EXHIBIT 4.10(a)
Initial Maximum Principal Amount of Lessor Notes Secured for Purposes of
Section 7-102 of the Real Property Article of the
Maryland Annotated Code: $341,433,713.48
================================================================================
INDENTURE OF TRUST, MORTGAGE
AND SECURITY AGREEMENT
(L1)
Dated as of December 19, 2000
between
MORGANTOWN OL1 LLC
and
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Lease Indenture Trustee
================================================================================
Morgantown Base-Load Units 1 and 2
Coal-Fired Electric. Generating Units
Land Located in Charles 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..................................6
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..............................15
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..............17
Section 2.17 Acceptance of the Lease Indenture Trustee............18
i
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME 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......19
Section 3.4 Certain Payments.....................................21
Section 3.5 Other Payments.......................................21
Section 3.6 Manner of Payment to the Owner Lessor................21
Section 3.7 Investment of Amounts Held by Lease Indenture
Trustee..............................................22
Section 3.8 Establishment of the Lease Indenture Trustee's
Account; and Lien and Security Interest; Etc.........22
Section 3.9 The Account Bank; Limited Rights of the Owner
Lessor...............................................23
SECTION 4. COVENANTS OF THE OWNER LESSOR; LEASE INDENTURE EVENTS
OF DEFAULT; REMEDIES.......................................25
Section 4.1 Covenants of the Owner Lessor........................25
Section 4.2 Lease Indenture Events of Default....................26
Section 4.3 Certain Rights to Cure...............................28
Section 4.4 Remedies.............................................29
Section 4.5 Taking Possession of Indenture Estate................32
Section 4.6 Remedies Cumulative..................................33
Section 4.7 Discontinuance of Proceedings........................33
Section 4.8 Waiver of Past Defaults..............................33
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.............................34
ii
SECTION 5 DISCLAIMER OF REPRESENTATIONS; NO SEGREGATION OF MONEYS;
FURTHER ASSURANCES; CERTAIN RIGHTS.........................34
Section 5.1 No Representations or Warranties as to the
Property Interest....................................34
Section 5.2 No Segregation of Moneys; No Interest................35
Section 5.3 Further Assurances; Financing Statements.............35
Section 5.4 Certain Rights of Owner Lessor and Owner
Participant..........................................35
SECTION 6. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER
DOCUMENTS..................................................38
Section 6.1 Supplements and Amendments to this Indenture and
the Other Documents..................................38
Section 6.2 Documents Furnished to Holders.......................40
Section 6.3 Lease Indenture Trustee Protected....................40
SECTION 7. MISCELLANEOUS..............................................41
Section 7.1 Termination of Indenture.............................41
Section 7.2 Governing Law; Counterparts..........................41
Section 7.3 No Legal Title to Indenture Estate in Holders........42
Section 7.4 Sale of Indenture Estate by Lease Indenture Trustee
Is Binding...........................................42
Section 7.5 Indenture for Benefit of the Owner Lessor, the Owner
Participant, any OP Guarantor, the Facility Lessee
and the Holders......................................42
Section 7.6 Notices..............................................42
Section 7.7 Severability.........................................43
Section 7.8 No Oral Modifications or Continuing Waivers..........43
Section 7.9 Successors and Assigns...............................43
Section 7.10 Headings.............................................43
Section 7.11 Normal Commercial Relations..........................43
Section 7.12 Waiver of Setoff.....................................43
iii
Section 7.13 Concerning the Owner Manager.........................44
Section 7.14 Required Holders; Etc................................44
Section 7.15 The Lease Indenture Trustee..........................44
Section 7.16 Maximum Secured Obligations..........................50
Section 7.17 .....................................................54
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
iv
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 MORGANTOWN OL1 LLC, a Delaware limited liability company
created for the benefit of the Owner Participant referred to below, as grantor
(the "Owner Lessor"), and 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
- -----
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 Morgantown base-load units 1 and 2 (the "Facility") with the right to
--------
nonexclusive possession thereof (the "Undivided Interest");
------------------
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 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 OPl LLC (the "Owner Participant"), a copy of which is recorded
-----------------
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
-----
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 $341,433,713.48 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
- -----------
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"):
----------------
(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 Interest thereunder; the Facility
Lease and all payments of any kind by the Facility Lessee
2
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 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");
--------
(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 Documents or arising from bankruptcy,
insolvency or other similar proceedings involving any party to the
Indenture Estate Documents; and
3
(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 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
4
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
- -------
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.
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.
5
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 (Ll) 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
-----------------------
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.
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
-------------------
6
Initial Lessor Notes are 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 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
-------
Date") and in the respective amounts set forth in Schedule I to this Indenture.
- ----
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
7
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, 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
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
8
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 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
9
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 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
10
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 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
11
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 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
12
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. Any such notice given under this Section 2.1
1(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.
13
(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, 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
14
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.
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
15
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 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;
16
(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, 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.
17
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:
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
18
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 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
19
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 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.
20
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.
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
21
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.
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
22
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 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
23
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 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.
24
(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 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);
25
(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 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
26
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 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,
27
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 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
28
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 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
29
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 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 I 80-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
30
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 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
31
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 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
32
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, 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
33
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 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,
34
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 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):
35
(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 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
36
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; provided, however, that this sentence shall not apply to the Facility
-------- -------
Lessee or 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 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.
37
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 judgment of the Lease Indenture Trustee,
materially adversely affect the interests of the Holders of the Lessor
Notes of any series;
38
(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 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,
(1) 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)), may
execute a supplement or amendment hereto for the purpose of adding
39
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,
-------- -------
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 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
40
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 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.
41
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 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
42
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.
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
43
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
-------- -------
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 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
44
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 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
45
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 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
46
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 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
47
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 $1 00.000.000 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.
(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
48
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, 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
49
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.
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.
50
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed on the day and year first above written.
MORGANTOWN 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
-------------------------------------
51
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.
/s/ Heather Graziano(SEAL)
--------------------
Notary Public
My Commission Expires: October 10, 2002
52
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 purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Heather Graziano (SEAL)
--------------------
Notary Public
My Commission Expires: October 10, 2002
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 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 purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Heather Graziano (SEAL)
--------------------
Notary Public
My Commission Expires: October 10, 2002
54
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
55
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.
"Tax Event" shall mean any event or transaction treated, for Federal
---------
income tax purposes, as a taxable sale or exchange of the Lessor Notes.
2
"Undivided Interest Percentage" shall mean 35.0%.
-----------------------------
3