such
Lessor Note shall be surrendered to the Lease Indenture Trustee for cancellation
after such payment. All payments in respect of the Lessor Notes shall be made as
soon as practicable prior to the close of business on the date the amounts to be
distributed by the Lease Indenture Trustee are actually received by the Lease
Indenture Trustee. One or more of the foregoing methods of payment may be
specified in a Lessor Note. Prior to due presentment for registration of
transfer of any Lessor Note, the Owner Lessor and the Lease Indenture Trustee
may deem and treat the Person in whose name any Lessor Note is registered on the
Note Register as the absolute owner and holder of such Lessor Note for the
purpose of receiving payment of all amounts payable with respect to such Lessor
Note and for all other purposes, and neither the Owner Lessor nor the Lease
Indenture Trustee shall be affected by any notice to the contrary. All payments
made on any Lessor Note in accordance with the provisions of this Section 2.6
shall be valid and effective to satisfy and discharge the liability on such
Lessor Note to the extent of the sums so paid and neither the Lease Indenture
Trustee nor the Owner Lessor shall have any liability in respect of such
payment.
Section 2.7 Application of Payments
Each payment on any outstanding Lessor Note shall be applied, first, to the
-----
payment of accrued interest (including interest on overdue principal and, to the
extent permitted by Requirements of Law, overdue interest) on such Lessor Note
to the date of such payment, second, to the payment of the principal amount of,
------
and premium (including, without limitation, Make-Whole Premium), if any, on such
Lessor Note then due (including any overdue installments of principal)
thereunder and third, to the extent permitted by Section 2.11 hereof, the
-----
balance, if any, remaining thereafter, to the payment of the principal amount
of, and premium (including, without limitation, Make-Whole Premium), if any, on
such Lessor Note. The order of application of payments prescribed by this
Section 2.7 shall not be deemed to supersede any provision of Section 3 hereof
regarding application of funds.
Section 2.8 Registration, Transfer and Exchange of Lessor Notes
The Owner Lessor shall maintain an office or agency where Lessor Notes may
be presented for registration of transfer or for exchange (the "Registrar").
---------
The Registrar shall keep a register of the Lessor Notes and of their transfer
and exchange. The Owner Lessor may have one or more co-registrars. The Owner
Lessor initially appoints the Lease Indenture Trustee as Registrar in connection
with the Lessor Notes. The Lease Indenture Trustee shall maintain at the Lease
Indenture Trustee Office a register in which it will provide for the
registration, registration of transfer and exchange of Lessor Notes (such
register being referred to herein as the "Note Register"). If any Lessor Note
-------------
is surrendered at said office for registration of transfer or
10
exchange (accompanied by a written instrument of transfer duly executed by or on
behalf of the holder thereof, together with the amount of any applicable
transfer taxes), the Owner Lessor will execute and the Lease Indenture Trustee
will authenticate and deliver, in the name of the designated transferee or
transferees, if any, one or more new Lessor Notes (subject to the limitations
specified in Sections 2.3 and 2.15 hereof) in any denomination or denominations
not prohibited by this Indenture, as requested by the Person surrendering the
Lessor Note, dated the same date as the Lessor Note so surrendered and of like
tenor and aggregate unpaid principal amount. Any Lessor Note or Lessor Notes
issued in a registration of transfer or exchange shall be entitled to the same
security and benefits to which the Lessor Note or Lessor Notes so transferred or
exchanged were entitled, including, without limitation, rights as to interest
accrued but unpaid and to accrue so that there will not be any loss or gain of
interest on the Lessor Note or Lessor Notes surrendered. Every Lessor Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by the Holder thereof or his
attorney duly authorized in writing, and the Registrar may require opinion of
counsel as to compliance of any such transfer with the Securities Act. The
Registrar shall make a notation on each new Lessor Note of the amount of all
payments of principal previously made on the old Lessor Note or Lessor Notes
with respect to which such new Lessor Note is issued and the date on which such
new Lessor Note is issued and the date to which interest on such old Lessor Note
or Lessor Notes shall have been paid. The Registrar shall not be required to
register the transfer or exchange of any Lessor Note during the 15 days
preceding the due date of any payment on such Lessor Note.
Section 2.9 Mutilated, Destroyed, Lost or Stolen Lessor Notes
Upon receipt by the Owner Lessor and the Lease Indenture Trustee of
evidence satisfactory to each of them of the loss, theft, destruction or
mutilation of any Lessor Note and, in case of loss, theft or destruction, of
indemnity satisfactory to each of them, and upon reimbursement to the Owner
Lessor and the Lease Indenture Trustee of all reasonable expenses incidental
thereto and payment or reimbursement for any transfer taxes, and upon surrender
and cancellation of such Lessor Note, if mutilated, the Owner Lessor will
execute and the Lease Indenture Trustee will authenticate and deliver in lieu of
such Lessor Note, a new Lessor Note, dated the same date as such Lessor Note and
of like tenor and principal amount. Any indemnity provided by the holder on a
Lessor Note pursuant to this Section 2.9 must be sufficient in the judgment of
the Owner Lessor and the Lease Indenture Trustee to protect the Owner Lessor,
the Lease Indenture Trustee, the Paying Agent, the Registrar and any co-
registrar or co-paying agent from any loss which any of them may suffer if a
Lessor Note is replaced.
Section 2.10 Optional Purchase upon Lease Event of Default
The Owner Lessor shall have the right, but shall not be obligated to, elect
to purchase all, but not less than all, of the Lessor Notes then outstanding,
without any Make-Whole Premium, in accordance with the provisions of this
Section 2.10, if: (i)(x) a Lease Indenture Event of Default, which is also a
Lease Event of Default, shall have occurred and be continuing for a period of at
least 90 days under this Indenture without the acceleration of such Lessor Notes
or the exercise of any remedy under the Facility Lease by the Lease Indenture
Trustee intended to dispossess the Facility Lessee of the Facility, (y) as a
result of the occurrence and continuation of
11
a Lease Indenture Event of Default, the Lease Indenture Trustee accelerates, in
its discretion, or acting at the direction of the Required Holders, the Lessor
Notes, and such acceleration has not been rescinded, or (z) within the 30 day
period immediately prior to the Owners Lessor's exercise of the election
pursuant to this Section 2.10 the Lease Indenture Trustee has provided written
notice to both the Facility Lessee and the Owner Participant that it intends to
exercise, within not less than 30 days, remedies available under the Facility
Lease intended to dispossess the Facility Lessee of the Facility under the
Facility Lease as the result of the occurrence of a Lease Indenture Event of
Default which also constitutes a Lease Event of Default and (ii) no Lease
Indenture Event of Default (other than solely as the result of the occurrence of
a Lease Event of Default) shall have occurred and be continuing under this
Indenture. To exercise the election permitted by this Section 2.10, the Owner
Lessor shall give written notice thereof to the Lease Indenture Trustee. Such
notice shall designate a date which is not more than ten (10) (nor less than
three (3)) Business Days thereafter as the purchase payment date. Each Holder
agrees that such Holder will, upon payment to such Holder in the manner provided
for in Section 2.6 from the Owner Lessor of an amount equal to the aggregate
unpaid principal amount of all Lessor Notes then held by such Holder, together
with accrued and unpaid interest thereon to the date of payment thereof and all
other sums then due and payable to such Holder hereunder and under the other
Operative Documents (but excluding any Make-Whole Premium or any other premium),
forthwith sell, assign, transfer and convey to the Owner Lessor (without
recourse, representation or warranty of any kind except for its own acts), all
of the estate, right, title and interest of such Holder in and to the Indenture
Estate, this Indenture, all Lessor Notes held by such Holder, the Participation
Agreement and the other Operative Documents (excluding all estate, right, title
and interest of such Holder under any of the foregoing to the extent such
estate, right, title or interest is, with respect to an obligation arising prior
to such sale (or to the extent such obligation relates solely to periods prior
to such sale), or with respect to any action, inaction or state of affairs
occurring prior to such sale). The Owner Lessor shall assume all of such
Holder's obligations under the Participation Agreement and this Indenture
arising subsequent to such sale (except to the extent such obligations relate
solely to periods prior to such sale) pursuant to an assignment and assumption
agreement in form and substance reasonably satisfactory to the parties . If the
Owner Lessor shall so request, such Holder will comply with the provisions of
Section 2.8 hereof to enable new Lessor Notes to be issued to the Owner Lessor
in such authorized denominations (as provided in said Section 2.8) as the Owner
Lessor shall request. All charges and expenses required pursuant to Section 2.14
hereof in connection with the issuance of any such new Lessor Note pursuant to
this Section 2.10 shall be borne by the Owner Lessor. Any election to purchase
the Lessor Notes under this Section 2.10 shall be irrevocable. For the avoidance
of doubt, it is expressly understood and agreed that no Holder shall be
obligated under this Section 2.10 to sell the Lessor Notes held by it unless
such Holder shall have received on the specified payment date the full amount
owing to such Holder under this Section 2.10.
Section 2.11 Redemption of Lessor Notes
(a) Mandatory Redemption With Make-Whole Premium. (i) All Lessor Notes
--------------------------------------------
outstanding under this Indenture, shall be redeemed, in whole but not in part,
at the principal amount thereof, together with all accrued and unpaid interest
thereon, if any, to the date of redemption plus a Make Whole Premium, on the
Obsolescence Termination Date, if the Facility
12
Lease is terminated in accordance with Section 14.1 thereof, (other than with
respect to a termination in accordance with Section 14.1 of the Facility Lease
resulting from (x) a change in Requirements of Law or (y) imposition by FERC or
any other Governmental Authority having or claiming jurisdiction over the
Facility Lessee or the Facility of any conditions or requirements (including,
without limitation, requiring significant capital improvements to the Facility)
upon the continued effectiveness or renewal of any Governmental Approval
necessary for the operation or ownership of the Facility) and (ii) all or any
series of the Lessor Notes outstanding under this Indenture shall be redeemed at
the principal amount thereof, together with all accrued and unpaid interest
thereon, if any, to the date of redemption plus a Make Whole Premium upon an
optional refinancing pursuant to Section 12.2 of the Participation Agreement.
(b) Mandatory Redemption Without Make-Whole Premium. Except as otherwise
-----------------------------------------------
provided in Section 2.12(a), all Lessor Notes outstanding under this Indenture
shall be redeemed, in whole but not in part, at the principal amount thereof,
together with all accrued and unpaid interest thereon, if any, to the date of
redemption, but without any Make-Whole Premium or any other premium, on the
earliest of:
(i) if the Facility Lease is terminated pursuant to Section 10.2(a)
thereof, on the applicable Termination Date provided in Section
10.2(a) of the Facility Lease;
(ii) if the Facility Lease is terminated in accordance with Section
13.3(a) thereof, on the applicable Termination Date provided in
Section 13.1 of the Facility Lease; and
(iii) if the Facility Lease is terminated in accordance with Section
14.1(a) thereof as a result of (x) a change in Requirements of
Law or (y) imposition by FERC or any other Governmental
Authority having or claiming jurisdiction over the Facility
Lessee or the Facility of any conditions or requirements
(including, without limitation, requiring significant capital
improvements to the Facility) upon the continued effectiveness
or renewal of any Governmental Approval necessary for the
operation or ownership of the Facility, on the Obsolescence
Termination Date.
(c) Unless the Facility Lease or the Participation Agreement requires the
Facility Lessee to give notice to the Lease Indenture Trustee of the event
giving rise to a redemption the Owner Lessor shall give a notice of redemption
(subject to revocation as provided below) under this Section 2.11 to the Lease
Indenture Trustee (and the Lease Indenture Trustee shall thereupon promptly
deliver such notice to each Holder) in the manner specified in Section 7.6
promptly after the Owner Lessor shall have received written notice from the
Facility Lessee of any event giving rise to a redemption pursuant to Section
2.11(a) or (b) hereof. Any such notice of redemption shall specify (i) that it
is a notice of redemption given pursuant to this Section 2.11, (ii) the date
fixed for such redemption, (iii) the clause of Section 2.11(a) or (b) hereof
under which such redemption is to be made, and (iv) the amount of and interest
on each Lessor Note to be redeemed pursuant to this Section 2.11 and the amount
of the Make-Whole Premium, if any.
13
Any such notice given under this Section 2.11(c) by the Owner Lessor may be
withdrawn to the same extent as the corresponding notice under the Facility
Lease or the Participation Agreement, as the case may be.
(d) The Owner Lessor may, at its option, upon 25 days irrevocable prior
written notice to the Lease Indenture Trustee, redeem any Initial Lessor Note,
in whole or in part, on any date, at the principal amount thereof, together with
all accrued and unpaid interest thereon, if any, to the date of redemption, plus
a Make Whole Premium.
(e) The Owner Lessor may, at its option, redeem any Subsequent Lessor Note
in whole, or in part, on any date, to the extent permitted by, and at the prices
set forth in, the supplemental indenture establishing the terms, conditions and
designations of such Subsequent Lessor Notes, together with the accrued interest
on such principal amount so redeemed to the date of redemption.
(f) The redemption amount payable in connection with any redemption in
accordance with this Section 2.11 shall be paid by the Owner Lessor to the
Holders in immediately available funds in Dollars at the place and by the time
and otherwise in the manner provided in Section 2.6.
(g) Except as otherwise expressly provided in this Indenture, the Lessor
Notes may not be prepaid in whole or in part.
Section 2.12 Assumption of Lessor Notes
(a) Upon the occurrence of an Assumption Event, the Facility Lessee may
notify the Lease Indenture Trustee of its intention to assume all of the Lessor
Notes in whole (but not in part) pursuant to and in accordance with this Section
2.12. In the event of the occurrence of an Assumption Event and provided each of
the conditions set forth below have been satisfied, all of the obligations and
liabilities of the Owner Lessor under this Indenture and each Lessor Note shall
be assumed by the Facility Lessee and the Owner Lessor shall be released and
discharged without further act or formality whatsoever from all obligations and
liabilities under this Indenture and each Lessor Note;
(i) no Significant Lease Default or Lease Event of Default shall
have occurred and be continuing after giving effect to such assumption;
(ii) the Lease Indenture Trustee shall have received a supplement to
this Indenture which shall, among other things, (A) confirm the release of
the Owner Lessor thereby effected and (B) contain provisions appropriately
amending this Indenture: (1) to reflect the fact that the obligations of
the Owner Lessor under this Indenture have been assumed directly by the
Facility Lessee, (2) to incorporate herein such provisions from the
Facility Lease, the Facility Site Lease and the Participation Agreement as
shall be appropriate, including covenants substantially identical to those
set forth in the Facility Lease and (3) as otherwise necessary to reflect
the foregoing provisions and preserve,
14
protect and maintain the Lien on the Indenture Estate (such supplement, the
"Assumption Agreement");
--------------------
(iii) the Lease Indenture Trustee shall have received an opinion of
counsel to the Facility Lessee (with customary qualifications and
limitations and otherwise reasonably satisfactory to the Lease Indenture
Trustee), addressed to the Lease Indenture Trustee and the Holders of the
Lessor Notes, to the effect that (A) the Assumption Agreement and each
other instrument, document or agreement executed and delivered by the
Facility Lessee in connection with the assumption contemplated by the
Assumption Agreement (collectively, the "Assumption Documents") have been
--------------------
duly authorized, executed and delivered by the Facility Lessee, (B) each
Assumption Document and the assumption contemplated thereby do not
contravene (1) the Organic Documents of the Facility Lessee, (2) any
Contractual Obligation of the Facility Lessee or (3) Requirements of Law,
(C) no Governmental Approval is necessary or required in connection with
any Assumption Document or the assumption contemplated thereby (or, if any
such Governmental Approval is necessary or required, that the same has been
duly obtained and is final and in full force and effect and any period for
the filing of notice of rehearing or application for judicial review of the
issuance of such Governmental Approval has expired without any such notice
or application having been made), (D) each Assumption Document is a legal,
valid and binding obligation of the Facility Lessee, enforceable in
accordance with its terms (except as limited by bankruptcy, insolvency or
similar laws of general application affecting the enforcement of creditors'
rights generally and equitable principles), (E) unless the Facility Lessee
has elected to provide to the Lease Indenture Trustee an indemnity against
the risk that such assumption of the Lessor Notes will cause a Tax Event to
occur as to any direct or indirect holder of a Lessor Note (including any
Certificateholder), such Assumption Agreement and the assumption of the
Notes thereunder shall not cause a Tax Event to occur as to any direct or
indirect holder of any Lessor Note (including any Certificateholder) and
(F) the lien of this Indenture will continue to be a first priority
perfected lien on the Indenture Estate;
(iv) the Lease Indenture Trustee shall have received copies of all
Governmental Approvals (if any) referred to in the opinion of counsel
referred to in clause (iii) above;
(v) the Lease Indenture Trustee shall have received UCC lien
searches, supplemental title reports, opinions and such other evidence as
may reasonably be required by the Lease Indenture Trustee demonstrating
that no impairment exists or will exist to the first-priority perfected
lien and security interest in the Undivided Interest; and
(vi) the Lease Indenture Trustee shall have received ratings letters
from each of Moody's and S&P to the effect that the then existing rating of
the Certificates will not be downgraded as a result of such assumption.
(b) Notice of any assumption of the Lessor Notes shall be given by the
Lease Indenture Trustee to the Holders as promptly as practicable after the
Lease Indenture Trustee has received notice thereof in accordance with the first
sentence of Section 2.12(a) hereof.
15
Section 2.13 Subsequent Lessor Notes
(a) The Owner Lessor may, subject to the conditions hereafter provided in
this Section 2.13, issue additional Lessor Notes ("Subsequent Lessor Notes")
-----------------------
under and secured by this Indenture, at any time or from time to time for the
purpose of (i) providing funds for a Supplemental Financing pursuant to Section
12.1 of the Participation Agreement (Subsequent Lessor Notes issued for such
purpose, the "Additional Lessor Notes") or (ii) refinancing the Lessor Notes or
-----------------------
other Subsequent Lessor Notes pursuant to Section 12.2 of the Participation
Agreement (Subsequent Lessor Notes issued for such purpose, the "New Lessor
----------
Notes").
- -----
(b) Before any Subsequent Lessor Notes shall be issued under the
provisions of this Section 2.13, the Owner Lessor shall have delivered to the
Lease Indenture Trustee, not less than 5 (15 days in the case of New Lessor
Notes) days nor more than 60 days (or in the case of a Supplemental Financing
under Section 12.1 of the Participation Agreement, 90 days) prior to the
proposed date of issuance of such Subsequent Lessor Notes, a request and
authorization to issue such Subsequent Lessor Notes, which request and
authorization shall (i) contain the proposed date of issuance of such Lessor
Notes and the terms thereof and (ii) include a certification by the Facility
Lessee that the terms of such Lessor Notes are in compliance with this Section
2.13 and Section 12.1 or 12.2 of the Participation Agreement, as the case may
be. Such Subsequent Lessor Notes shall have a designation so as to distinguish
such Subsequent Lessor Notes from the Lessor Notes theretofore issued, be dated
their respective dates of issuance, bear interest at such rates (which may be
either fixed or floating) as shall be agreed between the Facility Lessee and the
Owner Lessor, and shall be stated to be payable by their terms not later than
the latest date permitted therefor under Section 12.1 or 12.2 of the
Participation Agreement, as the case may be. The Subsequent Lessor Notes shall
not be subject to (i) prepayment except as provided in Section 2.11 hereof, (ii)
purchase except as provided in Section 2.10 hereof or (iii) assumption except as
provided in Section 2.12 hereof.
(c) Except as to any differences in the maturity dates of the Subsequent
Lessor Notes or the rate or rates of interest thereon, such Subsequent Lessor
Notes shall be on a parity with, and shall be entitled to the same benefits and
security of this Indenture, and shall be subject to the same terms, as the other
Lessor Notes issued pursuant to the terms hereof.
(d) The terms, provisions and designations of such Subsequent Lessor Notes
shall be set forth in a supplement to this Indenture executed by the Owner
Lessor and the Lease Indenture Trustee. Such Subsequent Lessor Notes shall be
executed, delivered and registered as provided in this Indenture, but before
such Subsequent Lessor Notes shall be delivered and registered there shall be
filed with the Lease Indenture Trustee, in addition to other documents and
certificates required by this Section 2.13, the following, all of which shall be
dated as of the date of the supplement to this Indenture:
(i) a copy of such supplement (which shall include the form of such
series of Subsequent Lessor Notes);
(ii) unless the Subsequent Lessor Notes will, upon issuance, be the
only Lessor Notes outstanding, evidence of the filing of record of such
supplement, together
16
with UCC lien searches, supplemental title reports, opinions, title
insurance endorsements and such other evidence that may be reasonably
required by the Lease Indenture Trustee demonstrating that this Indenture
and such supplement provide a first-priority perfected lien and security
interest, subject to Permitted Liens, in the Indenture Estate for the full
amount of all Lessor Notes outstanding, including all Subsequent Lessor
Notes described in such supplement;
(iii) an officer's certificate of an Authorized Officer of the
Facility Lessee stating that (A) no Lease Default has occurred and is
continuing, (B) the conditions in respect of the issuance of such
Subsequent Lessor Notes contained in this Section 2.13 have been satisfied,
(C) the Periodic Lease Rent and the Termination Value are calculated to be
sufficient to pay all the outstanding Lessor Notes, after taking into
account the issuance of such Subsequent Lessor Notes and any related
prepayment of Lessor Notes theretofore outstanding and (D) all conditions
to the Supplemental Financing or refinancing contained in Section 12.1 or
12.2 of the Participation Agreement or in any other provision of the
Operative Documents have been satisfied;
(iv) an officer's certificate of the Owner Lessor stating that no
Lease Indenture Default has occurred and is continuing; and
(v) an opinion of counsel to the Owner Lessor that the Subsequent
Lessor Notes and the supplement to this Indenture have been duly
authorized, executed and delivered by the Owner Lessor and constitute the
legal, valid and binding obligations of the Owner Lessor enforceable in
accordance with their terms;
Section 2.14 Payment of Expenses on Transfer
Upon the issuance of a new Lessor Note or Lessor Notes pursuant to Section
2.8 or 2.9 hereof, the Owner Lessor or the Lease Indenture Trustee may require
from the party requesting the issuance of such new Lessor Note or Lessor Notes
payment of a sum to reimburse the Owner Lessor and the Lease Indenture Trustee
for, or to provide funds for, the payment on an After-Tax Basis to the Owner
Lessor, Lease Indenture Trustee, Owner Participant, and any OP Member of any tax
or other governmental charge in connection therewith or any charges and expenses
connected with such tax or governmental charge paid or payable by the Owner
Lessor or the Lease Indenture Trustee.
Section 2.15 Restrictions of Transfer Resulting from Federal Securities
Laws; Legend
Each Lessor Note shall be delivered to the initial Holder thereof without
registration of such Lessor Note under the Securities Act and without
qualification of this Indenture under the Trust Indenture Act of 1939, as
amended. Prior to any transfer of any such Lessor Note, in whole or in part, to
any Person, the Holder thereof shall furnish to the Facility Lessee, the Lease
Indenture Trustee and the Owner Lessor an opinion of counsel, which opinion and
which counsel shall be reasonably satisfactory to the Lease Indenture Trustee,
the Owner Lessor and the Facility Lessee, to the effect that such transfer will
not violate the registration provisions of the Securities Act or require
qualification of this Indenture under the Trust Indenture Act of 1939, as
amended,
17
and all Lessor Notes issued hereunder shall be endorsed with a legend which
shall read substantially as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE OR OTHERWISE DISPOSED OF
EXCEPT WHILE SUCH REGISTRATION IS IN EFFECT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT.
Section 2.16 Security for and Parity of Lessor Notes
All Lessor Notes issued and outstanding hereunder shall rank on a parity
with each other and shall as to each other be secured equally and ratably by
this Indenture, without preference, priority or distinction of any thereof over
any other by reason of difference in time of issuance or otherwise.
Section 2.17 Acceptance of the Lease Indenture Trustee
Each Holder, by its acceptance of a Lessor Note, shall be deemed to have
consented to the appointment of the Lease Indenture Trustee.
Section 2.18 Taxes; Withholding and Information Reporting
The Lease Indenture Trustee shall exclude and withhold from each
distribution of principal, premium, if any, and interest and other amounts due
hereunder or under the Lessor Notes any and all withholding taxes applicable
thereto as required by law. The Lease Indenture Trustee agrees (i) to act as
such withholding agent and, in connection therewith, whenever any present or
future taxes or similar charges are required to be withheld with respect to any
amounts payable in respect of the Lessor Notes, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on behalf of
the Holders, (ii) that it will file any necessary withholding tax returns or
statements when due, and (iii) that, as promptly as possible after the payment
thereof, it will deliver to each Holder appropriate documentation showing the
payment thereof, together with such additional documentary evidence as such
Holders may reasonably request from time to time. The Lease Indenture Trustee
agrees to file any other information as it may be required to file under United
States law.
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM
INDENTURE ESTATE
Section 3.1 Distribution Prior to Lease Indenture Event of Default
Except as otherwise provided in Section 3.2 or 3.3 of this Indenture, each
installment of Periodic Lease Rent and any payment of Supplemental Lease Rent
constituting interest on overdue installments of Periodic Lease Rent received by
the Lease Indenture Trustee shall be distributed by the Lease Indenture Trustee
in the following order of priority:
18
first, so much of such amounts as shall be required to pay in full the
-----
aggregate principal and accrued interest (as well as any interest on
overdue principal and, to the extent permitted by Requirements of Law, on
overdue interest) then due and payable under the Lessor Notes shall be
distributed to the Holders ratably, without priority of any Holder over any
other Holder, in the proportion that the amount of such payment then due
and payable under each such Lessor Note bears to the aggregate amount of
the payments then due and payable under all such Lessor Notes; and
second, the balance, if any, of such amounts remaining shall be
------
distributed to the Owner Lessor for distribution by it in accordance with
the terms of the Lessor LLC Agreement; provided, however, that if a Lease
-------- -------
Indenture Event of Default shall have occurred and be continuing, then such
balance shall not be distributed as provided in this clause "second" but
------
shall be held by the Lease Indenture Trustee as part of the Indenture
Estate until the earliest to occur of: (i) receipt by the Lease Indenture
Trustee of written notice from the Required Holders stating that all Lease
Indenture Events of Default shall have been cured or waived, in which event
such balance shall be distributed as provided in this clause "second," (ii)
------
receipt by the Lease Indenture Trustee of written notice from the Required
Holders stating that Section 3.3 hereof shall be applicable, in which event
such balance shall be distributed in accordance with the provisions of said
Section 3.3, or (iii) unless the Lease Indenture Trustee shall have
accelerated the Lessor Notes and commenced to exercise remedies intended to
dispossess the Facility Lessee of the Undivided Interest pursuant to
Section 4.4 hereof, such Lease Indenture Event of Default shall have
continued for a period of 180 days (such period to be extended if and for
so long as the Lease Indenture Trustee shall be precluded by operation of
law or by any judgment or order of any court or regulatory body of
competent jurisdiction from exercising remedies under Section 4.4 hereof),
in which event such balance shall be distributed as provided in this clause
"second" and so long as the Lease Indenture Trustee shall have failed to
------
accelerate the Lessor Notes and failed to commence to exercise remedies
intended to dispossess the Facility Lessee of the Undivided Interest
pursuant to Section 4.4 hereof, such Lease Indenture Event of Default shall
not thereafter be the basis of a retention of any amount under this
proviso.
Section 3.2 Payments Following Event of Loss or Other Early Termination
(a) Except as otherwise provided in Section 3.3 hereof, any payment
received by the Lease Indenture Trustee with respect to a redemption arising
pursuant to Section 2.11 hereof shall be distributed by the Lease Indenture
Trustee in the following order of priority: first, as provided in clause
-----
"second" of Section 3.3 hereof; second, as provided in clause "third" of Section
------ ------ -----
3.3 hereof (but including all Make-Whole Premium (if any) due in respect thereof
required to be paid in accordance with Section 2.11(a) hereof); third, to
-----
reimburse such Holder (to the extent not previously reimbursed) for any
reasonable out-of-pocket costs or expenses incurred in connection with such
prepayment; and fourth, as provided in clause "fifth" of Section 3.3 hereof.
------ -----
(b) Except as otherwise provided in Section 3.2(a) or 3.3 hereof, any
amounts received directly or indirectly from any Governmental Authority or
insurer or other party not as a
19
result of an Event of Loss or pursuant to any provision of Section 10.3, Section
10.5 or Section 11 of the Facility Lease shall be applied as provided in the
applicable provisions of the Facility Lease and, if and to the extent that any
portion of such amounts are required to be held for the account of the Facility
Lessee and are not at the time required to be paid to the Facility Lessee
pursuant to the applicable provisions of the Facility Lease, shall be promptly
paid to (if not initially paid directly to the Lease Indenture Trustee) and,
thereafter, held by, the Lease Indenture Trustee as security for the obligations
of the Facility Lessee under the Facility Lease, and at such time as the Lease
Indenture Trustee shall have received written notice from the Facility Lessee
(i) stating that the conditions specified in the Facility Lease for payment of
such amounts to the Facility Lessee shall have been satisfied and (ii) setting
out the portion of such amounts so held by the Lease Indenture Trustee to be
paid to the Facility Lessee, the Lease Indenture Trustee shall pay to the
Facility Lessee the amount specified in such notice.
Section 3.3 Payments After Lease Indenture Event of Default
Notwithstanding Section 2.7 hereof, (a) if, during the continuance of a
Lease Indenture Event of Default, the Lease Indenture Trustee (acting on the
instruction of the Required Holders) has elected to pursue remedies in respect
thereof or (b) the entire principal amount of the Lessor Notes shall have become
due and payable as provided herein, all payments (other than Excepted Payments)
received by the Lease Indenture Trustee in respect of, all amounts (other than
Excepted Payments) held or realized by the Lease Indenture Trustee upon, and all
other payments or amounts (other than Excepted Payments) held by the Lease
Indenture Trustee as part of, the Indenture Estate shall be promptly distributed
in the following order of priority:
first, to the Lease Indenture Trustee, so much of such payments or
-----
amounts as shall be required to reimburse the Lease Indenture Trustee for
any amounts payable to it under Section 10.1 of the Participation Agreement
and not previously paid to the Lease Indenture Trustee pursuant to Section
3.4 hereof;
second, so much of such payments or amounts, as shall be required to
------
pay to the Holders all amounts payable to the Holders pursuant to the
Operative Documents, including, without limitation, the indemnification
provisions of Sections 10.1 and 10.2 of the Participation Agreement, but
excluding principal and interest on the Lessor Notes, shall be distributed
to the Holders as their interests may appear, and if the aggregate amount
shall be insufficient to pay all such amounts in full, such amount shall be
distributed ratably, without priority of any Holder over any other Holder,
in the proportion that the aggregate amount due each such Holder under this
clause "second" bears to the aggregate amount due to all such Holders under
------
this clause "second";
------
third, so much of such payments or amounts remaining as shall be
-----
required to pay in full the aggregate unpaid principal amount of all Lessor
Notes and accrued but unpaid interest thereon to the date of distribution
(as well as any interest on overdue principal and, to the extent permitted
by Requirements of Law, overdue interest at the Overdue Rate), shall be
distributed to the Holders, and if the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then such
distribution shall be made, ratably, without priority of one Holder over
any other Holder, in the proportion that the
20
aggregate unpaid principal amount of all Lessor Notes held by each such
Holder, plus the accrued but unpaid interest thereon to the date of
distribution, bears to the aggregate unpaid principal amount of all Lessor
Notes, plus the accrued but unpaid interest thereon to the date of
distribution;
fourth, to the Holders, so much of such payments or amounts as shall
------
be required to reimburse each such Holder for any tax, expense, charge or
other loss (including, without limitation, all amounts to be expended at
the expense of, or charged upon, the tolls, rents, revenues, issues,
products and profits of the Indenture Estate pursuant to Section 4.5 (b)
hereof) incurred by such Holder (to the extent not previously reimbursed)
under the Operative Documents, including, without limitation, the expenses
of any sale, taking or other proceeding, reasonable attorneys' fees and
expenses, court costs, and any other expenditures incurred or expenditures
or advances made by such Holder in the protection, exercise or enforcement
of any right, power or remedy or any damages sustained by such Holder,
liquidated or otherwise, upon such Lease Indenture Event of Default shall
be applied by such Holder in reimbursement of such expenses; and
fifth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be paid to the Owner Lessor for distribution in accordance
with the terms of the Lessor LLC Agreement.
Section 3.4 Certain Payments
(a) Except as otherwise provided in this Indenture, any payments received
by the Lease Indenture Trustee or any Holder for which provision as to the
application thereof is made in any other Operative Document shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of such Operative Document.
(b) The Owner Lessor hereby agrees that if, at any time during the term of
this Indenture, it receives from the Facility Lessee or any Affiliate of the
Facility Lessee any amount or payment (other than Excepted Payments) described
in Section 3.4(c) hereof, it shall hold such amount or payment in trust for the
benefit of the Lease Indenture Trustee and promptly pay such amount or payment
to the Lease Indenture Trustee. The Owner Lessor further agrees that the
obligation to remit such amount or payment shall be secured by this Indenture.
(c) Any payment of Supplemental Lease Rent received by the Owner
Participant or the Lease Indenture Trustee pursuant to the fourth sentence of
Section 4.3 hereof shall, so long as no Lease Indenture Event of Default shall
have occurred and be continuing, and except to the extent applied as provided in
Section 3.3 hereof, be retained by, or promptly distributed to, the Owner
Participant. Notwithstanding anything to the contrary in this Section 3 or any
of the Operative Documents and without regard to whether a Lease Indenture Event
of Default shall have occurred and be continuing, all Excepted Payments received
by the Lease Indenture Trustee shall be paid by the Lease Indenture Trustee
forthwith to the Person or Persons entitled thereto.
21
Section 3.5 Other Payments
Any payments in respect of the Indenture Estate received by the Lease
Indenture Trustee no provision for the application of which is made in the
Facility Lease or in another Operative Document or elsewhere in this Indenture
shall (i) to the extent received or realized at any time prior to the payment in
full of all obligations to the Holders secured by the Lien of this Indenture, be
deposited into the Lease Indenture Trustee's Account, and thereafter applied to
the payment of principal, interest, Make-Whole Premium and other amounts as and
when such principal, interest, Make-Whole Premium or other amounts come due
pursuant to priority "first" specified in Section 3.1 hereof or, if applicable
-----
at such time, pursuant to Section 3.2 or 3.3 hereof and (ii) to the extent
received or realized at any time after payment in full of all obligations to the
Holders secured by the Lien of this Indenture, in the following order of
priority: first, to reimburse the Lease Indenture Trustee and the Holders (to
-----
the extent not previously reimbursed) for any reasonable out-of-pocket costs or
expenses to which it is entitled to reimbursement pursuant to an Operative
Document; and second, in the manner provided in clause "fifth" of Section 3.3
------ -----
hereof.
Section 3.6 Manner of Payment to the Owner Lessor
Any amounts distributed hereunder by the Lease Indenture Trustee to the
Owner Lessor shall be paid by the Lease Indenture Trustee to the Owner Lessor by
wire transfer of funds of the type received by the Lease Indenture Trustee at
such offices and to such account or accounts of such entity or entities as shall
be designated in advance by written notice from the Owner Lessor to the Lease
Indenture Trustee from time to time. The Lease Indenture Trustee shall, whether
or not the Lien of this Indenture shall have been discharged in accordance
herewith, act as paying agent for the Owner Lessor, in connection with the Lease
Indenture Trustee's duties to make distributions to or for the benefit of the
Owner Lessor pursuant to this Section 3 and to accept all revenues, payments,
securities, investments and other amounts received by the Lease Indenture
Trustee and to be distributed to the Owner Lessor pursuant thereto or held in
trust for the benefit of the Owner Lessor pursuant to the terms of this
Indenture. The Owner Lessor hereby notifies and instructs the Lease Indenture
Trustee that unless and until the Lease Indenture Trustee receives written
notice to the contrary from the Owner Lessor, all amounts to be distributed to
the Owner Lessor pursuant to clause "second" of Section 3.1 hereof shall be
------
distributed by wire transfer of funds of the type received by the Lease
Indenture Trustee to the Owner Participant. In the event that the Lease
Indenture Trustee is unable to distribute any amounts to the Owner Lessor or the
Owner Participant on the same day such amounts are received by the Lease
Indenture Trustee, the Lease Indenture Trustee agrees that such amounts shall be
held in trust for the benefit of the Owner Lessor or the Owner Participant, as
the case may be, and shall be invested by the Lease Indenture Trustee for and at
the expense and risk of the Owner Lessor or the Owner Participant, as the case
may be, in Permitted Investments identified in written instructions to the Lease
Indenture Trustee from the Owner Lessor or the Owner Participant, as the case
may be, if such investments are reasonably available.
22
Section 3.7 Investment of Amounts Held by Lease Indenture Trustee
Any amounts held by the Lease Indenture Trustee pursuant to the proviso to
clause "second" of Section 3.1 hereof, pursuant to Section 3.2 hereof, or
------
pursuant to Section 10 or 11 of the Facility Lease shall be invested by the
Lease Indenture Trustee from time to time in Permitted Investments identified in
written instructions to the Lease Indenture Trustee from the Owner Lessor, at
the expense of the Owner Lessor, or, so long as no Lease Event of Default shall
have occurred and be continuing, from the Facility Lessee acting on behalf of
the Owner Lessor, at the expense of the Facility Lessee, if such investments are
reasonably available. Unless otherwise expressly provided in this Indenture,
any income realized as a result of any such investment, net of the Lease
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Lease Indenture Trustee in the same manner as
the principal amount of such investment is to be applied, and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lease Indenture Trustee shall not be liable for
any loss resulting from any investment required to be made by it under this
Indenture other than by reason of its willful misconduct or gross negligence as
determined by a court of competent jurisdiction in receiving, handling or
disbursing funds, and any such investment may be sold (without regard to its
maturity) by it without instructions whenever it reasonably believes such sale
is necessary to make a distribution required by this Indenture.
Section 3.8 Establishment of the Lease Indenture Trustee's Account; and
Lien and Security Interest; Etc.
(a) The Account Bank hereby confirms that it has established a securities
account entitled the "Lease Indenture Trustee's Account" (the "Lease Indenture
--------------------------------- ---------------
Trustee's Account"), which Lease Indenture Trustee's Account shall be maintained
- -----------------
by the Account Bank until the date this Indenture is terminated pursuant to
Section 7.1 hereof. The account number of the Lease Indenture Trustee's Account
established hereunder is specified in Schedule II hereto. The Lease Indenture
Trustee's Account shall not be evidenced by passbooks or similar writings.
(b) All amounts from time to time held in the Lease Indenture Trustee's
Account shall be maintained (i) in the name of the Owner Lessor subject to the
lien and security interest of the Lease Indenture Trustee for the benefit of the
Lease Indenture Trustee and each of the Holders as set forth herein and (ii) in
the custody of the Account Bank for and on behalf of the Lease Indenture Trustee
for the benefit of the Lease Indenture Trustee and each of the Holders for the
purposes and on the terms set forth in this Indenture. All such amounts shall
constitute a part of the Lease Indenture Trustee Account Collateral and shall
not constitute payment of any Indebtedness or any other obligation of the Owner
Lessor until applied as hereinafter provided.
(c) As collateral security for the prompt payment in full when due of the
Lessor Secured Obligations owed to the Lease Indenture Trustee and each Holder,
the Owner Lessor hereby pledges, assigns, hypothecates and transfers to the
Lease Indenture Trustee for the benefit of the Lease Indenture Trustee and each
of the Holders, and hereby grants to the Lease Indenture Trustee for the benefit
of the Lease Indenture Trustee and each of the Holders, a lien on and security
interest in and to, (i) the Lease Indenture Trustee's Account and any successor
account thereto and (ii) all cash, investments, investment property, securities
or other property at any time
23
on deposit in or credited to the Lease Indenture Trustee's Account, including
all income or gain earned thereon and any proceeds thereof (the "Lease Indenture
---------------
Trustee Account Collateral").
- --------------------------
Section 3.9 The Account Bank; Limited Rights of the Owner Lessor
(a) The Account Bank.
----------------
(i) Establishment of Securities Account. The Account Bank hereby
-----------------------------------
agrees and confirms that (A) the Account Bank has established the Lease
Indenture Trustee's Account as set forth in Section 3.8, (B) the Lease
Indenture Trustee's Account is and will be maintained as a "securities
----------
account" (within the meaning of Section 8-501(a) of the UCC), (C) the Owner
-------
Lessor is the "entitlement holder" (within the meaning of Section 8-
------------------
102(a)(7) of the UCC) in respect of the "financial assets" (within the
----------------
meaning of Section 8-102(a)(9) of the UCC) credited to the Lease Indenture
Trustee's Account, (D) all property delivered to the Account Bank pursuant
to this Indenture or any other Operative Document will be held by the
Account Bank and promptly credited to the Lease Indenture Trustee's Account
by an appropriate entry in its records in accordance with this Indenture,
(E) all "financial assets" (within the meaning of Section 8-102(a)(9) of
----------------
the UCC) in registered form or payable to or to the order of and credited
to the Lease Indenture Trustee's Account shall be registered in the name
of, payable to or to the order of, or indorsed to, the Account Bank or in
blank, or credited to another securities account maintained in the name of
the Account Bank, and in no case will any financial asset credited to the
Lease Indenture Trustee's Account be registered in the name of, payable to
or to the order of, or indorsed to, the Owner Lessor except to the extent
the foregoing have been subsequently indorsed by the Owner Lessor to the
Account Bank or in blank and (F) the Account Bank shall not change the name
or account number of the Lease Indenture Trustee's Account without the
prior written consent of the Lease Indenture Trustee.
(ii) Financial Assets Election. The Account Bank agrees that each
-------------------------
item of property (including any security, instrument or obligation, share,
participation, interest or other property whatsoever) credited to the Lease
Indenture Trustee's Account shall be treated as a "financial asset" within
---------------
the meaning of Section 8-102(a)(9) of the UCC.
(iii) Entitlement Orders. Notwithstanding anything in this Indenture
------------------
to the contrary, if at any time the Account Bank shall receive any
"entitlement order" (within the meaning of Section 8-102(a)(8) of the UCC)
-----------------
or any other order from the Lease Indenture Trustee directing the transfer
or redemption of any financial asset relating to the Lease Indenture
Trustee's Account, the Account Bank shall comply with such entitlement
order or other order without further consent by the Owner Lessor or any
other Person. The parties hereto hereby agree that the Lease Indenture
Trustee shall have "control" (within the meaning of Section 8-106(d) of the
-------
UCC) of the Owner Lessor's "security entitlements" (within the meaning of
---------------------
Section 8-102(a)(17) of the UCC) with respect to the financial assets
credited to the Lease Indenture Trustee's Account and the Owner Lessor
hereby disclaims any entitlement to claim "control" of such "security
------- --------
entitlements". Unless a Lease Indenture Event of Default shall have
------------
occurred and is
24
continuing, the Lease Indenture Trustee shall not deliver any entitlement
order directing the transfer or redemption of any financial asset relating
to the Lease Indenture Trustee's Account.
(iv) Subordination of Lien; Waiver of Set-Off. In the event that
----------------------------------------
the Account Bank has or subsequently obtains by agreement, operation of law
or otherwise a lien or security interest in the Lease Indenture Trustee's
Account or any security entitlement credited thereto, the Account Bank
agrees that such lien or security interest shall be subordinate to the lien
and security interest of the Lease Indenture Trustee for the benefit of the
Lease Indenture Trustee and each Holder. The financial assets standing to
the credit of the Lease Indenture Trustee's Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any
Person other than the Lease Indenture Trustee for the benefit of the Lease
Indenture Trustee and each Holder (except for the face amount of any checks
which have been credited to the Lease Indenture Trustee's Account but are
subsequently returned unpaid because of uncollected or insufficient funds).
(v) No Other Agreements. The Account Bank and the Owner Lessor
-------------------
have not entered into any agreement with respect to the Lease Indenture
Trustee's Account or any financial assets credited to the Lease Indenture
Trustee's Account other than this Indenture. The Account Bank has not
entered into any agreement with the Owner Lessor or any other Person
purporting to limit or condition the obligation of the Account Bank to
comply with entitlement orders originated by the Lease Indenture Trustee in
accordance with Section 3.9(a)(iii) hereof. In the event of any conflict
between this Section 3.9 or any other agreement now existing or hereafter
entered into, the terms of this Section 3.9 shall prevail.
(vi) Notice of Adverse Claims. Except for the claims and interest
------------------------
of the Lease Indenture Trustee for the benefit of the Lease Indenture
Trustee and each Holder and the Owner Lessor in the Lease Indenture
Trustee's Account, the Account Bank does not know of any claim to, or
interest in, the Lease Indenture Trustee's Account or in any financial
asset credited thereto. If any Person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of
attachment, execution or similar process) against the Lease Indenture
Trustee's Account or in any financial asset credited thereto, the Account
Bank will promptly notify the Lease Indenture Trustee and the Owner Lessor
in writing thereof.
(vii) Rights and Powers of the Lease Indenture Trustee. The rights
------------------------------------------------
and powers granted by the Lease Indenture Trustee to the Account Bank have
been granted in order to perfect its lien and security interests in the
Lease Indenture Trustee's Account, are powers coupled with an interest and
will neither be affected by the bankruptcy of the Owner Lessor nor the
lapse of time.
(b) Limited Rights of the Owner Lessor. The Owner Lessor shall not have
----------------------------------
any rights against or to monies held in the Lease Indenture Trustee's Account,
as third party beneficiary or otherwise, or any right to direct the Account Bank
or the Lease Indenture Trustee to apply or
25
transfer monies in the Lease Indenture Trustee's Account, except the right to
receive or make requisitions of monies held in the Lease Indenture Trustee's
Account, as expressly provided in this Indenture, and to direct the investment
of monies held in the Lease Indenture Trustee's Account as expressly provided in
Section 3.7 hereof. Except as expressly provided in this Indenture, in no event
shall any amounts or Cash Equivalent Investments deposited in or credited to the
Lease Indenture Trustee's Account be registered in the name of the Owner Lessor,
payable to the order of the Owner Lessor or specially indorsed to the Owner
Lessor except to the extent that the foregoing have been specially indorsed to
the Lease Indenture Trustee or in blank.
SECTION 4. COVENANTS OF THE OWNER LESSOR; LEASE INDENTURE EVENTS OF DEFAULT;
REMEDIES
Section 4.1 Covenants of the Owner Lessor
The Owner Lessor hereby covenants and agrees as follows:
(i) the Owner Lessor will duly and punctually pay the principal of
and interest on and other amounts (including any Make-Whole Premium) due
under the Lessor Notes and this Indenture in accordance with the terms
hereof and thereof and all amounts payable by it to the Lease Indenture
Trustee and the Holders under any other Operative Document;
(ii) in the event that an Authorized Officer of the Owner Lessor
shall have actual knowledge of a Lease Indenture Event of Default or a
Lease Indenture Default, the Owner Lessor will give prompt written notice
of such Lease Indenture Event of Default or Lease Indenture Default to the
Facility Lessee, the Owner Participant and the Lease Indenture Trustee (and
the Lease Indenture Trustee shall thereupon promptly deliver a copy of such
notice to each Holder);
(iii) in the event that an Authorized Officer of the Owner Lessor
shall have actual knowledge of an Event of Loss, then, to the extent that
the Facility Lessee is not required, pursuant to the Facility Lease, to
give notice of such event to the Lease Indenture Trustee, the Owner Lessor
will give prompt written notice of such Event of Loss to the Lease
Indenture Trustee (and the Lease Indenture Trustee shall thereupon promptly
deliver a copy of such notice to each Holder);
(iv) the Owner Lessor will furnish to the Lease Indenture Trustee
true and correct duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished
to the Owner Lessor under the Facility Lease, to the extent that the same
shall not have been (or are not required to be) furnished to the Lease
Indenture Trustee or the Holders pursuant to the Facility Lease or the
Participation Agreement; and
(v) except as contemplated by the Operative Documents, the Owner
Lessor will not incur any Indebtedness or engage in any business or
activity except with the prior
26
written consent of the Lease Indenture Trustee (acting on the instructions
of Required Holders).
The Owner Lessor warrants that the Lessor Secured Obligations secured by
this Indenture are a "commercial loan" as defined in Section 12-101(c) of the
Commercial Law Article of the Annotated Code of Maryland.
Section 4.2 Lease Indenture Events of Default
"Lease Indenture Event of Default", means any of the following events
--------------------------------
(whatever the reason for such Lease Indenture Event of Default and whether such
event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any Governmental
Authority):
(a) any Lease Event of Default (other than with respect to (x) Excepted
Payments unless the Facility Lease has been declared in default pursuant to
Section 16(a) thereof or (y) the failure of the Facility Lessee to maintain
insurance in the amounts and on the terms set forth in the Operative Documents
so long as the insurance actually maintained by the Facility Lessee is in
accordance with Prudent Industry Practice and such Lease Event of Default is
waived by the Owner Lessor and the Owner Participant) shall have occurred and be
continuing; or
(b) the failure of the Owner Lessor to pay when due any payment of
principal of, premium (including, without limitation, Make-Whole Premium), if
any, or interest on, or any scheduled fees or other amounts due and payable
under or with respect to, any Lessor Note and such failure shall continue for
five Business Days; or
(c) any material representation or warranty made by the Owner Participant
or the Owner Lessor in any Officer's Certificate, this Indenture or in any other
Operative Document to which it is a party shall prove to have been inaccurate
when made or deemed made in any material respect; or by any OP Guarantor in its
OP Guaranty (provided the OP Guaranty shall not have been terminated or
released), as the case may be, and such misrepresentation or breach of warranty
remains material and shall not have been corrected within a period of 30 days
following written notice thereof being given to the Owner Lessor and the Owner
Participant or such OP Guarantor, as the case may be, by any Holder (through the
Lease Indenture Trustee); provided that, if such misrepresentation or breach of
--------
warranty is capable of correction but cannot with diligence be corrected within
such 30-day period, such failure will not constitute a Lease Indenture Event of
Default so long as the party whose representation or warranty was inaccurate
promptly institutes corrective action within such 30-day period and diligently
pursues such corrective action (but in no event shall the total period permitted
to correct such misrepresentation or breach of warranty extend beyond 120 days
from the date such notice was provided); or
(d) any failure (i) by the Owner Lessor to observe or perform any other
material covenant or obligation of the Owner Lessor contained in this Indenture
or in any Operative Document to which it is a party (other than as provided in
clause (a) above) in any material
27
respect, or (ii) by the Owner Participant to observe or perform any material
covenant or obligation of the Owner Participant contained in any Operative
Document (other than the Tax Indemnity Agreement) to which it is a party, or
(iii) by any OP Guarantor to observe or perform any material covenant or
obligation of such OP Guarantor contained in any OP Guaranty (provided the OP
Guaranty shall not have been terminated or released), is not remedied within a
period of 30 days following written notice of such failure being given to the
Owner Lessor and the Owner Participant or such OP Guarantor, as the case may be,
by any Holder (through the Lease Indenture Trustee); provided that, if such
--------
failure is capable of remedy but cannot with diligence be remedied within such
30-day period, such failure will not constitute a Lease Indenture Event of
Default so long as the party failing to perform promptly commences remedial
action within such 30-day period and diligently pursues such action (but in no
event shall the total period permitted to cure such default extend beyond 180
days from the date such notice was provided); or
(e) the Owner Participant, any OP Guarantor (provided the OP Guaranty
shall not have been terminated or released) or the Owner Lessor shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other federal, state or foreign
bankruptcy, insolvency or similar law, (ii) consent to the institution of, or
fail to controvert in a timely and appropriate manner, any such proceeding or
the filing of any such petition, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator or similar official for the
Owner Lessor, the Owner Participant or such OP Guarantor (provided the OP
Guaranty shall not have been terminated or released) or any substantial part of
the property of any of the foregoing, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due, or
(vii) take corporate action for the purpose of effecting any of the foregoing;
or
(f) an involuntary proceeding is commenced or an involuntary petition is
filed in a court of competent jurisdiction seeking (i) relief in respect of the
Owner Participant, any OP Guarantor (provided the OP Guaranty shall not have
been terminated or released) or the Owner Lessor under Title 11 of the United
States Code or any other federal, state or foreign bankruptcy, insolvency or
similar law now or hereafter in effect, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Owner Participant,
such OP Guarantor (provided the OP Guaranty shall not have been terminated or
released) or the Owner Lessor or any substantial part of the property of the
foregoing or (iii) the winding-up or liquidation of the Owner Participant, such
OP Guarantor (provided the OP Guaranty shall not have been terminated or
released) or the Owner Lessor and such proceeding or petition continues
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing continues unstayed and in effect for 60 days.
Section 4.3 Certain Rights to Cure
In the event of any Lease Default or Lease Event of Default in the payment
of any installment of Periodic Lease Rent or Supplemental Lease Rent due under
the Facility Lease, the Owner Lessor or the Owner Participant may, but shall not
be obligated to, within ten Business
28
Days after the earlier of (a) receipt by the Owner Lessor and Owner Participant
of written notice of or (b) the Owner Lessor or Owner Participant acquiring
actual knowledge of, the occurrence of such Lease Default or Lease Event of
Default, without the consent or concurrence of the Lease Indenture Trustee or
any Holder, pay, as provided in Section 2.6 hereof, for application in
accordance with Section 3.1 hereof, a sum equal to the amount of all (but not
less than all) of the principal of, interest on and other amounts payable under
or in respect of, the Lessor Notes as shall then be due and payable on the
Lessor Notes (without giving effect to any acceleration pursuant to Section 4.4
hereof). If any other Lease Default or other Lease Event of Default occurs and
the Owner Lessor shall have been furnished (by or for the account of the Owner
Participant) with all funds necessary for remedying such Lease Default or Lease
Event of Default, the Owner Participant may, within ten Business Days after the
earlier of (a) receipt by the Owner Participant of written notice of or (b) the
Owner Participant acquiring actual knowledge of the occurrence of such Lease
Default or Lease Event of Default, without the consent or concurrence of the
Lease Indenture Trustee or any Holder, instruct the Owner Lessor to exercise the
Owner Lessor's rights under Section 21 of the Facility Lease to perform such
obligation on behalf of the Facility Lessee. Solely for the purpose of
determining whether there exists a Lease Indenture Event of Default, (a) any
payment by the Owner Participant or the Owner Lessor pursuant to, and in
compliance with, the first sentence of this Section 4.3 shall be deemed to
remedy any Lease Default or Lease Event of Default in the payment of
installments of Periodic Lease Rent theretofore due and payable and to remedy
any default by the Owner Lessor in the payment of any amount due and payable
under the Lessor Notes or hereunder, and (b) any performance by the Owner Lessor
of any obligation of the Facility Lessee under the Facility Lease pursuant to,
and in compliance with, the second sentence of this Section 4.3 shall be deemed
to remedy any Lease Default or Lease Event of Default to the same extent that
like performance by the Facility Lessee itself would have remedied such Lease
Default or Lease Event of Default (but any such payment or performance shall not
relieve the Facility Lessee of its duty to pay all Rent and perform all of its
obligations pursuant to the Facility Lease). If, on the basis specified in the
preceding sentence, such Lease Default or Lease Event of Default shall have been
remedied, then any determination that the Facility Lease, and any declaration
pursuant to this Indenture that the Lessor Notes are due and payable or that a
Lease Indenture Default or Lease Indenture Event of Default exists hereunder,
based upon such Lease Default or Lease Event of Default, shall be deemed to be
rescinded, and the Owner Participant shall (to the extent of any such payments
made by or for the account of the Owner Lessor) be subrogated to the rights of
the Holders hereunder to receive such payment of Rent from the Facility Lessee
(and the payment of interest on account of such Rent from the Facility Lessee
being overdue), and shall be entitled, so long as no other Lease Indenture Event
of Default shall have occurred or would result therefrom, to receive and retain
such payment from the Facility Lessee; provided, however, that the Owner
-------- -------
Participant shall not, so long as this Indenture shall not have terminated,
otherwise attempt to recover any such amount paid by it or for its account on
behalf of the Facility Lessee pursuant to this Section 4.3 except by demanding
of the Facility Lessee payment of such amount or by commencing an action at law
and obtaining and enforcing a judgment against the Facility Lessee for the
payment of such amount or taking appropriate action in a pending action at law
against the Facility Lessee and the Owner Participant will not obtain any Lien
on any part of the Indenture Estate on account of such payment nor will any
claim of the Owner Participant against the Facility Lessee or any other party
for the repayment thereof impair
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the prior right and security interest of the Lease Indenture Trustee and the
Holders in and to the Indenture Estate, as the case may be; provided, further,
-------- -------
however, that
- -------
(a) this Section 4.3 shall not apply with respect to any cure of any
default in the payment of Periodic Lease Rent if such cure shall have previously
been effected with respect to (A) four (4) consecutive payments of Periodic
Lease Rent immediately preceding the date of such default, or (B) more than
eight (8) payments of Periodic Lease Rent; and
(b) neither the Owner Lessor nor the Owner Participant shall (without the
prior written consent of the Required Holders) have the right to cure any Lease
Default or Lease Event of Default except as specified in this Section 4.3.
Section 4.4 Remedies
(a) If a Lease Indenture Event of Default shall have occurred and so long
as the same shall be continuing unremedied and, except as provided in the
proviso at the end of this sentence, if the Lessor Notes shall have been
accelerated pursuant to Section 4.4(b) or 4.4(c) hereof, then and in every such
case the Lease Indenture Trustee (acting on the instructions of the Required
Holders) may, if not precluded by law or otherwise, consistent with this Section
4.4(a), after written notice to the Owner Lessor and the Owner Participant,
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Section 4.4 and shall have and may exercise all of the
rights and remedies of a secured party under any and all applicable law, rule or
regulation and, in the event such Lease Indenture Event of Default arises as a
result of an event described in clause (a) of Section 4.2 hereof and is
continuing unremedied and Section 4.3 hereof shall either not apply or shall
have ceased to apply with respect to such Lease Indenture Event of Default, any
and all of the remedies pursuant to Section 18 of the Facility Lease, and may
take possession of all or any part of the Indenture Estate covered or intended
to be covered by the Lien created pursuant hereto and may exclude the Owner
Participant, the Owner Lessor, the Facility Lessee (to the extent permitted by
Section 18 of the Facility Lease) and all Persons claiming under any thereof or
wholly or partly therefrom; provided, however, that, under no circumstances
-------- -------
shall the Lease Indenture Trustee sell any of the Property Interest or exercise
other remedies against the Property Interest seeking to deprive the Owner Lessor
or the Owner Participant of their respective interests therein unless the Lessor
Notes are then due and payable. It is understood and agreed that, subject to the
provisions of this Section 4.4, the Lease Indenture Trustee (acting on the
instructions of the Required Holders) may exercise any right of sale of the
Property Interest available to it, even though it shall not have taken
possession of the Property Interest and shall not have possession thereof at the
time of such sale so long as, in each such case, the Owner Lessor and the Owner
Participant are afforded a commercially reasonable opportunity to bid for all or
part of the Property Interest subject to such sale; provided that, 20 days shall
be deemed to be a commercially reasonable opportunity to bid for all or part of
such Property Interest at such sale. It is further agreed and understood that if
the Lease Indenture Trustee (acting on the instructions of the Required Holders)
shall proceed to foreclose on the Lien of this Indenture or exercise any other
material remedy with respect to the Property Interest, the Lease Indenture
Trustee shall substantially simultaneously therewith, to the extent the Lease
Indenture Trustee is then entitled to do so hereunder and under the Facility
Lease proceed (to the extent it has not already done so) to exercise one or more
of the remedies with respect to the
30
Property Interest set forth in Section 18.1 of the Facility Lease intended to
dispossess the Facility Lessee of its leasehold interest in the Undivided
Interest; provided that in the event the Lease Indenture Trustee is stayed or
--------
otherwise prevented by operation of any law from exercising such remedies for a
continuous period of 180 days following the commencement of such stay or other
prevention, it may (acting on the instruction of the Required Holders), upon the
expiration of such 180-day period, exercise any remedy available to it under
this Indenture. For the avoidance of doubt, it is expressly understood and
agreed that the above-described inability of the Lease Indenture Trustee to
exercise any right or remedy under the Facility Lease shall not prevent the
Lease Indenture Trustee from exercising any of its other rights, powers and
remedies under this Indenture.
(b) If a Lease Indenture Event of Default referred to in clause (e) or (f)
of Section 4.2 shall have occurred, then and in every such case the unpaid
principal of all Lessor Notes then outstanding, together with interest accrued
but unpaid thereon and all other amounts due thereunder or with respect thereto
(but excluding any Make-Whole Premium), shall immediately and without further
act become due and payable, without presentment, demand, protest or notice, all
of which are hereby waived.
(c) If any Lease Indenture Event of Default (other than a Lease Indenture
Event of Default referred to in clause (e) or (f) of Section 4.2) shall have
occurred and be continuing, then and in every such case the Lease Indenture
Trustee (acting on the instruction of the Required Holders) may at any time,
subject to Section 4.3, declare the Lessor Notes to be due and payable,
whereupon the unpaid principal of all Lessor Notes then outstanding, together
with accrued but unpaid interest thereon and other amounts due thereunder or
with respect thereto (but excluding any Make-Whole Premium), shall become due
and payable upon written notice to the Owner Lessor and Owner Participant.
(d) Each Holder shall be entitled, at any sale pursuant to Section 18.1 of
the Facility Lease, to credit against any purchase price bid at such sale by
such Holder all or any part of the unpaid obligations owing to such Holder and
secured by the Lien of this Indenture in the amount that would be distributable
to such Holder pursuant hereto.
(e) Notwithstanding anything to the contrary contained herein, if all
Lessor Notes are held by the Facility Lessee or an Affiliate of the Facility
Lessee, then (i) upon a Lease Indenture Event of Default that is caused by a
Lease Default or Lease Event of Default, the remedies hereunder may be exercised
only with the written consent of the Owner Lessor and (ii) only the Owner Lessor
may exercise any or all of the remedies under the Facility Lease with respect to
any such Lease Default or Lease Event of Default.
(f) In addition to all other remedies provided for herein if a Lease
Indenture Event of Default shall have occurred and be continuing, the Lease
Indenture Trustee shall have the right, subject to Section 4.3 and the second
sentence of Section 4.4(a) hereof, to exercise any STATUTORY POWER OF SALE and
sell the Indenture Estate or any part of the Indenture Estate at public sale or
sales, in order to pay the Lessor Secured Obligations, and all impositions, if
any, with accrued interest thereon, and all expenses of the sale and of all
proceedings in connection therewith, including reasonable attorney's fees, if
incurred. The Owner Lessor assents
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to the passage of a decree for the sale of the Indenture Estate upon the
occurrence of a Lease Indenture Event of Default, by any court having
jurisdiction, and to the Owner Lessor authorizes and empowers the Lease
Indenture Trustee, upon the occurrence of a Lease Indenture Event of Default, to
sell the Owner Lessor's interest in the Indenture Estate, in accordance with the
Maryland Rules of Procedure or any other applicable law. The Indenture Estate or
any interest therein may be sold upon such terms and in as many parcels as the
person conducting the sale may, in its sole discretion, elect. No
readvertisement of any sale shall be required if the sale is adjourned by
announcement, at the time and place set therefor, on the date and at the time
and place to which the same is to be adjourned. If, after a sale by the
Indenture Trustee under the provisions of this Indenture, a deficiency exists in
the net proceeds of such sale, the Indenture Trustee shall be entitled to a
deficiency judgment or a decree for such deficiency which shall bear interest at
the Overdue Rate.
(g) Anything herein to the contrary notwithstanding, in the case of a
Lease Indenture Event of Default as a consequence of a Lease Event of Default
under Section 17(a) of the Facility Lease with respect to the Equity Portion of
Periodic Rent only, the Lease Indenture Trustee shall not, so long as no other
Lease Indenture Event of Default shall have occurred and be continuing, be
entitled to exercise remedies under this Indenture for a period of 180 days
unless the Owner Lessor or the Owner Participant consents to the declaration of
a Lease Event of Default by the Lease Indenture Trustee.
(h) Any provisions of the Facility Lease or this Indenture to the contrary
notwithstanding, if the Facility Lessee shall fail to pay any Excepted Payment
to any Person entitled thereto as and when due, such Person shall have the right
at all times, to the exclusion of the Lease Indenture Trustee, to demand,
collect, sue for, enforce performance of obligations relating to, or otherwise
obtain all amounts due in respect of such Excepted Payment.
(i) If the Lease Indenture Trustee elects to proceed under the Maryland
Uniform Commercial Code to dispose of any of the property comprising the
Indenture Estate, the Lease Indenture Trustee shall give the Owner Lessor notice
by certified mail, postage prepaid, return receipt requested, of the time and
place of any public sale of any of such property or of the time after which any
private sale or other intended disposition thereof is to be made by sending
notice to the Owner Lessor at least five (5) days before the time of the sale or
other disposition, which provisions for notice Owner Lessor and the Lease
Indenture Trustee agree are reasonable; provided, however, that nothing herein
-------- -------
shall preclude the Lease Indenture Trustee from proceeding as to all the of the
property comprising the Indenture Estate in accordance with the rights and
remedies of a mortgagee in respect of the real property, as provided in Section
9-501(4) of the Commercial Law Article of the Annotated Code of Maryland, as
amended from time to time.
Section 4.5 Taking Possession of Indenture Estate
(a) Subject to the rights of the Owner Lessor and the Owner Participant
under Section 4.3 hereof, and unless, the Owner Participant or the Owner Lessor
shall have purchased the Lessor Notes pursuant to Section 2.10 hereof, if a
Lease Indenture Event of Default shall have occurred and be continuing and the
Lessor Notes shall have been accelerated (and any such
32
acceleration has not been rescinded) pursuant to Section 4.4(b) or 4.4(c)
hereof, at the request of the Required Holders, the Owner Lessor shall promptly
execute and deliver or cause to be delivered to the Lease Indenture Trustee and
the Holders such instruments and other documents as the Required Holders may
deem necessary or advisable to enable the Lease Indenture Trustee at such time
or times and place or places as the Lease Indenture Trustee (acting on the
instruction of the Required Holders) may specify, to obtain possession of all or
any part of the Indenture Estate to which the Holders shall at the time be
entitled hereunder. If the Owner Lessor shall for any reason fail to execute and
deliver or cause to be delivered such instruments and documents after such
request by the Lease Indenture Trustee, the Lease Indenture Trustee (acting on
the instruction of the Required Holders) may (i) obtain a judgment conferring on
the Lease Indenture Trustee the right to immediate possession and requiring the
Owner Lessor to execute and deliver or cause to be delivered such instruments
and documents to the Lease Indenture Trustee and the Owner Lessor hereby
specifically consents to the entry of such judgment to the fullest extent it may
lawfully do so, and (ii) to the extent permitted by law, pursue all or part of
such Indenture Estate, as applicable, wherever it may be found, subject to
Section XI of the Participation Agreement and Section 4.2 of the Facility Lease,
if applicable. All expenses (including those of the Lease Indenture Trustee) of
obtaining such judgment or of pursuing, searching for and taking such property
shall, until paid, be secured by the Lien of this Indenture.
(b) Upon every such taking of possession in connection with a Lease Event
of Default, the Lease Indenture Trustee (acting on the instruction of the
Required Holders) may, from time to time at the expense of the Indenture Estate,
make all such expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to and of the Indenture Estate as the
Required Holders may deem proper. In each such case, the Lease Indenture Trustee
(acting on the instructions of the Required Holders) or its designee shall have
the right to maintain, use, operate, store, lease, control or manage the
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Lessor relating to the Indenture Estate, as the Required
Holders shall deem best, including the right to enter into any and all such
agreements with respect to the maintenance, insurance, use, operation, storage,
leasing, control, management or disposition of the Indenture Estate or any part
thereof as the Required Holders may determine; and the Lease Indenture Trustee
shall be entitled to collect and receive directly all tolls, rents (including
Rent), revenues, issues, income, products and profits constituting part of the
Indenture Estate and every part thereof, except Excepted Payments, without
prejudice, however, to the right of the Lease Indenture Trustee under any
provision of this Indenture to collect and receive all cash held by, or required
to be deposited with, the Lease Indenture Trustee hereunder. Such tolls, rents
(including Rent), revenues, issues, income, products and profits shall be
applied to pay the expenses of use, operation, storage, subleasing, control,
management or disposition of the Indenture Estate and of conducting the business
thereof, and of all maintenance, repairs, replacements, alterations, additions
and improvements, and to make all payments which the Lease Indenture Trustee may
be required or may elect (acting on the instruction of the Required Holders) to
make, if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Lessor), and all other payments which the Lease
Indenture Trustee may be required or authorized to make under any provision of
this Indenture,
33
as well as reasonable compensation for the services of the Lease Indenture
Trustee, and of all Persons properly engaged and employed by the Lease Indenture
Trustee.
Section 4.6 Remedies Cumulative
Except as provided herein, each and every right, power and remedy given to
the Lease Indenture Trustee on behalf of the Holders or any of them specifically
or otherwise in this Indenture shall be cumulative and shall be in addition to
every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Lease Indenture Trustee (acting on the instruction of the
Required Holders), and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Lease Indenture Trustee in the exercise of any right, remedy or
power or in the pursuance of any remedy shall impair any such right, power or
remedy or be construed to be a waiver of any default on the part of the Owner
Lessor or the Facility Lessee or to be an acquiescence therein.
Section 4.7 Discontinuance of Proceedings
In case the Lease Indenture Trustee (acting on the instruction of the
Required Holders) shall have instituted any proceeding to enforce any right,
power or remedy under this Indenture by foreclosure, entry or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Holders, then and in every such case
the Owner Lessor, the Owner Participant, the Lease Indenture Trustee and the
Facility Lessee shall, subject to any determination in such proceedings, be
restored to their former positions and rights hereunder with respect to the
Indenture Estate, as the case may be, and all rights, remedies and powers of the
Lease Indenture Trustee shall continue in effect as if no such proceedings had
been instituted.
Section 4.8 Waiver of Past Defaults
Upon the instruction of the Required Holders (or all Holders, in the case
of a waiver that requires the consent of each Holder pursuant to Section
6.1(b)), the Lease Indenture Trustee shall waive any past default hereunder and
its consequences and upon any such waiver such default shall cease to exist and
any Lease Indenture Event of Default (as well as any Lease Event of Default
giving rise to such Lease Indenture Event of Default) or Lease Indenture Default
(as well as any Lease Default giving rise to such Lease Indenture Default)
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture, but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
Section 4.9 Waiver of Stay, Extension, Moratorium Laws; Equity of
Redemption
To the maximum extent permitted by law, the Owner Lessor shall not at any
time insist upon, or plead, or in any manner whatever claim or take any benefit
or advantage of any
34
applicable present or future stay, extension or moratorium law, that may affect
observance or performance of the provisions of this Indenture; nor claim, take
or insist upon any benefit or advantage of any present or future law providing
for the valuation or appraisal of the Indenture Estate or any portion thereof
prior to any sale or sales thereof that may be made under or by virtue of
Section 4.2 or 4.3 hereof; and the Owner Lessor, to the extent that it lawfully
may, hereby waives all benefit or advantage of any such law or laws. The Owner
Lessor for itself and all who may claim under it, hereby waives, to the maximum
extent permitted by applicable law, any and all rights and equities of
redemption from sale under the power of sale created hereunder or from sale
under any order or decree of foreclosure of this Indenture and (if a Lease
Indenture Default shall have occurred) all notice or notices of seizure, and all
right to have the Indenture Estate marshalled upon any foreclosure hereof. The
Indenture Trustee shall not be obligated to pursue or exhaust its rights or
remedies as against any other part of the Indenture Estate and the Owner Lessor
hereby waives any right or claim of right to have the Indenture Trustee proceed
in any particular order.
Section 4.10 No Action Contrary to the Facility Lessee's Rights Under the
Facility Lease.
Notwithstanding any other provision of any Operative Document, so long as
the Facility Lease shall not have been declared (or deemed to have been
declared) in default, the Lease Indenture Trustee shall not take or cause to be
taken any action contrary to the right of the Facility Lessee under the Facility
Lease, including its rights, as between the Facility Lessee and the Owner
Lessor, the Owner Participant and any Person claiming by or through the Owner
Lessor or Owner Participant, to quiet use and possession of the Undivided
Interest under the Facility Lease.
SECTION 5. DISCLAIMER OF REPRESENTATIONS; NO SEGREGATION OF MONEYS;
FURTHER ASSURANCES; CERTAIN RIGHTS
Section 5.1 No Representations or Warranties as to the Property Interest
NONE OF THE OWNER LESSOR, THE OWNER MANAGER, THE TRUST COMPANY OR THE OWNER
PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE, AND EACH HEREBY EXPRESSLY
DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
VALUE, WORKMANSHIP, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY,
DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR
PURPOSE OF THE PROPERTY INTEREST OR ANY PART THEREOF, AS TO THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, INCLUDING ANY ENVIRONMENTAL
LIABILITY, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY
INTEREST OR ANY PART THEREOF WHATSOEVER, except that the Owner Lessor warrants
that on the Closing Date it shall have received such rights and interests that
were conveyed to it with respect to the Property Interest pursuant to the
Facility Deed, the Bill of Sale
35
and the Facility Site Lease subject to the rights of the parties to this
Indenture and to Permitted Liens and Permitted Encumbrances, and the Trust
Company warrants that on the Closing Date the Property Interest shall be free
and clear of Owner Lessor Liens attributable to the Trust Company. None of the
Owner Manager or the Trust Company makes or shall be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
this Indenture, the Lessor LLC Agreement or the Lessor Notes or as to the
correctness of any statement contained in any such document, except for the
representations and warranties of the Owner Lessor, the Owner Manager or the
Trust Company in its individual capacity made under this Indenture or in the
Participation Agreement.
Section 5.2 No Segregation of Moneys; No Interest
Any moneys paid to or retained by the Lease Indenture Trustee pursuant to
any provision hereof and not then required to be distributed to any Holder, the
Facility Lessee or the Owner Lessor or the Owner Participant as provided in
Section 3 hereof need not be segregated in any manner except to the extent
provided herein or as otherwise required by Requirements of Law, and may, except
as aforesaid, be deposited under such general conditions as may be prescribed by
Requirements of Law, and the Lease Indenture Trustee shall not (except as
otherwise provided in Section 3.7 hereof) be liable for any interest thereon or
any losses resulting from the investment thereof.
Section 5.3 Further Assurances; Financing Statements
At any time and from time to time, upon the request of any Holder (through
the Lease Indenture Trustee) or the Owner Participant, the Owner Lessor shall,
at the expense of the Owner Lessor, promptly and duly execute and deliver any
and all such further instruments and documents presented to it in execution form
as may be specified in such request and as are necessary or desirable to
perfect, preserve or protect the mortgage, first priority security interests and
assignments created or intended to be created hereby, or to obtain for the Lease
Indenture Trustee and the Holders the full benefit of the specific rights and
powers herein granted, including, without limitation, the execution and delivery
of Uniform Commercial Code financing statements and continuation statements with
respect thereto, or similar instruments relating to the perfection of the
mortgage, security interests or assignments created or intended to be created
hereby.
Section 5.4 Certain Rights of Owner Lessor and Owner Participant
(a) Notwithstanding any other provisions of this Indenture other than
Sections 4.4(e) and 5.4(b) hereof, including the Granting Clause, the following
rights (the "Section 5.4 Rights") shall be exercisable by the Owner Lessor or
------------------
the Lease Indenture Trustee (acting on the instruction of the Required Holders):
(i) at all times the Owner Lessor shall have the right, together with
or independently of the Lease Indenture Trustee, (A) to receive from the
Facility Lessee all notices, certificates, reports, filings, opinions of
counsel and other documents and all information which the Facility Lessee
is permitted or required to give or furnish to the
36
Owner Lessor pursuant to any Operative Document, (B) to exercise inspection
rights granted to the Owner Lessor pursuant to Section 12 of the Facility
Lease, (C) to exercise, to the extent necessary to enable it to exercise
its rights under Section 4.3 hereof, the rights of the Owner Lessor under
Section 21 of the Facility Lease, (D) to request from the Facility Lessee
such further documents or assurances, or request that the Facility Lessee
take such further actions in respect of such party's interests, as shall be
required to be delivered or taken by the Facility Lessee pursuant to
Section 5.6 or 16.14 of the Participation Agreement, and (E) to give notice
of a Lease Default or a Lease Event of Default pursuant to Section 18 of
the Facility Lease; provided, however, that the rights excepted and
reserved by this Section 5.4(a)(i) shall not be deemed to include the
exercise of any remedies provided for in Section 18.1 of the Facility
Lease, except that the Owner Lessor and the Owner Participant may proceed
by appropriate court action or actions, either at law or in equity, to
enforce performance by the Facility Lessee of the applicable covenants and
terms of Excepted Payments or to recover damages for the breach thereof but
not proceed to terminate the Facility Lease;
(ii) so long as the Lessor Notes have not been accelerated pursuant
to Section 4.3 hereof and the Lease Indenture Trustee shall not have
commenced the exercise of remedies to dispossess the Facility Lessee of the
Undivided Interest under this Indenture, the Owner Lessor shall have the
right, together with the Lease Indenture Trustee and to the extent
permitted by the Operative Documents and Requirements of Law, to seek
specific performance of the covenants of the Facility Lessee under the
Operative Documents relating to the protection, insurance, maintenance,
possession, use and return of the Property Interest; and
(iii) so long as the Lessor Notes have not been accelerated pursuant
to Section 4.3 hereof (or, if accelerated, such acceleration has
theretofore been rescinded) and the Lease Indenture Trustee shall not have
commenced the exercise of remedies to dispossess the Facility Lessee of the
Undivided Interest under this Indenture, neither the Owner Lessor nor the
Lease Indenture Trustee shall have any right, without the prior consent of
the other (A) to amend, supplement, modify or waive any return condition in
Section 5 of the Facility Lease, or (B) to exercise any rights with respect
to the Facility Lessee's use and operation, modification or maintenance of
the Property Interest which the Facility Lease specifically confers on the
Owner Lessor, or (C) to exercise the Owner Lessor's right under Section
23.4(b) of the Facility Lease to withhold or grant its consent to an
assignment by the Facility Lessee of its rights under the Facility Lease.
(b) Notwithstanding the foregoing provisions of this Section 5.4 but
subject to Section 4 hereof, the Lease Indenture Trustee (acting on the
instructions of the Required Holders) shall at all times have the right, to the
exclusion of the Owner Lessor and the Owner Participant, to declare the Facility
Lease in default and to exercise the remedies set forth in Section 18.1 of the
Facility Lease and in Section 4.4 and 4.5 hereof. Notwithstanding anything
herein or in any other Operative Document to the contrary, so long as the
Facility Lessee or any Affiliate of the Facility Lessee is a Holder or Owner
Lessor, neither the Facility Lessee nor any such Affiliate, in its capacity as
Holder or Owner Lessor, shall have any rights to approve, consent to, vote on or
ratify any action, inaction or determination taken or made or to be taken or
made hereunder;
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provided, however, that this sentence shall not apply to the Facility Lessee or
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any such Affiliate with respect to those matters set forth in Section 6.1 hereof
requiring the consent of all Holders.
(c) Notwithstanding any other provision of this Indenture:
(1) The Owner Lessor shall at all times, to the exclusion of the
Lease Indenture Trustee, retain all rights (i) to demand and receive
payment of, and to commence an action for payment of, Excepted Payments,
but the Owner Lessor shall have no remedy or right with respect to any such
payment against the Indenture Estate nor any right to collect any such
payment by the exercise of any of the remedies under Section 18 of the
Facility Lease; (ii) except in connection with the exercise of remedies
pursuant to the Facility Lease, to exercise the Owner Lessor's rights
relating to the Appraisal Procedure and to confer and agree with the
Facility Lessee on Fair Market Rental Value, or any Renewal Lease Term;
(iii) retain all rights with respect to insurance that Section 11 of the
Facility Lease specifically confers upon the Owner Lessor and to waive any
failure by the Facility Lessee to maintain the insurance required by
Section 11 of the Facility Lease before or after the fact so long as the
insurance maintained by the Facility Lessee still constitutes Prudent
Industry Practice; and (iv) retain all rights to adjust Periodic Lease Rent
and Termination Value as provided in Section 3.4 of the Facility Lease,
Section 13 of the Participation Agreement or the Tax Indemnity Agreement;
provided, however, that after giving effect to any such adjustment (x) the
amount of Periodic Lease Rent payable on each Rent Payment Date shall be at
least equal to the aggregate amount of all principal and accrued interest
payable on such Rent Payment Date on all Lessor Notes then outstanding and
(y) Termination Value shall in no event be less (when added to all other
amounts required to be paid by the Facility Lessee in respect of any early
termination of the Facility Lease) than an amount sufficient, as of the
date of payment, to pay in full the principal of, and interest on all
Lessor Notes outstanding on and as of such date of payment;
(2) So long as the Lessor Notes have not been accelerated pursuant to
Section 4.4 hereof (or, if accelerated, such acceleration has theretofore
been rescinded) or the Lease Indenture Trustee shall not have exercised any
of its rights pursuant to Section 4 hereof to take possession of,
foreclose, sell or otherwise take control of all or any part of the
Indenture Estate, the Owner Lessor shall retain the right to the exclusion
of the Lease Indenture Trustee to exercise the rights of the Owner Lessor
under the provisions of Section 10 (other than Section 10.2 and Section
10.4 thereof), 13, 14 and 15 of the Facility Lease; provided, however, that
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if a Lease Indenture Event of Default shall have occurred and be
continuing, subject to Section 4.3, the Owner Lessor shall cease to retain
such rights upon notice from the Lease Indenture Trustee (acting on the
instruction of the Required Holders) stating that such rights shall no
longer be retained by the Owner Lessor.
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SECTION 6. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS
Section 6.1 Supplements and Amendments to this Indenture and the Other
Documents:
(a) Without Consent of Holders or Required Holders. Subject to the
----------------------------------------------
provisions of the Participation Agreement, at any time and from time to time,
the Owner Lessor (but only on the written request of the Owner Participant) and
the Lease Indenture Trustee may enter into any indenture or indentures
supplemental hereto or execute any amendment, modification, supplement, waiver
or consent with respect to any other Operative Document, without the consent of
the Holders or the Required Holders for one or more of the following purposes:
(i) to correct, confirm or amplify the description of any property
at any time subject to the Lien on the Indenture Estate or to convey,
transfer, assign, mortgage or pledge any property or assets to the Lease
Indenture Trustee as security for the Lessor Notes;
(ii) to evidence the succession of another corporation as Owner
Manager or the appointment of a co-manager in accordance with the terms of
the Lessor LLC Agreement;
(iii) to add to the covenants of the Owner Lessor for the benefit of
the Holders of all or any series of Lessor Notes (and if such covenants are
to be for the benefit of less than all series of Lessor Notes, stating that
such covenants are expressly being included solely for the benefit of such
series) such further covenants, restrictions, conditions or provisions as
the Owner Lessor and the Lease Indenture Trustee shall consider to be for
the protection of the Holders of any series, and to make the occurrence, or
the occurrence and continuance, of a default in complying with any such
additional covenant, restriction, condition or provision a Lease Indenture
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; in respect of any
such additional covenant, restriction, condition or provision, such
supplement may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such a
Lease Indenture Event of Default or may limit the remedies available to the
Lease Indenture Trustee upon such a Lease Indenture Event of Default or may
limit the right of the Required Holders to waive such a Lease Indenture
Event of Default;
(iv) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplement which may be defective or
inconsistent with any other provision contained herein or in any
supplement, or to add or modify such other provisions or agreements herein
or in any other Operative Documents, in each case as the Owner Lessor may
deem necessary or desirable, with respect to matters or questions arising
under this Indenture; provided that no such action shall, in the reasonable
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judgment of the Lease Indenture Trustee, materially adversely affect the
interests of the Holders of the Lessor Notes of any series;
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(v) to provide for any evidence of the creation and issuance of any
Subsequent Lessor Notes of any series pursuant to, and subject to the
conditions of, Section 2.13 and to establish the form and terms of such
Subsequent Lessor Notes;
(vi) to effect an assumption of the Lessor Notes, as permitted by
Section 2.12; provided that the supplemental indenture entered into to
--------
effect such assumption shall contain all of the covenants applicable to the
Facility Lessee contained in the Facility Lease and the Participation
Agreement for the benefit of the Lease Indenture Trustee or the Holders,
such that the Facility Lessee's obligations contained therein, to the
extent they are applicable, will continue to be in full force and effect in
the event the Facility Lease is terminated;
(vii) to evidence and provide for the acceptance of appointment
hereunder by a successor Lease Indenture Trustee with respect to the Lessor
Notes and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, all as provided in Section 7.15;
(viii) to grant or confer upon the Lease Indenture Trustee for the
benefit of the Holders any additional rights, remedies, powers, authority
or security which may be lawfully granted or conferred upon the Lease
Indenture Trustee and which are not contrary to or inconsistent with this
Indenture; and
(ix) subject to Section 6.1(b) with respect to the provisions of the
Indenture Estate Documents referred to therein, to effect any other
amendment, modification, supplement, waiver or consent with respect to any
Indenture Estate Document; provided that no such action shall, in the
--------
judgment of the Lease Indenture Trustee, materially and adversely affect
the interests of the Holders of any of the Lessor Notes of any series;
provided, however, that no such amendment, modification, supplement, waiver
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or consent contemplated by this Section 6.1(a) shall, without the consent
of the Required Holders, modify the provisions of Sections 5.4, 5.12, 6.1,
6.2, 6.3, 6.4, 6.7 or 6.8 of the Participation Agreement or Sections 20.1,
23.4(b), 23.4(c) or 23.4(d) of the Facility Lease (other than any
amendment, modification, supplement, waiver or consent having no adverse
effect on the interests of the Holders).
The Lease Indenture Trustee is hereby authorized to join with the Owner Lessor
in the execution of any such supplement, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property or assets
thereunder, but the Lease Indenture Trustee shall not be obligated to enter into
any such supplement which affects the Lease Indenture Trustee's own rights,
duties or immunities under this Indenture or otherwise.
(b) Instructions of Required Holders; Limitations. Subject to the
---------------------------------------------
provisions of the Participation Agreement, at any time and from time to time,
(i) the Owner Lessor (but only on the written request of the Owner Participant)
and the Lease Indenture Trustee (but only if so directed by the Required Holders
to the extent that the same is not expressly permitted by Section 6.1(a)),
40
may execute a supplement or amendment hereto for the purpose of adding
provisions to, or changing or eliminating provisions of, this Indenture as
specified in such request, (ii) the Owner Lessor (but only on the written
request of the Owner Participant) and, except with respect to Excepted Payments,
the Lease Indenture Trustee (but only if so directed by the Required Holders to
the extent that the same is not expressly permitted by Section 6.1(a)), may
enter into such written amendment of or supplement to any Indenture Estate
Document as may be specified in such request and (iii) the Owner Lessor shall
not revoke or otherwise terminate the Lessor LLC Agreement or, if such amendment
or supplement would impair the rights of the Lease Indenture Trustee or any
Holder, amend or supplement the Lessor LLC Agreement; provided, however, that,
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without the consent of each Holder, except with respect to Excepted Payments, no
such amendment of or supplement to any Indenture Estate Document, and no waiver
or modification of the terms of any thereof, shall, except to the extent
pertaining to the Excepted Payments, (1) modify the definition of the term
"Required Holders" or reduce the percentage of Holders required to take or
----------------
approve any action hereunder, (2) change the amount or the time of payment of
any amount owing or payable under any Lessor Note or change the rate or manner
of calculation of interest payable with respect to any Lessor Note, (3) alter or
modify the provisions of Section 3 hereof with respect to the manner of payment
or the order of priorities in which distribution thereunder shall be made as
between the Holders and the Owner Lessor or the Owner Participant, (4) reduce
the amount (except as to any amount as shall be sufficient to pay the aggregate
principal of, make-whole premium, if any, and interest on, all outstanding
Lessor Notes) or extend the time of payment of Periodic Lease Rent or
Termination Value except as expressly provided in the Facility Lease, or, except
in connection with Section 6.1(a)(vi), change any of the circumstances under
which Periodic Lease Rent or Termination Value is payable, (5) except in
connection with Section 6.1(a)(vi) or as expressly provided in Section 23.4 of
the Facility Lease, allow for the assignment of the Facility Lease if, in
connection therewith, the Facility Lessee will be released from its obligation
to pay Periodic Lease Rent and Termination Value, (6) except in connection with
Section 6.1(a)(vi), release the Facility Lessee from its obligation to pay
Periodic Lease Rent or Termination Value or change the absolute and
unconditional character of such obligations as set forth in Section 9 of the
Facility Lease or (7) deprive the Lease Indenture Trustee of the Lien on a
material portion of the Indenture Estate or permit the creation of any Lien on a
material portion of the Indenture Estate ranking equally or prior to the Lien of
the Lease Indenture Trustee, except for permitted liens.
Section 6.2 Documents Furnished to Holders
Promptly after the execution by the Owner Lessor or the Lease Indenture
Trustee of any document entered into pursuant to Section 6.1, the Lease
Indenture Trustee shall furnish a copy thereof to the Holders but the failure of
the Lease Indenture Trustee to deliver such conformed copy, or the failure of
the Holders to receive such conformed copies, shall not impair or affect the
validity of such document.
Section 6.3 Lease Indenture Trustee Protected
Notwithstanding anything to the contrary contained herein, if, in the
opinion of the Lease Indenture Trustee, any document required to be executed by
it pursuant to Section 6.1 adversely affects any right, duty, immunity or
indemnity of or in favor of the Lease Indenture Trustee under
41
any Indenture Estate Document or under any other Operative Document, the Lease
Indenture Trustee may in its discretion decline to execute such document unless
the Person or Persons requesting any related action shall provide an indemnity
that is reasonably satisfactory to the Lease Indenture Trustee.
SECTION 7. MISCELLANEOUS
Section 7.1 Termination of Indenture
Upon payment in full of the principal of and interest on, and all other
amounts payable to the Holders hereunder, under all Lessor Notes and under the
Operative Documents, the Lease Indenture Trustee shall execute and deliver to
the Owner Lessor an appropriate instrument releasing the Indenture Estate from
the Lien of this Indenture and releasing the Indenture Estate Documents from the
assignment and pledge thereof hereunder, and the Lease Indenture Trustee shall
execute and deliver such instrument as aforesaid and, at the Owner Lessor's
expense, will execute and deliver such other instruments or documents as may be
reasonably requested by the Owner Lessor to give effect to such release;
provided, however, that this Indenture shall earlier terminate and this
- -------- -------
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Lease Indenture Trustee of all property constituting part of
the Indenture Estate and the final distribution by the Lease Indenture Trustee
of all moneys or other property or proceeds constituting part of the Indenture
Estate in accordance with the terms hereof. Further, upon the purchase or
redemption of the Lessor Notes pursuant to Section 2.10 or 2.11 hereof, and
receipt by the Lease Indenture Trustee of a certificate from each Holder to the
effect that all sums payable to the Holders hereunder and under the Operative
Documents, the Lease Indenture Trustee shall execute and deliver to the Owner
Lessor an appropriate instrument releasing the Indenture Estate from the Lien of
this Indenture and releasing the Indenture Estate Documents from the assignment
and pledge hereunder, and the Lease Indenture Trustee shall execute and deliver
such instruments as aforesaid. Except as otherwise provided in this Section
7.1, this Indenture and the Lien created by this Indenture shall continue in
full force and effect in accordance with the terms hereof. Promptly upon
receipt by a Holder of payment in full of the principal of and interest on the
Lessor Notes held by it, and all other amounts payable to it hereunder, under
the Lessor Notes and under the Operative Documents such Holder shall deliver the
appropriate certificate contemplated by the foregoing sentences of this Section
7.1 to be delivered by it.
Section 7.2 Governing Law; Counterparts
THIS INDENTURE AND THE LESSOR NOTES SHALL BE IN ALL RESPECTS GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THE LAWS OF THE STATE OF MARYLAND ARE MANDATORILY APPLICABLE UNDER
THE LAWS OF THE STATE OF MARYLAND. This Indenture may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument. Regardless of any provision in any other
agreement, for purposes of the Uniform Commercial Code (as in effect from time
to time in the
42
State of New York), the "Securities Intermediary's Jurisdiction" of the Account
--------------------------------------
Bank with respect to the Lease Indenture Trustee's Account is the State of New
York.
Section 7.3 No Legal Title to Indenture Estate in Holders
No Holder shall have legal title to any part of the Indenture Estate except
as may result from the exercise of remedies hereunder. No transfer, by
operation of law or otherwise, of any Lessor Note or other right, title and
interest of any Holder in and to the Indenture Estate or hereunder shall operate
to terminate this Indenture or entitle such Holder or any successor or
transferee of such Holder to an accounting or to the transfer to it of legal
title to any part of the Indenture Estate.
Section 7.4 Sale of Indenture Estate by Lease Indenture Trustee Is
Binding
Any sale or other conveyance of the Indenture Estate or any interest
therein by the Lease Indenture Trustee made pursuant to the terms of this
Indenture shall be effective to transfer or convey all right, title and interest
of the Lease Indenture Trustee, the Owner Lessor, the Owner Participant and the
Holders in and to the Indenture Estate. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or regularity
of such sale or conveyance or as to the application of any sale or other
proceeds with respect thereto by the Lease Indenture Trustee.
Section 7.5 Indenture for Benefit of the Owner Lessor, the Owner
Participant, any OP Guarantor, the Facility Lessee and the Holders
Nothing in this Indenture, whether express or implied, shall be construed
to give to any Person, other than the Owner Lessor, the Owner Participant, any
OP Guarantor, the Lease Indenture Trustee, the Holders (including, without
limitation, any pledgee of the Lessor Notes) and the Facility Lessee (with
respect to Sections 5.4 and 6.1), any legal or equitable right, remedy or claim
under or in respect of this Indenture.
Section 7.6 Notices
All notices, instructions or demands required or permitted by the terms
hereof shall be in English and, unless otherwise specifically provided herein,
in writing and must be given in the manner hereinafter specified. Any written
notice instruction or demand shall be given by United States mail (certified or
registered, postage pre-paid, return receipt requested), by hand-delivery
(including overnight mail or courier service), or, if followed and confirmed by
hand delivery (including overnight mail or courier service) or United States
mail, by facsimile. Any notice, instruction or demand delivered by hand
(including overnight mail or courier service) shall become effective when
delivered. Any notice, instruction or demand delivered by United States mail
shall become effective on the date of receipt. Any notice, instruction or
demand delivered by facsimile shall become effective on the date such facsimile
is sent, as established by evidence of proper receipt of such transmission. Any
notice to any party to the Participation Agreement shall be directed to such
party at its address or facsimile numbers set forth in the Participation
Agreement or to such other address or number as any such party may designate by
notice given to
43
the other parties hereto. Any notice to any Holder shall be directed to such
Holder at its address or facsimile numbers as set forth in the Note Register.
Each Person delivering a notice hereunder shall deliver a copy thereof to the
Facility Lessee; provided that no such Person shall have any liability for
--------
failing to deliver such copy to the Facility Lessee and all notices otherwise
properly delivered pursuant to this Section 7.6 shall be effective against the
Owner Lessor regardless of whether the Person delivering such notice delivers a
copy thereof to the Facility Lessee.
Section 7.7 Severability
Any provision of this Indenture which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 7.8 No Oral Modifications or Continuing Waivers
No terms or provisions of this Indenture or the Lessor Notes may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party or other Person against whom enforcement of the
change, waiver, discharge or termination is sought; and any waiver of the terms
hereof or of any Lessor Note shall be effective only in the specific instance
and for the specific purpose given.
Section 7.9 Successors and Assigns
All covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, each of the parties hereto and the successors and
permitted assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Holder shall
bind the successors and assigns of such Holder.
Section 7.10 Headings
The headings of the various Sections herein and in the table of contents
hereto are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 7.11 Normal Commercial Relations
Anything contained in this Indenture to the contrary notwithstanding, the
Lease Indenture Trustee, any Holder or any of their respective Affiliates may
conduct any banking or other financial transactions, and have banking, trustee,
custody, administrative support or other commercial relationships, with any
Holder, the Facility Lessee, the Owner Lessor, the Owner Participant and any OP
Guarantor, fully to the same extent as if this Indenture were not in effect,
including, without limitation, the making of loans or other extensions of credit
to any Holder, the Facility Lessee, the Owner Lessor, the Owner Participant or
such OP Guarantor for any purpose whatsoever, but only if not related to any of
the transactions contemplated hereby.
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Section 7.12 Waiver of Setoff
Each of the Holders hereby irrevocably waives any and all rights of set-off
that it may have in connection with this Indenture or the Lessor Notes against
the Owner Lessor, the Facility Lessee or any other Person by reason of
Requirements of Law or otherwise. The Owner Lessor hereby irrevocably waives
any and all rights of set-off that it may have in connection with this Indenture
or the Lessor Notes against any Holder, the Facility Lessee (other than as
expressly provided in the Facility Lease), the Facility Sublessee or any other
Person by reason of Requirements of Law or otherwise.
Section 7.13 Concerning the Owner Manager
The Owner Manager is executing this Indenture on behalf of the Owner Lessor
solely in its capacity as Owner Manager under the Lessor LLC Agreement and not
in its individual capacity (except as expressly stated herein) and in no case
shall the Trust Company (or any successor entity acting as Owner Manager under
the Lessor LLC Agreement) be personally liable for or on account of any of the
statements, representations, warranties, covenants or obligations stated to be
those of the Owner Lessor or the Owner Manager hereunder, all such liability, if
any, being expressly waived by the parties hereto and any Person claiming by,
through, or under such party; provided, however, that the Trust Company (or any
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such successor Owner Manager) shall be personally liable hereunder for its own
gross negligence or willful misconduct or for its breach of its covenants,
representations and warranties contained herein, to the extent covenanted or
made in its individual capacity.
Section 7.14 Required Holders; Etc.
As used in this Indenture and the Indenture Estate Documents, the term
"Required Holders" means Holders holding more than 50% of the principal amount
----------------
of Lessor Notes outstanding (disregarding for such computation any Lessor Notes
held directly or beneficially by the Facility Lessee, the Owner Lessor, the
Owner Participant, any OP Guarantor or any of their respective Affiliates,
unless such Person owns all of the Lessor Notes in accordance with the
provisions of this Indenture). In the event that any Holder has pledged its
interests in any of its Lessor Notes, upon registration in the Note Register,
the pledgee will, upon delivery of a written request of such pledgee to the
Lease Indenture Trustee and the Owner Lessor, be treated as the Holder of such
Lessor Notes for all purposes under this Indenture.
Section 7.15 The Lease Indenture Trustee
(a) Each of the Holders hereby designates and appoints State Street Bank
and Trust Company of Connecticut, National Association to act as the Lease
Indenture Trustee under this Indenture, and each of the Holders hereby
acknowledges such appointment and the rights and powers of the Lease Indenture
Trustee under this Indenture. The Lease Indenture Trustee may take such actions
on its behalf under the provisions of this Indenture and may exercise such
powers and perform such duties as are expressly delegated to the Lease Indenture
Trustee by the terms of this Indenture or which duties have been instructed or
directed in writing, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
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contrary elsewhere in this Indenture, the Lease Indenture Trustee shall not have
any duties or responsibilities, except those set forth in this Indenture, and no
implied covenants, functions or responsibilities shall be read into this
Indenture or otherwise exist against the Lease Indenture Trustee. The Lease
Indenture Trustee shall not be responsible or liable for any action taken,
suffered or omitted to be taken by it in good faith hereunder, or in connection
herewith, or in connection with the Indenture Estate, unless caused by its own
gross negligence (ordinary negligence in connection with the receipt and
distribution of moneys) or willful misconduct as determined by a court of
competent jurisdiction.
(b) In the administration of its duties hereunder, the Lease Indenture
Trustee may perform such duties directly or through agents or attorneys and may
consult with counsel, accountants and other relevant experts to be selected with
due care and employed by it, and the Lease Indenture Trustee shall not be
responsible or liable for any action taken, suffered or omitted in good faith by
it in accordance with the advice or opinion of any such counsel, accountants or
other relevant experts (which shall be complete authorization and protection to
the Lease Indenture Trustee) and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture
and shall not be responsible or liable for any act or omission on the part of
any agent or attorney appointed with due care by it hereunder.
(c) Neither the Lease Indenture Trustee nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall (i) be
liable for any action lawfully taken, suffered or omitted to be taken by it
under or in connection with this Indenture (except for its own gross negligence
(ordinary negligence in connection with the receipt and distribution of moneys)
or willful misconduct as determined by a court of competent jurisdiction) or
(ii) be responsible or liable in any manner to any of the Holders for any
recitals, statements, representations or warranties made by Owner Lessor or any
other Person or any representative of any thereof contained in this Indenture or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Lease Indenture Trustee under or in connection with
this Indenture or for the accuracy, value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Indenture or for any failure of any of the
Owner Lessor, the Owner Manager or any OP Guarantor to perform their respective
obligations hereunder. The Lease Indenture Trustee shall not be responsible for
perfecting or continuing the perfection of any security interest or Lien granted
under this Indenture or for filing, re-filing, recording or re-recording any
document, instrument or notice in any public office at any time or times. The
Lease Indenture Trustee shall not be under any obligation to any Holder to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Indenture, or to inspect the
properties, books or records of the Owner Lessor or any other Person.
(d) The Lease Indenture Trustee shall be entitled to rely conclusively,
and shall be fully authorized and protected in so relying, upon any Lessor Note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and purported
to have been signed, sent or made by the proper Person or Persons. In
connection with any request of the Required Holders or making any determinations
under this Indenture, the Lease Indenture Trustee shall be fully authorized and
protected in so relying on a certificate of any Person, purportedly signed by an
Authorized Officer of such Person, setting forth the Lessor
46
Notes held by such Person as of the date of such certificate, which certificate
shall state that the Person signing such certificate is an Authorized Officer of
such Person and shall state specifically the provision hereof pursuant to which
the Lease Indenture Trustee is being directed to act. The Lease Indenture
Trustee shall be entitled to rely conclusively, and shall be fully authorized
and protected in so relying on such certificate. In the absence of bad faith on
its part (as determined by a court of competent jurisdiction), the Lease
Indenture Trustee may rely conclusively, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates, advice or
opinions furnished to the Lease Indenture Trustee hereunder and conforming to
the respective requirements hereof. The Lease Indenture Trustee shall be fully
justified and protected in failing or refusing to take any action under this
Indenture (i) if such action would, in the opinion of the Lease Indenture
Trustee (upon consultation with counsel), be contrary to Requirements of Law or
the terms of this Indenture, (ii) if such action is not specifically provided
for in this Indenture, and it shall not have received such advice or concurrence
of the Required Holders, (iii) while waiting for advice or instructions
requested by the Lease Indenture Trustee from the Holders or (iv) if, in
connection with the taking of any such action that would constitute an exercise
of remedies under this Indenture, it shall not first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Lease
Indenture Trustee shall in all cases be fully protected in acting, or in
refraining from acting, under this Indenture in accordance with a request of the
Required Holders (except to the extent the consent of each Holder is required
hereunder, in which case the Lease Indenture Trustee shall be fully protected in
acting or refraining from acting in accordance with the direction of all
Holders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Holders.
(e) If, with respect to a proposed action to be taken by it, the Lease
Indenture Trustee shall determine in good faith that the provisions of this
Indenture relating to the functions or responsibilities or powers of the Lease
Indenture Trustee are or may be ambiguous or inconsistent, the Lease Indenture
Trustee shall notify the Holders, identifying the proposed action and the
provisions that it considers are or may be ambiguous or inconsistent, and shall
not perform such function or responsibility or exercise such power unless it
shall have received the written confirmation from each of the Holders that such
Holder concurs in the circumstances that the action proposed to be taken by the
Lease Indenture Trustee is consistent with the terms of this Indenture or is
otherwise appropriate. The Lease Indenture Trustee shall be fully authorized
and protected in acting or refraining from acting upon such confirmation
received by it from each of the Holders in this respect, and such confirmation
shall be binding upon each such Holder and the Lease Indenture Trustee. Each
Holder may consult with counsel in determining the appropriateness of the
proposed action.
(f) In the absence of actual knowledge by an Authorized Officer of the
Lease Indenture Trustee, the Lease Indenture Trustee shall not be deemed to have
actual, constructive, direct or indirect knowledge or notice of the occurrence
of any Lease Default, Lease Event of Default, Lease Indenture Default or Lease
Indenture Event of Default unless and until an Authorized Officer of the Lease
Indenture Trustee has received an officer's certificate from an Authorized
Officer of such Holder stating that such an event has occurred. The Lease
Indenture Trustee shall have no obligation whatsoever either prior to or after
receiving such certificate to
47
inquire whether any Lease Default, Lease Event of Default, Lease Indenture
Default or Lease Indenture Event of Default has in fact occurred and shall be
entitled to rely conclusively, and shall be fully authorized and protected in so
relying, on any such certificate so furnished to it. No provision of this
Indenture shall require the Lease Indenture 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. In the
event that the Lease Indenture Trustee receives such a certificate regarding the
occurrence of any Lease Default, Lease Event of Default, Lease Indenture Default
or Lease Indenture Event of Default, the Lease Indenture Trustee shall give
notice thereof to the Holders. The Lease Indenture Trustee shall take such
action with respect to such Event of Default as so requested by the Required
Holders pursuant to this Indenture.
(g) The Owner Lessor shall pay upon demand to the Lease Indenture Trustee
(but only to the extent that the Owner Lessor has received such amounts from the
Facility Lessee) the amount of any and all reasonable fees, costs and expenses
(including disbursements), including the reasonable fees and expenses of its
counsel (and any local counsel) and of any experts and agents, which the Lease
Indenture Trustee may incur in connection with (i) without duplication of
amounts payable in accordance with any fee letter with the Lease Indenture
Trustee expressly with respect to the administration of this Indenture, the
preparation, execution, delivery and administration of this Indenture (including
any amendments hereto), (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Indenture Estate, (iii)
the exercise or enforcement (whether through negotiations, legal proceedings or
otherwise) of any of the rights or remedies of the Lease Indenture Trustee or
the Holders hereunder or (iv) the failure by the Owner Lessor or any other
Person to perform or observe any of the provisions hereof or of any of the
Indenture Estate Documents. Each of the Owner Lessor and the Lease Indenture
Trustee agrees that the fees set forth in the fee letter relating to the fees of
the Lease Indenture Trustee cover the services of the Lease Indenture Trustee
enumerated therein assuming that no Lease Default, Lease Event of Default, Lease
Indenture Default, Lease Indenture Event of Default or other extraordinary event
has occurred. At any time any Lease Default, Lease Event of Default, Lease
Indenture Default or Lease Indenture Event of Default has occurred and is
continuing, the Lease Indenture Trustee shall be entitled to receive additional
fees commensurate with the time spent by the Lease Indenture Trustee in
connection with its duties hereunder. The Lease Indenture Trustee shall from
time to time determine such fees and send The Facility Lessee and the Owner
Lessor notice thereof, and such fees shall be payable upon demand. The Owner
Lessor and the Lease Indenture Trustee may from time to time agree in writing to
modify the fees payable to the Lease Indenture Trustee and no consent of any
other Person shall be required in order to so modify such fees.
(h) Each of the Holders expressly acknowledges that neither the Lease
Indenture Trustee nor any of its officers, directors, employees, agents or
attorneys has made any representations or warranties to it and that no act by
the Lease Indenture Trustee hereinafter taken, including, without limitation,
any review of the Indenture Estate Documents or of the affairs of the Owner
Lessor or any other Person, shall be deemed to constitute any representation or
warranty by the Lease Indenture Trustee to any Holder. Except for notices,
reports and other documents expressly required to be furnished to the Holders by
the Lease Indenture Trustee hereunder, the Lease Indenture Trustee shall not
have any duty or responsibility to provide any
48
Holder with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Indenture
Estate or any obligor under any Indenture Estate Document which may come into
the possession of the Lease Indenture Trustee or any of its officers, directors,
employees, agents or attorneys-in-fact.
(i) Either of the Lease Indenture Trustee or the Account Bank may resign
its appointment upon 30 days' notice to the Holders and may be removed at any
time with or without cause by the Required Holders, with any such resignation or
removal to become effective only upon the acceptance of appointment of a
successor Lease Indenture Trustee or Account Bank that (i) has (or is a member
of a bank holding company group, the parent company of which has) capital,
surplus and undivided profits of at least $100,000,000 and (ii) is experienced
in administering sophisticated financing transactions; provided, however, that
-------- -------
if no successor Lease Indenture Trustee or Account Bank shall have been so
appointed within 30 days, the resigning Lease Indenture Trustee or Account Bank
may, at the expense of the Owner Lessor, petition any court of competent
jurisdiction for the appointment of a new Lease Indenture Trustee or Account
Bank. If the Lease Indenture Trustee or the Account Bank shall resign or be
removed as Lease Indenture Trustee or Account Bank by the Required Holders then
the Required Holders shall (and if no such successor shall have been appointed
within 30 days of the Lease Indenture Trustee's or Account Bank's resignation or
removal, the Lease Indenture Trustee may) appoint a successor that (i) has (or
is a member of a bank holding company group, the parent company of which has)
capital, surplus and undivided profits of at least $100,000,000 and (ii) is
experienced in administering sophisticated financing transactions, whereupon
such successor shall succeed to the rights, powers and duties of the "Lease
-----
Indenture Trustee" or "Account Bank", and the term "Lease Indenture Trustee" or
- ----------------- ------------ -----------------------
"Account Bank" shall mean such successor effective upon its acceptance of
------------
appointment, and the former Lease Indenture Trustee's or Account Bank's rights,
powers and duties as Lease Indenture Trustee or Account Bank shall be
terminated, without any other or further act or deed on the part of such former
Lease Indenture Trustee or Account Bank (except that the resigning Lease
Indenture Trustee or Account Bank shall deliver all Indenture Estate then in its
possession to the successor Lease Indenture Trustee or Account Bank) or any of
the other Holders. Such former Lease Indenture Trustee or Account Bank shall
give notice of its resignation or removal to the Owner Lessor and all Holders.
After any retiring Lease Indenture Trustee's or Account Bank's resignation or
removal hereunder as Lease Indenture Trustee or Account Bank, the provisions of
this Indenture shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Lease Indenture Trustee or Account Bank.
(j) The Lease Indenture Trustee and each Holder hereby irrevocably
designate and appoint State Street Bank and Trust Company of Connecticut,
National Association, as the Account Bank under this Indenture. The Account Bank
hereby agrees to act as "securities intermediary" (within the meaning of
-----------------------
Section 8-102(a)(14) of the UCC) with respect to the Lease Indenture Trustee's
Account. The Owner Lessor hereby acknowledges that the Account Bank shall act
as securities intermediary with respect to the Lease Indenture Trustee's Account
pursuant to this Indenture. The Account Bank shall not have duties or
responsibilities except those expressly set forth in Sections 3.8 and 3.9 of
this Indenture. The Lease Indenture Trustee, at the written direction of the
Required Holders, may remove and replace the Account Bank pursuant to the terms
and conditions of Section 7.15(i) and direct such Account Bank according to the
terms of this Indenture.
49
(k) Any corporation into which the Lease Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Lease Indenture
Trustee shall be a party, or any corporation succeeding to substantially all of
the corporate trust business of the Lease Indenture Trustee, shall be the
successor of the Lease Indenture Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 9.15(i) 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.
(l) The Lease Indenture Trustee is hereby authorized and directed to
execute and deliver the Short Form Indenture on the date hereof. All of the
protective provisions in this Indenture for the benefit of the Lease Indenture
Trustee shall apply mutatis mutandis to the Short Form Indenture.
(m) At any time, for the purpose of meeting any legal requirements of any
jurisdiction, the Lease Indenture Trustee shall have power to appoint, and, upon
the request of the Holders of at least twenty-five percent (25%) in aggregate
principal amount of Lessor Notes then Outstanding, shall appoint, one or more
Persons approved by the Lease Indenture Trustee either to act as co-trustee or
co-trustees, jointly with the Lease Indenture Trustee, or to act as separate
trustee or separate trustees, and to vest in such Person or Persons, in such
capacity, such rights, powers, duties, trusts or obligations as the Lease
Indenture Trustee may consider necessary or desirable, subject to the remaining
provisions of this subsection.
Every co-trustee or separate trustee shall, to the extent permitted by law
but to such extent only, be appointed subject to the following terms, namely:
(i) The Lessor Notes shall be authenticated and delivered solely by
the Lease Indenture Trustee.
(ii) All rights, immunities, powers, trusts, duties and obligations
conferred or imposed upon the trustees shall be conferred or imposed upon
and exercised or performed by the Lease Indenture Trustee, or by the Lease
Indenture Trustee and such co-trustee or co-trustees or separate trustee or
separate trustees jointly, as shall be provided in the instrument
appointing such co-trustee or co-trustees or separate trustee or separate
trustees, except to the extent that, under the law of any jurisdiction in
which any particular act or acts are to be performed, the Lease Indenture
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such act or acts, in which event such act or acts shall be
performed by such co-trustee or co-trustees or separate trustee or separate
trustees.
(iii) Any request in writing by the Lease Indenture Trustee to any co-
trustee or separate trustee to take or to refrain from taking any action
hereunder shall be sufficient warrant for the taking, or the refraining
from taking, of such action by such co-trustee or separate trustee.
(iv) Any co-trustee or separate trustee may, to the extent permitted
by law,
50
delegate to the Lease Indenture Trustee the exercise of any right,
immunity, power, trust, duty or obligation, discretionary or otherwise.
(v) The Lease Indenture Trustee at any time, by any instrument in
writing, may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section. Upon the request of the Lease
Indenture Trustee, the Owner Lessor shall join with the Lease Indenture
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal.
(vi) No trustee hereunder shall be personally liable by reason of
any act or omission or any other trustee hereunder, nor will the act or
omission of any trustee hereunder be imputed to any other trustee.
(vii) Any demand, request, direction, appointment, removal, notice,
consent, waiver or other action in writing delivered to the Lease Indenture
Trustee shall be deemed to have been delivered to each such co-trustee or
separate trustee.
(viii) Any moneys, papers, securities or other items of personal
property received by any such co-trustee or separate trustee hereunder
shall forthwith, so far as may be permitted by law, be turned over to the
Lease Indenture Trustee.
Upon the acceptance in writing of such appointment by any such co-trustee
or separate trustee, it shall be vested with such rights, immunities, trusts,
powers, duties or obligations as shall be specified in the instrument of
appointment jointly with the Lease Indenture Trustee (except insofar as
applicable law makes it necessary for any such co-trustee or separate trustee to
act alone) subject to all the terms hereof. Every such acceptance shall be filed
with the Lease Indenture Trustee. To the extent permitted by law, any co-trustee
or separate trustee may, at any time by an instrument in writing, constitute the
Lease Indenture Trustee its or his attorney-in-fact and agent, with full power
and authority to perform all acts and things and to exercise all discretion on
its or his behalf and in its or his name.
In case any co-trustee or separate trustee shall die, become incapable of
acting, resign or be removed, all rights, immunities, trusts, powers, duties and
obligations of said co-trustee or separate trustee shall, so far as permitted by
law, vest in and be exercised by the Lease Indenture Trustee unless and until a
successor co-trustee or separate trustee shall be appointed in the manner herein
provided.
Section 7.16 Maximum Secured Obligations
The maximum principal amount of the Lessor Notes initially secured hereby
is equal to the aggregate principal amount of the Initial Lessor Notes specified
in Schedule I hereto, plus interest and Make-Whole Premium (if any), plus any
disbursements for taxes and insurance on the Facility, plus interest thereon,
and any other sums advanced in accordance with the terms hereof or any of the
other Operative Documents to protect the security of this Indenture.
51
Section 7.17 Execution by Owner Lessor
The Owner Lessor executes this instrument as a debtor under the Maryland
Uniform Commercial Code, it being intended that this Indenture shall constitute
and be a security agreement and financing statement under the laws of the State
of Maryland.
52
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed on the day and year first above written.
DICKERSON OL1 LLC, as Owner Lessor
By: Wilmington Trust Company, not in its
individual capacity but solely as the Owner
Manager under the Lessor LLC Agreement
By: /s/ W. Chris Sponenberg
----------------------------------------------
Name: W. Chris Sponenberg
--------------------------------------------
Title: Assistant Vice President
-------------------------------------------
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Lease Indenture Trustee,
By: /s/ Nicole Poole
----------------------------------------------
Name: Nicole Poole
--------------------------------------------
Title: Assistant Secretary
-------------------------------------------
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Account Bank
By: /s/ Nicole Poole
----------------------------------------------
Name: Nicole Poole
--------------------------------------------
Title: Assistant Secretary
-------------------------------------------
53
STATE OF NEW YORK, COUNTY OF NEW YORK, to wit:
I HEREBY CERTIFY, that on this 19th day of December, 2000, before me, the
undersigned Notary Public of the State of New York, personally appeared W. Chris
Sponenberg, of Wilmington Trust Company, a Delaware banking corporation, known
to me (or satisfactorily proved) to be the person who executed the foregoing
Indenture of Trust, Mortgage and Security Agreement and acknowledged that
he/she, as Assistant Vice President of such corporation, executed the same for
the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Heather Graziano (SEAL)
----------------------------
Notary Public
My Commission Expires:
54
STATE OF NEW YORK, COUNTY OF NEW YORK, to wit:
I HEREBY CERTIFY, that on this 19th day of December, 2000, before me, the
undersigned Notary Public of the State of New York, personally appeared
Nicole Poole, of State Street Bank and Trust Company of Connecticut, National
Association, a national baking association, known to me (or satisfactorily
proved) to be the person who executed the foregoing Indenture of Trust, Mortgage
and Security Agreement and acknowledged that he/she, as Assistant Secretary of
such corporation, executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Heather Graziano (SEAL)
----------------
Notary Public
My Commission Expires
55
STATE OF NEW YORK, COUNTY OF NEW YORK, to wit:
I HEREBY CERTIFY, that on this 19th day of December, 2000, before me, the
undersigned Notary Public of the State of New York, personally appeared Nicole
Poole, of State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, known to me (or satisfactorily
proved) to be the person who executed the foregoing Indenture of Trust, Mortgage
and Security Agreement and acknowledged that he/she, as Assistant Secretary of
such corporation, executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Heather Graziano (SEAL)
-------------------------
Notary Public
My Commission Expires
Oct. 10, 2007
56
MARYLAND CERTIFICATION
This is to certify that the foregoing instrument was prepared by or under
the supervision of the undersigned, an attorney duly admitted to practice before
the Court of the Appeals of the State of Maryland.
/s/ Petrina M.E. Chavis
-----------------------------------------
Petrina M.E. Chavis, Attorney at Law
CERTIFICATION
-------------
I hereby certify that this document was prepared by or under the
supervision of an attorney admitted to practice before the Court of Appeals of
the State of Maryland.
_______________ ____________________________________
Date
Annex A to Indenture
DEFINED TERMS
Unless otherwise defined or the context otherwise requires, terms for which
meanings are provided in this Indenture shall have such meanings when used in
each notice and other communication delivered from time to time in connection
with this Indenture.
"Account Bank" shall mean State Street Bank and Trust Company of
------------
Connecticut, National Association, in its capacity as Account Bank hereunder,
together with its successors and assigns in such capacity.
"Additional Lessor Notes" shall have the meaning assigned to such term in
-----------------------
Section 2.13 hereof.
"Assumption Agreement" shall have the meaning assigned to such term in
--------------------
Section 2.12 hereof.
"Assumption Documents" shall have the meaning assigned to such term in
--------------------
Section 2.12(a).
"Assumption Event" shall mean the election by the Facility Lessee to assume
----------------
the Lessor Notes pursuant to Section 10.2(b) or Section 13.4 of the Facility
Lease.
"Holder" shall mean a holder of a Lessor Note.
------
"Indenture Estate" shall have the meaning assigned to such term in the
----------------
granting clause.
"Indenture Estate Documents" shall have the meaning assigned to such term
--------------------------
in the Granting Clause.
"Interest Payment Date" shall have the meaning assigned to such term in
---------------------
Section 2.4(b) hereof.
"Lease Default" shall mean a Lease Event of Default or any condition,
-------------
occurrence or event which, with notice or lapse of time or both, would
constitute a Lease Event of Default.
"Lease Indenture Default" shall mean a Lease Indenture Event of Default or
-----------------------
any condition, occurrence or event which, with notice or lapse of time or both,
would constitute a Lease Indenture Event of Default.
"Lease Indenture Event of Default" shall have the meaning assigned to such
--------------------------------
term in Section 4.2 hereof.
"Lease Indenture Trustee's Account" shall have the meaning assigned to such
---------------------------------
term in Section 3.8(a) hereof.
"Lease Indenture Trustee Account Collateral" shall have the meaning
------------------------------------------
assigned to such term in Section 3.8(c) hereof.
"Lessor Note" shall mean each Initial Lessor Note and each Subsequent
-----------
Lessor Note.
"Lessor Secured Obligations" shall have the meaning assigned to such term
--------------------------
in the Granting Clause.
"Make-Whole Premium" shall mean, with respect to any Lessor Note subject to
------------------
redemption pursuant to Section 2.11 of this Indenture, an amount equal to the
Discounted Present Value calculated for such Lessor Note being so redeemed less
the unpaid principal amount plus accrued interest of such Lessor Note; provided
--------
that the Make Whole Premium shall not be less than zero. For purposes of this
definition, the "Discounted Present Value" of the principal amount of any Lessor
------------------------
Note subject to redemption pursuant to this Indenture shall be equal to the
discounted present value, as of the date of redemption, of all principal and
interest payments scheduled to become due in respect of such Lessor Note after
the date of such redemption, calculated using a discount rate equal to the sum
of (i) the yield to maturity on the U.S. Treasury security having an average
life equal to the remaining average life of such Lessor Note and trading in the
secondary market at the price closest to par plus (ii) 0.50%; provided, however,
-------- -------
that if there is no U.S. Treasury security having an average life equal to the
remaining average life of such Lessor Note, such discount rate shall be
calculated using a yield to maturity interpolated or extrapolated on a straight-
line basis (rounding to the nearest calendar month, if necessary) from the
yields to maturity for the two U.S. Treasury securities having average lives
most closely corresponding to the remaining life of such Lessor Note and trading
in the secondary market at the price closest to par.
"New Lessor Notes" shall have the meaning assigned to such term in Section
----------------
2.13 hereof.
"Note Register" shall have the meaning assigned to such term in Section 2.8
-------------
hereof.
"Owner Lessor" shall have the meaning assigned to such term in the
------------
Recitals.
"Payment Date" shall have the meaning assigned to such term in Section
------------
2.4(b) hereof.
"Participation Agreement" shall have the meaning assigned to such term in
-----------------------
the Section 1 hereof.
"Property Interest" shall have the meaning assigned to such term in the
-----------------
Granting Clause.
"Registrar" shall have the meaning assigned to such term in Section 2.8
---------
hereof.
"Required Holders" shall have the meaning assigned to such term in Section
----------------
7.14 hereof.
"Section 5.4 Rights" shall have the meaning assigned to such term in
------------------
Section 5.4 hereof.
"Subsequent Lessor Note" shall have the meaning assigned to such term in
----------------------
Section 2.13 hereof.
2
"Tax Event" shall mean any event or transaction treated, for Federal income
---------
tax purposes, as a taxable sale or exchange of the Lessor Notes.
"Undivided Interest Percentage" shall mean ___%.
-----------------------------
3