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EXHIBIT 10.15
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TRUST INDENTURE AND SECURITY AGREEMENT
dated as of August 7, 1997
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual
capacity except as otherwise expressly provided herein,
but solely as Nonaffiliated Partner Trustee under the
Trust Agreement dated as of August 7, 1997 with
Beneficiaries,
BJ SERVICES EQUIPMENT, L.P.,
a Delaware Limited Partnership
and
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee.
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Well Services Equipment
(BJ Services Trust No. 1997-1)
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CONTENTS
Section Page
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Excluded Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 HABENDUM CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.4 Attachment of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.5 Effect of Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.6 Appointment of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.8 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2. THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1 Notes; Title, Dating and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 Indenture Trustee as Agent; Ownership of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.6 Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.7 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.8 Payment on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.9 Payment from Indenture Estate Only; Nonrecourse Obligations; Excess Amounts . . . . . . . . . . . . . 16
2.10 Execution and Delivery of Notes upon Original Issuance . . . . . . . . . . . . . . . . . . . . . . . . 17
2.11 Security for and Parity of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.12 Application of Payments to Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.13 Intentional Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.14 Late Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.15 Definition of Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.16 Special Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3. RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE . . . . . . . . . . . . . . . . . . . 21
3.1 Payment Upon Delivery of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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3.2 Payments Upon Event of Loss, Obsolescence or ET Right; Certain Prepayments . . . . . . . . . . . . . . 21
3.3 Application of Priority Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.4 Application of Certain Amounts Upon Event of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.5 Amounts During Indenture Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.6 Amounts for Which Application is Provided in Other Basic Documents . . . . . . . . . . . . . . . . . . 24
3.7 Amounts for Which No Application is Otherwise Provided . . . . . . . . . . . . . . . . . . . . . . . . 24
3.8 Excepted Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.9 Notice of Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4. COVENANTS OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . 25
5. DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE INDENTURE ESTATE DURING CONTINUATION OF
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1 Disposition, Substitution and Release of Property Included in the Indenture Estate During
Continuation of Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Possession of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.3 Release of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.4 Release of Units - Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.5 Protection of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.1 Prepayment of Notes upon Event of Loss, Obsolescence or ET Date . . . . . . . . . . . . . . . . . . . 29
6.2 Notice of Prepayment to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.3 Deposit of Prepayment Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.4 Notes Payable on Prepayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7. NONAFFILIATED PARTNER TRUSTEE AND INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.1 Prepayment of Moneys for Note Payments Held by Indenture Trustee . . . . . . . . . . . . . . . . . . . 32
7.2 No Representations or Warranties as to Units or Documents . . . . . . . . . . . . . . . . . . . . . . 32
8. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.1 Indenture Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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8.2 Acceleration; Rescission and Annulment; Limitations . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3 Other Remedies Available to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.4 Waiver of Nonaffiliated Partner Trustee and Partnership . . . . . . . . . . . . . . . . . . . . . . . 45
8.5 Waiver of Existing Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.6 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.7 Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.8 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.9 Indenture Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9. INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.1 Rights and Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.2 Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.3 Funds May Be Held by Indenture Trustee; Investments . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.4 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.6 Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.7 Successor Indenture Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.8 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.9 Trustee's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.10 Withholding Taxes; Information Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.11 Co-Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10. SATISFACTION AND DISCHARGE; TERMINATION
OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.1 Satisfaction and Discharge of Agreement; Termination of Obligations . . . . . . . . . . . . . . . . . 54
10.2 Survival of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.3 Moneys to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.4 Moneys to Be Returned to Nonaffiliated Partner Trustee . . . . . . . . . . . . . . . . . . . . . . . . .55
11. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.1 Amendments to This Indenture Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 55
11.2 Supplements to Partnership Agreement, Guaranty, Services Agreement and O&M Agreement Without Holder
Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.3 Amendments With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
11.4 Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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11.5 Indenture Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.6 Opinion of Counsel Conclusive as to Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12. ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
12.1 Actions to Be Taken upon Exercise of Certain Rights . . . . . . . . . . . . . . . . . . . . . . . . . 59
13. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
13.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
13.3 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
13.4 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
13.5 Indenture for Benefit of Nonaffiliated Partner Trustee, Indenture Trustee, Beneficiaries and Holders . 61
13.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
13.7 No Oral Modifications or Continuing Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.9 Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.10 No Legal Title to Indenture Estate in Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.11 Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.12 Directly or Indirectly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
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Attachments
Exhibit A Note
Exhibit B Indenture Supplement No. 1
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TRUST INDENTURE AND SECURITY AGREEMENT dated as of August 7,
1997 among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association not in its individual capacity except as otherwise
expressly provided herein, but solely as Nonaffiliated Partner
Trustee, BJ SERVICES EQUIPMENT, L.P., a Delaware Limited Partnership
and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, as Indenture Trustee hereunder.
R E C I T A L S:
A. Beneficiaries and First Security Bank, National Association, a
national banking association, have entered into the Trust Agreement whereby,
among other things, (i) Nonaffiliated Partner Trustee has established a certain
trust for the use and benefit of Beneficiaries, to be subject, however, to the
Lien of the Indenture created pursuant hereto and (ii) Nonaffiliated Partner
Trustee has been authorized and directed to execute and deliver this Indenture.
B. Before the Commencement Date General Partner and
Organizational Limited Partner formed Partnership pursuant to the Initial
Partnership Agreement, and General Partner contributed the Initial Units to
Partnership.
C. Nonaffiliated Partner Trustee, Indenture Trustee and other
parties have entered into the Participation Agreement providing for the
commitment of the Note Purchasers to purchase Notes in an aggregate amount not
to exceed $75,000,000.
D. Subject to the terms of the Participation Agreement,
Nonaffiliated Partner Trustee on the Commencement Date will enter into the
Partnership Agreement (which amends and restates the Initial Partnership
Agreement) with General Partner, Affiliated Partner and Organizational Limited
Partner and will make a capital contribution to Partnership.
E. The proceeds of the Notes are to be used by Nonaffiliated
Partner Trustee to finance a portion of the Nonaffiliated Partner Trustee's
capital contribution to Partnership on the Commencement Date.
F. The parties desire by this Indenture, among other things, (i)
to provide for the issuance by Nonaffiliated Partner
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Trustee of the Notes in accordance with this Indenture, (ii) to provide for the
assignment, mortgage and pledge by Nonaffiliated Partner Trustee to Indenture
Trustee, as part of the Indenture Estate hereunder, among other things, of
Nonaffiliated Partner Trustee's Partnership Interest and of certain of
Nonaffiliated Partner Trustee's right, title and interest under certain Basic
Documents and certain payments and other amounts received hereunder or
thereunder, and (iii) to provide for the assignment, mortgage and pledge by
Partnership to Indenture Trustee, as part of the Indenture Estate hereunder,
among other things, of all of Partnership's right title and interest in and to
the Units and certain of Partnership's right, title and interest under certain
Basic Documents and certain payments and other amounts received with respect
thereto, all in accordance with the terms hereof, as security for, among other
things, the payment and performance of the Notes and Nonaffiliated Partner
Trustee's other obligations to Holders and to Indenture Trustee, for the
ratable benefit and security of Holders.
G. The Holders (i) by entering into the Participation Agreement,
have made it possible for Nonaffiliated Partner Trustee to make its capital
contribution to Partnership and, accordingly, have conferred financial and
other benefits on Partnership and Partners and (ii) would not enter into the
transactions contemplated by the Basic Documents without the grant by
Partnership and Nonaffiliated Partner Trustee of the Liens provided hereunder.
H. All things necessary to make this Indenture the legal, valid
and binding obligation of Nonaffiliated Partner Trustee, Partnership and
Indenture Trustee, for the uses and purposes herein set forth, in accordance
with its terms, have been done and performed and have happened.
I. For all purposes of this Indenture, except as otherwise
defined herein or unless the context otherwise requires:
(a) capitalized terms used herein shall have the meanings
assigned to them in Appendix A attached hereto and made a part hereof;
(b) the words "herein", "hereof" and "hereunder", and
other words of similar import, refer to this Indenture as a
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whole and not to any particular Section or other subdivision hereof; and
(c) all references in this Indenture to Sections and
Exhibits refer to Sections and Exhibits of this Indenture unless otherwise
indicated.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. SECURITY
1.1 Grant of Security Interest.
To secure the prompt payment of the principal of, Premium, if
any, and interest on the Notes from time to time Outstanding in accordance with
their terms and to secure the payment, performance and observance by
Nonaffiliated Partner Trustee and Partnership of all the agreements, covenants
and provisions for the benefit of the Holders and Indenture Trustee contained
herein and in the Basic Documents to which Partnership or Nonaffiliated Partner
Trustee is a party (collectively, the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions hereof,
(i) Nonaffiliated Partner Trustee does hereby grant,
bargain, sell, assign, transfer, convey, pledge and confirm, unto
Indenture Trustee, its successors and assigns, for the security and
benefit of the Holders from time to time and Indenture Trustee, and
grant a security interest in and lien on, all estate, right, title and
interest of Nonaffiliated Partner Trustee in, to and under the
following described property, agreements, rights, interests and
privileges, whether now owned or hereafter acquired, arising or
existing (which collectively, including, without limitation, all
property hereafter specifically subjected to the Lien of this
Indenture by Nonaffiliated Partner Trustee by any instrument
supplemental hereto, but excluding the Excepted Property, are herein
called the "Nonaffiliated Partner Trustee Indenture Estate"):
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(A) the Partnership Agreement and Nonaffiliated
Partner Trustee's Partnership Interest under the Partnership
Agreement (including all instruments or certificates owned or
held by or established in favor of Nonaffiliated Partner
Trustee with respect to such Partnership Interest) and all
rights, authority, powers and privileges of Nonaffiliated
Partner Trustee as a holder of such Partnership Interest and
all payments and distributions thereunder of whatever kind or
character and whether in cash or other property, at any time
made or distributable to Nonaffiliated Partner Trustee
thereunder or in respect thereof, whether due or to become due
and whether representing profits, distributions, repayment of
capital contributions or otherwise (including all amounts of
Priority Distributions, Supplemental Priority Distributions,
Special Distributions, Disposition Value, ET Price, FT Price
and payments of any kind required to be made to Nonaffiliated
Partner Trustee thereunder), including, without limitation,
the immediate and continuing right of Nonaffiliated Partner
Trustee to receive and collect all distributions and any other
payments or other amounts and the right of Nonaffiliated
Partner Trustee 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 consent to any
amendment, modification or waiver or to make any claims or
demands under or to take any other action provided under or in
respect of the Partnership Agreement, the Services Agreement
or the O&M Agreement or to accept surrender of any Unit or
Units, including all the rights and powers of Nonaffiliated
Partner Trustee to the exclusion of General Partner and any
other Partner, to declare the O&M Agreement and the Services
Agreement to be in default, to terminate such agreements and
exercise all rights and remedies thereunder and under the
Partnership Agreement, including, without limitation, the
commencement, conduct and consummation of legal,
administrative and other proceedings as permitted thereunder
or by law, the liquidation of Partnership, and all rights and
powers of Nonaffiliated Partner Trustee to the exclusion of
General Partner and any other Partner
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following a BJ Event of Default to amend, modify or waive such
agreements and to exercise the other rights contained in
Section 7 of the Partnership Agreement;
(B) all rights, authority, powers and privileges
of, and all payments and distributions payable to,
Nonaffiliated Partner Trustee under Sections 5.11 through 5.18
and Section 5.22 of the Participation Agreement;
(C) without limiting the foregoing clause (A) or
(B), all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien
of this Indenture which relate to such Partnership Interest,
including, without limitation, the immediate and continuing
right to receive any of the foregoing;
(D) all moneys and securities now or hereafter
paid or deposited or required to be paid or deposited to or
with Indenture Trustee by or for the account of Nonaffiliated
Partner Trustee pursuant to any term of any Basic Document and
held or required to be held by Indenture Trustee hereunder
that relate to Partnership, the Units or to the Notes;
(E) the Guaranty, including, without limitation,
all covenants and warranties in favor of Nonaffiliated Partner
Trustee and all other rights and remedies of Nonaffiliated
Partner Trustee thereunder, whether now owned or hereafter
acquired; and
(F) all proceeds of the foregoing (Nonaffiliated
Partner Trustee, concurrently, with the delivery hereof,
having delivered to Indenture Trustee originals of the
executed Partnership Agreement, O&M Agreement, Services
Agreement, Guaranty and the relevant Partnership Agreement
Supplement and O&M Agreement Supplement and executed
counterparts of the Trust Agreement); and
(ii) Partnership does hereby grant, bargain, sell, assign,
transfer, convey, pledge and confirm, unto Indenture Trustee, its
successors and assigns, for the
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security and benefit of the Holders from time to time and Indenture
Trustee, and grant a security interest in and lien on, all estate,
right, title and interest of Partnership in, to and under the
following described property, agreements, rights, interests and
privileges, whether now owned or hereafter acquired, arising or
existing (which collectively, including, without limitation, all
property hereafter specifically subjected to the Lien of this
Indenture by Partnership by any instrument supplemental hereto, but
excluding the Excepted Property, are herein called the "Partnership
Indenture Estate" and together with the Nonaffiliated Partner Trustee
Indenture Estate herein called the "Indenture Estate"):
(A) the Units and all replacements thereof and
substitutions therefor in which Partnership shall from time to
time acquire an interest under the Contribution Agreements and
the Partnership Agreement, as more particularly described in
the Indenture Supplement, Partnership Agreement Supplement and
O&M Agreement Supplement executed and delivered with respect
to such Units;
(B) without limiting the foregoing clause(A), all
rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of
this Indenture which relate to the Contribution Agreements,
the Units or the Notes, including, without limitation, the
immediate and continuing right to receive any of the
foregoing;
(C) all insurance proceeds, sale proceeds or
proceeds arising out of a taking, condemnation, requisition or
appropriation by any government authority with respect to
Partnership, the Units or any Unit, including, without
limitation, the immediate and continuing right to receive any
of the foregoing;
(D) all moneys and securities now or hereafter
paid or deposited or required to be paid or deposited to or
with Indenture Trustee by or for the account of Partnership
pursuant to any term of any Basic Document and held or
required to be held by Indenture Trustee hereunder that relate
to the Units or to the Notes;
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(E) all Contribution Agreements, including,
without limitation, all covenants and warranties in favor of
Partnership and all other rights and remedies of Partnership
thereunder, whether now owned or hereafter acquired; and
(F) all proceeds of the foregoing (Partnership,
concurrently, with the delivery hereof, having delivered to
Indenture Trustee originals of the executed Partnership
Agreement, O&M Agreement, Services Agreement, Contribution
Agreements, Guaranty and the relevant Partnership Agreement
Supplement and O&M Agreement Supplement and executed
counterparts of the Trust Agreement);
excluding however, all Excepted Property. Such mortgage, charge, hypothec,
security interest and assignment shall attach to the Partnership Agreement, the
O&M Agreement and the Services Agreement and the amounts due and to become due
thereunder upon the execution and delivery of this Agreement, the
Participation Agreement, the Partnership Agreement, the O&M Agreement and the
Services Agreement; such security interest shall attach to the Units
specifically described in a supplement hereto upon the execution and delivery
of such supplement. The mortgage, charge, hypothec, security interest and
assignment granted hereunder shall in all events be subject to the terms and
conditions of this Indenture and the rights of Nonaffiliated Partner Trustee
and Partnership, respectively hereunder.
There shall be excluded from the foregoing grant of security interest
and assignment all Excepted Property.
1.2 Excluded Rights.
(a) Notwithstanding the foregoing assignment,
Nonaffiliated Partner Trustee and Partnership, respectively, shall have the
right, not to the exclusion of Indenture Trustee:
(i) to receive from Partnership, General
Partner, Affiliated Partner, Service Taker and Operator, respectively,
duplicate copies of all notices, documents, reports and other information that
Partnership, General Partner, Affiliated Partner, Service Taker and Operator
are required or permitted to give to Nonaffiliated Partner Trustee or
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Partnership under the Partnership Agreement, the Services Agreement, the O&M
Agreement, the Participation Agreement or any other Basic Document;
(ii) to inspect the Units and
Partnership's, General Partner's, Affiliated Partner's, Service Taker's, and
Operator's respective records with respect thereto and with respect to the
Partnership Agreement, O&M Agreement and the Services Agreement;
(iii) to provide or carry insurance in addition to
that required to be carried by Operator pursuant to the O&M Agreement so long
as such additional insurance does not adversely affect Operator's insurance or
the cost thereof or impair the collectibility of such insurance carried by
Operator; and
(iv) in the case only of Nonaffiliated
Partner Trustee, subject to the limitations of Section 8.3(e)(i)(5), to make
advances to protect or preserve the Units, and to pay, purchase, contest or
compromise any insurance premium, encumbrance, charge, tax, lien or other sum
that in the reasonable judgment of Nonaffiliated Partner Trustee appears to
affect the Units to enable it to exercise its rights under this Indenture.
(b) If no Indenture Event of Default exists,
Nonaffiliated Partner Trustee and Partnership shall have the right:
(i) jointly with and not to the
exclusion of Indenture Trustee, to consent or withhold consent to any
amendment, modification or waiver of any provision of the Partnership
Agreement, Sections 5.11 through 5.18 and 5.22 of the Participation Agreement,
any provision of the O&M Agreement, any provision of the Services Agreement to
which Nonaffiliated Partner Trustee has the right to join or consent pursuant
to Section 11.2 of the Services Agreement, it being the intention of the
parties that consent of Nonaffiliated Partner Trustee and Indenture Trustee
shall be required for any such amendment, modification or waiver;
(ii) to the exclusion of Indenture
Trustee, but jointly with Nonaffiliated Partner Trustee and Partnership,
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to adjust the Priority Distributions, Disposition Values and ET Price, pursuant
to and in accordance with Section 2.7 of the Participation Agreement, and to
amend the Partnership Agreement to reflect any such adjustment, if such
adjustment or amendment does not reduce the amounts payable under the
Partnership Agreement on any date below that necessary to pay in full, when
due, the principal of, Premium, if any, and the interest on the Notes due or to
become due on such date; and
(iii) to the exclusion of Indenture Trustee, but
jointly with Nonaffiliated Partner Trustee and Partnership to determine the
"Fair Market Value" pursuant to Section 5.17 of the Participation Agreement.
(c) During the continuance of an Indenture Event of
Default and until Indenture Trustee forecloses on the Indenture Estate,
Nonaffiliated Partner Trustee shall have the right, jointly with and not to the
exclusion of Indenture Trustee, to consent or withhold consent to any
amendment, modification or waiver of Sections 3.1, 5, 6, 7, 8, 9, 10, 11, 12,
13, 14, 15.1, 15.2, 15.3, 17, 19, 20, 22, 23.1 and 23.8 of the O&M Agreement,
Sections 3.1, 4, 5, 6, 7.1, 7.2, 7.3, 9, 10, 12 and 13.1 of the Services
Agreement, Sections 2.4, 3, 4, 6, 7, 9, 10, 11, 13.1, 13.2 and 13.5 of the
Partnership Agreement and Sections 5.11 through 5.18 and 5.22 of the
Participation Agreement, it being the intention of the parties that consent of
both Nonaffiliated Partner Trustee and Indenture Trustee shall be required for
any such amendment, modification or waiver.
(d) Subject to Section 1.2(b)(iii), Nonaffiliated Partner
Trustee and Indenture Trustee shall jointly determine the "Fair Market Value"
pursuant to the Basic Documents.
1.3 HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the property described in Section
1.1 unto Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the Holders from time to time, without any preference,
priority or distinction of any one Note over any other Note under this
Indenture, and for the benefit and security of Indenture Trustee and for the
uses and purposes and subject to the terms and provisions set forth in this
Indenture.
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1.4 Attachment of Security Interest.
This Indenture, as supplemented from time to time, is intended to and
shall create and grant to Indenture Trustee a security interest in each of the
Units, which security interest shall attach on the Commencement Date or other
date on which Partnership acquires an interest in such Units. The security
interests created by this Indenture and the Indenture Supplements and granted
to Indenture Trustee hereunder and thereunder in the Indenture Estate other
than the Units shall likewise attach on the Commencement Date.
1.5 Effect of Assignment.
Anything herein contained to the contrary notwithstanding,
Nonaffiliated Partner Trustee or Partnership, as the case may be, shall remain
liable under each of the Basic Documents to which it is a party to perform all
of the obligations assumed by it thereunder, all in accordance therewith and
Indenture Trustee and the Holders shall have no obligation or liability under
any of the Basic Documents to which Nonaffiliated Partner Trustee or
Partnership, as the case may be, is a party by reason of or arising out of any
assignment hereunder, nor shall Indenture Trustee (except as to Indenture
Trustee, if Indenture Trustee becomes Nonaffiliated Partner Trustee under the
Partnership Agreement) or the Holders be required or obligated in any manner to
perform or fulfill any obligations of Nonaffiliated Partner Trustee or
Partnership, as the case may be, under or pursuant to any of the Basic
Documents to which Nonaffiliated Partner Trustee or Partnership, as the case
may be, is a party or, except as herein expressly provided, 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.
1.6 Appointment of Indenture Trustee.
Subject to the terms and conditions hereof, Nonaffiliated Partner
Trustee and Partnership do each hereby constitute Indenture Trustee the true
and lawful attorney of Nonaffiliated Partner Trustee or
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Partnership, as the case may be, irrevocably, with full power (in the name of
Nonaffiliated Partner Trustee or Partnership, as the case may be, or otherwise)
to ask, require, demand, receive, compound and give acquittance for any and all
moneys and claims for moneys due and to become due to Nonaffiliated Partner
Trustee or Partnership, as the case may be, (other than with respect to the
Excepted Property) under or arising out of the Partnership Agreement, the
Services Agreement or the O&M Agreement to endorse any checks or other
instruments or orders in connection therewith, to file any claims or take any
action or institute any proceedings which Indenture Trustee may deem to be
necessary or advisable in the premises. Nonaffiliated Partner Trustee and
Partnership have agreed, in the Partnership Agreement, that Partnership shall
make all Priority Distributions, Supplemental Priority Distributions and
Special Distributions distributable to Nonaffiliated Partner Trustee directly
to Indenture Trustee in accordance with this Indenture. Promptly on receipt
thereof, Nonaffiliated Partner Trustee or Partnership, as the case may be,
shall transfer to Indenture Trustee any and all moneys from time to time
received by it constituting part of the Indenture Estate, for distribution by
Indenture Trustee pursuant to this Indenture, except that Nonaffiliated Partner
Trustee shall accept for distribution pursuant to the Trust Agreement or
Partnership Agreement, as the case may be, any amounts distributed to it by
Indenture Trustee as expressly provided in this Indenture and any Excepted
Property.
1.7 Further Assurances.
Nonaffiliated Partner Trustee and Partnership each agrees that, at any
time and from time to time, upon the written request of Indenture Trustee,
Nonaffiliated Partner Trustee or Partnership, as the case may be, will, at
General Partner's expense as provided in the Participation Agreement, promptly
and duly execute, acknowledge and deliver or cause to be duly executed,
acknowledged and delivered to Indenture Trustee any and all such further acts,
deeds, conveyances, transfers and assurances as Indenture Trustee may
reasonably request for the perfection or protection of the Lien being herein
provided for in the Indenture Estate, whether now owned or hereafter acquired.
All property described or referred to in Section 1.1 hereafter acquired by
Nonaffiliated Partner Trustee or Partnership, as the case may be, shall,
without further act, assignment or conveyance by Nonaffiliated Partner Trustee,
Partnership or Indenture Trustee, become subject to the Lien of
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this Indenture as fully and completely as if originally described herein.
1.8 Representations and Warranties.
Nonaffiliated Partner Trustee does hereby warrant and represent that
it has the right, power and authority under the Trust Agreement and Partnership
Agreement, and Partnership does hereby warrant and represent that it has the
right, power and authority under the Partnership Agreement, to grant a Lien on,
and a security interest in, all property comprising the Indenture Estate and
that it has not granted, bargained, sold, assigned, transferred, conveyed or
pledged a security interest in or lien on, and hereby covenants that it will
not grant, bargain, sell, assign, transfer, convey or pledge a security
interest in, or lien on, so long as this Indenture remains in effect, any of
its right, title or interest in the Indenture Estate to anyone other than
Indenture Trustee. Nonaffiliated Partner Trustee will warrant and defend such
security interest against all Persons claiming by, through or under
Nonaffiliated Partner Trustee. Partnership will warrant and defend such
security interest against all Persons claiming by, through or under
Partnership.
SECTION 2. THE NOTES.
2.1 Notes; Title, Dating and Terms.
(a) The Notes shall be substantially in the form set
forth in Exhibit A or in the form or forms set forth in the Indenture
Supplement. The Notes shall be (i) dated the original date of issuance, (ii)
issued in such maturities, aggregate principal amounts, subject to repayment or
redemption in the aggregate and bear interest as the same are specified in
Exhibit B to the Indenture Supplement, and (iii) each subject to repayment or
redemption as specified herein and therein. Accrued interest on each Note
shall be payable on each Payment Date until the principal thereof is paid or
made available for payment in full.
(b) The Notes shall be issued in registered form
only. The Notes may not be prepaid or redeemed (or purchased in lieu of
prepayment or redemption), in whole or in part, except as provided in this
Indenture.
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(c) All computations of interest accruing on any
Note shall be made on the basis of a year of 360 days consisting of twelve
30-day months.
(d) The aggregate outstanding principal amount of
the Notes shall not exceed at any time $75,000,000. The Notes shall have the
same Payment Dates as to both principal and interest.
(e) The principal of, Premium (as defined in
Section 2.15), if any, and interest on the Notes shall be payable in
immediately available funds at the principal corporate trust office of
Indenture Trustee.
(f) All payments in respect of the Notes shall
be made in United States dollars.
2.2 Execution and Authentication.
(a) Notes shall be executed on behalf of
Nonaffiliated Partner Trustee by manual signature of the president, a senior
vice president, a vice president, an assistant vice president, its treasurer,
its secretary, an assistant secretary, an assistant treasurer or other
authorized officer of Nonaffiliated Partner Trustee.
(b) Immediately after the execution of the Notes,
Nonaffiliated Partner Trustee shall deliver such Notes to Indenture Trustee for
authentication and, subject to the provisions of Section 2.10, Indenture
Trustee shall authenticate the Notes by manual signature upon written orders of
Nonaffiliated Partner Trustee. Notes shall be authenticated on behalf of
Indenture Trustee by any authorized officer or signatory of Indenture Trustee.
(c) A Note shall not be valid or obligatory for
any purpose or entitled to any security or benefit hereunder until executed on
behalf of Nonaffiliated Partner Trustee by the manual signature of the officer
of Nonaffiliated Partner Trustee specified in Section 2.2(a) and until
authenticated on behalf of Indenture Trustee by the manual signature of the
authorized officer or signatory of Indenture Trustee specified in Section
2.2(b). Such signatures shall be conclusive evidence
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that such Note has been duly executed, authenticated and issued under this
Indenture and any Indenture Supplement.
(d) The authentication by Indenture Trustee of
any Note issued hereunder shall not be construed as a representation or
warranty by Indenture Trustee as to the validity or security of this Indenture
or such Note, and Indenture Trustee shall in no respect be liable or answerable
for the use made of such Note or the proceeds thereof.
2.3 Register. Indenture Trustee shall maintain an office
where the Notes may be presented for registration of transfer or for exchange.
At such office, the registrar (the "Registrar") shall keep a register (the
"Register") with respect to the Notes and their transfer and exchange. The
names and addresses of Holders, the transfers of the Notes and the names and
addresses of the transferees of all Notes shall be registered in the Register.
Indenture Trustee may appoint one or more co-registrars (the "Co-Registrars")
for the Notes and Indenture Trustee may terminate the appointment of any
Co-Registrar at any time upon written notice. The term "Registrar" includes
any Co- Registrar.
2.4 Transfer and Exchange. At the option of a Holder and
subject to Section 2.13 and Section 6.2 of the Participation Agreement, Notes
may be presented for exchange or surrendered for transfer for an equal
aggregate principal amount of other Notes, having the same date of original
issue, Payment Dates, Debt Rate and Maturity Date as the Notes so to be
exchanged or transferred at the office of the Registrar. Whenever any Note or
Notes are so presented or surrendered, Nonaffiliated Partner Trustee shall
execute and deliver to Indenture Trustee, and Indenture Trustee shall
authenticate and deliver to the Holder, the replacement Note or Notes which
such Holder or the transferee, as the case may be, is entitled to receive.
Each replacement Note shall bear a notation by Indenture Trustee of (a) the
aggregate amounts of principal of, and Premium, if any, on such replacement
Note that were paid to any Holder of the replaced Note at any time prior to the
delivery of the replacement Note, and (b) the date to which interest on such
replacement Note had been paid to any Holder of the replaced Note prior to the
delivery of the replacement Note.
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Any Note issued in connection with an exchange or transfer of existing
Notes shall be in a principal amount not less than the lesser of (a) the then
outstanding principal amount of the Note presented for exchange or transfer and
(b) $1,000,000, subject to Section 6.2 of the Participation Agreement.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of Nonaffiliated Partner Trustee,
evidencing the same obligations, and entitled to the same security and benefits
under this Indenture, as the Notes surrendered upon such registration of
transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by Indenture Trustee or Nonaffiliated Partner
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer or exchange in form satisfactory to, Indenture Trustee and
Nonaffiliated Partner Trustee, duly executed by the requesting Holder or such
Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
The Registrar shall not be required (a) to register the transfer of or
to exchange any Note during a period beginning at the opening of business 10
days before the day of the scheduled prepayment (or purchase in lieu of
prepayment where applicable) of Notes pursuant to Section 6.1 or 8.3(e) and
ending at the close of business on the scheduled date of prepayment (or
purchase) or (b) to register the transfer of or to exchange any Note called for
prepayment (or purchase in lieu of prepayment where applicable) pursuant to
such Section 6.1 or 8.3(e).
2.5 Indenture Trustee as Agent; Ownership of Notes.
(a) Indenture Trustee is hereby appointed the
agent of Nonaffiliated Partner Trustee for the payment, registration, transfer
and exchange of Notes. Subject to the provisions of Section 2.8, Notes may be
presented for payment at, and notices or demands with respect to the Notes or
this
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Indenture may be served or made at, the principal corporate trust office of
Indenture Trustee. Indenture Trustee shall promptly notify Nonaffiliated
Partner Trustee of any such presentment, notice or demand; provided, however,
that the failure of Indenture Trustee to so notify Nonaffiliated Partner
Trustee shall not affect the obligations of Nonaffiliated Partner Trustee
hereunder or under the Notes or, absent gross negligence or wilful misconduct,
give rise to any liability of Indenture Trustee to Nonaffiliated Partner
Trustee or to any other Person for any such failure.
(b) Ownership of the Notes shall be proved by the
Register kept by the Registrar. Prior to due presentment for registration of
transfer of any Note, Nonaffiliated Partner Trustee and Indenture Trustee shall
deem and treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of,
Premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and neither Nonaffiliated
Partner Trustee nor Indenture Trustee shall be affected by notice to the
contrary.
2.6 Mutilated, Destroyed, Lost or Stolen Notes. If any Note
is mutilated, destroyed, lost or stolen, Nonaffiliated Partner Trustee shall,
upon the written request of the relevant Holder, issue and execute, and
Indenture Trustee shall authenticate and deliver to the relevant Holder in
replacement thereof, a new Note of the same date of original issue and having
the same Payment Dates, Debt Rate and Maturity Date, payable to the same Holder
in the same principal amount and dated the same date as the Note so mutilated,
destroyed, lost or stolen. If the Note being replaced has become mutilated,
such Note shall be surrendered to Indenture Trustee. If the Note being
replaced has been destroyed, lost or stolen, the relevant Holder shall furnish
to Nonaffiliated Partner Trustee and Indenture Trustee (i) such security or
indemnity as may be required by them to save Nonaffiliated Partner Trustee and
Indenture Trustee harmless and (ii) evidence satisfactory to Nonaffiliated
Partner Trustee and Indenture Trustee of the destruction, loss or theft of such
Note and of the ownership thereof. If the original Holder or such other Person
that is an institutional investor is the owner of any such destroyed, lost or
stolen Note, then the affidavit of the President, any Vice President, Assistant
Vice President, Treasurer or Secretary of
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the original Holder or such other Person setting forth the fact of destruction,
loss or theft and of its ownership of the Note, at the time thereof, shall be
accepted as satisfactory evidence thereof, and no indemnity shall be required
as a condition to the execution and delivery of a new Note other than the
written agreement of such original Holder or other Person reasonably
satisfactory to Nonaffiliated Partner Trustee and Indenture Trustee to
indemnify (including for any costs and expenses, including reasonable
attorneys' fees) Nonaffiliated Partner Trustee and Indenture Trustee for any
claims or actions against them resulting from the issuance of such new Note or
the reappearance of the old Note. Each Note issued pursuant to this Section
2.6 shall bear a notation by Indenture Trustee of (a) the aggregate amounts of
principal of, and Premium, if any, on, such mutilated, destroyed, lost or
stolen Note that were paid to any Holder thereof at any time before the
delivery of such new Note and (b) the date to which interest on such mutilated,
destroyed, lost or stolen Note had been paid to any Holder thereof at or prior
to the time of such delivery.
2.7 Cancellation. All Notes surrendered for the purpose of
payment, redemption, transfer or exchange shall be delivered to Indenture
Trustee for cancellation or, if surrendered to Indenture Trustee, shall be
cancelled by it, and no Notes shall be issued in lieu thereof except as
expressly required or permitted by this Indenture. Indenture Trustee shall
deliver a certificate to Nonaffiliated Partner Trustee specifying any
cancellation of Notes that has been made. All such cancelled Notes shall be
held by Indenture Trustee until this Indenture is discharged, at which time
Indenture Trustee shall either deliver such cancelled Notes in a manner
necessary to effect the discharge and release of this Indenture or, if no such
delivery is necessary, such Notes shall be delivered to or disposed of as
directed by Nonaffiliated Partner Trustee.
2.8 Payment on Notes.
(a) The principal of, the Premium, if any,
interest on, and any other amounts payable with respect to, the Notes shall be
payable at the principal office of Indenture Trustee, in lawful money of the
United States of America without surrender or presentation of such Note and
without any notation being made thereon. The Holder (or the Person for whom
such Holder is a nominee) will, before selling, transferring or
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otherwise disposing of such Note, present such Note to Indenture Trustee for
transfer and notation as provided in Section 2.4. Any payment or prepayment of
amounts due on the Notes in accordance with the terms thereof and hereof which
is due on a date that is not a Business Day shall be payable, at the election
of Nonaffiliated Partner Trustee, on the next following Business Day without
penalty or reduction of, or increase in, the amount of interest that is payable
thereon.
(b) Notwithstanding Section 2.8(a), if any Note
is held by the original Note Purchaser, a permitted successor or assign that is
an institutional investor or a nominee thereof, Indenture Trustee shall, if
requested in writing by such Holder, pay interest on such Note and pay or
prepay the principal thereof and the Premium, if any, thereon and shall pay all
other amounts due with respect to such Note, by check, duly mailed, by
first-class mail, postage prepaid, or delivered to such Holder at its address
appearing on the Register. Upon written notice from any Holder that is an
original Note Purchaser, a permitted successor or assign that is an
institutional investor or a nominee thereof, which notice shall be given not
less than 30 days before the payment or prepayment of the Notes (and Section
2.16 shall constitute such written notice and wire transfer instructions until
otherwise designated in the case of the Note Purchasers), Indenture Trustee
will pay interest on such Note and pay or prepay the principal thereof and the
Premium, if any thereon, by wire transfer of immediately available funds to
such institution in the continental United States as such Holder may designate
in such notice, such wire transfers to be made on each date on which such
payment or prepayment is due if, and only so long as, such institution has
facilities for the receipt of a wire transfer. Indenture Trustee will transmit
any such wire transfer from its offices not later than 1:00 p.m. (New York
time) on each date on which payment or prepayment is due if, and only so long
as, available funds therefor have been received by Indenture Trustee by 11:00
a.m. (New York time) on such date or, if Indenture Trustee has not received
such available funds, Indenture Trustee will transmit such wire transfer
promptly upon receipt of such available funds.
(c) A Holder shall have no further interest in,
or other right with respect to, the Indenture Estate when and if the principal
amount of, Premium, if any, and interest on all
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Notes held by such Holder and all other sums payable to such Holder and secured
hereunder are paid in full.
2.9 Payment from Indenture Estate Only; Nonrecourse
Obligations; Excess Amounts.
(a) All amounts payable by Indenture Trustee and
Nonaffiliated Partner Trustee under the Notes, this Indenture and the relevant
Indenture Supplement shall be made only from the income and proceeds of the
Indenture Estate and each Holder by its acceptance of its Note agrees that (i)
it will look solely to such Indenture Estate for the payment of such amounts,
to the extent available for distribution to it as herein provided, and (ii)
none of Nonaffiliated Partner Trustee, any Beneficiary, Indenture Trustee or
any of their permitted successors or assigns, is or shall be personally liable
to any Holder for any amount payable under such Note or this Indenture, except,
in the case of Nonaffiliated Partner Trustee and Indenture Trustee and any of
their permitted successors or assigns, as expressly provided in this Indenture.
Notwithstanding any other provision of this Indenture, including Section 9,
First Security shall be liable hereunder in its individual capacity for its own
willful misconduct or gross negligence or, in the case of the holding or
transfer of funds, the failure to act with the same care as it uses in the
handling of its own funds.
(b) First Security Bank, National Association is
entering into this Indenture solely as Nonaffiliated Partner Trustee under the
Trust Agreement and not in its individual capacity, and in no case whatsoever
shall First Security, or any entity acting as successor trustee under the Trust
Agreement, be personally liable for, or for any loss in respect of, any
statements, representations, warranties, agreements or obligations hereunder or
thereunder; provided that First Security shall be liable hereunder (i) for the
performance of its agreements under Sections 3.5(c), 5.5 and 5.9 of the
Participation Agreement, and (ii) for its own willful misconduct or gross
negligence or, in the case of the holding and transfer of funds, the failure to
act with the same care as it uses in the handling of its own funds. If a
successor Nonaffiliated Partner Trustee is appointed in accordance with the
terms of Section 8 of the Trust Agreement and the Participation Agreement, such
successor Nonaffiliated Partner Trustee shall,
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without any further act, succeed to all of the rights, duties, immunities and
obligations hereunder, and its predecessor Nonaffiliated Partner Trustee and
First Security shall be released from all further duties and obligations
hereunder, without prejudice to any claims against such predecessor
Nonaffiliated Partner Trustee or First Security, for any default by such
predecessor Nonaffiliated Partner Trustee or First Security, respectively, in
the performance of its obligations hereunder prior to such appointment.
(c) If (i) all or any part of the Trust Estate
becomes the property of, or any Beneficiary becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Reform Act of 1978 or any successor
provision, (ii) pursuant to such reorganization provisions, First Security or
any Beneficiary is required, by reason of First Security or any Beneficiary
being held to have recourse liability to the Holders or Indenture Trustee,
directly or indirectly, to make payment on account of the principal of,
Premium, if any, or interest on the Notes and (iii) any Holder or Indenture
Trustee actually receives any Excess Amount (as defined below) which reflects
any payment by First Security or any Beneficiary on account of clause (ii)
above, then such Holder or Indenture Trustee, as the case may be, shall
promptly refund to First Security or such Beneficiary (whichever shall have
made such payment) such Excess Amount. For purposes of this Section 2.9,
"Excess Amount" means the amount by which any payment required to be made by
First Security or any Beneficiary under clause (ii) above exceeds the amount
which would have been received by the Holder(s) or Indenture Trustee if First
Security or such Beneficiary had not become subject to the recourse liability
referred to in clause (ii) above.
2.10 Execution and Delivery of Notes upon Original Issuance.
Nonaffiliated Partner Trustee shall issue, execute and deliver to Indenture
Trustee, and Indenture Trustee shall authenticate and deliver to Holders, the
Notes for original issuance only upon payment by Holders pursuant to the
Participation Agreement of an amount equal to the aggregate original principal
amount of the Notes.
2.11 Security for and Parity of Notes. It is the intention of
the parties hereto that all Notes issued and Outstanding hereunder rank on a
parity with each other Note and,
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that as to each other Note, they be secured equally and ratably by the
collateral described in this Indenture and any Indenture Supplement without
preference, priority or distinction of any one thereof over any other by reason
of difference in time of issuance, or otherwise, and that each such Note be
entitled to the same benefits and security in this Indenture and any Indenture
Supplement as each other such Note.
2.12 Application of Payments to Notes. In the case of each
Note, each payment of principal of, and Premium, if any, and interest on such
Note, shall be applied, first, to the payment of accrued but unpaid interest on
such Note (including any interest at the Late Rate on overdue principal,
Premium and (to the extent permitted by applicable law) interest) to the date
of such payment, second, the balance, if any, remaining thereafter to the
payment of the principal amount due and payable on such Note, and third, the
balance, if any, remaining thereafter, to the payment of Premium, if any, then
due and payable on such Note, provided that such Note shall not be subject to
prepayment or redemption by Nonaffiliated Partner Trustee except as provided in
Sections 6.1 and 8.3(e).
2.13 Intentional Omitted.
2.14 Late Rate. If Nonaffiliated Partner Trustee, any
Beneficiary or a Person designated by any of them elects or is required to
redeem, prepay, pay or purchase any Note (in whole or in part) under any
provision of this Indenture or any other Basic Document, and such redemption,
prepayment or purchase is not consummated on the date originally scheduled
therefor (unless, following General Partner's election to remove the Unit or
Units from the Lien of the Indenture pursuant to Section 5.16 of the
Participation Agreement or to exercise its ET Right pursuant to Section 9.1 of
the Partnership Agreement, Nonaffiliated Partner Trustee provides written
notice to Indenture Trustee and each Holder no later than eight Business Days
before such originally scheduled prepayment date to the effect that such
termination or purchase will not occur and accordingly it will not be prepaying
the Notes on such date), the Notes shall accrue interest at the Late Rate from
such date to the date of payment, payable on demand.
2.15 Definition of Premium. As used herein "Premium" means as
at any date a payment thereof is due (the "payment
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date") in connection with payment or prepayment in respect of any of the Notes
the excess of (i) the present value as at the payment of the Prepaid Cash
Flows, discounted semiannually at an annual rate which is equal to the Treasury
Rate plus 0.50% over (ii) the aggregate principal amount of such Notes then to
be paid or prepaid. To the extent that the Treasury Rate plus 0.50% at the
time of determination of the Premium is equal to or higher than the rate of
interest then borne by such Notes, the Premium shall be zero.
The following terms shall have the following meanings:
"Prepaid Cash Flows" -- for each date on which a payment
of principal or interest, or both, is scheduled to become due on the
Notes, an amount determined by subtracting (x) the amount of such
payment scheduled to become due on such date after giving effect to
any installment of principal scheduled to be paid on the date as to
which the determination is being made and the application of such
installment from (y) the amount of such payment (exclusive of interest
accrued to the date of such payment) which would have become due on
such date but for such prepayment.
"Statistical Release" -- the then most recently published
statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve System
and which establishes yields on actively traded U.S. government
securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination hereunder,
such other reasonably comparable index which shall be designated by a
Majority In Interest.
"Treasury Rate" -- the yield to maturity of actually
traded United States Treasury obligations with a constant maturity
(rounded to the nearest month) corresponding to the remaining Weighted
Average Life to Maturity of the Prepaid Cash Flows as set forth on
page 5 of the Telerate or, if not available, on page "USD" of the
Bloomberg Financial Markets Screen (or, if not available, any other
nationally recognized trading screen reporting on-line intraday
trading in United States government securities) at
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10:00 a.m. (New York City time) on the second Business Day before the
date fixed for prepayment, or in the event no such nationally
recognized trading screen reporting on-line intraday trading in United
States government securities is available, the arithmetic mean of the
two most recent yields under the heading "week ending" published in
the Statistical Release opposite the caption "Treasury Constant
Maturities" for the maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the Prepaid
Cash Flows. If no maturity exactly corresponding to the remaining
Weighted Average Life to Maturity of the Prepaid Cash Flows shall
appear therein, yields for the two most closely corresponding
published maturities shall be calculated pursuant to the foregoing
sentence and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis (rounding to the nearest
month). If such rates shall not have been so published, the Treasury
Rate in respect of such determination date shall be calculated
pursuant to the next preceding sentence on the basis of the arithmetic
mean of the arithmetic means of the secondary market ask rates, as of
approximately 3:30 p.m. (New York City time) on the last Business Days
of each of the two weeks preceding the payment date, for the actively
traded U.S. Treasury security or securities with a maturity or
maturities most closely corresponding to the remaining Weighted
Average Life to Maturity of the Prepaid Cash Flows as at such payment
or prepayment date, as reported by three primary United States
government securities dealers in New York City of national standing
selected in good faith by Operator.
"Weighted Average Life to Maturity" -- with respect to
the Prepaid Cash Flows, as at the payment or prepayment date for the
determination of the Treasury Rate, the number of years obtained by
dividing the then Remaining Dollar-years of such Prepaid Cash Flows by
the principal amount of Notes then being paid or prepaid. The term
"Remaining Dollar-years" of the Prepaid Cash Flows means the product
obtained by (x) multiplying (A) the principal portion of each Prepaid
Cash Flow (including the payment at final maturity), by (B) the number
of years (calculated to the nearest one-twelfth) between the time of
determination and the date of such Prepaid Cash Flow, and (y) totaling
all
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the products obtained in the computations described in clause (x).
2.16 Special Rights of Holders. Notwithstanding any provision
to the contrary in this Agreement, the Indenture or the Notes relating to the
manner and place of payment, all amounts payable to a Holder with respect to
any Notes held by such Holder or a nominee for such Holder shall be paid by
Indenture Trustee to such Holder (without any presentment thereof and without
any notation of the payment being made thereon) by check, duly mailed, by
first-class mail, postage prepaid, or delivered to such Holder at the address
for payments for such Holder or, if a wire transfer to a bank account is
designated in Schedule 1 to the Participation Agreement or in a written notice
from such Holder to Nonaffiliated Partner Trustee and Indenture Trustee, by
wire transfer of immediately available funds to the bank so designated for
credit to the account and marked for attention as so designated so long as such
bank has facilities for the receipt of a wire transfer, or in any other manner
or to any other address in the United States as may be designated by such
Holder in a written notice from such Holder to Nonaffiliated Partner Trustee
and Indenture Trustee. In the case of any wire transfer, Indenture Trustee
will transfer funds from the office of Indenture Trustee not later than 1:00
p.m. New York time on the date any payment or prepayment of principal, Premium,
if any, or interest on the Notes is due if funds therefor have been received by
Indenture Trustee in cash or in solvent credits acceptable to it by 11:00 a.m.,
New York time, or if not so received by such time, Indenture Trustee shall
transfer such funds promptly upon its receipt of such cash or solvent credits.
Each Holder agrees that, if such Holder shall sell or transfer any Notes, such
Holder will notify Indenture Trustee of the name and address of the transferee
and such Holder will, before the delivery of such Notes, make a notation on
such Notes of the date to which interest has been paid thereon and of the
amount of any payments or prepayments made on account of the principal thereof.
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE
INDENTURE ESTATE.
3.1 Payment Upon Delivery of Units. On the Commencement
Date, Indenture Trustee, on behalf of Nonaffiliated Partner Trustee, shall
apply the proceeds of the sale of the
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Notes to the financing of a portion of Nonaffiliated Partner Trustee's capital
contribution to Partnership on the Commencement Date in accordance with the
provisions of the Participation Agreement.
3.2 Payments Upon Event of Loss, Obsolescence or ET Right;
Certain Prepayments.
(a) Except as otherwise provided in Section 3.5,
if the Notes are prepaid in whole or in part in accordance with Section 6.1(a),
6.1(b), 6.1(c), 8.3(e)(iii) or 8.3(e)(iv), Indenture Trustee will apply on the
Prepayment Date any amounts then held by it in the Indenture Estate with
respect to such Notes and received by it from or on behalf of Nonaffiliated
Partner Trustee, Guarantor or any other Person (other than Excepted Property),
in the following order of priority:
first, so much thereof as is required to pay the
Prepayment Price on the Outstanding Notes which are being prepaid in
whole or in part pursuant to Section 6.1(a), 6.1(b), 6.1(c),
8.3(e)(iii) or 8.3(e)(iv), as the case may be, on the Prepayment Date
shall be applied to the prepayment (or purchase, in lieu of
prepayment, of the Notes, if applicable) of such Notes in accordance
with the appropriate aforesaid Section on the Prepayment Date for
application in accordance with the ordering set forth in Section 2.12;
second, so much thereof as is required to pay all other
accrued and unpaid Secured Obligations;
third, so much thereof as was received by Indenture
Trustee with respect to the amounts due to it pursuant to Section 9.5
shall be applied to pay Indenture Trustee such amounts; and
fourth, the balance, if any, thereof remaining shall be
distributed to Nonaffiliated Partner Trustee to be held or distributed
in accordance with the Trust Agreement.
3.3 Application of Priority Distributions. Except as
otherwise provided in Section 3.5, each Priority Distribution received by
Indenture Trustee from or on behalf of Nonaffiliated Partner Trustee, Guarantor
or any other Person together with any
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other amount received by Indenture Trustee with respect to interest on Priority
Distributions not made on the relevant Distribution Date shall be distributed
by Indenture Trustee in the following order of priority:
first, so much of such aggregate amount as is required to
pay in full the principal and interest then due on all Outstanding
Notes shall be distributed to the Holders entitled thereto for
application in accordance with the ordering set forth in Section 2.12;
and
second, the balance, if any, of such aggregate amount
remaining thereafter shall be distributed to Nonaffiliated Partner
Trustee for distribution in accordance with the terms of the Trust
Agreement.
3.4 Application of Certain Amounts Upon Event of Loss.
Except as otherwise provided in Section 3.5, any amounts received directly by
Indenture Trustee from Nonaffiliated Partner Trustee or through Partnership,
Service Taker or Operator from any Government Authority or other Person in
connection with an Event of Loss, to the extent such amounts are not at the
time to be paid to or retained by Partnership pursuant to Section 11 or 12 of
the O&M Agreement or Section 5.14 or 5.15 of the Participation Agreement (other
than Excepted Property), shall, except as otherwise provided in the next
sentence, be applied in accordance with Section 3.2 in reduction of
Partnership's obligations to distribute a Supplemental Priority Distribution in
an amount equal to Disposition Value and other amounts referred to or described
in Section 5.12 of the Participation Agreement and Section 6.1(c) of the
Partnership Agreement and the remainder, if any, shall, except as provided in
the next sentence, be distributed to Nonaffiliated Partner Trustee to be
distributed in accordance with the terms of the Trust Agreement. Any portion
of any such amount referred to in the preceding sentence that is not to be so
paid or retained by Partnership pursuant to the O&M Agreement and the
Participation Agreement, solely because a BJ Default or BJ Event of Default
exists, shall be held by Indenture Trustee, and at such time as no BJ Default
or BJ Event of Default exists, such portion shall be paid to Partnership,
unless Indenture Trustee (as assignee from Nonaffiliated Partner Trustee of
certain rights with respect to the O&M Agreement) theretofore declares the O&M
Agreement to be in default or terminates the
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O&M Agreement pursuant to Section 15 thereof, in which event such portion shall
be distributed forthwith upon such declaration or termination in accordance
with Section 3.5.
3.5 Amounts During Indenture Event of Default. All
distributions and payments (except Excepted Property) received and amounts held
or realized by Indenture Trustee with respect to Nonaffiliated Partner
Trustee's Partnership Interest or Partnership's interest in any Unit subject to
the Lien of this Indenture while an Indenture Event of Default exists
(including any amounts thereafter realized by Indenture Trustee from the
exercise of any remedies pursuant to Section 8), as well as all distributions,
payments or amounts then held or thereafter received by Indenture Trustee as
part of the Indenture Estate while such Indenture Event of Default exists,
shall be distributed by Indenture Trustee in the following order of priority:
first, so much of such distributions, payments or amounts
as is required to pay Indenture Trustee all amounts then due it
pursuant to Section 9.5 shall be applied to pay Indenture Trustee such
amounts;
second, so much of such distributions, payments or
amounts as is required to pay the expenses (including, without
limitation, all fees, taxes, assessments, insurance and other proper
charges) (i) of any sale, taking or other proceeding, (ii) of or in
connection with the use, operation, storage, leasing, controlling or
managing the Indenture Estate and of all maintenance, insurance,
repairs, replacements, alterations, additions or improvements of any
property included in the Indenture Estate, (iii) of or in connection
with realizing on any of the collateral in the Indenture Estate,
including, in the case of each of clauses (i), (ii) and (iii) all
reasonable attorneys' fees and expenses, court costs and any other
reasonable expenditures incurred or advances made by Indenture Trustee
or any Holder in the protection, exercise or enforcement of any right,
power or remedy or taking of any other action permitted by this
Indenture or by law upon such Indenture Event of Default, all of the
foregoing to the extent incurred in accordance with Section 8.3(c);
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third, so much of such distributions, payments or amounts
remaining as is required to pay the principal then due and payable of
all of the Notes then Outstanding and accrued interest then due and
payable on all such Notes then Outstanding payable to the applicable
Holders, whether by declaration of acceleration pursuant to Section
8.2 or otherwise, shall be applied to the payment of such principal
and interest due and payable for application in accordance with the
ordering set forth in Section 2.12; and in case such distributions,
payments or amounts are insufficient to pay in full the whole amount
aforesaid, then to the payment of such principal and interest, in
accordance with the ordering (except as to Premium) set forth in
Section 2.12, without any preference, priority or distinction of one
such Note over another, ratably according to the aggregate amount so
payable for principal and interest, at the date fixed by Indenture
Trustee for the distribution of such distributions, payments or
amounts;
fourth, the balance, if any, of such distributions,
payments or amounts remaining thereafter shall be distributed to
Nonaffiliated Partner Trustee for distribution under the Trust
Agreement;
except that, anything in this Section 3 to the contrary notwithstanding, after
Indenture Trustee has knowledge of an Indenture Event of Default (including,
without limitation, a BJ Event of Default), all amounts (other than Excepted
Property) that, but for the provisions of this Section 3.5, would otherwise be
distributable by Indenture Trustee to Nonaffiliated Partner Trustee, shall be
held by Indenture Trustee as part of the Indenture Estate, and if (i) such
amounts shall have been retained by Indenture Trustee for more than 180 days,
(ii) the unpaid principal amount of all Notes have not been declared to be
immediately due and payable and (iii) in the case of an Indenture Event of
Default arising solely out of a BJ Event of Default, Indenture Trustee does not
commence the exercise of any one or more of the available remedies if any,
referred to in Section 6.1(d), 11.1, 11.3 or 11.4 of the Partnership Agreement,
Section 5.22 of the Participation Agreement, Section 7.1 of the Services
Agreement or Section 15.1 of the O&M Agreement (the choice of which remedy or
remedies to exercise to be made by Indenture Trustee in its sole good faith
discretion) to the
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extent such remedy or remedies are then available and may be exercised by
Indenture Trustee (the determination of which remedy or remedies, if any, are
then available and may be exercised by Indenture Trustee to be made by
Indenture Trustee in its sole good faith discretion), such amounts shall be
distributed to Nonaffiliated Partner Trustee in accordance with the other
applicable provisions of this Section 3.
3.6 Amounts for Which Application is Provided in Other Basic
Documents. Except as otherwise provided in this Indenture, any distribution or
payment received by Indenture Trustee for which provision as to the application
thereof is made in another Basic Document shall be distributed to the Person
for whose benefit such distributions or payments were made in accordance with
the terms of such Basic Document.
3.7 Amounts for Which No Application is Otherwise Provided.
Except as otherwise provided in Section 3.5 or 3.6, any distribution or payment
received by Indenture Trustee for which no provision as to the application
thereof is made elsewhere in this Indenture or in another Basic Document shall
be distributed in accordance with Section 3.5, except that any distribution or
payment received and amounts realized by Indenture Trustee with respect to
Nonaffiliated Partner Trustee's interest in Partnership or the Units to the
extent received or realized at any time after the conditions set forth in
Section 10 for the satisfaction and discharge of this Indenture are satisfied,
as well as any other amounts remaining as part of the Indenture Estate after
such satisfaction, shall be distributed by Indenture Trustee to Nonaffiliated
Partner Trustee for distribution under the Trust Agreement.
3.8 Excepted Property. Indenture Trustee shall deliver any
Excepted Property received by it to whomsoever is lawfully entitled to the
same.
3.9 Notice of Nonpayment. By 2:00 p.m., New York time, on
the Distribution Date of any Priority Distribution, Indenture Trustee shall
notify the Holders, Nonaffiliated Partner Trustee, Beneficiaries and General
Partner, by telephone, which notice shall be confirmed in writing by facsimile
transmission, if Indenture Trustee has not received such Priority Distribution;
but the failure of Indenture Trustee so to notify such parties shall not affect
the obligations of Nonaffiliated Partner
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Trustee hereunder or under the Notes or of Partnership under the Partnership
Agreement or the Participation Agreement or give rise to any liability of
Indenture Trustee to such parties or any other Person for any such failure.
SECTION 4. COVENANTS OF NONAFFILIATED PARTNER TRUSTEE AND
PARTNERSHIP.
4.1 Nonaffiliated Partner Trustee hereby covenants and agrees
that:
(a) it will, subject to Section 2.9, pay or cause
to be paid when due all amounts of principal of, Premium, if any, and interest
on the Notes and all other amounts due hereunder (in any case, without
duplication of amounts theretofore paid to Indenture Trustee in respect
thereof);
(b) if any responsible officer of Nonaffiliated
Partner Trustee has actual knowledge of an Indenture Event of Default or
Indenture Default or an Event of Loss, Nonaffiliated Partner Trustee will give
prompt written notice thereof to Indenture Trustee and Operator;
(c) it will not, in its capacity as Nonaffiliated
Partner Trustee, engage in any business or other activity (including the
incurrence of indebtedness for money borrowed), except as contemplated hereby
or by the other Basic Documents; and
(d) it will not, except with respect to Excepted
Property or except as expressly permitted hereunder, declare a default, or
exercise any remedies under, or terminate, modify or accept a surrender of, or
offer or agree to any termination, modification or surrender of, the Services
Agreement, the O&M Agreement or the Partnership Agreement.
4.2 Partnership hereby covenants and agrees that if any
responsible officer of General Partner or Affiliated Partner has actual
knowledge of an Indenture Event of Default or Indenture Default or an Event of
Loss, Partnership will give prompt written notice thereof to Indenture Trustee
and Operator.
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SECTION 5. DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN THE INDENTURE ESTATE DURING CONTINUATION OF
PARTNERSHIP.
5.1 Disposition, Substitution and Release of Property
Included in the Indenture Estate During Continuation of Partnership. So long
as Partnership is in existence and the Partnership Agreement, the O&M Agreement
and the Services Agreement are in effect:
(a) Modifications. Operator has the obligation,
or the right, to make certain Modifications to the Units. Any Optional
Modification that is a Non-severable Modification and any Required Modification
shall become subject to the Lien of this Indenture and the relevant Indenture
Supplement. Any Optional Modifications that are Severable Modifications shall
not become subject to the Lien of this Indenture. Indenture Trustee shall
promptly execute an appropriate written instrument or instruments to confirm
the absence of a security interest in any Optional Modification that is a
Severable Modification; provided that Indenture Trustee receives a written
request from Partnership therefor addressed to Indenture Trustee and
Nonaffiliated Partner Trustee certifying that the Modifications are Severable
Modifications which are not Required Modifications.
(b) Substitution of Units. Upon the occurrence
of (y) an Event of Loss, or (z) an optional substitution of a Unit pursuant to
Section 5.11 of the Participation Agreement, Section 7.2(d) of the Partnership
Agreement and Section 8.4 of the O&M Agreement, Partnership and Operator may
substitute a replacement for such Unit, upon satisfaction of the conditions
provided therefor in Section 5.11 or 5.12, as the case may be, of the
Participation Agreement. Any Unit substituted as permitted under Section 5.11
or 5.12 of the Participation Agreement shall become subject to the Lien of this
Indenture. Nonaffiliated Partner Trustee and Indenture Trustee shall execute,
concurrently with any such substitution pursuant to said Section 5.11 or 5.12,
an Indenture Supplement substantially in the form of Exhibit B with respect to
any such Unit substituted in accordance with Section 5.11 or 5.12 of the
Participation Agreement. Upon satisfaction of the conditions contained herein
and in the Participation Agreement, Indenture Trustee shall execute and deliver
to Operator, Partnership and
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Nonaffiliated Partner Trustee an instrument releasing its Lien in and to such
replaced Unit and shall execute for recording in public offices, at the expense
of Partnership, such instruments in writing as Nonaffiliated Partner Trustee or
Operator shall reasonably request and as shall be reasonably acceptable to
Indenture Trustee in order to make clear upon public records that such Lien
with respect to such replaced Unit has been released under the laws of the
applicable jurisdiction.
5.2 Possession of Units. So long as no BJ Event of Default
exists, Partnership shall be permitted to remain in full possession, enjoyment
and control of the Units and to manage, operate and use the same and each part
thereof with the rights and franchises appertaining thereto, including, without
limitation, the right to grant to Operator and Service Taker and their
respective permitted successors and assigns possession, enjoyment and control
of the Units; provided that the possession, enjoyment, control and use thereof
shall at all times be subject, insofar as Partnership is concerned, to the
observance and performance of the terms of this Indenture. Without limiting
the generality of the foregoing, it is expressly understood and agreed that
providing Services to Service Taker and the use and possession of the Units by
Operator under and subject to the Services Agreement and the O&M Agreement,
respectively, shall not constitute a violation of this Section 5.2.
5.3 Release of Units. So long as no Indenture Default or
Indenture Event of Default exists, Indenture Trustee shall execute a release in
respect of any Unit in the following instances:
(a) in the case of a Reduction Election with
respect to a Unit or Units pursuant to Section 5.16 of the Participation
Agreement and Section 7.2(e) of the Partnership Agreement, upon receipt by
Indenture Trustee of (i) written notice of such Reduction Election pursuant to
Section 5.16 of the Participation Agreement and (ii) all amounts payable to it
pursuant to Section 6.1(b) in connection with such Reduction Election;
(b) in the case of the exercise by General
Partner of its ET Right pursuant to Section 9.1 of the Partnership Agreement,
upon receipt by Indenture Trustee of (i)
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written notice of such exercise pursuant to Section 9.1 of the Partnership
Agreement and (ii) all amounts payable to it pursuant to Section 6.1(c) in
connection with such exercise of the ET Right;
(c) when designated by Partnership for a cash
settlement after the occurrence of an Event of Loss pursuant to Section 5.12 of
the Participation Agreement, upon receipt by Indenture Trustee of (i) written
notice thereof pursuant to Section 5.12 of the Participation Agreement and (ii)
all amounts payable to it pursuant to Section 6.1(a) in connection with such
Event of Loss; and
(d) in the case of a Unit to be replaced in
connection with an optional substitution (the "Replaced Unit") of a Unit
pursuant to Section 5.11 of the Participation Agreement and Section 7.2(d) of
the Partnership Agreement or Section 5.12 of the Participation Agreement and
Section 7.2(c) of the Partnership Agreement, as the case may be, upon the
compliance with the terms of such Section 5.11 or 5.12, as the case may be, of
the Participation Agreement and the attachment of the Lien of the Indenture to
the Unit being delivered to Partnership in substitution for the Replaced Unit.
Subject to the succeeding sentence, each such release shall be
executed only upon receipt by Indenture Trustee of the applicable amount
described in this Section 5.3 and the written request of General Partner
accompanied by an Officer's Certificate of General Partner setting forth the
basis for such request and stating that General Partner has complied with the
applicable provisions of the Participation Agreement, together with such
additional evidence of such compliance as Indenture Trustee may reasonably
request in writing. Upon written request of Nonaffiliated Partner Trustee, in
the case of Units returned to Nonaffiliated Partner Trustee, pursuant to
Section 5.17(b) of the Participation Agreement in connection with a Reduction
Election pursuant to Section 5.16 thereof, a release shall be executed upon
receipt by Indenture Trustee of the amount described in Section 5.3(a).
5.4 Release of Units - Consent of Holders. Partnership may
sell or otherwise dispose of any Unit then subject to the security interest of
this Indenture and Indenture Trustee shall release the same from the security
interest hereof, to the
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extent and on the terms, and upon compliance with, the conditions provided for
in any written consent given thereto at any time or from time to time by all
Holders. The provisions of this Section 5.4 are in addition to the provisions
of Section 5.3.
5.5 Protection of Purchaser. No purchaser in good faith of
property purporting to be released hereunder shall be bound to ascertain the
authority of Indenture Trustee to execute the release, or to inquire as to any
facts required by the provisions hereof for the exercise of such authority; nor
shall any purchaser in good faith of any Unit be under an obligation to
ascertain or inquire into the conditions upon which any such sale is hereby
authorized.
SECTION 6. PREPAYMENT OF NOTES.
6.1 Prepayment of Notes upon Event of Loss, Obsolescence or
ET Date.
(a) If an Event of Loss occurs with respect to a
Unit and such Unit is not replaced pursuant to Section 5.12 of the
Participation Agreement, the principal on each Outstanding Note shall be
prepaid in part, together with interest on the principal so prepaid, at a
Prepayment Price equal to the sum of (1) as to principal thereof, an amount
equal to the product obtained by multiplying the aggregate Current Principal
Amount of each Outstanding Note as of the Prepayment Date (after deducting
therefrom the related scheduled principal payment, if any, due and paid to
Indenture Trustee on the Prepayment Date) by a fraction, the numerator of which
shall be the Equipment Value of such Unit and the denominator of which shall be
the Equipment Value of the Units then subject to the Lien of this Indenture
immediately prior to such Prepayment Date, plus (2) as to interest, the
aggregate amount of interest accrued and unpaid in respect of the principal
amount to be prepaid pursuant to clause (1) above to but not including the
Prepayment Date after giving effect to the application of any Priority
Distribution or Supplemental Priority Distribution distributable in accordance
with Section 6.1(b) or 6.1(c) of the Partnership Agreement received by
Indenture Trustee on or prior to the date of such prepayment. Each prepayment
made pursuant to subclause (1) of this clause shall be (A) applied to the
prepayment of such Notes being prepaid so that each of the remaining
installments of
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principal of each such Note shall be reduced in the proportion that the
principal amount of the prepayment bears to the unpaid principal amount of such
Notes immediately before the prepayment and (B) made ratably over the Notes,
without preference, priority or distinction of any one such Note over any
other. The Prepayment Date for Notes to be prepaid, in whole or in part,
pursuant to this Section 6.1(a) shall be the Settlement Date related to the
Event of Loss giving rise to the prepayment.
(b) At any time on a Payment Date occurring after
the fifth anniversary of the Commencement Date, if General Partner determines
that any Units then subject to the Lien of this Indenture are obsolete or
surplus to the needs of Partnership in accordance with Section 5.16 of the
Participation Agreement and either (y) Nonaffiliated Partner Trustee has given
notice to Indenture Trustee pursuant to Section 5.18 of the Participation
Agreement of its election to retain such Units and to prepay the Notes on the
Reduction Date as provided below, or (z) Nonaffiliated Partner Trustee has not
given such notice and Partnership has not withdrawn its notice as provided in
Section 5.16 of the Participation Agreement, principal on each Outstanding Note
shall be prepaid in part, together with interest on the principal so prepaid at
a Prepayment Price equal to the sum of (1) as to principal thereof, an amount
equal to the product obtained by multiplying the Current Principal Amount of
each Outstanding Note as of the Prepayment Date (after deducting therefrom the
related scheduled principal payment, if any, due and paid to Indenture Trustee
on the Prepayment Date) by a fraction, the numerator of which shall be the
Equipment Value of such Unit or Units and the denominator of which shall be the
Equipment Value of the Units then subject to the Lien of this Indenture
immediately before such Prepayment Date, plus (2) as to interest, the aggregate
amount of interest accrued and unpaid in respect of the principal amount to be
prepaid pursuant to clause (1) above to, but not including, the Prepayment Date
after giving effect to the application of any Priority Distribution paid to
Indenture Trustee on or before the date of such prepayment, plus (3) the
Premium. Each prepayment made pursuant to subclause (1) of this clause (b)
shall be (A) applied to the prepayment of such Notes being prepaid so that each
of the remaining installments of principal of each such Note shall be reduced in
the proportion that the principal amount of the prepayment bears to the unpaid
principal amount of such Notes in the aggregate immediately prior to the
prepayment
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and (B) made ratably over the Notes, without preference, priority or
distinction of any one such Note over any other. The Prepayment Date for Notes
to be prepaid pursuant to this Section 6.1(b) shall be the Payment Date that
occurs on the Reduction Date.
(c) Upon the election of General Partner to
exercise its fixed price purchase option pursuant to Section 9.1 of the
Partnership Agreement, on the ET Date, the Outstanding Notes shall be prepaid
at a Prepayment Price equal to the sum of (1) Current Principal Amount thereof,
plus (2) accrued but unpaid interest thereon to, but not including, the
applicable Prepayment Date, plus (3) the Premium plus (4) any other accrued and
unpaid Secured Obligations, if any. The Prepayment Date for Notes to be
prepaid pursuant to this Section 6.1(c) shall be the Payment Date that occurs
on the ET Date.
(d) Upon the request of Nonaffiliated Partner
Trustee or Beneficiaries and delivery of notice, all pursuant to Section
8.3(e)(iii), each Outstanding Note shall be purchased on the date specified in
the notice at a Prepayment Price equal to the sum of (1) the Current Principal
Amount thereof, plus (2) accrued but unpaid interest thereon to, but not
including, the applicable Prepayment Date.
(e) Upon the request of Nonaffiliated Partner
Trustee or Beneficiaries and delivery of notice, all pursuant to Section
8.3(e)(iv), each Outstanding Note shall be purchased at a Prepayment Price
equal to the sum of (1) the Current Principal Amount thereof, plus (2) accrued
but unpaid interest thereon to, but not including, the applicable Prepayment
Date, plus (3) the Premium.
6.2 Notice of Prepayment to Holders. Notice of prepayment,
redemption or purchase with respect to any Notes contemplated by Section 6.1
shall be given by Indenture Trustee, in the manner provided in Section 13.1,
not less than five nor more than ten Business Days before the applicable
Prepayment Date, to each Holder of such Note to be prepaid or purchased, at
such Holder's address appearing in the Register.
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All notices of prepayment shall state:
(1) the Prepayment Date;
(2) whether the Notes are to be prepaid in whole
or in part;
(3) the Section and clause of this Indenture
pursuant to which the prepayment is being made;
(4) that, with respect to prepayments in whole of
the Notes, on the Prepayment Date, the Prepayment Price will become
due and payable with respect to the Notes, and that, if any of the
Notes are then Outstanding, interest on such Notes shall cease to
accrue on and after such Prepayment Date;
(5) that, with respect to prepayments in part of
Notes on the Prepayment Date, the Prepayment Price will become due and
payable on such Notes, and that interest with respect to that portion
of the Prepayment Price attributable to the principal amount of such
Notes shall cease to accrue on and after the applicable Prepayment
Date;
(6) the Prepayment Price, including in reasonable
detail the calculation of the estimated Premium, if any, to be paid in
connection therewith; and
(7) the place or places where such Notes are to
be surrendered or presented for payment of the Prepayment Price, which
shall be the office of Indenture Trustee.
6.3 Deposit of Prepayment Price. On or before the Prepayment
Date, Nonaffiliated Partner Trustee (or any Person on behalf of Nonaffiliated
Partner Trustee) shall, to the extent an amount equal to the Prepayment Price
with respect to the Notes to be prepaid, redeemed or purchased on the
Prepayment Date shall not then be held in the Indenture Estate, deposit or
cause to be deposited with Indenture Trustee by 11:00 a.m. (New York time) on
the Prepayment Date in immediately available funds the Prepayment Price with
respect to the Notes to be prepaid or purchased.
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6.4 Notes Payable on Prepayment Date. If notice of
prepayment, redemption or purchase is given in accordance with Section 6.2, the
Notes or portions thereof shall, on the Prepayment Date, become due and payable
at the principal corporate trust office of Indenture Trustee, and from and
after the related Prepayment Date (unless there is a default in the payment of
the Prepayment Price), all Notes then Outstanding shall cease to bear interest
as to any portion the principal of which is prepaid.
If any Note called in whole or in part for prepayment or purchase is
not so paid, the principal amount thereof shall, until paid, continue to bear
interest from the applicable Prepayment Date at the Late Rate as of such
Prepayment Date through the date upon which such Note or such portion is paid.
SECTION 7. NONAFFILIATED PARTNER TRUSTEE AND INDENTURE TRUSTEE.
7.1 Prepayment of Moneys for Note Payments Held by Indenture
Trustee. Any money held by Indenture Trustee in trust for any payment of the
principal of, Premium, if any, or interest on any Note (but not any money
constituting Excepted Property and not any moneys representing the balance, if
any, after giving effect to applications pursuant to clauses "first" through
"third", of Section 3.5, which balance, if any, is to be distributed upon the
terms and conditions provided in clause "fourth" of Section 3.5) and remaining
unclaimed for more than two years and eleven months (or such lesser time as
Indenture Trustee is satisfied, after 60 days written notice from Nonaffiliated
Partner Trustee or General Partner on behalf of Partnership, is one month
before the escheat period provided under applicable law) after the due date for
such payment, shall be paid to Nonaffiliated Partner Trustee; and the Holders
entitled to payment thereon shall thereafter, as unsecured general creditors,
look only to Nonaffiliated Partner Trustee for payment thereof, and all
liability of Indenture Trustee with respect to such trust money shall thereupon
cease, except that Indenture Trustee, before being required to make any such
repayment, shall, at the written direction of Nonaffiliated Partner Trustee
with a copy to General Partner on behalf of Partnership, cause to be mailed to
each such Holder notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
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mailing, any unclaimed balance of such money then remaining will be repaid to
Nonaffiliated Partner Trustee as provided herein.
7.2 No Representations or Warranties as to Units or
Documents. NEITHER NONAFFILIATED PARTNER TRUSTEE IN ITS INDIVIDUAL CAPACITY
OR OTHERWISE NOR INDENTURE TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION,
DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE UNITS OR AS TO
THEIR TITLE THERETO, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE UNITS WHATSOEVER OR ANY REPRESENTATION OR WARRANTY AS TO THE VALIDITY OR
ENFORCEABILITY OF ANY BASIC DOCUMENT, except that (i) First Security makes the
representations and warranties contained in Sections 3.1(h) and 3.1(k) of the
Participation Agreement and Nonaffiliated Partner Trustee hereby represents and
warrants that on the Commencement Date Nonaffiliated Partner Trustee received
whatever right, title and interest was conveyed to it by Partnership and First
Security represents, warrants and covenants that such right, title and interest
and the Units are on the Commencement Date, and thereafter shall be, free of
Nonaffiliated Partner Trustee Liens attributable to First Security and (ii) ITC
represents and warrants that it has not breached its covenant contained in
Section 5.9 of the Participation Agreement.
SECTION 8. DEFAULTS AND REMEDIES.
8.1 Indenture Events of Default. The following events shall
constitute "Indenture Events of Default" under this Indenture (whether any such
event is voluntary or involuntary or comes about or is 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 administrative or government
body):
(a) default in the payment of any installment of
principal, interest or Premium, if any, in respect of any Note when and as the
same shall become due and payable (whether on the due date thereof, a date
fixed for prepayment, by acceleration or otherwise), and which is not
thereafter paid within five Business Days after the same becomes due and
payable;
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(b) the existence of a BJ Event of Default (other
than a BJ Event of Default arising by reason of nonpayment of, or failure to
perform with respect to, Excepted Property);
(c) default in the due observance or performance
of any other covenant or agreement to be observed or performed by Nonaffiliated
Partner Trustee (in its individual capacity or as Nonaffiliated Partner
Trustee) under the Notes or hereunder or to be observed or performed by
Nonaffiliated Partner Trustee (in its individual capacity or as Nonaffiliated
Partner Trustee) or any Beneficiary for the benefit of any Holder under the
Participation Agreement or the Trust Agreement, and any such default continues
unremedied for 30 days after Nonaffiliated Partner Trustee and Beneficiaries
receive notice thereof from Indenture Trustee specifying the default and
demanding that the same be remedied; except that, if such failure is capable of
being remedied and such remedy does not involve the payment of money alone, no
such failure shall constitute an Indenture Event of Default hereunder while
Nonaffiliated Partner Trustee (in its individual capacity or as Nonaffiliated
Partner Trustee)or any Beneficiary is diligently proceeding to remedy such
failure, but in no event shall such failure continue unremedied for a period of
the lesser of 90 days from the date of such notice and the number of days
remaining in the Transaction Term;
(d) any representation or warranty made by
Nonaffiliated Partner Trustee (in its individual capacity or as Nonaffiliated
Partner Trustee) herein, or by Nonaffiliated Partner Trustee or any Beneficiary
in the Participation Agreement or in any certificate or other statement
furnished by Nonaffiliated Partner Trustee (in its individual capacity or as
Nonaffiliated Partner Trustee) or any Beneficiary to Indenture Trustee or any
Holder in connection with the transactions contemplated by the Participation
Agreement is incorrect in any material respect as of the date of the issuance
or making thereof;
(e) Nonaffiliated Partner Trustee, the Trust
Estate or any Beneficiary becomes insolvent or bankrupt or generally fails to
pay, or admits in writing its inability to pay, its debts as they come due, or
makes a general assignment for the benefit of creditors, or applies for,
consents to or acquiesces in the appointment of a trustee, custodian or
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receiver or other similar official for Nonaffiliated Partner Trustee, Trust
Estate or Beneficiary;
(f) a trustee, custodian or receiver or other
similar official is appointed for Nonaffiliated Partner Trustee, the Trust
Estate or any Beneficiary and is not discharged within 60 days after such
appointment;
(g) any bankruptcy, reorganization, arrangement,
insolvency or liquidation case or proceeding, or other case or proceeding for
relief under any bankruptcy law or similar law for the relief of debtors, is
instituted by or against Nonaffiliated Partner Trustee, the Trust Estate or any
Beneficiary and, if instituted against Nonaffiliated Partner Trustee, the Trust
Estate or any Beneficiary is allowed against Nonaffiliated Partner Trustee or
any Beneficiary or is consented to or is not dismissed within 60 days after
such institution.
8.2 Acceleration; Rescission and Annulment; Limitations. If
an Indenture Event of Default exists, Indenture Trustee by written notice to
Nonaffiliated Partner Trustee, Partnership and each Beneficiary, may, and upon
written request of a Majority In Interest of Holders shall, declare the
principal of all the Notes to be due and payable; except that the principal of
all Notes, together with accrued interest thereon from the date in respect of
which interest was last paid hereunder to the date payment of such principal
has been made, and all other accrued and unpaid Secured Obligations will
automatically become due and payable without any action of Indenture Trustee or
the Holders in the case of an Indenture Event of Default under Section 8.1(e),
(f) or (g), unless such Indenture Event of Default with respect to a
Beneficiary is remedied or the defaulting Beneficiary transfers its Beneficial
Interest pursuant to Section 8.3(e)(i)(4). Upon such declaration, the
principal of all Notes, together with accrued interest thereon from the date in
respect of which interest was last paid hereunder to the date payment of such
principal has been made and all other accrued and unpaid Secured Obligations
shall be immediately due and payable as a result of such declaration or
automatic acceleration. At any time after such declaration or automatic
acceleration, as the case may be, and before the sale or disposition of the
Indenture Estate, a Majority In Interest of Holders, by written notice to
Indenture Trustee, Nonaffiliated Partner Trustee, Partnership and each
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Beneficiary, may rescind such a declaration or automatic acceleration, as the
case may be, and thereby annul its consequences if (a) an amount sufficient to
pay all principal of and interest (including interest at the Late Rate on
overdue payments) on such Notes, to the extent each such amount is due or past
due without regard to the acceleration hereof, if any, in respect of the
Outstanding Notes and all other sums then due and payable to Indenture Trustee
has been deposited with Indenture Trustee, (b) the rescission would not
conflict with any judgment or decree and (c) all existing Indenture Defaults
and Indenture Events of Default under this Indenture are cured or waived except
nonpayment of principal of, or interest on, the Notes which have become due
solely because of such acceleration. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
8.3 Other Remedies Available to Indenture Trustee.
(a) If an Indenture Event of Default exists, then
and in every such case Indenture Trustee, as trustee of an express trust and as
assignee hereunder of Nonaffiliated Partner Trustee's Partnership Interest or
as holder of a security interest in the Units or otherwise, may, and when
required pursuant to Section 9 shall, exercise (subject to the following
sentence and Sections 8.3(e) and 8.3(f)), any or all of the rights and powers
and pursue any and all of the remedies accorded to Nonaffiliated Partner
Trustee under the Partnership Agreement and the Participation Agreement and to
Partnership and Nonaffiliated Partner Trustee under the O&M Agreement, the
Services Agreement and this Section 8, may recover judgment in its own name as
Indenture Trustee against the Indenture Estate and may take possession of all
or any part of the Indenture Estate and may exclude Nonaffiliated Partner
Trustee, Partnership, any Partner, Operator, Service Taker and Beneficiaries
and all Persons claiming under any of them wholly or partly therefrom.
Notwithstanding any other provision of this Indenture to the contrary,
Indenture Trustee shall not be entitled pursuant to Section 8.3(b) or otherwise
to sell any of the Partnership Indenture Estate or exercise other remedies
against the Partnership Indenture Estate or to exercise BJ Remedies (as defined
below) until such time, if any, as a BJ Event of Default exists.
Notwithstanding any other provision of this Indenture, Indenture Trustee shall
not be entitled to exercise any remedy hereunder as a result of an Indenture
Event
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of Default that arises solely by reason of one or more events or circumstances
that constitute a BJ Event of Default unless Indenture Trustee as security
assignee of Nonaffiliated Partner Trustee declares the O&M Agreement to be in
default and simultaneously, to the extent it is then entitled to do so
hereunder and under the Partnership Agreement, O&M Agreement and Participation
Agreement and is not then stayed or otherwise prevented from doing so by
operation of law, exercises one or more of the rights or remedies (each right
or remedy, a "BJ Remedy") in Section 6.1(d), 11.1, 11.3 or 11.4 of the
Partnership Agreement, Section 15.1 of the O&M Agreement involving a
termination of the O&M Agreement or any other remedy in Section 15.1 of the O&M
Agreement or Section 5.22 of the Participation Agreement; except, that if
Indenture Trustee is so stayed or otherwise prevented by operation of law from
exercising such BJ Remedies, it shall in any event refrain from so foreclosing
or otherwise exercising BJ Remedies hereunder (i) for 180 days after the
commencement of such stay or other circumstances preventing the exercise of BJ
Remedies or (ii) if Guarantor or an Affiliate of Guarantor with court approval
assumes (and is performing the obligations of each Bankrupt BJ Entity under)
the Basic Documents to which each Bankrupt BJ Entity is a party in accordance
with Section 365 of the Bankruptcy Code and, if an Affiliate of Guarantor so
assumes, Guarantor remains liable for all its obligations under the Guaranty to
the same extent as if such assumption had not occurred.
(b) Subject to Sections 8.3(a), 8(e) and 8(f), if
an Indenture Event of Default exists, Indenture Trustee may, if at the time
such action is lawful and subject to compliance with any mandatory legal
requirements, either with or without taking possession, and either before or
after taking possession, and without instituting any legal proceedings
whatsoever, and having first given notice of such action by registered mail to
Nonaffiliated Partner Trustee, Partnership and each Beneficiary once at least
15 days before the date of such action, and any other notice required by law,
sell and dispose of the Indenture Estate, or any part thereof, or interest
therein, at a private sale or sales or a public auction to the highest bidder,
in each case, in one lot as an entirety or in separate lots, and either for
cash or on credit and on such terms as Indenture Trustee may determine, and at
any place (whether or not it is the location of the Indenture Estate or any
part thereof) and time designated
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in the notice above referred to. Notwithstanding any provision herein to the
contrary, Indenture Trustee shall not sell any of the Partnership Indenture
Estate or exercise other remedies against the Partnership Indenture Estate or
exercise BJ Remedies unless a BJ Event of Default exists. Notwithstanding any
provision herein to the contrary, Indenture Trustee shall not sell any of the
Indenture Estate or exercise other remedies against the Indenture Estate
seeking to deprive Beneficiaries of their interest therein as a result of an
Indenture Event of Default that arises solely by reason of one or more events
or circumstances that constitute a BJ Event of Default unless a declaration of
acceleration has been made pursuant to Section 8.2, Indenture Trustee as
security assignee of Nonaffiliated Partner Trustee declares the O&M Agreement
to be in default and Indenture Trustee is simultaneously exercising, to the
extent it is then entitled to do so hereunder and under the Partnership
Agreement, the Participation Agreement and the O&M Agreement and is not then
stayed or otherwise prevented from doing so by operation of law, one or more BJ
Remedies; and no private sale may be made to BJ USA or any of its Affiliates;
except, that if Indenture Trustee is so stayed or otherwise prevented by
operation of law from exercising such BJ Remedies, it shall in any event
refrain from so foreclosing or otherwise exercising remedies hereunder (i) for
180 days after the commencement of such stay or other circumstances preventing
the exercise of BJ Remedies or (ii) if Guarantor or an Affiliate of Guarantor
with court approval assumes (and is performing the obligations of each Bankrupt
BJ Entity under) the Basic Documents to which each Bankrupt BJ Entity is a
party in accordance with Section 365 of the Bankruptcy Code and, if an
Affiliate of Guarantor so assumes, Guarantor remains liable for all its
obligations under the Guaranty as if such assumption had not occurred. Any
such sale or sales may be adjourned from time to time by announcement at the
time and place appointed for such sale or sales, or for any such adjourned sale
or sales, without further notice, and Indenture Trustee and any Holder may bid
and become the purchaser at any such sale. Indenture Trustee may exercise such
right without possession or production of the Notes or proof of ownership
thereof, and as representative of Holders may exercise such right without
notice to Holders or including Holders as parties to any suit or proceeding
relating to foreclosure of any property in the Indenture Estate. Nonaffiliated
Partner Trustee and Partnership each hereby irrevocably constitutes Indenture
Trustee the true and lawful attorney-in-fact of Nonaffiliated
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Partner Trustee (in the name of Nonaffiliated Partner Trustee or otherwise) and
Partnership (in the name of Partnership or otherwise), as the case may be, for
the purpose of effectuating any sale, assignment, transfer or delivery upon
enforcement of the Lien created under this Indenture, whether pursuant to
foreclosure or power of sale or otherwise, to execute and deliver all such
bills of sale, assignments and other instruments as Indenture Trustee may
consider necessary or appropriate, with full power of substitution,
Nonaffiliated Partner Trustee and Partnership each hereby ratifying and
confirming all that such attorney or any substitute shall lawfully do by virtue
hereof. Nevertheless, if so requested by Indenture Trustee or any purchaser,
Nonaffiliated Partner Trustee and Partnership each shall ratify and confirm any
such sale, assignment, transfer or delivery, by executing and delivering to
Indenture Trustee or such purchaser all bills of sale, assignments, releases
and other proper instruments to effect such ratification and confirmation as
may be designated in any such request.
(c) Subject to Sections 8.3(a), 8.3(e) and
8.3(f), if an Indenture Event of Default exists, Nonaffiliated Partner Trustee
or Partnership, or both, shall, at the request of Indenture Trustee upon
enforcement of the Lien created under this Indenture, promptly execute and
deliver to Indenture Trustee such instruments of title or other documents as
Indenture Trustee may deem necessary or advisable to enable Indenture Trustee
or an agent or representative designated by Indenture Trustee, at such time and
place or places as Indenture Trustee may specify, to obtain possession of all
or any part of the Indenture Estate. If Nonaffiliated Partner Trustee or
Partnership for any reason fails to execute and deliver such instruments and
documents after such request by Indenture Trustee, Indenture Trustee shall be
entitled to a judgment for specific performance of the covenants contained in
the foregoing sentence, conferring upon Indenture Trustee the right to
immediate possession and requiring Nonaffiliated Partner Trustee or
Partnership, as the case may be, to execute and deliver such instruments and
documents to Indenture Trustee. Subject to Sections 8.3(a), 8.3(e) and 8.3(f),
Indenture Trustee shall also be entitled to pursue all or any part of the
Indenture Estate wherever it may be found and may enter any of the premises of
Nonaffiliated Partner Trustee or Partnership or any other Person wherever the
Indenture Estate may be or be supposed to be and
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search for the Indenture Estate and take possession of any item of the
Indenture Estate pursuant to this Section 8.3(c). Subject to Sections 8.3(a),
8.3(e) and 8.3(f), Indenture Trustee 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 it may deem proper. In each such case, Indenture Trustee
shall have the right to use, operate, store, lease, control or manage the
Indenture Estate and to exercise all rights and powers of Nonaffiliated Partner
Trustee or Partnership relating to the Indenture Estate as Indenture Trustee
shall deem appropriate, including the right to enter into any and all such
agreements with respect to the use, operation, storage, leasing, control or
management of the Indenture Estate or any part thereof; and Indenture Trustee
shall be entitled to collect and receive directly all tolls, rents, payments,
distributions (including Priority Distributions, Supplemental Priority
Distributions and Special Distributions other than Excepted Property), issues,
profits, products, revenues and other income of the Indenture Estate and every
part thereof, without prejudice, however, to the right of Indenture Trustee
under any provision of this Indenture to collect and receive cash held by, or
required to be deposited with, Indenture Trustee hereunder. In accordance with
the terms of this Section 8.3(c), such tolls, rents, payments, distributions
(including Priority Distributions, Supplemental Priority Distributions and
Special Distributions other than Excepted Property), issues, profits, products,
revenues and other income shall be applied to pay the expenses of using,
operating, storing, leasing, controlling or managing the Indenture Estate, and
of all maintenance, insurance, repairs, replacements, alterations, additions
and improvements, and to make all payments which Indenture Trustee may be
required or may elect 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 Nonaffiliated Partner
Trustee and Partnership) and all other payments which Indenture Trustee may be
required or authorized to make under any provision of this Indenture, including
this Section 8.3(c), as well as just and reasonable compensation for the
services of Indenture Trustee, and of all persons properly engaged and employed
by Indenture Trustee.
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If a BJ Event of Default exists and Indenture Trustee
obtains possession of or title to the Units, Indenture Trustee shall not be
obligated to use or operate the Units or cause the Units to be used or operated
directly or indirectly by itself or through agents or other representatives or
to lease, license or otherwise permit or provide for the use or operation of
the Units by any other Person.
(d) Subject to Sections 8.3(a), 8.3(e) and
8.3(f), Indenture Trustee may proceed to protect and enforce this Indenture and
the Notes by suit or suits or proceedings in equity, at law or in bankruptcy,
and whether for the specific performance of any covenant or agreement herein
contained or in execution or aid of any power herein granted, or for
foreclosure hereunder, or for the appointment of a receiver or receivers for
the Indenture Estate or any part thereof, or for the recovery of judgment for
the indebtedness secured by the Lien created under this Indenture or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
(e) (i) (1) If Partnership fails to
distribute any Priority Distribution distributable under the Partnership
Agreement at least ten Business Days after the Distribution Date therefor,
Nonaffiliated Partner Trustee or any Beneficiary, without the consent of
Indenture Trustee or any Holder but subject to Section 8.3(e)(i)(5), may,
within the time period specified in clause (4) below, pay to Indenture Trustee
for application in accordance with Section 3.3, a sum equal to the amount of
all (but not less than all) principal and interest (other than by acceleration)
then due and payable on the Outstanding Notes, together with any interest on
account of such Priority Distribution not being made on the Distribution Date
as provided in Section 4.4(b) of the Partnership Agreement.
(2) If Partnership or General Partner
defaults in the payment or performance of any obligation hereunder or under the
Partnership Agreement (other than the obligation to make Priority
Distributions) or the Participation Agreement, Guarantor defaults in the
payment or performance of any obligation under the Guaranty or the
Participation Agreement, BJ USA defaults in the payment or performance of any
obligation under the Participation Agreement, Service Taker defaults in the
payment or performance of any obligation under the Services Agreement or the
Participation Agreement or
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Operator defaults in the payment or performance of any obligation under the O&M
Agreement or the Participation Agreement and such default can be cured,
Nonaffiliated Partner Trustee or any Beneficiary, without the consent of
Indenture Trustee or any Holder, may, within the period specified in clause (4)
below, pay or perform such obligation on behalf of Partnership, General
Partner, Guarantor, BJ USA, Service Taker or Operator or otherwise perform
such obligations on behalf of Partnership, General Partner, Guarantor, BJ USA,
Service Taker or Operator, without the necessity of giving any notice to
Partnership, General Partner, Guarantor, BJ USA, Service Taker or Operator, it
being understood and agreed that nothing herein contained shall be deemed or
construed to prohibit Nonaffiliated Partner Trustee or any Beneficiary from
exercising any such rights of Partnership before any such notice from Indenture
Trustee.
(3) Solely for the purpose of
determining whether there exists an Indenture Event of Default, (i) any payment
by Nonaffiliated Partner Trustee or any Beneficiary pursuant to, and in
compliance with, Section 8.3(e)(i)(1) shall, for the purposes of this
Indenture, be deemed to remedy any default by Partnership in making Priority
Distributions theretofore distributable and to remedy any default by
Nonaffiliated Partner Trustee in the payment of any amount due and payable
under the Notes, in each case only if such payment pursuant to Section
8.3(e)(i)(1) is in an amount sufficient to remedy such default, and (ii) any
payment or performance by Nonaffiliated Partner Trustee or any Beneficiary of
any obligation of Partnership, General Partner, Guarantor, BJ USA, Service
Taker or Operator under the Partnership Agreement, Participation Agreement,
Guaranty, Services Agreement or O&M Agreement pursuant to, and in compliance
with, Section 8.3(e)(i)(2) shall, for the purposes of this Indenture, be deemed
to remedy any default by Partnership, General Partner, Guarantor, BJ USA,
Service Taker or Operator in the performance in full of such obligation and to
remedy any related default by Nonaffiliated Partner Trustee under this
Indenture.
(4) While an Indenture Event of Default
arising solely from a BJ Event of Default or an Indenture Event of Default with
respect to a Beneficiary under Section 8.1(c), 8.1(d), 8.1(e), 8.1(f) or 8.1(g)
exists, (x) Indenture Trustee shall give Nonaffiliated Partner Trustee and each
Beneficiary at
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least 15 Business Days' prior written notice of its intention to exercise any
rights as assignee of Nonaffiliated Partner Trustee's or Partnership's rights
under the Guaranty, Partnership Agreement, Participation Agreement, Services
Agreement or O&M Agreement (such 15 Business Days' prior written notice to be
given without regard to how long a BJ Event of Default or an Indenture Event of
Default with respect to a Beneficiary under Section 8.1(c), 8.1(d), 8.1(e),
8.1(f) or 8.1(g) which has given rise to such intent to so exercise rights
under the Guaranty, Partnership Agreement, Participation Agreement, Services
Agreement or O&M Agreement exists) or declare the Notes to be so due and
payable for purposes of this Section 8.3(e), (y) if an Indenture Default with
respect to a Beneficiary under Section 8.1(e), 8.1(f) or 8.1(g) exists (such
Indenture Event of Default, a "Beneficiary Bankruptcy" and such Beneficiary, a
"Bankrupt Beneficiary"), Nonaffiliated Partner Trustee or any other Beneficiary
may give Indenture Trustee written notice within 15 days of such Beneficiary
Bankruptcy of the intention of Nonaffiliated Partner Trustee or such
Beneficiary to remedy any default by Bankrupt Beneficiary or to acquire or
cause to be acquired all of Bankrupt Beneficiary's Beneficial Interest and of
the actions it intends to take to accomplish the same, and (z) during such
15-Business Day period or, if the notice required by clause (y) above was
given, during the 90-day period after the occurrence of such Beneficiary
Bankruptcy, Indenture Trustee shall not exercise any rights as assignee of
Nonaffiliated Partner Trustee's or Partnership's rights under the Guaranty,
Partnership Agreement, Participation Agreement, Services Agreement or O&M
Agreement as a result of such Indenture Event of Default and neither Indenture
Trustee nor the Holders shall declare the Notes to be due and payable pursuant
to Section 8.2 as a result of such Indenture Event of Default or exercise any
remedies under Section 8 as a result of such Indenture Event of Default; except
that if within such 15-Business Day period or 90-day period, as the case may
be, Nonaffiliated Partner Trustee or any non-defaulting Beneficiary remedies
any default by Partnership, General Partner, Guarantor, BJ USA, Service Taker
or Operator as provided in clauses (1) and (2) or remedies any default by any
Beneficiary or such defaulting Beneficiary transfers all of its Beneficial
Interest pursuant to Section 6.1 of the Participation Agreement, Indenture
Trustee shall not exercise any rights as assignee of Nonaffiliated Partner
Trustee's or Partnership's rights under the Partnership Agreement,
Participation Agreement, Guaranty,
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Services Agreement or O&M Agreement as a result of such Indenture Event of
Default and neither Indenture Trustee nor the Holders shall declare the Notes
to be due and payable pursuant to Section 8.2 as a result of such Indenture
Event of Default or exercise any remedies under Section 8 as a result of such
Indenture Event of Default.
(5) Section 8.3(e)(i)(1) shall not apply
to any default in making any Priority Distribution under the Partnership
Agreement, if default in making two consecutive Priority Distributions, or in
making a total of five Priority Distributions, are cured by Nonaffiliated
Partner Trustee or any Beneficiary pursuant to Section 8.3(e)(i)(1). Section
8.3(e)(i)(2) shall not apply to any default by Partnership or General Partner
in the payment or performance of any obligation hereunder or under the
Partnership Agreement (other than the obligation to make Priority
Distributions) or the Participation Agreement, by Guarantor in the payment or
performance of any obligation under the Guaranty or the Participation
Agreement, by BJ USA in the payment or performance of any obligation under the
Participation Agreement, by Service Taker in the payment or performance of any
obligation under the Services Agreement or the Participation Agreement or by
Operator in the payment or performance of any obligation under the O&M
Agreement or the Partnership Agreement, if such defaults are cured by
Nonaffiliated Partner Trustee or a Beneficiary pursuant to Section 8.3(e)(i)(2)
by the expenditure of $2,500,000 or more in the aggregate.
(6) Upon the exercise of any cure right
under this Section 8.3(e)(i), neither Nonaffiliated Partner Trustee nor any
Beneficiary shall retain any Lien on any part of the Indenture Estate on
account of any payment made or the costs and expenses incurred in connection
therewith nor shall any claim of Nonaffiliated Partner Trustee or any
Beneficiary against Partnership, General Partner, Guarantor, Operator or any
other Person for the repayment thereof impair the prior right and security
interest of Indenture Trustee in and to the Indenture Estate.
(ii) Upon the exercise of any cure right under
Section 8.3(e)(i), Nonaffiliated Partner Trustee or Beneficiaries, as the case
may be, shall be subrogated to the rights of Holders (1) to receive from
Indenture Trustee the
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Priority Distribution, Supplemental Priority Distribution or other amount with
respect to which Nonaffiliated Partner Trustee or any Beneficiary effected such
cure (including interest on account of such Priority Distribution or
Supplemental Distribution not being distributed on the Distribution Date
therefor or interest on account of such other amount being overdue) and (2)
with respect to which Nonaffiliated Partner Trustee or any Beneficiary
otherwise effected such cure, and if Indenture Trustee thereafter receives such
Priority Distribution, Supplemental Priority Distribution or other amount and
no other Indenture Event of Default exists, then, notwithstanding the
requirements of Section 3.3, Indenture Trustee forthwith shall remit such
Priority Distribution, Supplemental Priority Distribution or other amount to
Nonaffiliated Partner Trustee or such Beneficiary, as the case may be, in
reimbursement for the funds so advanced by any of them; except that, if the
principal of and interest on any Notes have become due and payable pursuant to
Section 8.2, such Priority Distribution or Supplemental Distribution shall be
distributed by Indenture Trustee in accordance with Section 3.5. Neither
Nonaffiliated Partner Trustee nor any Beneficiary shall attempt to recover any
such Priority Distribution, Supplemental Priority Distribution or other amount
paid by it on behalf of General Partner, Partnership, Operator, Service Taker,
BJ USA or Guarantor pursuant to this Section 8.3(e)(ii) except by demanding of
Partnership, General Partner, Operator, Service Taker, BJ USA or Guarantor
payment of such amount or by proceeding by appropriate court action or actions,
either at law or at equity, to enforce performance by Partnership, General
Partner, Operator, Service Taker, BJ USA or Guarantor of the applicable
covenants or recover damages for the breach thereof. Further, upon the
exercise of any cure right under Section 8.3(e)(i)(4) with respect to a
defaulting Beneficiary, Nonaffiliated Partner Trustee or such Beneficiary
effecting such remedy or acquiring the defaulting Beneficiary's Beneficial
Interest, as the case may be, shall be subrogated to the rights of defaulting
Beneficiary to receive distributions, payments and other amounts payable to
defaulting Beneficiary under the Basic Documents.
(iii) If (1) the Notes are accelerated pursuant to
Section 8.2, or (2) the Notes are automatically accelerated, or (3) one or more
BJ Event(s) of Default exists for a period of 180 days or more (and no
Indenture Event of Default that does
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not arise solely from a BJ Event of Default exists) and the Notes are not
accelerated by Indenture Trustee or the Holders during such period,
Nonaffiliated Partner Trustee or a Beneficiary may give notice to Indenture
Trustee of Nonaffiliated Partner Trustee's or a Beneficiary's intention to
purchase, or cause to be purchased by another Person designated by
Nonaffiliated Partner Trustee (or prepay in lieu of purchase), all of the Notes
in accordance with this Section 8.3(e)(iii), which, if a redemption, shall be
pursuant to Section 6.1(d). Concurrently with such notice, Nonaffiliated
Partner Trustee or Beneficiary will deposit with Indenture Trustee, whether or
not an Indenture Event of Default then exists, an amount sufficient to pay the
Prepayment Price equal to the aggregate unpaid principal amount of all unpaid
Notes then Outstanding, but without Premium, together with (A) accrued but
unpaid interest thereon to the date of such receipt (as well as any interest on
overdue principal and, to the extent permitted by applicable law, overdue
interest calculated as provided in Section 4.4(b) of the Partnership Agreement)
and (B) all amounts then due and payable to Indenture Trustee pursuant to
Section 9.5(a)(i), which funds shall be held by Indenture Trustee as provided
in Section 9.3. Upon the receipt of such funds, Indenture Trustee will
terminate any proceedings then in progress. In the event of a purchase by a
Beneficiary, Nonaffiliated Partner Trustee (or a designee) of the Notes
pursuant to this Section 8.3(e)(iii) and upon payment to Indenture Trustee of
the Prepayment Price calculated pursuant to this Section 8.3(e)(iii), each
Holder will be deemed to sell, assign, transfer and convey to such Beneficiary
or Nonaffiliated Partner Trustee or its designee (without recourse or warranty
of any kind except as to title to the Notes being conveyed free and clear of
Liens attributable to such Holder) all of the right, title and interest of such
Holder in and to the Indenture Estate, this Indenture and all Notes held by
such Holder. The Registrar shall register the transfer of ownership of the
Notes into the name of Nonaffiliated Partner Trustee or its designee.
(iv) If a BJ Event of Default exists and before
(1) acceleration of the Notes and (2) the expiration of the 180-day period
referred to in Section 8.3(e)(iii) (and no Indenture Event of Default that does
not arise solely from a BJ Event of Default exists), Nonaffiliated Partner
Trustee or any Beneficiary may give notice to Indenture Trustee of
Nonaffiliated Partner Trustee's or Beneficiary's intention to
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purchase, or cause to be purchased by another Person designated by
Nonaffiliated Partner Trustee (or prepay in lieu of purchase), all of the Notes
in accordance with this Section 8.3(e)(iv), which, if a redemption, shall be
pursuant to Section 6.1(f). Concurrently with such notice, Nonaffiliated
Partner Trustee or Beneficiary will deposit with Indenture Trustee, whether or
not an Indenture Event of Default exists, an amount sufficient to pay the
Prepayment Price equal to the aggregate unpaid principal amount of all unpaid
Notes then Outstanding, together with (A) accrued but unpaid interest thereon
to the date of such receipt (as well as any interest on overdue principal and,
to the extent permitted by applicable law, overdue interest calculated as
provided in Section 4.4(b) of the Partnership Agreement), (B) the Premium, if
any, as of the date of deposit and (C) all amounts then due and payable to
Indenture Trustee pursuant to Section 9.5(a)(i), which funds shall be held by
Indenture Trustee as provided in Section 9.3. Upon the receipt of such funds,
Indenture Trustee will terminate any proceedings then in progress. In the
event of a purchase by any Beneficiary or Nonaffiliated Partner Trustee of
Notes pursuant to this Section 8.3(e)(iv) and upon payment to Indenture Trustee
of the Prepayment Price calculated pursuant to this Section 8.3(e)(iv), each
Holder will be deemed to sell, assign, transfer and convey to Beneficiary or
Nonaffiliated Partner Trustee or its designee (without recourse or warranty of
any kind except as to title to the Notes being conveyed free and clear of Liens
attributable to such Holder) all of the right, title and interest of such
Holder in and to the Indenture Estate, this Indenture and all Notes held by
such Holder. The Registrar shall register the transfer of ownership of the
Notes into the name of Nonaffiliated Partner Trustee or its designee.
(f) Notwithstanding any provision of this
Indenture to the contrary, as long as no BJ Event of Default exists, neither
Indenture Trustee nor Nonaffiliated Partner Trustee shall take any action
contrary to, or disturb, Service Taker's rights under the Services Agreement,
Operator's rights under the O&M Agreement or the rights of General Partner and
Affiliated Partner under the Partnership Agreement.
(g) Each and every right, power and remedy herein
given to Indenture Trustee 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
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now or hereafter existing at law, in equity or by statute, each and every
right, power and remedy whether specifically herein given or otherwise existing
may, subject to the limitations set forth herein, be exercised from time to
time and as often in such order as may be deemed expedient by Indenture
Trustee, 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 Indenture Trustee or any Holder in the exercise of any right, remedy or
power or in pursuing any remedy shall impair any such right, power or remedy or
be construed to be a waiver of any default on the part of Nonaffiliated Partner
Trustee, Partnership, General Partner, Guarantor, Operator or Service Taker or
to be an acquiescence therein. The giving, taking or enforcement of any other
additional security, collateral or guaranty for the payment and performance of
Secured Obligations shall not operate to impair, affect, waive or prejudice the
Lien of this Indenture or any rights, powers or remedies hereunder. Neither
Indenture Trustee nor any Holder shall be required to look to any additional
security, collateral or guaranty, or exhaust any remedies with respect thereto,
before exercising remedies hereunder or under the Partnership Agreement,
Participation Agreement, the Services Agreement, the Guaranty, or the O&M
Agreement in accordance with the terms hereof or thereof.
8.4 Waiver of Nonaffiliated Partner Trustee and Partnership.
To the extent now or at any time hereafter enforceable under applicable law,
Nonaffiliated Partner Trustee and Partnership each covenants that it will not
at any time insist upon or plead, or in any manner whatsoever claim or take any
benefit or advantage of, any stay or extension law now or at any time hereafter
in force, nor claim, take or insist upon any benefit or advantage of or from
any law now or hereafter in force providing for the valuation or appraisal of
the Indenture Estate or
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any part thereof before any sale or sales thereof to be made pursuant hereto,
or to the decree, judgment or order of any court of competent jurisdiction;
nor, after such sale or sales, claim or exercise any right under any statute
now or hereafter made or enacted by any state or otherwise to redeem the
property so sold or any part thereof, and hereby expressly waives for itself
and on behalf of each and every Person, except decree or judgment creditors of
Nonaffiliated Partner Trustee acquiring any interest in or title to the
Indenture Estate or any part thereof subsequent to the date of this Indenture,
all benefit and advantage of any such law or laws, and covenants that it will
not invoke or utilize any such law or laws or otherwise hinder, delay or impede
the execution of any power herein granted and delegated to Indenture Trustee,
but will suffer and permit the execution of every such power as though no such
law or laws had been made or enacted. Nothing in this Section 8.4 shall be
deemed to be a waiver by Nonaffiliated Partner Trustee or Partnership of its
rights under the exception to Section 8.3(a) and under Section 8.3(e).
8.5 Waiver of Existing Defaults. A Majority In Interest by
notice to Indenture Trustee may waive on behalf of the Holders an existing
Indenture Default or Indenture Event of Default and its consequences except (a)
an Indenture Default or Indenture Event of Default in the payment of the
principal of, Premium, if any, or interest on, any Note or (b) in respect of a
covenant or provision hereof which pursuant to Section 11.3 cannot be amended
or modified without the consent of the Holder affected.
8.6 Control by Holders. A Majority In Interest may direct
the time, method and place of conducting any proceeding for any remedy
available to Indenture Trustee or exercising any trust or power conferred on it
by this Indenture. However, Indenture Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that is unduly prejudicial
to the rights of the Holders so affected, or that would subject Indenture
Trustee to personal liability.
8.7 Limitation on Suits by Holders. A Holder may pursue a
remedy under this Indenture or under a Note only if:
(a) the Holder gives to Indenture Trustee written
notice of a continuing Indenture Event of Default under this Indenture;
(b) a Majority In Interest make a written request
to Indenture Trustee to pursue the remedy;
(c) such Holder or Holders offer to Indenture
Trustee indemnity satisfactory to Indenture Trustee against any loss, liability
or expense to be, or which may be, incurred by Indenture Trustee in pursuing
the remedy;
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(d) Indenture Trustee does not comply with the
request within 60 days after receipt of the request and the offer of indemnity;
and
(e) during such 60-day period, a Majority In
Interest does not give Indenture Trustee a direction inconsistent with the
request.
A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.
8.8 Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of, Premium, if any, and interest on a Note on or after
the respective due dates expressed in such Note shall not be impaired or
affected without the consent of such Holder.
8.9 Indenture Trustee May File Proofs of Claim. Indenture
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of Indenture Trustee and of
the Holders allowed in any judicial proceedings relating to Partnership,
Guarantor, Service Taker, Operator or Nonaffiliated Partner Trustee, their
respective creditors, or their property.
SECTION 9. INDENTURE TRUSTEE.
9.1 Rights and Duties of Indenture Trustee.
(a) Indenture Trustee accepts the trusts hereby
created and applicable to it and agrees to perform its duties with respect to
the same but only upon the terms of this Indenture, and agrees to receive and
disburse all moneys constituting part of the Indenture Estate in accordance
herewith and applicable law.
(b) Before Indenture Trustee acts or refrains
from acting, it may consult with counsel or require an Officer's Certificate or
an opinion of counsel from General Partner, Partnership or Nonaffiliated
Partner Trustee after which it will take such action or refrain from acting as
it deems appropriate. Indenture Trustee shall not be liable for any action it
takes or
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omits to take in good faith and in accordance herewith in reliance on a
resolution of the Board of Directors of General Partner, the written advice of
counsel acceptable to Nonaffiliated Partner Trustee and Indenture Trustee,
Officer's Certificates or opinions of counsel provided by General Partner,
Partnership or Nonaffiliated Partner Trustee.
(c) Indenture Trustee may act through agents
appointed with due care and shall be responsible for the misconduct or
negligence of any such agent; except that Indenture Trustee shall not be
responsible for the misconduct or negligence of any agent appointed at the
request of the Holders.
(d) Indenture Trustee shall not be liable for any
action it takes or omits to take which it in good faith believes to be
authorized or within its rights or powers.
(e) Indenture Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory
to it against any loss, liability or expense.
(f) Subject to Section 9.3, Indenture Trustee
shall not be liable for interest on any money received by it except as
Indenture Trustee may otherwise agree in writing with General Partner,
Partnership or Nonaffiliated Partner Trustee. Money held in trust by Indenture
Trustee need not be segregated from other funds except to the extent required
by law.
(g) Notwithstanding any other provision of this
Section 9, whether or not an Indenture Event of Default under this Indenture
exists, Indenture Trustee shall exercise its rights and powers under this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(h) Except during the existence of an Indenture
Event of Default:
(i) Indenture Trustee need perform only those
duties that are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against Indenture
Trustee.
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(ii) In the absence of bad faith on its part,
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to Indenture Trustee and conforming
to the requirements of this Indenture. However, Indenture Trustee
shall examine the certificates and opinions to determine whether or
not they substantially conform to the requirements of this Indenture.
(i) Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own wilful misconduct, except that:
(i) This Section 9.1(i) does not limit the effect
of Section 9.1(h).
(ii) Indenture Trustee shall not be liable for any
error of judgment made in good faith by a responsible officer or
officers, unless it shall be proved that Indenture Trustee was
negligent in ascertaining the pertinent facts.
(iii) Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with the direction received by it pursuant to Section 8.6.
(j) Every provision of this Indenture that in any
way relates to Indenture Trustee is subject to Sections 9.1(g), 9.1(h) and
9.1(i).
9.2 Individual Rights of Indenture Trustee. Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise have business relationships with Nonaffiliated
Partner Trustee, any Beneficiary, BJ USA or an Affiliate of any thereof with
the same rights it would have if it were not Indenture Trustee. Any agent may
do the same with like rights.
9.3 Funds May Be Held by Indenture Trustee; Investments. Any
moneys (including for the purpose of this Section 9.3 any cash deposited with
Indenture Trustee or Permitted Investments purchased by the use of such cash
pursuant
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to this Section 9.3 or any cash constituting the proceeds of the maturity, sale
or other disposition of any Permitted Investment) held by Indenture Trustee
hereunder as part of the Indenture Estate, until paid out by Indenture Trustee
as herein provided, (a) subject to clause (b) below, may be carried by
Indenture Trustee on deposit with itself or on deposit to its account with any
bank, trust company or national banking association incorporated or doing
business under the laws of the United States of America or one of the States
thereof having combined capital and surplus and retained earnings of at least
$1,000,000,000 and having a rating assigned to the long-term unsecured debt of
such institutions by Standard & Poor's Corporation and Moody's Investors
Service, Inc. at least equal to AA and AA2, respectively, and Indenture Trustee
shall not have any liability for interest upon any such moneys except as
otherwise agreed in writing with Nonaffiliated Partner Trustee, General Partner
or Partnership; provided, that Indenture Trustee shall not seek indemnity or
reimbursement from any Holder as a result of liability for interest, or (b) at
any time and from time to time at the request of General Partner acting as the
agent of Nonaffiliated Partner Trustee solely for purposes of this Section 9.3,
shall be invested and reinvested in Permitted Investments as specified in such
request (if such investments are reasonably available for purchase); and such
Permitted Investments shall be held by Indenture Trustee in trust as part of
the Indenture Estate until so sold; except that General Partner, as agent of
Nonaffiliated Partner Trustee solely for purposes of this Section 9.3, shall
upon demand pay to Indenture Trustee the amount of any loss realized upon
maturity, sale or other disposition of any such Permitted Investment. Any net
income, profit, interest, dividend or gain realized upon maturity, sale or
other disposition of any Permitted Investment shall be held as part of the
Indenture Estate and shall be applied by Indenture Trustee at the same time, on
the same conditions and in the same manner as the amounts in respect of which
such income, profit, interest, dividend or gain was realized are required to be
distributed in accordance with the provisions hereof. Indenture Trustee shall
not be responsible for any losses on any investments or sales of Permitted
Investments made pursuant to the procedure specified in this Section 9.3.
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9.4 Notice of Defaults.
(a) If an Indenture Event of Default under this
Indenture exists and if it is actually known to Indenture Trustee, Indenture
Trustee shall promptly send written notice thereof to General Partner (on
behalf of Partnership), Nonaffiliated Partner Trustee, Beneficiaries and the
Holders (except Indenture Trustee shall not be obligated to provide such notice
to any such Person if such Person had informed Indenture Trustee of such
Indenture Event of Default). In addition, if an Indenture Default under this
Indenture exists and if a responsible officer of Indenture Trustee has actual
knowledge thereof, Indenture Trustee shall promptly send written notice thereof
to General Partner (on behalf of Partnership), Nonaffiliated Partner Trustee,
Beneficiaries and the Holders. Subject to Sections 9.4(c) and 9.5, Indenture
Trustee shall take or refrain from taking such action, not inconsistent with
the provisions of the Basic Documents, with respect thereto as the Majority in
Interest shall direct by written instruction to Indenture Trustee. If
Indenture Trustee gives the Holders written notice of any event and does not
receive written instruction as above provided within 20 days after mailing
notice of such event to the Holders, Indenture Trustee may, subject to the
Basic Documents, take or refrain from taking such action, but shall be under no
duty to, or shall have no liability for a failure or refusal to, take or
refrain from taking any action with respect thereto as it determines to be
advisable in the best interests of the Holders.
(b) Notice pursuant to this Section 9.4 shall be
transmitted in the manner provided in Section 13.1 to all Holders, as the names
and addresses of such Holders appear upon the Register.
(c) Subject to the terms of, and except as
otherwise provided in Sections 8, 9.5 and 11, upon the written instructions at
any time and from time to time of a Majority in Interest of the Holders or of
Holders holding at least 66 2/3% of the Outstanding Notes, as the case may be,
Indenture Trustee shall take such of the following actions as may be specified
in such instructions: (i) exercise such election or option, or make such
decision or determination, or give such notice, consent, waiver or approval or
exercise such right, remedy or power to take such other action hereunder or in
respect of any
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part or all of the Indenture Estate as specified in such instructions; (ii)
take such action with respect to, or to preserve or protect, the Indenture
Estate (including the discharge of Liens) as specified in such instruction and
as are consistent with this Indenture and the other Basic Documents; and (iii)
take such other action in respect of the subject matter of this Indenture as is
consistent with the terms hereof and of the Basic Documents.
9.5 Compensation.
(a) Nonaffiliated Partner Trustee shall pay to
Indenture Trustee, from time to time, on demand, the following amounts: (i)
reasonable compensation for Indenture Trustee's services, which compensation
shall not be limited by any law on compensation of a trustee of an express
trust, (ii) reimbursement for all reasonable out- of-pocket expenses incurred
by Indenture Trustee in connection with the performance of its duties under
this Indenture (including the reasonable compensation and expenses of Indenture
Trustee's counsel in accordance with Section 9.1(b) and any agent appointed in
accordance with Section 9.1(c)) and (iii) any expense, loss or liability
incurred by it arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder except (1) such expenses or
loss or liability resulting from the negligence or wilful misconduct of
Indenture Trustee or the inaccuracy of any representation or warranty of
Indenture Trustee in its individual capacity in Section 3.3 of the
Participation Agreement, (2) as otherwise provided in Section 9.9 and (3) as
otherwise excluded by Sections 7.1 and 7.2 of the Participation Agreement from
BJ USA's indemnities under said Sections; except that, so long as the
Partnership Agreement is in effect, Indenture Trustee shall not make any claim
against Nonaffiliated Partner Trustee under this Section 9.5 for any claim or
expense for which BJ USA is liable, or for which Nonaffiliated Partner Trustee
is indemnified against by BJ USA, under the Participation Agreement without
first making demand on BJ USA for payment of such claim or expense. Indenture
Trustee shall notify Nonaffiliated Partner Trustee and BJ USA promptly of any
claim or expense for which it may seek indemnity.
(b) To secure the payment obligations of
Nonaffiliated Partner Trustee pursuant to this Section 9.5,
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Indenture Trustee shall have a Lien prior to that of the Holders on all money
or property held or collected from Partnership or Nonaffiliated Partner Trustee
by Indenture Trustee, except that held in trust to pay the principal of,
Premium, if any, and interest on, the Notes.
9.6 Replacement of Indenture Trustee.
(a) The resignation or removal of Indenture
Trustee and the appointment of a successor Indenture Trustee shall become
effective only upon the successor Indenture Trustee's acceptance of appointment
as provided in this Section 9.6.
(b) Indenture Trustee may resign by giving at
least 30 days' prior written notice to General Partner (on behalf of
Partnership), Nonaffiliated Partner Trustee, Beneficiaries and the Holders. A
Majority In Interest may remove Indenture Trustee, and also may appoint a
successor Indenture Trustee, by giving at least 30 days' prior written notice
to Indenture Trustee, Nonaffiliated Partner Trustee, Beneficiaries and General
Partner (on behalf of Partnership). Nonaffiliated Partner Trustee (whether or
not acting pursuant to instructions from Beneficiaries) may remove Indenture
Trustee if:
(i) Indenture Trustee fails to comply, with
Section 9.8;
(ii) Indenture Trustee is adjudged a bankrupt or
an insolvent;
(iii) a receiver or public officer takes charge of
Indenture Trustee or its property; or
(iv) Indenture Trustee becomes incapable of acting.
(c) If (i) Indenture Trustee resigns or is
removed, (ii) the Holders have removed Indenture Trustee pursuant to the second
sentence of Section 9.6(b) and have not appointed a successor within 30 days or
(iii) a vacancy otherwise exists in the office of Indenture Trustee for any
reason, then Nonaffiliated Partner Trustee may, subject to prior
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action being taken pursuant to Section 9.6(d), promptly appoint a successor
Indenture Trustee.
(d) If a successor Indenture Trustee does not
take office within 30 days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, General Partner (on behalf of
Partnership), Beneficiaries or a Majority In Interest may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
(e) If Indenture Trustee fails to comply with
Section 9.8, any Holder may petition any court of competent jurisdiction for
the removal of such Indenture Trustee and the appointment of a successor
Indenture Trustee.
(f) A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring Indenture Trustee, to
General Partner (on behalf of Partnership), to Beneficiaries and to
Nonaffiliated Partner Trustee. Thereupon, the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the retiring Indenture
Trustee for which the successor Indenture Trustee is to be acting under this
Indenture. The retiring Indenture Trustee shall promptly transfer all property
and all books and records relating to the administration of the Indenture
Estate held by it as Indenture Trustee to the successor Indenture Trustee
subject to the Lien provided for in Section 9.5(b). Nonaffiliated Partner
Trustee shall give notice of each appointment of a successor Indenture Trustee
by mailing written notice of such event by first-class mail to Holders.
9.7 Successor Indenture Trustee by Merger, etc. If Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business assets to, another
corporation, the successor corporation, without any further act, shall be the
successor Indenture Trustee.
9.8 Eligibility; Disqualification. Indenture Trustee shall
at all times have a combined capital and surplus of at least $100,000,000 and
shall be subject to supervision or examination by Federal or state authority.
If Indenture Trustee publishes reports of condition at least annually, pursuant
to
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law or to the requirements of Federal or state supervising or examining
authority, then for the purposes of this Section 9.8, the combined capital and
surplus of Indenture Trustee shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published.
If at any time Indenture Trustee ceases to be eligible in
accordance with this Section 9.8, Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 9.6.
9.9 Trustee's Liens. Indenture Trustee in its individual
capacity agrees that it will at its own cost and expense promptly take such
action as may be necessary to comply with the provisions of Section 5.9 of the
Participation Agreement.
9.10 Withholding Taxes; Information Reporting. Indenture
Trustee shall exclude and withhold from each distribution of principal,
Premium, if any, and interest and other amounts due hereunder or under the
Notes any and all withholding taxes applicable thereto as required by law
(provided, however, no such exclusion or withholding shall be made from such
distribution if Indenture Trustee shall have received a duly exercised and
properly completed U.S. Internal Revenue Service Form W-9 or 1001 or any
substitute Form which may be applicable). Indenture Trustee agrees (a) 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 Notes, to withhold such amounts and timely
pay the same to the appropriate authority in the name of and on behalf of the
Holders, (b) that it will file any necessary withholding tax returns or
statements when due and (c) that, as promptly as possible after the payment of
such amounts, it will deliver to each Holder appropriate documentation showing
the payment of such amounts, together with such additional documentary,
evidence as such Holders may reasonably request from time to time. Indenture
Trustee agrees to file any other information reports relating to withholding
taxes as it may be required to file under United States law.
9.11 Co-Trustee. At any time, for the purpose of meeting any
legal requirements of any jurisdiction in which any
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part of the Indenture Estate may at the time be located, Indenture Trustee
shall have the power, subject to receipt of the prior written approval of
Nonaffiliated Partner Trustee as long as no Indenture Event of Default exists,
and shall execute and deliver all instruments necessary, to appoint one or more
Persons to act as co-trustee, or co-trustees, or separate trustee or separate
trustees, of all or any part of the Indenture Estate, and to vest in such
Person or Persons in such capacity, such interest in the Indenture Estate or
any part thereof, and such rights, powers, duties, trusts or obligations as
Indenture Trustee may consider necessary or desirable.
SECTION 10. SATISFACTION AND DISCHARGE; TERMINATION
OF OBLIGATIONS.
10.1 Satisfaction and Discharge of Agreement; Termination of
Obligations. Subject to Section 10.2, this Indenture shall cease to be of
further force or effect, and Nonaffiliated Partner Trustee and Indenture
Trustee shall, except as herein provided, be deemed to have been discharged
from their respective obligations with respect to the Notes (and Indenture
Trustee, on demand and at the reasonable expense of Nonaffiliated Partner
Trustee, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture in respect of the Notes upon delivery of
satisfactory evidence that all Notes theretofore authenticated have been fully
paid or discharged), when all accrued and unpaid Secured Obligations has been
fully paid or there shall have been deposited with Indenture Trustee in trust
for the purpose of paying and discharging such accrued and unpaid Secured
Obligations, an amount in cash sufficient without reinvestment thereof to
discharge such accrued and unpaid Secured Obligations, including the principal
of, and Premium, if any, and interest on the Notes to the date of such deposit
(in the case of Notes which have become due and payable), or to the maturity
thereof, as the case may be.
10.2 Survival of Certain Obligations. Notwithstanding Section
10.1, the obligations of Nonaffiliated Partner Trustee and Indenture Trustee
contained in Sections 2.1 through 2.8, 7.1, 9.9, 9.10, 10.3 and 10.4 and the
rights, duties, immunities and privileges hereunder of Indenture Trustee shall
survive the discharge of this Indenture.
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10.3 Moneys to Be Held in Trust. All moneys deposited with
Indenture Trustee pursuant to Section 10.1 shall be held in trust and applied
by it, in accordance with the Notes and this Indenture, to the payment to the
Holders, of all sums due and to become due thereon for principal, Premium, if
any, and interest.
10.4 Moneys to Be Returned to Nonaffiliated Partner Trustee.
Indenture Trustee shall promptly pay or return to Nonaffiliated Partner Trustee
upon request of Nonaffiliated Partner Trustee any money held by it at any time
that is not required for the payment of the amounts described above in Section
10.3 for which money has been deposited pursuant to Section 10.1.
SECTION 11. AMENDMENTS AND WAIVERS.
11.1 Amendments to This Indenture Without Consent of Holders.
Nonaffiliated Partner Trustee, Partnership and Indenture Trustee may enter into
one or more written agreements supplemental hereto without the consent of any
Holder for any of the following purposes:
(a) to cure any defect or inconsistency herein or
in the Notes, to make any change not inconsistent with the provisions hereof or
to cure any ambiguity or correct any mistake, provided that such change does
not adversely affect the interests of any Holder;
(b) to evidence the succession of another party
as Nonaffiliated Partner Trustee in accordance with the terms of the Trust
Agreement or to evidence (in accordance with Section 9) the succession of a new
Indenture Trustee hereunder, the removal of Indenture Trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees to Indenture Trustee or Nonaffiliated Partner Trustee;
(c) to subject to the Lien of this Indenture
additional property hereafter acquired by Nonaffiliated Partner Trustee or
Partnership and intended to be subjected to the Lien of this Indenture;
(d) to correct or amplify the description of any
property at any time subject to the Lien of this Indenture or
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better to assure, convey and confirm unto Indenture Trustee any property
subject or required to be subject to the Lien of this Indenture;
(e) to add to the covenants of Nonaffiliated
Partner Trustee or Partnership for the benefit of Holders, or to surrender any
rights or power herein conferred upon Nonaffiliated Partner Trustee,
Partnership, Beneficiaries or General Partner;
(f) to add to the rights of Holders;
(g) to include on the Notes any legend required
by law; or
(h) to permit the qualification of this Indenture
under the Trust Indenture Act of 1939, as amended, or any similar federal
statute hereafter in effect, except that nothing herein contained shall permit
or authorize the inclusion of the provisions referred to in Section 316(a)(2)
of said Trust Indenture Act of 1939 or any corresponding provision in any
similar federal statute hereafter in effect.
11.2 Supplements to Partnership Agreement, Guaranty, Services
Agreement and O&M Agreement Without Holder Consent. Indenture Trustee, from
time to time and at any time, subject to the restrictions contained in this
Indenture, may, without the consent of Holders, consent to any amendment of or
supplement to the Partnership Agreement, the Guaranty, the Services Agreement
or the O&M Agreement for any one of the following purposes:
(a) to adjust the Priority Distributions,
Disposition Values, and ET Price payable under Section 2.7 of the Participation
Agreement, subject to all of the conditions set forth therein, if, on or before
the effective date of any adjustment pursuant to the provisions of this Section
11.2(b), Indenture Trustee shall have received an Officer's Certificate of
General Partner (on behalf of Partnership), addressed to Holders and Indenture
Trustee and to the effect that, after giving effect to such adjustment, the
amount of Priority Distributions distributable on each Payment Date under the
Partnership Agreement equals or exceeds the amount payable on such date for
principal and accrued interest on all the Notes, and the amounts of Disposition
Value or ET Price payable on any
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date under the Partnership Agreement or Participation Agreement equals or
exceeds the unpaid principal amount of all the Notes and accrued interest and,
in the case of the ET Price, Premium, if any, thereon after giving effect to
the making of any Category B Priority Distributions on such date, which
certificate shall set forth detailed information sufficient to demonstrate such
matters; and
(b) if requested by Nonaffiliated Partner
Trustee, to agree to any other amendment made to the Partnership Agreement, the
Services Agreement, the O&M Agreement or the Guaranty solely with respect to
matters that constitute, or relate to, Excepted Property.
11.3 Amendments With Consent of Holders.
(a) With the written consent of Holders of not
less than 66-2/3% of the unpaid principal balance of the Notes, (x)
Nonaffiliated Partner Trustee and Partnership may take any action prohibited,
or omit the taking of any action required, by any of the provisions of this
Indenture or any agreement supplemental hereto, (y) Nonaffiliated Partner
Trustee, Partnership and Indenture Trustee may enter into such written
supplemental agreements to add any provisions to or to change or eliminate any
provisions of this Indenture or of any such supplemental agreements, or to
modify the rights of Holders, or (z) Nonaffiliated Partner Trustee and
Partnership may enter into such written supplemental agreements to add any
provisions to or to change or eliminate any provisions of the Partnership
Agreement, the Services Agreement, the O&M Agreement or the Guaranty or of any
supplemental agreements thereto, or to modify the obligations of Nonaffiliated
Partner Trustee, Partnership, General Partner, Affiliated Partner, Operator,
Service Taker or Guarantor thereunder; provided, however, that, without the
consent of each Holder affected thereby, an amendment under this Section 11.3
may not:
(i) reduce any amount payable with respect to,
principal, Premium, if any, or interest on, any Note held by such
Holder;
(ii) change the date on which any principal of,
Premium, if any, or interest on any Note held by such Holder, is due
or payable or otherwise affect the terms of
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payment of any Note or change to a location outside the United States
the place of payment where, or the coin or currency in which, any
payment hereunder is payable;
(iii) reduce the amount of any capital contribution
to be contributed or any Priority Distribution, Supplemental Priority
Distribution or Special Distribution to be distributed under the
Partnership Agreement so that the same is less than the scheduled
payment of principal of, Premium, if any, and interest on any Notes
held by such Holder intended to be made by Nonaffiliated Partner
Trustee from such distributions;
(iv) create any Lien on the Indenture Estate
except such as are permitted by this Indenture, or deprive any Holders
of the benefit of the Lien on the Indenture Estate created by this
Indenture;
(v) reduce the percentage in principal amount of
the Outstanding Notes, the consent of whose Holders is required for
any such supplemental agreement, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or of defaults hereunder or their consequences) provided for
in this Indenture; or
(vi) make any change in Sections 8.5 through 8.8 or
this Section 11.3(a).
(b) Promptly after the execution by Nonaffiliated
Partner Trustee and Indenture Trustee of any supplemental agreement or other
amendment pursuant to Section 11.1, 11.2 or this 11.3, Indenture Trustee shall
transmit by first-class mail a notice, setting forth in general terms the
substance of such supplemental agreement or other amendment, together with a
conformed copy thereof, to all Holders, as the names and addresses of such
Holders appear on the Register. Any failure of Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental agreement.
11.4 Notation on or Exchange of Notes. Indenture Trustee may
place an appropriate notation about an amendment or
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waiver on any Note thereafter executed. Indenture Trustee in exchange for any
Notes may execute new Notes that reflect the amendment or waiver.
11.5 Indenture Trustee Protected. Indenture Trustee need not
sign any supplemental agreement or other amendment pursuant to Section 11.2 or
11.3 that adversely affects its rights.
11.6 Opinion of Counsel Conclusive as to Supplements.
Indenture Trustee may receive an opinion of counsel selected by it (which may
be independent counsel for General Partner, Partnership or Nonaffiliated
Partner Trustee) as conclusive evidence that any waiver, consent or
supplemental agreement or other amendment executed pursuant to this Section 11
complies with the requirements of this Section 11.
SECTION 12. ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS.
12.1 Actions to Be Taken upon Exercise of Certain Rights.
Upon any of:
(a) a Reduction Election with respect to any Unit
pursuant to Section 5.16 of the Participation Agreement and Section 7.2(c) of
the Partnership Agreement on a Reduction Date, and upon payment to Indenture
Trustee on a Prepayment Date of an amount equal to the Prepayment Price of the
required portion of the Outstanding Notes determined pursuant to Section
6.1(b);
(b) the purchase by General Partner or its
designee of the Partnership Interest of Nonaffiliated Partner Trustee pursuant
to Section 9.1 of the Partnership Agreement on the ET Date and upon payment to
Indenture Trustee on such date of an amount equal to the Prepayment Price of
the required portion of the Outstanding Notes determined pursuant to Section
6.1(c);
(c) the exercise by Partnership of its right to
remove the Lien of this Indenture with respect to a Unit on the relevant date,
following an Event of Loss suffered by such Unit under circumstances where
Partnership does not exercise its option to substitute replacement equipment
therefor pursuant to Section 5.12 of the Participation Agreement and Section
7.2(c)
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of the Partnership Agreement, and upon payment to Indenture Trustee of an
amount equal to the Prepayment Price as at the Prepayment Date of the required
portion of the Outstanding Notes determined pursuant to Section 6.1(a);
(d) the exercise of Partnership's right to remove
the Lien of this Indenture with respect to any Unit to be replaced in
connection with a substitution pursuant to Section 5.11 of the Participation
Agreement and Section 7.2(d) of the Partnership Agreement or Section 5.12 of
the Participation Agreement and Section 7.2(c) of the Partnership Agreement,
and upon compliance with the terms of such Section 5.11 or 5.12, as the case
may be, of the Participation Agreement and the attachment of the Lien of the
Indenture to the Unit being delivered to Nonaffiliated Partner Trustee in
substitution for the Unit being replaced; and
(e) satisfaction, discharge, defeasance and
termination of the obligations under this Indenture in accordance with Section
10.1;
then Indenture Trustee shall, without recourse or warranty (except as to the
absence of Liens of Persons claiming by, through or under Indenture Trustee)
transfer all of Indenture Trustee's right, title and interest in and to such
Units to the Person contemplated by the relevant provisions of the Partnership
Agreement and Participation Agreement, and Indenture Trustee shall execute such
instruments as may reasonably be requested by General Partner, Nonaffiliated
Partner Trustee or any Beneficiary to evidence such termination.
SECTION 13. MISCELLANEOUS.
13.1 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all communication and notices provided for
herein shall be in writing, and any such notice shall become effective when
received (and notices given pursuant to clause (b) below shall be deemed
received three days after being deposited in the mail). Any written notice
shall be by (a) personal delivery thereof, including, without limitation, by
overnight mail and courier service, (b) United States mail, certified, postage
prepaid, return receipt requested or (c) facsimile transmission, in each case
effective upon receipt (in the case of clause (c) as evidenced by the sender's
receipt of
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electronic confirmation of the addressee's receipt), and in each case addressed
to the following Person at its respective address set forth below or at such
other address as such Person may from time to time designate by written notice
to the other Persons listed below:
If to BJ USA:
BJ Services Company U.S.A.
5500 Northwest Central Drive
Houston, TX 77092
Attention: Mr. Taylor M. Whichard III
Facsimile: 713/895-5420
Confirmation No.: 713/895-5847
If to Nonaffiliated Partner Trustee:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: 801/246-5053
Confirmation No.: 801/246-5630
If to any Beneficiary:
To such Beneficiary at its address set forth on Schedule 1 to the
Participation Agreement
If to Indenture Trustee:
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Facsimile: 617/664-5297
Confirmation No.: 617/664-5666
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If to any Holder:
To such Holder at its address set forth in the Register.
13.2 Governing Law. THIS INDENTURE AND THE NOTES SHALL BE IN
ALL RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK
FOR CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, EXCEPT TO THE EXTENT THAT
MATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION
OF THE LIEN GRANTED BY THE BASIC DOCUMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
13.3 No Recourse Against Others. No director, officer,
employee, stockholder or Affiliate, as such, of Guarantor, General Partner,
Service Taker, BJ USA, Operator, Nonaffiliated Partner Trustee or any
Beneficiary, as the case may be, shall have any liability for any obligations
of Guarantor, General Partner, Service Taker, BJ USA, Operator, Nonaffiliated
Partner Trustee or any Beneficiary, as the case may be, under this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Notes.
13.4 Execution in Counterparts. This Indenture may be
executed in any number of counterparts, and the parties hereto on separate
signature pages, each executed counterpart constituting an original but
altogether only one Indenture.
13.5 Indenture for Benefit of Nonaffiliated Partner Trustee,
Indenture Trustee, Beneficiaries and Holders. Nothing in this Indenture or the
Notes, whether express or implied, shall be construed to give to any Person
other than Nonaffiliated Partner Trustee, Indenture Trustee, Partnership,
Beneficiaries and the Holders any legal or equitable right, remedy or claim
under or in respect of this Indenture, other than General Partner to the extent
expressly provided herein.
13.6 Severability. Whenever possible, each provision of this
Indenture shall be interpreted in such manner as to be
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effective and valid under applicable law, but if any provision of this
Indenture shall be prohibited by or invalid under the laws of any jurisdiction,
such provision, as to such jurisdiction, shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Indenture as to such jurisdiction
or in any other jurisdiction.
13.7 No Oral Modifications or Continuing Waivers. No terms or
provisions of this Indenture or the Notes may be waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the waiver, discharge or termination
is sought; and any waiver of the terms hereof or of any Note shall be effective
only in the specific instance and for the specific purpose given.
13.8 Successors and Assigns. This Indenture shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of, and shall be enforceable by, the parties hereto and
their respective successors and assigns as permitted by and in accordance with
the terms hereof and the Basic Documents. Except as expressly provided herein
or in the other Basic Documents, no party hereto may assign its interests
herein without the consent of the other party hereto. Any request, notice,
direction, consent, waiver or other instrument or action by any Holder shall
bind the successors and assigns of such Holder.
13.9 Headings and Table of Contents. The headings of the
Sections of this Indenture and the Table of Contents are inserted for the
purposes of convenience only and shall not be construed to affect the meaning
or construction of any of the provisions hereof.
13.10 No Legal Title to Indenture Estate in Holders. No Holder
shall have legal title to any part of the Indenture Estate. No transfer, by
operation of law or otherwise, of any Note or other right, title and interest
of any Holder in and to the Indenture Estate or the trusts hereunder shall
operate to terminate this Indenture or the trusts hereunder or entitle any
successor or transferee of such Holder to an accounting or the transfer to it
of legal title to any part of the Indenture Estate.
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13.11 Capacity in Which Acting. Nonaffiliated Partner Trustee
acts hereunder solely as trustee herein and in the Trust Agreement provided and
not in its individual capacity, except as otherwise expressly provided herein,
in the Trust Agreement and in the Participation Agreement.
13.12 Directly or Indirectly. Where any provision in this
Indenture refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
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IN WITNESS WHEREOF, Nonaffiliated Partner Trustee, Partnership and
Indenture Trustee have caused this INDENTURE to be duly executed and delivered
as of the date first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its
individual capacity except as
expressly provided herein,
but solely as Nonaffiliated
Partner Trustee
By: /s/
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
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BJ SERVICES EQUIPMENT, L.P.
By: BJ SERVICES COMPANY, U.S.A.,
its general partner
By: /s/
-----------------------------------
Name:
-------------------------------
Title:
------------------------------
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STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee
By: /s/
------------------------------------
Name:
-------------------------------
Title:
------------------------------
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