EXHIBIT 4.2
Execution Copy
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TRUST INDENTURE, MORTGAGE,
ASSIGNMENT OF CHARTER, AND SECURITY AGREEMENT
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual
capacity, except to
the extent expressly
set forth herein,
but solely as Owner Trustee,
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual
capacity, except to
the extent expressly
set forth herein,
but solely as Indenture Trustee
Dated as of September 30, 1997
Leveraged Lease for One New, Double-Hulled Product Tanker
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................................. 5
ARTICLE II
THE SECURED NOTES
SECTION 2.01. Secured Notes............................................. 5
SECTION 2.02. Payment from Indenture Estate Only........................ 7
SECTION 2.03. Method of Payment......................................... 7
SECTION 2.04. Note Register............................................. 8
SECTION 2.05. Registered Owners......................................... 8
SECTION 2.06. Transfer, Exchange and Replacement of Notes............... 9
SECTION 2.07. New Notes, Payment of Expenses............................ 10
SECTION 2.08. Additional Notes.......................................... 10
SECTION 2.09. Termination of Interest in Indenture Estate............... 14
SECTION 2.10. Equally and Ratably Secured............................... 14
SECTION 2.11. Execution and Delivery of Secured Note upon Original
Issuance................................................... 14
ARTICLE III
REDEMPTION AND REFUNDING
SECTION 3.01. Generally................................................. 14
SECTION 3.02. Mandatory Redemption...................................... 15
SECTION 3.03. [Intentionally Omitted]................................... 15
SECTION 3.04. Assumption of Obligations of the Owner Trustee by the
Charterer................................................. 15
SECTION 3.05. Optional Redemption Refunding............................. 18
SECTION 3.06. Owner Trustee's and Owner Participant's Option to Redeem or
Purchase Secured Notes.................................... 18
SECTION 3.07. Deposited Redemption or Purchase Moneys................... 20
SECTION 3.08. Acquisition of Secured Notes.............................. 20
SECTION 3.09. Condition to Redemption and Refunding..................... 20
SECTION 3.10. Notice of Certain Redemptions............................. 20
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ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 4.01. Base Charter Hire Distribution............................... 21
SECTION 4.02. Certain Distributions........................................ 22
SECTION 4.03. Distribution After Indenture Event of Default................ 23
SECTION 4.04. Application of Payments on Secured Notes..................... 25
SECTION 4.05. Applications of Payments According to Applicable Operative
Document Provisions.......................................... 25
SECTION 4.06. Amounts Received for Which No Provision Is Made.............. 26
SECTION 4.07. Payment Procedures........................................... 27
SECTION 4.08. Application of Payments Under Guaranty....................... 27
ARTICLE V
COVENANTS OF OWNER TRUSTEE; CERTAIN AGREEMENTS;
INDENTURE EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 5.01. Covenants of Owner Trustee; Certain Agreements............... 27
SECTION 5.02. Indenture Events of Default.................................. 29
SECTION 5.03. Certain Rights............................................... 31
SECTION 5.04. Remedies..................................................... 33
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate............ 35
SECTION 5.06. Remedies Cumulative.......................................... 39
SECTION 5.07. Discontinuance of Proceedings................................ 39
SECTION 5.08. Waiver of Past Defaults...................................... 39
SECTION 5.09. No Action Contrary to Charterer's Rights Under the Charter... 40
SECTION 5.10. Rights of Holders of Secured Notes........................... 40
SECTION 5.11. Limitation on Suits by Holders............................... 40
ARTICLE VI
DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.01. Certain Actions.............................................. 41
SECTION 6.02. Action upon Instructions..................................... 41
SECTION 6.03. Release of Lien of Indenture................................. 42
SECTION 6.04. Indemnification.............................................. 43
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SECTION 6.05. No Implied Duties........................................... 44
SECTION 6.06. Duties to Remove Certain Liens.............................. 44
SECTION 6.07. No Action Except Under Operative Documents or Instructions.. 44
SECTION 6.08. Certain Rights of the Owner Trustee and the Owner Participant 44
SECTION 6.09. Filing of Financing and Continuation Statements............. 45
SECTION 6.10. Publishing of Notices....................................... 45
SECTION 6.11. Taxes; Withholding; Information Reporting................... 46
ARTICLE VII
THE INDENTURE TRUSTEE AND THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties............................. 46
SECTION 7.02. Absence of Duties Except as Specified....................... 47
SECTION 7.03. No Representations or Warranties............................ 47
SECTION 7.04. No Segregation of Moneys; No Interest; Investments.......... 47
SECTION 7.05. Reliance; Agents; Advice of Counsel......................... 48
SECTION 7.06. No Compensation from Holders or Indenture Estate............ 49
SECTION 7.07. Right of the Indenture Trustee to Perform Covenants, Etc.... 49
SECTION 7.08. Moneys for Payments in Respect of Notes to be Held in Trust. 49
SECTION 7.09. Disposition of Moneys Held for Payments of Notes............ 50
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustees.......................... 50
SECTION 8.02. Resignation of Indenture Trustee; Appointment of Successor.. 50
SECTION 8.03. Co-Trustees and Separate Trustees........................... 52
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Indenture Supplements Without Consent of Holders............ 54
SECTION 9.02. Supplements and Amendments to Indenture With Consent of
Holders of Notes............................................ 55
SECTION 9.03. Execution of Indenture Supplement, Amendments, Etc.......... 60
SECTION 9.04. Effect of Indenture Supplement.............................. 61
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SECTION 9.05. Reference in Secured Notes to Indenture Supplements......... 61
SECTION 9.06. Notices of Indenture Supplements and Amendments, Etc........ 61
SECTION 9.07. Charterer's Rights.......................................... 61
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Indenture................................... 62
SECTION 10.02. No Legal Title to Indenture Estate in Holders.............. 63
SECTION 10.03. Power of Attorney.......................................... 63
SECTION 10.04. Regarding the Owner Trustee................................ 64
SECTION 10.05. Notices.................................................... 65
SECTION 10.06. Severability of Provisions................................. 65
SECTION 10.07. No Oral Modification or Continuing Waivers................. 65
SECTION 10.08. Successors and Assigns..................................... 66
SECTION 10.09. Headings; Table of Contents................................ 66
SECTION 10.10. Normal Commercial Relations................................ 66
SECTION 10.11. Governing Law.............................................. 66
SECTION 10.12. Execution.................................................. 66
SECTION 10.13. Security Agreement......................................... 66
SECTION 10.14. Benefits of Indenture...................................... 66
Appendix A Definitions
Schedule 1 Description of Vessel
Exhibit A Form of Secured Note
Exhibit B Maturity Dates, etc.
Exhibit C Relevant Amendment
Exhibit D Form of Indenture Supplement
Exhibit E Form of Relevant Date Supplement
Exhibit F Form of Ship Mortgage
TRUST INDENTURE, MORTGAGE, ASSIGNMENT OF CHARTER,
AND SECURITY AGREEMENT
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This TRUST INDENTURE, MORTGAGE, ASSIGNMENT OF CHARTER, AND SECURITY
AGREEMENT, dated as of September 30, 1997, between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity,
except as expressly provided herein, but solely as Owner Trustee under the Trust
Agreement (the "Owner Trustee") (capitalized terms used herein having the
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respective meanings ascribed to them in Section 1.01) and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company, not in its individual capacity,
except as expressly provided herein, but solely as Indenture Trustee (the
"Indenture Trustee"):
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WITNESSETH:
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WHEREAS, the Owner Participant and the Owner Trustee have heretofore
entered into the Trust Agreement, whereby, among other things, the Owner Trustee
in its capacity as Owner Trustee thereunder has declared a certain trust for the
use and benefit of the Owner Participant, subject, however, to the Lien of this
Indenture, and the Owner Trustee has been authorized and directed to execute and
deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture to provide, among
other things (i) for the issuance by the Owner Trustee to the Pass Through
Trustee of the Series 1997-B Secured Note specified in Exhibit B hereto, upon
payment by the Pass Through Trustee of the principal amount of such Series 1997-
B Secured Note, and (ii) for the assignment, mortgage and pledge by the Owner
Trustee to the Indenture Trustee, as part of the Indenture Estate hereunder,
among other things, of all of the right, title and interest of the Owner
Trustee, other than Excepted Payments, in, to and under, as the case may be, the
Vessel (by virtue of the grant hereunder and the grant under the Ship Mortgage),
the Charter, the Parent Guaranty, and all payments and other amounts received
hereunder and thereunder, other than Excepted Payments, in accordance with the
terms hereof and thereof, as security for, among other things, the Owner
Trustee's obligations to the Indenture Trustee, the Loan Participant and other
Holders from time to time and for the benefit and security of the Loan
Participant and such Holders;
WHEREAS, all things have been done to make the Secured Notes, when executed
by the Owner Trustee and authenticated, issued and delivered hereunder, the
legal, valid, binding and enforceable obligations of the Owner Trustee in
accordance with their terms; and
WHEREAS, all things necessary to make this Indenture the legal, valid,
binding and enforceable obligation of the Owner Trustee, for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened, and the Indenture
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Trustee has duly accepted the trust created hereby and as evidenced thereof has
joined in the execution hereof;
NOW, THEREFORE, THIS TRUST INDENTURE, MORTGAGE, ASSIGNMENT OF CHARTER AND
SECURITY AGREEMENT, WITNESSETH, that, to secure (i) the prompt payment when and
as due and payable of the principal of, Make-Whole Amount, if any, and interest
on all the Secured Notes from time to time Outstanding hereunder and of all
other amounts payable to the Holders (whether as Holders or Loan Participants)
hereunder, under the Secured Notes and under the other Operative Documents
(other than the Tax Indemnity Agreement), (ii) the performance and observance by
the Owner Trustee of all the provisions, covenants and agreements for the
benefit of the Indenture Trustee or the Holders herein, in the Participation
Agreement, in the Secured Notes and in the other Operative Documents (other than
the Tax Indemnity Agreement), and (iii) the performance and observance by the
Owner Participant of its covenants and agreements contained in the Operative
Documents (other than the Tax Indemnity Agreement) (the obligations described in
the above clauses (i), (ii) and (iii) collectively, the "Indenture
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Indebtedness"), and for the uses and purposes and subject to the terms and
provisions hereof, and in consideration of the premises and of the covenants
herein contained and of the acceptance of the Secured Notes by the Holders
thereof:
GRANTING CLAUSE
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The Owner Trustee, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to secure the payment and
performance of the Indenture Indebtedness, hereby presently irrevocably grants,
conveys, mortgages, hypothecates, and pledges unto the Indenture Trustee and
creates, to and for the benefit of the Indenture Trustee a security interest in
and mortgage lien on, and assigns by way of security, all of the right, title
and interest of the Owner Trustee in and to the following property, rights and
privileges, other than Excepted Payments, now owned or in the future acquired by
the Owner Trustee or in which the Owner Trustee now has or may in the future
acquire any estate, right, title or interest (which collectively, together with
all of the Indenture Trustee's right, title and interest in and to the Vessel
described in the Ship Mortgage, by virtue of the grant of the Ship Mortgage,
including all property subjected to the Lien of this Indenture, the Ship
Mortgage or any security interest or mortgage supplemental hereto or thereto,
but excluding Excepted Payments, shall constitute the "Indenture Estate"), to
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wit:
(a) all right, title and interest of the Owner Trustee in the Vessel
(as described in Schedule 1 hereto), including, without limitation, any
appurtenance thereto and any Modification to the Vessel which, pursuant to
the terms of the Charter, are the property of the Owner Trustee;
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(b) the Bill of Sale and the Conveyancing Instrument, and all rights,
powers and remedies of the Owner Trustee pursuant thereto, whether arising
thereunder or by statute, at law, in equity or otherwise;
(c) the Charter, including, without limitation, (i) all amounts of
hire, rent, income, insurance proceeds and requisition, indemnity or other
payments of any kind for or with respect to the Vessel, (ii) all rights of
the Owner Trustee to exercise any election or option, or to give any
notice, consent, waiver or approval under or in respect of the Charter, or
to accept any surrender or enter into any modification thereof, as the case
may be, and (iii) all rights, powers and remedies of the Owner Trustee
pursuant to the Charter, whether arising thereunder or by statute, at law,
in equity or otherwise, including, without limitation, the right to
possession of the Vessel;
(d) the Parent Guaranty, including without limitation, (i) all amounts
payable thereunder, (ii) all rights of the Owner Trustee to exercise any
election or option, or to give any notice, consent, waiver or approval
under or in respect of the Parent Guaranty, or to accept any surrender or
enter into any modification thereof, as the case may be, and (iii) all
rights, powers and remedies of the Owner Trustee pursuant to the Parent
Guaranty, whether arising thereunder or by statute, at law, in equity or
otherwise;
(e) all moneys and securities now or hereafter paid or deposited or
required to be paid or deposited to or with the Indenture Trustee pursuant
to any term of any Operative Document, and held or required to be held by
the Indenture Trustee hereunder;
(f) to the extent assignable, any and all permits, certificates,
approvals and authorizations, however characterized, issued or in any way
furnished to the Owner Trustee in connection with the Vessel, whether
necessary or not for the operation and use of the Vessel;
(g) all the tolls, rents, issues, profits, products, revenues and
other income of the property subjected or required to be subjected to the
Lien of this Indenture, including all payments or proceeds payable to the
Owner Trustee upon or after termination of the Charter as the result of the
sale, lease or other disposition of the Vessel, and all estate, right,
title and interest of every nature whatsoever of the Owner Trustee in and
to the same and every part thereof; and
(h) all rights or property which may be received upon the exercise of
any remedy or option contained in any of the above-described instruments
and all proceeds in whatever form of all or any part of any of the
foregoing;
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EXCLUDING, HOWEVER, from the foregoing grant, and thereby from the
Lien of this Indenture and from the Indenture Estate, any and all Excepted
Payments and provided that, notwithstanding the foregoing provisions or anything
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herein to the contrary, the charter interest granted to the Charterer under the
Charter shall not be subject to the Lien of this Indenture or the Ship Mortgage
or be part of the Indenture Estate, and nothing in this Indenture or in the Ship
Mortgage shall affect the rights of the Charterer under the Charter so long as
no Charter Event of Default has occurred and is continuing; and
SUBJECT to the rights of the Owner Trustee and the Owner Participant
hereunder;
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee
and its successors and assigns, for the benefit and security of the Holders,
without any priority of any one Secured Note over any other (except as expressly
provided herein or under any Operative Document), and for the uses and purposes
and subject to the terms and conditions set forth in this Indenture. This
Indenture is a mortgage given to secure the payment of the Indenture
Indebtedness and this Indenture is also intended to operate as, among other
things, a security agreement and, to the extent set forth above, an assignment
of Base Charter Hire, Interim Charter Hire and Supplemental Charter Hire, leases
and rents.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Charter and the other Operative Documents to perform all of the obligations of
the Owner Trustee hereunder and thereunder, all in accordance with and pursuant
to the terms and provisions of each thereof, and the Holders and, except as
expressly provided herein, the Indenture Trustee shall have no obligation or
liability under any Operative Document by reason of or arising out of this
Indenture (except as to the Indenture Trustee, if the Indenture Trustee shall
have become the "Shipowner" under the Charter). None of the Indenture Trustee
or any Holder shall be required or obligated in any manner to perform or fulfill
any obligation of the Owner Trustee under or pursuant to any Operative Document
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 to
present or file any claim, or to 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.
Simultaneously with the execution and delivery hereof, the Owner
Trustee, as mortgagor, shall execute and deliver the Ship Mortgage,
substantially in the form annexed hereto as Exhibit F, except that the blanks in
such form shall be filled in, and such form may be modified as contemplated
therein.
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So long as no Charter Event of Default shall have occurred and be
continuing, the Indenture Trustee hereby reassigns to the Owner Trustee all the
Indenture Trustee's right, title and interest in the Conveyancing Instrument and
in the interests contained therein; provided, if and so long as an Charter Event
of Default shall have occurred and be continuing, the reassignment to the Owner
Trustee contained herein shall be void and of no further force and effect.
Accordingly, the Owner Trustee and the Indenture Trustee hereby agree
for themselves and for the benefit and security of the Holders as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise defined herein, for the
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purposes hereof, capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in Appendix A. References in this Indenture
to Sections, subsections, paragraphs, Schedules, Appendices and Exhibits are to
Sections, subsections and paragraphs in, and Schedules, Appendices and Exhibits
to, this Indenture unless otherwise indicated.
ARTICLE II
THE SECURED NOTES
SECTION 2.01. Secured Notes. (a) Generally. Except for any Secured
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Note issued pursuant to Section 2.06 or 2.08, the Secured Note may be issued
only on the Funding Date. On the Funding Date, the Secured Note to be issued on
such Date pursuant to Section 2.2 of the Participation Agreement, subject to
Section 2.11, shall be duly executed by the Owner Trustee, duly authenticated
and delivered by the Indenture Trustee and registered in the name of the Loan
Participant to which the Secured Note is being issued and shall have attached
thereto the Amortization Schedule for the Secured Note. Receipt by the
Indenture Trustee of Secured Notes duly executed by the Owner Trustee shall
constitute instructions to the Indenture Trustee to authenticate, register and
deliver such Secured Notes on the Funding Date.
(b) Series 1997-B Secured Note. The Series 1997-B Secured Note shall:
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(i) be limited in aggregate original principal amount to the
amount specified in Exhibit B hereto;
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(ii) be issuable only as registered Secured Notes in
denominations of $1,000, and integral multiples thereof, or if the
remaining principal amount thereof shall be less than $1,000, such
remaining principal amount;
(iii) be dated the Funding Date;
(iv) bear interest on the unpaid principal amount thereof from
the date of the Series 1997-B Secured Note at the rate specified in
Exhibit B (computed on the basis of a 360-day year consisting of
twelve 30-day months);
(v) provide for payments of interest and otherwise be due and
payable as to principal and interest as specified herein and therein;
(vi) be prepayable only as provided in Sections 3.02, 3.05,
3.06, 4.02 and 4.03; and
(vii) be substantially of the tenor and in the form set forth in
Exhibit A.
(c) Each Secured Note shall be signed on behalf of the Owner Trustee
by a Responsible Officer of the Owner Trustee, manually or in facsimile.
If any officer of the Owner Trustee executing Secured Notes or attesting to
the Owner Trustee's seal no longer holds that office at the time a Secured
Note is executed on behalf of the Owner Trustee, such Secured Note shall be
valid nevertheless. No Secured Note shall be secured by or entitled to any
benefit under this Indenture, or be valid for any purpose, unless there
appears thereon a certificate of authentication executed by or on behalf of
the Indenture Trustee by the manual signature of a Responsible Officer of
the Indenture Trustee, and such certificate on any Secured Note shall be
conclusive evidence that such Secured Note has been duly authenticated and
delivered hereunder.
(d) The Indenture Trustee shall not be required (i) to register the
transfer of or to exchange any Secured Note during a period beginning at
the opening of business 15 Business Days before the day of the mailing of a
notice of redemption (or purchase in lieu of redemption) of Secured Notes
pursuant to Section 3.02, 3.05 or 3.06 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or to
exchange any Secured Note called for redemption (or purchase in lieu of
redemption) pursuant to such Section 3.02, 3.05 or 3.06.
SECTION 2.02. Payment from Indenture Estate Only. All payments of
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principal, Make-Whole Amount, if any, and interest to be made by the Owner
Trustee and, except as otherwise provided in the Operative Documents, all
payments of any other amounts payable by or on behalf of the Owner Trustee under
the Secured Notes and this Indenture, shall be made
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only from the income and proceeds from the Indenture Estate, and only to the
extent that the Indenture Trustee shall have received sufficient income or
proceeds from the Indenture Estate to make such payments in accordance with the
terms hereof. Each Holder, by its acceptance of a Secured Note, agrees that it
will look solely to the income and proceeds from the Indenture Estate to the
extent available for payment as herein provided and that (a) none of the Owner
Trustee or the Indenture Trustee (whether in its individual or trust capacity)
shall be personally liable to such Holder for any amounts payable under the
Secured Notes, nor, except as specifically provided herein or in the other
Operative Documents, for any amounts payable or any liability under this
Indenture and (b) the Owner Participant shall not be liable to the Indenture
Trustee or to any Holder under any circumstances for any reason whatsoever
except to the extent expressly provided herein or in any other Operative
Document.
SECTION 2.03. Method of Payment. (a) The principal of, and Make-
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Whole Amount, if any, and interest, on each Secured Note shall be payable in
immediately available funds, the receipt of which has been confirmed by a
Responsible Officer of the Indenture Trustee (which shall be done promptly upon
receipt thereof) on or before 12:00 p.m., New York time, at the place of
receipt, on the due date therefor, to the Indenture Trustee at the Corporate
Trust Office of the Indenture Trustee. Amounts so received by the Indenture
Trustee shall be paid by the Indenture Trustee to each Holder on the due date
therefor without any presentment or surrender of any Secured Note held by such
Holder by whichever of the following methods shall be specified by prior written
notice from such Holder to the Indenture Trustee: (i) by transferring prior to
2:00 p.m., New York City time, on such date such payment to such Holder in
immediately available funds by crediting the amount to be distributed to any
Holder to any account maintained by such Holder with the Indenture Trustee or
(ii) by initiating a wire transfer prior to the time set forth in clause (i) of
this Section 2.03(a) of such amount in immediately available funds to a banking
institution designated in such notice with bank wire transfer facilities for the
account of such Holder, in all cases without any presentment or surrender of any
Secured Note, except that on the date of the final maturity thereof (whether at
maturity, upon prepayment, acceleration or otherwise), the Holder of each
Secured Note shall surrender such Secured Note promptly after payment; provided
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that failure to so present such Secured Note shall not diminish the effect of
full and final payment by the Owner Trustee. If any Holder does not specify one
of the foregoing methods, payment will be made by check mailed to the registered
address of such Holder. In the event the Indenture Trustee shall fail to make
any payment as provided in the preceding sentences after its receipt of funds at
the place and on or before the time specified in this Section 2.03(a), the
Indenture Trustee in its individual capacity agrees to compensate each Holder
for loss of use of funds at the Federal Funds overnight rate.
(b) Whenever any payment to be made hereunder or pursuant to the terms
of any Secured Note shall be stated to be due on a day which is not a Business
Day, such payment shall be due and payable on the next succeeding Business Day
with the same force and effect as if made on such scheduled date and (provided
such payment is timely made on such succeeding
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Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date.
(c) If payment of any installment of principal or interest payable in
accordance with the terms hereof and of the Secured Notes is not paid in full
when due, whether as scheduled or upon acceleration and whether before or after
the maturity date of the Secured Notes, such overdue amount of principal or
interest shall (to the extent not prohibited by applicable law) bear interest,
payable on demand, for each day from and including the date payment thereof was
due to the actual date of payment, at the Overdue Rate.
(d) Subject to Section 6.11, the Holder of any Secured Note shall be
entitled to the principal of, and Make-Whole Amount, if any, and interest on
such Secured Note free from all rights of set-off or counterclaims of the Owner
Trustee, the Indenture Trustee or any prior Holder of such Secured Note.
Nothing set forth in this Section 2.03(d) shall impair the right of the Owner
Trustee to receive a return from the Indenture Trustee of any amount
unintentionally overpaid by the Owner Trustee in respect of a Secured Note.
SECTION 2.04. Note Register. The Indenture Trustee shall cause to be
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kept at the Indenture Trustee's corporate trust office a register (the "Note
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Register") for the registration or transfer of the Secured Notes. The Note
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Register shall be maintained by the Indenture Trustee, and the names and
addresses of the registered Holders of the Secured Notes, the transfers of the
Secured Notes and the names and addresses of the transferees of the Secured
Notes shall be entered in the Note Register under such reasonable regulations as
the Indenture Trustee may prescribe.
SECTION 2.05. Registered Owners. The Owner Trustee and the Indenture
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Trustee shall deem and treat any registered Holder as the absolute owner of any
Secured Note held by such Holder, as indicated in the Note Register, for the
purpose of receiving payment of all amounts payable with respect to such Secured
Note and for all other purposes, and neither the Owner Trustee nor the Indenture
Trustee shall be affected by any notice to the contrary. All such payments so
made shall be valid and effectual to satisfy and discharge the liability of the
Owner Trustee upon such Secured Note to the extent of the sum or sums so paid.
SECTION 2.06. Transfer, Exchange and Replacement of Notes. (a)
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Secured Notes may be transferred only on the Note Register. Any Secured Note
may be transferred on the Note Register if such Secured Note is surrendered for
cancellation at the Corporate Trust Office of the Indenture Trustee and is
accompanied by an instrument of transfer in form and substance reasonably
satisfactory to the Indenture Trustee, which Secured Note or Secured Notes shall
be canceled by the Indenture Trustee. A new Secured Note or Secured Notes of
the same series, duly executed by the Owner Trustee and registered in the name
of the transferee or transferees in a principal amount or amounts equal to the
principal amount of such transferred
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Secured Note, shall be duly authenticated and delivered by the Indenture Trustee
to the transferee or transferees named by the Holder of such transferred Secured
Note in exchange for such transferred Secured Note. Promptly after registration
of the transfer of any Secured Note, the Indenture Trustee shall give notice
thereof to the Charterer and the Owner Trustee specifying the name and address
for notices of the transferee or transferees.
(b) Any Secured Note may be exchanged for a new Secured Note if such
Secured Note to be so exchanged is surrendered for cancellation at the Corporate
Trust Office of the Indenture Trustee and is accompanied by the request of the
Holder thereof specifying the denomination of the new Secured Note (which shall
be in denominations of at least $1,000 or in integral multiples thereof, or if
less, the remaining principal amount thereof) to be issued in exchange therefor.
Upon instructions from the Indenture Trustee, the Owner Trustee shall deliver to
the Indenture Trustee a new Secured Note of the same series, duly executed by
the Owner Trustee and registered in the name of such Holder in the denominations
so requested and in an aggregate principal amount equal to the aggregate
original principal amount of such Secured Note to be so exchanged, and such new
Secured Note shall be duly authenticated by the Indenture Trustee and delivered
by the Indenture Trustee to such Holder in exchange for such Secured Note to be
so exchanged, which Secured Note shall be cancelled by the Indenture Trustee.
(c) If any Secured Note shall become mutilated or be destroyed, lost
or stolen, upon request of the Holder thereof, a new Secured Note of the same
series, duly executed by the Owner Trustee and registered in the name of such
Holder in the same original principal amount as the Secured Note so mutilated,
destroyed, lost or stolen, shall be duly authenticated and delivered by the
Indenture Trustee to such Holder in exchange for such Secured Note, if
mutilated, or in substitution for such Secured Note, if destroyed, lost or
stolen. In the case of a mutilated Secured Note, such Secured Note shall be
surrendered for cancellation at the Corporate Trust Office of the Indenture
Trustee and shall be cancelled by the Indenture Trustee. In the case of a
destroyed, lost or stolen Secured Note, the Holder thereof shall furnish to the
Owner Trustee and the Indenture Trustee (i) evidence to their reasonable
satisfaction of the destruction, loss or theft of such Secured Note and
ownership thereof, and (ii) such security or indemnity as may be reasonably
required by them to save them harmless; provided that if the affected Holder is
--------
a Pass Through Trustee, the written agreement of such Holder to indemnify the
Owner Trustee and the Indenture Trustee (in their respective individual and
trust capacities) with respect to such destroyed, lost or stolen Secured Note,
together with written notice of ownership and destruction, loss or theft
thereof, shall satisfy the conditions of this sentence.
(d) The Indenture Trustee shall cancel all Secured Notes surrendered
for replacement, redemption, registration of transfer, exchange, payment or
cancellation and shall destroy canceled Secured Notes.
10
SECTION 2.07. New Notes, Payment of Expenses. (a) Each Secured Note
------------------------------
issued pursuant to Section 2.06 (a "New Note") upon transfer of, in exchange for
--------
or in substitution for a Secured Note (an "Old Note") shall be dated as of the
--------
date of such Old Note. The Indenture Trustee shall mark on each New Note (i) the
date to which principal and interest have been paid on the applicable Old Note
and (ii) all payments and prepayments of principal made on such Old Note which
are allocable to such New Note. Interest shall be deemed to have been paid on
such New Note to the date to which interest was paid on the applicable Old Note,
and all payments and prepayments of principal required to have been marked on
such New Note, as provided in clause (ii) of the preceding sentence, shall be
deemed to have been made thereon. All New Notes issued pursuant to Section 2.06
upon transfer of, in exchange for or in substitution for or in lieu of Old Notes
shall be valid obligations of the Owner Trustee evidencing the same debt as such
Old Notes and shall be entitled to the benefits and security of this Indenture
to the same extent as such Old Notes. Issuance of any New Note shall not for
any purposes be deemed a further advance of funds to the Owner Trustee and the
perfection and priority of the security interest in the Indenture Estate
applicable to such New Note shall for all purposes be the same as that
applicable to the Old Note replaced by such New Note.
(b) Upon the issuance of a New Note or New Notes pursuant to Section
2.06, the Owner Trustee and/or the Indenture Trustee may require from the party
requesting such New Note or New Notes payment of a sum to reimburse the Owner
Trustee and/or the Indenture Trustee for, or to provide funds for, the payment
of any tax or other governmental charge or any other charge or expense paid or
payable with respect to such transfer by the Owner Trustee and/or the Indenture
Trustee, without any right of reimbursement under any Operative Document with
respect to such payments.
SECTION 2.08. Additional Notes. (a) So long as no Charter Event of
----------------
Default or Indenture Event of Default shall have occurred and be continuing,
Additional Notes of one or more series may be issued under and secured by this
Indenture at any time or from time to time, subject to the conditions
hereinafter provided in this Section 2.08, for the purpose of financing all or a
portion of the cost of any Modification to the Vessel as provided in Section 14
of the Participation Agreement.
(b) Prior to the issuance of any Additional Notes of any series
pursuant to this Section 2.08, the Owner Trustee shall have received from the
Charterer and delivered to the Indenture Trustee, not less than thirty (30) days
prior to the proposed date of issuance of such Additional Notes, a request and
authorization to issue Additional Notes (a "Request"), which Request shall
-------
include the amount and series of such Additional Notes, the proposed date of
issuance of such Additional Notes, and the other details with respect thereto
which shall be consistent with this Section 2.08. Such Additional Notes shall
have a designation so as to distinguish such Additional Notes from the Initial
Secured Note and Additional Notes of any other series, but otherwise shall be
substantially similar in form to the Initial Secured Note, with
11
such omissions therefrom, variations therein and additions thereto as shall be
appropriate. Such Additional Notes shall not rank senior in any respect to the
Initial Secured Note, but may be subordinate to the Initial Secured Note and
other Secured Notes issued pursuant to the terms hereof.
(c) The terms, conditions and designations of such Additional Notes
(which shall be consistent with the Request and with the terms of this Indenture
and of the Participation Agreement) shall be set forth in a supplement to this
Indenture, substantially in the form of Exhibit D, which shall be executed by
the Owner Trustee and the Indenture Trustee. Such indenture supplement shall
set forth:
(i) after giving effect to the issuance of the Additional Notes, the
aggregate principal amount Outstanding of all Secured Notes (including such
Additional Notes), which shall not exceed 80% of the total Fair Market
Sales Value of the Vessel at such time (as determined pursuant to mutual
agreement of the Owner Trustee and the Charterer and otherwise by the
Appraisal Procedure) after giving effect to such Modifications;
(ii) the principal amount of the Additional Notes, which shall not
exceed 100% of the cost of such Modifications;
(iii) the text of such Additional Notes (which, except for the terms
of payment thereof, shall be of substantially the same effect as the text
of the Initial Secured Notes set forth in this Indenture, with such changes
as are consistent with and permitted by this Indenture and which in all
events shall provide that such Additional Notes are never more than pari
passu in priority of payment, in right of security and in all other
respects with the Initial Secured Notes);
(iv) the date of maturity of such Additional Notes (which shall be no
later than the end of the Base Charter Term);
(v) the date from which, and the date or dates on which, interest is
payable (which shall be Interest Payment Dates);
(vi) the terms for the repayment of the principal amount of such
Additional Notes (each regularly scheduled payment of principal shall be an
Interest Payment Date);
(vii) the terms, if any, as to prepayment or redemption of such
Additional Notes at the option of the Owner Trustee or the Charterer, and
as to the premium, if any, payable on any redemption or prepayment of such
Additional Notes; and
12
(viii) any other terms and agreements in respect thereof as required
or permitted by this Indenture or necessary to specify the terms and
conditions on which such Additional Notes shall be issued.
(d) Such Additional Notes shall be executed by the Owner Trustee
as provided in Section 2.01 and deposited with the Indenture Trustee for
authentication and delivery, but before such Additional Notes shall be
authenticated and delivered by the Indenture Trustee, there shall be delivered
to or deposited with the Indenture Trustee the following:
(i) the Request;
(ii) the supplement to this Indenture described in Section 2.08(c),
duly executed by the Owner Trustee;
(iii) a supplement to the Charter, duly authorized, executed and
delivered by the Charterer and the Owner Trustee, providing for adjustments
to the Base Charter Percentages, Stipulated Loss Value Percentages and
Termination Value Percentages, to ensure that all such payments required
hereunder and under the Secured Notes, after giving effect to the issuance
of such Additional Notes, shall be sufficient in amount to pay all amounts
due hereunder and thereunder, together with such instruments of conveyance,
assignment and transfer, if any, necessary to subject such supplement to
the Charter to the Lien and security interest of this Indenture and to
perfect such Lien and security interest subject to no Liens other than
Permitted Liens, and evidence as to the due recording or filing of each
thereof or of financing or similar statements with respect thereto;
(iv) such instruments of conveyance, assignment and transfer
(including, without limitation, contractors' waivers), if any, duly
executed and delivered by the respective parties thereto, and such evidence
of the due filing thereof or of financing statements with respect thereto,
as may be required to convey title to the Owner Trustee of all property
included in such Modification and to subject such property to the Lien of
this Indenture, subject to no Liens except Permitted Liens or an opinion of
counsel reasonably satisfactory to the Indenture Trustee that such filing
is not required;
(v) an amendment to the Ship Mortgage so that it will secure the
Additional Notes to the extent set forth in the supplement to this
Indenture described in Section 2.08(c) or an opinion of counsel that such
amendment is not required;
(vi) originals or certified copies of all corporate actions
necessary for the due and valid issue of such Additional Notes, the due and
valid authorization, execution, delivery and performance by the Owner
Trustee of the supplement to this Indenture
13
relating thereto, and the due and valid authorization, execution, delivery
and performance by the Charterer and the Owner Trustee of the Supplement to
the Charter and the creation of the Lien and security interest thereon
referred to above, all of which corporate actions shall have been duly
obtained and shall be in full force and effect, together with evidence as
to the due occurrence of all such authorization, execution, delivery and
performance;
(vii) documentation, duly executed and delivered, to the extent
practicable, by the respective parties thereto, whereby the proposed
holders of the Additional Notes agree to be bound by the terms of the
Operative Documents (including, without limitation, representations and
covenants corresponding to those contained in Section 9 of the
Participation Agreement);
(viii) an Officer's Certificate of the Charterer certifying (a) as to
the cost of such Modification and (b) that all conditions precedent to the
issuance of the Additional Notes contained in this Section 2.08 and in
Section 14 of the Participation Agreement have been satisfied unless such
conditions have been waived in writing by the Indenture Trustee and Owner
Trustee;
(ix) such opinions of counsel as are customary in transactions of
this type, including, without limitation, opinions of counsel to the
Charterer and/or the Owner Trustee as to the due authorization, execution,
delivery and enforceability of such supplement to this Indenture and such
Additional Notes and the creation and perfection of the security interest
in such Modification (subject to usual or customary exceptions,
qualifications and assumptions) and such other certificates and other
documents as may be reasonably requested by the Indenture Trustee to
evidence the validity and binding effect of such supplement to this
Indenture and such Additional Notes and compliance with this Section 2.08;
and
(x) Rating Agency Confirmation with respect to the issuance of
such Additional Notes.
(e) When the documents referred to in Section 2.08(d) shall have
been delivered to or deposited with the Indenture Trustee and when such
Additional Notes described in the Request and the supplement to this Indenture
have been executed by the Owner Trustee as required by this Indenture, the
Indenture Trustee shall authenticate and deliver such Additional Notes in the
manner described in such Request, but only upon payment to the Owner Trustee of
the sum or sums specified in such Request, whereupon the Owner Trustee shall pay
such sum or sums to the Charterer.
SECTION 2.09. Termination of Interest in Indenture Estate. A Holder
-------------------------------------------
shall have no further interest in, or other right with respect to, the Indenture
Estate upon the payment of
14
principal of, Make-Whole Amount, if any, and interest on, any Secured Notes held
by such Holder and all other sums payable to such Holder hereunder with respect
to any such Secured Notes, under the other Operative Documents and under such
Secured Notes.
SECTION 2.10. Equally and Ratably Secured. Except as otherwise
---------------------------
expressly provided in this Indenture, all Secured Notes at any time Outstanding
under this Indenture shall be equally and ratably secured by this Indenture
without preference, priority or distinction on account of the series, date, time
of issue or maturity of such Secured Notes.
SECTION 2.11. Execution and Delivery of Secured Note upon Original
----------------------------------------------------
Issuance. The Owner Trustee shall issue and execute, and the Indenture Trustee
- --------
shall authenticate and deliver, one or more Secured Notes for original issuance
only upon Charterer's request and upon payment by the Loan Participant pursuant
to the Participation Agreement of an aggregate amount equal to the aggregate
original principal amount of such Secured Note or Notes.
ARTICLE III
REDEMPTION AND REFUNDING
SECTION 3.01. Generally. The Secured Notes may not be redeemed or
---------
prepaid except to the extent and in the manner expressly permitted or required
by this Indenture. Except as otherwise expressly provided in this Indenture,
any amount prepaid in partial redemption of the Secured Notes Outstanding shall
be distributed by the Indenture Trustee to all Holders ratably, without priority
of any Holder or any series over any other Holder or any other series, in the
proportion that the principal amount of Secured Notes held by such Holder bears
to the principal amount of all Secured Notes then Outstanding.
SECTION 3.02. Mandatory Redemption. (a) Casualty Redemption. If an
-------------------- -------------------
Event of Loss with respect to the Vessel shall occur, unless the Charterer shall
have elected to substitute a vessel as the Vessel in accordance with the terms
and requirements set forth in Section 11(b)(ii) of the Charter, then the Owner
Trustee shall redeem on the date on which Stipulated Loss Value is paid pursuant
to the Charter (the date of any redemption under this Section 3.02(a) being
herein called a "Casualty Redemption Date") the entire unpaid principal amount
------------------------
of the Secured Notes Outstanding on such Casualty Redemption Date, at a
redemption price equal to 100% of such unpaid principal amount of such Secured
Notes, together with any accrued and unpaid interest thereon to, but not
including, such Casualty Redemption Date and without Make-Whole Amount or any
other premium.
(b) Early Termination Redemption. If the Charter is terminated with
----------------------------
respect to the Vessel pursuant to Section 12 of the Charter, the Owner Trustee
shall redeem on the
15
applicable Termination Date (the date of any redemption under this Section
3.02(b) being herein called a "Termination Redemption Date"), the entire unpaid
---------------------------
principal amount of the Secured Notes Outstanding on such Termination Redemption
Date, at a redemption price equal to 100% of such unpaid principal amount of
such Secured Notes, together with any accrued and unpaid interest thereon to,
but not including, such Termination Redemption Date plus, in the case of each
Secured Note redeemed prior to the Premium Termination Date applicable to such
Secured Note, a premium, equal to the Make-Whole Amount, if any, with respect to
such Secured Note and otherwise without Make-Whole Amount or any other premium.
(c) Purchase Redemption. In the event that the Charterer shall
-------------------
purchase the Vessel pursuant to Section 15(a) of the Charter prior to the date
of expiration of the Basic Charter Term, and the Charterer shall not have
assumed the obligations of the Owner Trustee under the Secured Notes pursuant to
Section 11.6 of the Participation Agreement, the Owner Trustee shall redeem on
the date of purchase (the date of any redemption under this Section 3.02(c)
being herein called a "Purchase Redemption Date"), the entire unpaid principal
------------------------
of the Secured Notes Outstanding on such Purchase Redemption Date at a
redemption price equal to 100% of the unpaid principal amount of the Secured
Notes together with any accrued and unpaid interest thereon to, but not
including, such Purchase Redemption Date plus, in the case of each Secured Note
redeemed prior to the Premium Termination Date applicable to such Secured Note,
a premium equal to the Make-Whole Amount, if any, with respect to such Secured
Note and otherwise without Make-Whole Amount or any other premium.
SECTION 3.03. [Intentionally Omitted]
----------------------
SECTION 3.04. Assumption of Obligations of the Owner Trustee by the
-----------------------------------------------------
Charterer. In the event that the Charterer shall have elected to assume all of
- ---------
the rights and obligations of the Owner Trustee under this Indenture in respect
of the Secured Notes in connection with the purchase by the Charterer of the
Vessel pursuant to Section 15(a) of the Charter or pursuant to Section 11.6 of
the Participation Agreement (the date of any such assumption being referred to
hereinafter as the "Relevant Date") and, if on or prior to the Relevant Date:
-------------
(a) the Charterer shall have delivered to the Indenture Trustee an
Officer's Certificate of the Charterer, dated the Relevant Date, stating
that the Charterer has paid to the Owner Trustee all amounts required to be
paid to the Owner Trustee pursuant to the Charter, in connection with such
purchase or termination and assumption;
(b) no Indenture Event of Default after giving effect to the Relevant
Amendment (as defined below) shall have occurred and be continuing
immediately subsequent to such purchase or termination and assumption and
the Indenture Trustee
16
shall have received an Officer's Certificate, dated the Relevant Date, of
the Charterer to such effect;
(c) the Indenture Trustee shall have received a supplement to this
Indenture, substantially in the form of Exhibit E (the "Relevant Date
-------------
Supplement"), duly executed by the Charterer, which shall provide that the
----------
Charterer agrees that it is acquiring, subject to the mortgage, security
interest and Lien thereon granted to the Indenture Trustee under this
Indenture (or a mortgage, security interest and Lien in the same or
substantially identical terms), the Vessel, as provided in Section 2 of the
form of Relevant Date Supplement attached as Exhibit E;
(d) the Indenture Trustee shall have received, on or prior to the
Relevant Date, evidence of all filings, recordings and other action
referred to in the opinion of counsel referred to below;
(e) the Guarantor shall have confirmed in writing to the Indenture
Trustee that the Guaranty remains in full force and effect and covers the
Charterer's obligations under this Indenture and under the Secured Notes;
and
(f) the Indenture Trustee shall have received an opinion or opinions
of counsel to the Charterer subject to usual or customary qualifications,
exceptions and assumptions, to the effect that, after giving effect to the
Relevant Amendment (as defined below):
(i) on the Relevant Date, this Indenture, as supplemented by the
Relevant Date Supplement and as amended by the Relevant Amendment, the
Ship Mortgage, and the Secured Notes issued thereunder constitute the
legal, valid and binding obligations of the Charterer, enforceable
against the Charterer in accordance with their terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, and except as
limited by applicable laws which may affect the remedies provided for
in this Indenture or the Ship Mortgage as so supplemented, which laws,
however, do not in the opinion of such counsel make the remedies
provided for in this Indenture or the Ship Mortgage inadequate for the
practical realization of the rights and benefits provided for in this
Indenture as so supplemented or the Ship Mortgage;
(ii) on the Relevant Date, the Guaranty constitutes the legal,
valid and binding obligation of the Guarantor enforceable in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency,
17
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;
(iii) the Lien of this Indenture, and of the Ship Mortgage on
the Vessel, has been accomplished and creates a security interest or
first preferred mortgage, respectively, in the Indenture Estate and
all filings and recordings and other action necessary or appropriate
to perfect the interests of the Indenture Trustee have been
accomplished; and
(iv) holders of the Secured Notes will not recognize income, gain
or loss for United States federal income tax purposes as a result of
such assumption;
then, simultaneously with the delivery of such documents, the Indenture Trustee
shall execute and deliver the Relevant Date Supplement, and automatically and
without the requirement of further action by any Person, effective as of the
Relevant Date:
(x) this Indenture shall be deemed to have been amended as provided
for in Exhibit C hereto (the "Relevant Amendment"); and
------------------
(y) the Owner Trustee shall be released from all of its obligations
under this Indenture in respect of the Secured Notes or otherwise (other
than any obligations or liabilities of the Owner Trustee in its individual
capacity incurred on or prior to the Relevant Date or arising out of or
based upon events occurring on or prior to the Relevant Date, which
obligations and liabilities shall remain the sole responsibility of the
Owner Trustee) and there shall be immediately distributed any funds then
being retained hereunder that are distributable to the Owner Trustee or the
Owner Participant.
SECTION 3.05. Optional Redemption Refunding. (a) The Owner Trustee,
-----------------------------
with the prior written consent of the Charterer, may redeem at any time in whole
all Outstanding Secured Notes, or in whole all Outstanding Secured Notes of any
series, at a redemption price equal to 100% of the unpaid principal amount of
the Secured Notes to be redeemed pursuant to this Section 3.05, together with
any accrued and unpaid interest thereon to, but not including, the date of
redemption, plus, in the case of each Secured Note redeemed prior to the Premium
Termination Date applicable to such Secured Note, a premium equal to the Make-
Whole Amount, if any, with respect to such Secured Note and otherwise without
Make-Whole Amount or any other premium.
(b) Following a redemption of the Initial Secured Note in accordance
with this Section 3.05(a), the Owner Trustee, with the prior written consent of
the Charterer, may issue and sell, and the Indenture Trustee shall authenticate
and deliver, one or more new series of Secured Notes having such terms and
provisions (including, without limitation, interest rate,
18
amortization schedule, maturity date and redemption provisions) as the Owner
Trustee shall deem appropriate and as shall be approved by the Charterer;
provided that prior to the authentication of such new series of Secured Notes,
- --------
the Indenture Trustee shall have received written evidence from Standard & Poors
Ratings Group and Moody's Investors Service, Inc. to the effect that the
issuance of such new series, by itself, would not result in the downgrading of
the credit rating (if any) assigned to the then Outstanding Pass Through
Certificates issued in respect of the Initial Secured Note.
(c) The Owner Trustee shall not refund or refinance any Secured Notes
unless requested by Charterer.
SECTION 3.06. Owner Trustee's and Owner Participant's Option to
-------------------------------------------------
Redeem or Purchase Secured Notes. In the event that (i) the Indenture Trustee
- --------------------------------
has given the Owner Trustee or the Owner Participant notice of the intent to
accelerate the Secured Notes pursuant to Section 5.04, (ii) the Secured Notes
shall have been accelerated pursuant to Section 5.04 or (iii) at any time one or
more Charter Events of Default shall have occurred and be continuing for more
than 180 days during which time the Secured Notes could, but shall not have
been, accelerated pursuant to Section 5.04, the Owner Trustee or the Owner
Participant may, at its option, give at least 30 days' prior irrevocable notice
to the Indenture Trustee that it will redeem (or purchase in lieu of redemption)
all Secured Notes then Outstanding, which redemption or purchase shall be at a
redemption or purchase price equal to 100% of the unpaid principal amount of
such Secured Notes, together with any accrued and unpaid interest thereon to,
but not including, the date of such redemption or purchase, but otherwise
without Make-Whole Amount or any other premium. On or prior to the Business Day
preceding such Redemption Date, the Owner Trustee or the Owner Participant will
deposit with the Indenture Trustee an amount sufficient to redeem or purchase at
the applicable Redemption Price all Secured Notes then Outstanding plus an
amount equal to all other sums then due and payable to the Loan Participants
hereunder, and to pay the Indenture Trustee all amounts then due it hereunder,
which funds shall be held by the Indenture Trustee as provided in Section 7.04.
Upon the giving of such notice and the receipt by the Indenture Trustee of such
deposit, the Indenture Trustee shall deem all instructions received from the
Owner Trustee or the Owner Participant as having been given by the Loan
Participants of 100% of the Outstanding principal amount of Secured Notes for
all purposes of this Indenture. If such notice is given, the Owner Trustee
further agrees that it will deposit or cause to be deposited with the Indenture
Trustee, on or prior to the Business Day preceding the applicable Redemption
Date, whether or not an Indenture Event of Default is then continuing, funds
sufficient, when added to the funds already held by the Indenture Trustee for
such purpose, to redeem or purchase at the applicable Redemption Price
(including the premium actually payable in respect thereof computed as provided
for herein), on such Redemption Date all Secured Notes then Outstanding, to pay
all other sums then due and payable to a Loan Participant hereunder and to pay
the Indenture Trustee all amounts then due it hereunder. In the event the Owner
Trustee shall have given any such notice to purchase or redeem, unless the Owner
Trustee shall have consented
19
thereto, the Indenture Trustee shall not during the period from such notice to
the Redemption Date specified therein institute any new remedy or proceeding in
respect of any new remedy under this Indenture, and the Indenture Trustee shall,
to the extent the same may be accomplished without prejudicing the rights of the
Indenture Trustee hereunder, take such actions and forbear from taking actions,
in each case sufficient to maintain the status quo with respect to any pending
------ ---
remedies or proceedings in respect thereof being then pursued hereunder;
provided, however, that in no event shall the Indenture Trustee sell or assign
- -------- -------
any portion of the Indenture Estate during the period from such notice to the
Redemption Date specified therein. In the event the Owner Trustee shall have
given any such notice to purchase or redeem, and the Owner Trustee has deposited
with the Indenture Trustee the amounts required to be deposited pursuant to this
Section 3.06, then on the Redemption Date, each Loan Participant will be deemed
to sell, assign, transfer and convey to the Owner Trustee or its designee
(without recourse or warranty of any kind other than of title to the Secured
Notes so conveyed) all of the right, title and interest of such Loan Participant
in and to the Secured Notes held by such Loan Participant. On and after such
Redemption Date, the Indenture Trustee shall no longer treat the former Loan
Participants as the "Loan Participants," except for purposes of the Loan
Participants' right to receive their respective portions of the amounts paid to
the Indenture Trustee as aforesaid and all other amounts due to such Loan
Participants under the Operative Documents with respect to acts, events,
circumstances or conditions occurring or existing prior to such Redemption Date,
and on such date the Indenture Trustee shall register the transfer of ownership
of the Secured Notes into the name of the Owner Trustee or its designee. If the
Owner Trustee elects to purchase the Secured Notes under this Section 3.06,
nothing herein, including the use of the terms "Redemption Date" and "Redemption
Price," shall be deemed to result in a redemption of the Secured Notes.
SECTION 3.07. Deposited Redemption or Purchase Moneys. Moneys held
---------------------------------------
by the Indenture Trustee for the redemption or purchase of any Secured Note
issued hereunder as provided in this Article III shall be held by the Indenture
Trustee as a separate fund in trust for the account of the respective Holders of
the Secured Notes to be redeemed, shall be invested in accordance with the
provisions of Section 7.04 and shall be delivered to such Holders respectively
in accordance with Section 2.03 on the Redemption Date. Any amounts so held by
the Indenture Trustee shall be deemed paid for purposes of Section 2.09, and
promptly after payment of all amounts of principal of, Make-Whole Amount, if
any, and interest on, and all other amounts due and payable under any such
Secured Notes, the Holders thereof shall deliver such Secured Notes to the
Indenture Trustee for cancellation.
SECTION 3.08. Acquisition of Secured Notes. The Owner Trustee
----------------------------
covenants that it will not, directly or indirectly, acquire or make any offer to
acquire any Secured Note except pursuant to the provisions of this Indenture.
20
SECTION 3.09. Condition to Redemption and Refunding. It shall be a
-------------------------------------
condition to any redemption, refinancing or refunding of Secured Notes effected
under this Article III other than under Section 3.06 that all amounts of
principal of, Make-Whole Amount, if any, and interest on, and all other amounts
then due and payable under the Secured Notes which are to be the subject of such
redemption, refinancing or refunding, as the case may be, as well as all other
amounts due and payable to the Holders of such Secured Notes as are to be the
subject of such redemption, refinancing or refunding shall have been paid as
specified therein or in any other Operative Document.
SECTION 3.10. Notice of Certain Redemptions. In connection with a
-----------------------------
redemption of any of the Secured Notes pursuant to Section 3.02 or Section 3.05,
the Owner Trustee shall give irrevocable (except with respect to redemption
notices given pursuant to Section 3.02(a), Section 3.02(b), Section 3.02(c) (to
the extent, in the case of Section 3.02(c), such redemption notice relates to
the Charterer's election to exercise a purchase option under Section 15(a)(iv)
or 12(d) of the Charter) or Section 3.05, which may be withdrawn, (a) in the
case of such a redemption notice given pursuant to 3.02(a) following the
occurrence of an Event of Loss with respect to the Vessel, if the Charterer has
elected (or shall be deemed to have elected) the option set forth in Section
11(b)(ii) of the Charter with respect to such Event of Loss, (b) in the case of
such a redemption notice given pursuant to Section 3.02(b) or 3.02(c), if the
Charter is not terminated with respect to the Vessel, and (c) in the case of
such a redemption notice given pursuant to Section 3.05, not less than three
Business Days prior to the Redemption Date) notice of such redemption at least
25 days and not more than 60 days prior to the Redemption Date to each Loan
Participant of such Secured Notes to be redeemed, at such Loan Participant's
address appearing in the Note Register.
Any such notice of redemption shall state:
(i) the Redemption Date;
(ii) the applicable basis for determining the redemption price
pursuant to Section 3.02 or Section 3.05 (the "Redemption Price");
----------------
(iii) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Secured Note, and that, if any such Secured
Notes are then Outstanding, interest on such Secured Notes shall cease to
accrue on and after such Redemption Date; and
(iv) the place or places where such Secured Notes are to be
surrendered for payment of the Redemption Price.
21
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 4.01. Base Charter Hire Distribution. (a) Generally.
------------------------------ ---------
Except as otherwise provided in Sections 4.01(b) and 4.03, each installment of
Base Charter Hire (other than any portion thereof constituting an Excepted
Payment), any payment of Supplemental Charter Hire representing interest on
overdue installments of Base Charter Hire (other than any portion thereof
constituting an Excepted Payment) and any payment received by the Indenture
Trustee as contemplated by Section 5.03 shall be promptly distributed by the
Indenture Trustee on the date such payment is due (or as soon thereafter as such
payment shall be received by the Indenture Trustee) in the following order of
priority:
first, in accordance with Section 4.04, so much of such installment or
-----
payment as shall be required to pay in full the aggregate amount of the
payment or repayment of principal, interest and other amounts then due
under all Secured Notes shall be distributed to the Holders of such Secured
Notes ratably, without priority of one Holder over any other Holder (except
for Additional Notes, if any, which are subordinate to the Initial Secured
Note and other Secured Notes), in the proportion that the amount of such
payment or payments then due under each such Secured Note bears to the
aggregate amount of the payments then due under all such Secured Notes; and
second, subject to Section 4.01(b), the balance, if any, of such
------
installment remaining thereafter shall be distributed to the Owner Trustee
for distribution pursuant to the Trust Agreement.
(b) Retention of Amounts by the Indenture Trustee. If, at the time of
---------------------------------------------
receipt by the Indenture Trustee of an installment of Base Charter Hire (whether
or not then overdue) or of payment of Supplemental Charter Hire representing
interest on any overdue installment of Base Charter Hire, the Indenture Trustee
shall have Actual Knowledge that there shall have occurred and be continuing an
Indenture Event of Default, the Indenture Trustee shall retain and not
distribute any amount otherwise required to be distributed pursuant to clause
"second" of Section 4.01(a), and (i) at such time as there shall not be
- -------
continuing any such Indenture Event of Default or (ii) on the first Business Day
following the date that is 180 days after the receipt of such amount, whichever
shall first occur, the Indenture Trustee shall distribute such amount pursuant
to clause "second" of Section 4.01(a) unless prior thereto the Indenture Trustee
------
(as assignee of the Owner Trustee) shall have given notice to declare the
Charter to be in default in accordance with Section 18 thereof, the Indenture
Trustee shall have given notice to the Owner Trustee pursuant to the first
proviso to Section 5.04 of the Indenture Trustee's intent to declare the Secured
Notes due and payable or any of the Secured Notes shall have been declared or
22
otherwise shall have become immediately due and payable pursuant to Section
5.04, in which case such amount shall be distributed by the Indenture Trustee
forthwith in accordance with the terms of Section 4.03.
SECTION 4.02. Certain Distributions. (a) In the event the Secured
---------------------
Notes are to be redeemed pursuant to Section 3.02 or 3.05, any payment received
by the Indenture Trustee from the Owner Trustee or the Charterer pursuant to
such Section 3.02 or 3.05, shall be distributed forthwith in the following order
of priority:
first, in the manner provided in clause "first" of Section 4.03;
----- -----
second, so much of the proceeds remaining as shall be required to pay
------
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and Make-Whole Amount, if any, and all accrued but unpaid
interest thereon to, but not including, the date of distribution, shall be
distributed to the Holder of such Secured Note, and if the proceeds
remaining are insufficient to pay all such amounts in full, they shall be
distributed to all Holders ratably, without priority of any Holder over any
other Holder (except as otherwise expressly provided herein), in the
proportion that the aggregate amount due each such Holder under this clause
"second" bears to the aggregate amount due all such Holders under this
------
clause "second";
------
third, in the manner provided in clause "second" of Section 4.03;
----- ------
fourth, in the manner provided in clause "fourth" of Section 4.03; and
------ ------
fifth, in the manner provided in clause "fifth" of Section 4.03.
----- -----
(b) The portion of each payment referred to in this Section 4.02
distributed to a Holder on account of principal or interest on any Secured Note
held by such Holder shall be applied by such Holder in payment of such Secured
Note in accordance with the terms of Section 4.04.
(c) Application of Certain Payments in Case of Event of Loss. Except
--------------------------------------------------------
as otherwise provided in the second sentence of this Section 4.02(c), any
amounts received directly or through the Charterer from any Governmental
Authority or other Person pursuant to Section 11 of the Charter with respect to
the Vessel as the result of an Event of Loss, to the extent that such amounts
are not at the time required or permitted to be paid to, or retained by, the
Charterer pursuant to said Section 11, and any amounts of insurance proceeds for
damage to the Indenture Estate received directly or through the Charterer from
any insurer pursuant to Section 10 of the Charter with respect thereto as the
result of an Event of Loss, to the extent such amounts are not at the time
required to be paid to, or retained by, the Charterer pursuant to said Section
10, shall,
23
except as otherwise provided in the next sentence, be applied in reduction of
the Charterer's obligations to pay Stipulated Loss Value as provided in the
Charter and the remainder, if any, shall, except as provided in the next
sentence, be distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Charter. Notwithstanding this Section 4.02(c)
or Section 4.03 hereof, any amounts held by the Indenture Trustee, including,
without limitation, pursuant to Section 11 of the Charter, which are payable to
the Charterer pursuant to the terms of the Charter or held by the Indenture
Trustee in accordance with Section 21(g) of the Charter shall be (i) so paid to
the Charterer or (ii) held by the Indenture Trustee as security for the
obligations of the Charterer, in each case in accordance with the applicable
provisions of the Charter.
SECTION 4.03. Distribution After Indenture Event of Default. Except
---------------------------------------------
as otherwise provided in the second sentence of Section 4.02(c) or in Section
4.05, if (a) an Indenture Event of Default shall have occurred and be
continuing, and (b) either the Indenture Trustee (as assignee of the Owner
Trustee) shall have given notice to declare the Charter to be in default
pursuant to Section 18(a) thereof, the Indenture Trustee shall have given notice
to the Owner Trustee pursuant to the first proviso to Section 5.04 of the
Indenture Trustee's intent to declare the Secured Notes due and payable or any
of the Secured Notes shall have been declared or otherwise shall have become
immediately due and payable pursuant to Section 5.04, then, to the extent that
each such notice or declaration shall not have been rescinded or the Secured
Notes shall remain immediately due and payable, (i) all amounts then held by the
Indenture Trustee pursuant to Section 4.01 or otherwise under the Indenture (but
not including funds described in the second sentence of Section 4.02(c) and
Section 4.05 excluded from the operation of this Section 4.03), in each case
hereunder or under any Operative Document (other than amounts held for its own
account), and (ii) all payments and amounts thereafter realized by the Indenture
Trustee through the exercise of remedies hereunder or under any of the
agreements assigned or pledged to the Indenture Trustee under this Indenture or
otherwise as trustee under this Indenture or under the Ship Mortgage (for
purposes of this Section 4.03, all such amounts and payments held or realized
being herein called "proceeds"), other than amounts expressly paid to it for its
--------
own account and other than Excepted Payments, shall be distributed forthwith by
the Indenture Trustee in the following order of priority:
first, so much of such proceeds as shall be required to reimburse the
-----
Indenture Trustee for any unpaid fees for its services under this Indenture
and any unreimbursed tax, expense (including reasonable legal fees) or
other loss incurred by it (in each case to the extent reimbursable under
the Operative Documents) shall be distributed to the Indenture Trustee for
application to itself;
second, so much of the remaining proceeds as shall be required to
------
reimburse the then existing or prior Holders for amounts paid or advanced
by the Holders pursuant to Section 6.04 (to the extent not previously
reimbursed), shall be distributed to the then existing and prior Holders as
their respective interests may appear, and if the proceeds
24
remaining are insufficient to pay all such amounts in full, they shall be
distributed ratably, without priority of any recipient over any other
recipient (except as otherwise expressly provided herein), in the
proportion the aggregate amount due each such Person under this clause
"second" bears to the aggregate amount and interest due all such Persons
-------
under this clause "second";
------
third, so much of the proceeds remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and all accrued but unpaid interest thereon to, but not
including, the date of distribution, shall be distributed to the Holder of
such Secured Note, and if the proceeds remaining are insufficient to pay
all such amounts in full, they shall be distributed to all Holders ratably,
without priority of any Holder over any other Holder (except as otherwise
expressly provided herein), in the proportion that the aggregate amount due
each such Holder under this clause "third" bears to the aggregate amount
-----
due all such Holders under this clause "third";
-----
fourth, so much of the proceeds remaining as shall be required to pay
------
to each Holder all other amounts payable pursuant to the indemnification
provisions of Section 12 of the Participation Agreement or pursuant to any
other provision of any Operative Document and secured hereunder to such
Holder or to its predecessors and remaining unpaid shall be distributed to
such Holder for distribution to itself and such predecessors, as their
respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any Holder over any other Holder (except as
otherwise expressly provided herein), in the proportion that the aggregate
amount due each such Holder under this clause "fourth" bears to the
------
aggregate amount due all such Holders under this clause "fourth"; and
------
fifth, the balance, if any, of the proceeds remaining shall be
-----
distributed to the Owner Trustee for distribution pursuant to the Trust
Agreement.
For the avoidance of doubt, no Make-Whole Amount or any other premium
shall be due and payable on the Secured Notes as a consequence of the
acceleration of the Secured Notes as a result of an Indenture Event of Default.
All amounts distributed to any Holder pursuant to clause "third" of
-----
this Section 4.03 shall be applied by such Holder in payment of the Secured
Notes held by it in accordance with the terms of Section 4.04.
SECTION 4.04. Application of Payments on Secured Notes. Each payment
----------------------------------------
on a Secured Note shall be applied, first, to the payment of accrued interest on
-----
such Secured Note to
25
the date of such payment and second, to the payment of any principal on such
------
Secured Note then due thereunder.
SECTION 4.05. Applications of Payments According to Applicable
------------------------------------------------
Operative Document Provisions. (a) Notwithstanding Section 4.03 or any other
- -----------------------------
provision of this Indenture to the contrary, any payments or amounts (other than
Excepted Payments) received by the Indenture Trustee, provision for the
application of which is made in any Operative Document, shall be applied
promptly as provided in such Operative Document (including in the case of
payments or amounts that would be payable to the Charterer as provided in
Sections 11(b), 11(c) and 21(g) of the Charter) unless (i) in the case of
payments or amounts that would be payable to the Charterer upon satisfaction of
any applicable conditions, a Charter Event of Default shall have occurred and be
continuing at the time the Indenture Trustee receives such payment and the
Indenture Trustee has Actual Knowledge of such Charter Event of Default, in
which case the Indenture Trustee shall hold such payments and amounts as cash
collateral security for the obligations of the Charterer under the Operative
Documents and shall invest such payments and amounts in accordance with the
terms of Section 7.04, and, subject to earlier distribution thereof by the
Indenture Trustee under Section 4.03 if the Charter shall have been declared in
default in accordance with Section 18 thereof, or under Section 4.01(b) (subject
to Section 4.05(b)), such payments and amounts, and the proceeds of any
investment thereof, shall be paid by the Indenture Trustee to the Charterer at
such time as any applicable conditions shall have been satisfied and no Charter
Event of Default shall be continuing, and (ii) in the case of any other such
payments and amounts, an Indenture Event of Default shall have occurred and be
continuing at the time the Indenture Trustee receives such payment and the
Indenture Trustee has Actual Knowledge of such Indenture Event of Default, in
which case the Indenture Trustee shall hold such payment as part of the
Indenture Estate, as cash collateral security hereunder for the performance of
the Indenture Indebtedness and on the earlier of the next Business Day on which
no Indenture Event of Default shall have occurred and be continuing or the first
Business Day occurring more than 180 days after the receipt of such payment,
and, subject to any prior application of such payment pursuant to Section
4.01(b) or 4.03, the Indenture Trustee shall apply such payment, and the
proceeds of any investment thereof, to the purpose for which it was made.
(b) Notwithstanding any other provision of this Indenture to the
contrary, and whether or not any such provision refers to this Section 4.05, any
Excepted Payment or other amount expressly provided by the terms of this
Indenture to be paid directly to the Owner Trustee or to the Owner Participant
shall be paid or distributed promptly by the Indenture Trustee to the Owner
Trustee or the Owner Participant, as the case may be.
(c) The Indenture Trustee will distribute promptly upon receipt any
indemnity or other payment received by it from the Owner Trustee or the
Charterer in respect of the
26
Indenture Trustee in its individual capacity or any Holder pursuant to either
Section 12.1 or 12.2 of the Participation Agreement directly to the Person
entitled thereto.
SECTION 4.06. Amounts Received for Which No Provision Is Made. (a)
-----------------------------------------------
Any payment received or amounts realized by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Indenture or
in any other Operative Document, except as provided in Section 4.03, and (b) all
payments received and amounts realized by the Indenture Trustee under the
Charter, or otherwise with respect to the Vessel, to the extent received or
realized at any time after payment in full of the principal of and interest on
all Secured Notes issued hereunder or after the conditions set forth in Section
10.01 for the defeasance of the Secured Notes shall have been satisfied, as well
as any other amounts remaining as part of or as proceeds of the Indenture Estate
after payment in full of the principal of, Make-Whole Amount, if any, and
interest on all such Secured Notes, shall be distributed forthwith by the
Indenture Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to pay
-----
the Indenture Trustee all amounts then due it pursuant to Section 6.04
shall be applied to pay the Indenture Trustee such amounts; and
second, the balance, if any, of such aggregate amount remaining
------
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Trust Agreement, the
Charter or the Participation Agreement, as applicable.
SECTION 4.07. Payment Procedures. All amounts which are
------------------
distributable from time to time by the Indenture Trustee to the Owner Trustee,
the Charterer, the Owner Participant or any Holder shall be paid by the
Indenture Trustee in immediately available funds promptly after such amounts
become immediately available to it, and the Indenture Trustee shall not be
obligated to see to the application of any such payment made by it. All
payments made by the Indenture Trustee to the Owner Participant or to the Owner
Trustee shall be made in the manner and to the address set forth in Schedule 1
to the Participation Agreement or to such other address as may be specified from
time to time by notice to the Indenture Trustee from the Owner Participant or
the Owner Trustee.
SECTION 4.08. Application of Payments Under Guaranty. All payments
--------------------------------------
received by the Indenture Trustee pursuant to the Guaranty shall be distributed
forthwith by the Indenture Trustee in the same order of priority, and in the
same manner, as it would have distributed the payment on the underlying
obligation in respect of which such payment under the Guaranty was received.
27
ARTICLE V
COVENANTS OF OWNER TRUSTEE; CERTAIN AGREEMENTS;
INDENTURE EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 5.01. Covenants of Owner Trustee; Certain Agreements. (a)
----------------------------------------------
Subject to Section 2.02, the Owner Trustee will duly and punctually perform and
observe all covenants and conditions to be performed and observed by it pursuant
to the terms of any Operative Document. Except as permitted by this Indenture
or the terms of any Operative Document, the Owner Trustee will take no action
and will cooperate with the Indenture Trustee so as to permit no action to be
taken by others which will release, or which may be construed as releasing, the
Owner Trustee or the Charterer from any of its or the Charterer's, as the case
may be, obligations or liabilities under any Operative Document, or which may
result in the termination, amendment or modification, or impair the validity, of
any such Operative Document.
(b) If the Owner Trustee has Actual Knowledge of any Indenture Event
of Default, Indenture Default, Charter Event of Default or Event of Loss, the
Owner Trustee will give prompt written notice thereof to the Indenture Trustee,
the Charterer and the Owner Participant if such notice shall not already have
been given to such party. The notice shall set forth in reasonable detail the
circumstances of such default or loss known to such Owner Trustee.
(c) At any time and from time to time, upon the reasonable request of
the Indenture Trustee, the Owner Trustee shall promptly and duly execute and
deliver any and all such further instruments and documents as the Indenture
Trustee may deem necessary or desirable (and as shall be consistent with the
intent, purposes and provisions hereof) to perfect or maintain the Liens of this
Indenture and of the Ship Mortgage or to obtain for the Indenture Trustee the
full benefit of the specific rights and powers herein or therein granted,
conveyed or assigned, or which the Owner Trustee may be or may hereafter be
bound to convey or assign to the Indenture Trustee or to facilitate the
performance of the terms of this Indenture and of the Ship Mortgage, or the
filing, registering or recording of this Indenture and of the Ship Mortgage,
including, without limitation, the execution and delivery of any financing
statement (and any continuation statement with respect to any such financing
statement) or any other similar document specified in such instructions as may
be necessary or desirable to perfect or maintain the Lien of this Indenture and
of the Ship Mortgage.
(d) The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants that, except as provided herein or
permitted by the other Operative Documents, it will not (other than in respect
of Excepted Payments) and rights under the Conveyancing Instrument assign or
pledge, so long as this Indenture shall remain in effect and the Lien of this
Indenture shall not have been released pursuant to Section 6.03 hereof, any of
the Owner Trustee's right, title or interest hereby assigned to anyone other
than the
28
Indenture Trustee, and that the Owner Trustee will not (other than in respect of
Excepted Payments and rights under the Conveyancing Instrument), except as
provided in or permitted by this Indenture or any other Operative Document, (i)
accept any payment from the Charterer, (ii) terminate or consent to the
cancellation or surrender of the Charter or accept any prepayment of Charter
Hire under the Charter, (iii) enter into any agreement amending or supplementing
any Operative Document, (iv) execute or grant any waiver or modification of, or
consent under, the terms of any Operative Document, (v) settle or compromise any
claim arising under any Operative Document, or (vi) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Operative Document to arbitration thereunder.
(e) The Owner Trustee does hereby ratify and confirm the Charter, and
does hereby agree the Owner Trustee will not, except as provided in or permitted
by this Indenture or the terms of any other Operative Document, take or omit to
take any action, the taking or omission of which might result in an alteration
or impairment of the Charter or any other Operative Document, or of any of the
rights created by the Charter or any Operative Document, or the assignment
hereunder or thereunder, as the case may be.
(f) The Owner Trustee will, in its individual capacity and at its own
cost and expense, promptly take such action as may be necessary to discharge any
Shipowner's Lien on any of the Owner Trustee's estate, right, title or interest
in the Trust Estate so pledged or assigned or intended to be conveyed, pledged
or assigned under this Indenture or the Ship Mortgage.
(g) Until the release of the security interest in the Indenture Estate
pursuant to Section 6.03, all payments due or to become due under any Operative
Document to the Owner Trustee that are part of the Indenture Estate shall be
made directly to the Indenture Trustee or in accordance with the Indenture
Trustee's instructions, and the Owner Trustee shall give all notices as shall be
required under each Operative Document to direct that such payments be made to
the Indenture Trustee and promptly upon receipt of any such amount, the Owner
Trustee shall transfer such amount to the Indenture Trustee for distribution
pursuant to this Indenture.
(h) An executed counterpart of each amendment or supplement to the
Trust Agreement shall be delivered within 20 Business Days after the execution
thereof to the Indenture Trustee, provided that any amendment or supplement
under which a successor trustee is appointed shall be mailed to the Indenture
Trustee within 10 days after the execution thereof. The Lien of this Indenture
shall not be affected by any amendment or supplement to the Trust Agreement or
by any other action taken under or in respect of the Trust Agreement. Without
the prior written consent of the Indenture Trustee, the Trust Agreement may not
in any event be terminated or revoked by the Owner Participant prior to the
termination of this Indenture. In the case of any appointment of a successor to
any Owner Trustee pursuant to the Trust Agreement or any merger, conversion,
consolidation or transfer of all or substantially all of the corporate trust
29
business of the Owner Trustee pursuant to the Trust Agreement, the successor
Owner Trustee shall give prompt notice thereof to the Indenture Trustee and the
Charterer.
SECTION 5.02. Indenture Events of Default. "Indenture Event of
--------------------------- ------------------
Default" means any of the following events (whatever the reason for such
- -------
Indenture Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any
Governmental Rule):
(a) any Charter Event of Default (other than a Charter Event of
Default arising from the failure of the Charterer to make an Excepted
Payment) shall have occurred and be continuing; or
(b) to the extent not arising from clause (a) above, any payment of
principal of, Make-Whole Amount, if any, or interest on any Secured Note
shall not have been made when due and such default shall continue
unremedied for ten (10) Business Days after the same shall have become due
and payable; or
(c) the assignment or pledge by the Owner Trustee (except as permitted
under the Operative Documents) of any of its right, title or interest in
the Indenture Estate hereby assigned to anyone other than the Indenture
Trustee, or the failure by either of the Owner Participant or the Owner
Trustee, in their individual or trust capacities, as the case may be, to
perform or observe in any material respect any covenant or agreement to be
performed or observed by it under this Indenture or any other Operative
Document (other than the Tax Indemnity Agreement), (i) which failure,
assignment or pledge, as the case may be, shall continue for a period of 30
days after receipt by the Owner Participant or the Owner Trustee, as the
case may be, of a written notice from the Indenture Trustee or from Holders
of Secured Notes owning at least 25% in principal amount of Outstanding
Secured Notes specifying such failure, assignment or pledge and requiring
it be remedied or (ii) which failure, assignment or pledge, as the case may
be, if such failure, assignment or pledge is remediable and the Owner
Participant or the Owner Trustee is diligently attempting to remedy such
failure, assignment or pledge, shall continue for a period of 180 days
after receipt of notice thereof; or
(d) any representation or warranty made by either of the Owner
Participant or the Owner Trustee pursuant to Sections 6 or 7, as the case
may be, of the Participation Agreement shall prove to have been inaccurate
in any material respect when made, unless such inaccurate representation or
warranty shall not be material to the recipient at the time when the notice
referred to below shall have been received by the Owner Participant or the
Owner Trustee or any material adverse impact thereof shall have been cured
within thirty (30) days after receipt by the Owner Participant or the Owner
Trustee, as the case
30
may be, of a written notice thereof from the Indenture Trustee or from
Holders of Secured Notes owning at least 25% in principal amount of
Outstanding Secured Notes; provided that if such material adverse impact is
--------
remediable and the Owner Participant or the Owner Trustee is diligently
attempting to remedy such impact, the Owner Participant or the Owner
Trustee shall have 90 days after receipt of written notice thereof from the
Indenture Trustee to remedy any such material adverse impact; or
(e) either of the Owner Participant or the Owner Trustee shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of its or any substantial part of its property, or
shall consent to any such relief or to the appointment or taking possession
by any such official or agency in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall take any corporate action to authorize any of the
foregoing, or an involuntary case or other proceeding shall be commenced
against either of the Owner Participant or the Owner Trustee seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official or agency of its or any substantial
part of its part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
(90) days, or if, under the provisions of any law providing for
reorganization or winding-up of corporations which may apply to the Owner
Trustee or the Owner Participant, any court of competent jurisdiction shall
assume jurisdiction, custody or control of the Indenture Estate, the Owner
Trustee or the Owner Participant or of any substantial part of its property
and such jurisdiction, custody or control shall remain in force
unrelinquished, unstayed or unterminated for a period of ninety (90) days.
SECTION 5.03. Certain Rights. (a) If the Charterer shall fail to
--------------
make any payment of Base Charter Hire under the Charter when the same shall
become due, and if such failure of the Charterer to make such payment of Base
Charter Hire shall not constitute the fourth consecutive such failure or the
sixth or subsequent cumulative such failure, then as long as no Indenture Event
of Default (other than arising from a Charter Event of Default not involving any
failure to make any payments to which the Indenture Trustee or any Loan
Participant is entitled hereunder when due) shall have occurred and be
continuing, the Owner Participant or the Owner Trustee may (but need not),
without consent or concurrence of the Indenture Trustee or any Holder, in the
manner provided in Section 2.03, for application in accordance with Section
4.01, pay to the Indenture Trustee, at any time prior to the day which is the
11th day subsequent to the expiration of the grace period provided for in
Section 17(a)(i) of the Charter with respect to the payment of Base Charter Hire
(and the Indenture Trustee shall not (without the prior written
31
consent of the Owner Trustee) declare the Charter in default pursuant to Section
18 thereof or exercise any of the rights, powers or remedies pursuant to such
Section 18 of the Charter or Section 5.04 hereof prior to the occurrence of such
later date), an amount equal to the full amount of such payment of Base Charter
Hire, together with any interest due thereon on account of the delayed payment
thereof to, but not including, the date of such payment in accordance with
Section 2.03(c) hereof, and such payment by the Owner Participant or the Owner
Trustee shall be deemed to cure as of the date of such payment any Indenture
Event of Default which arose from such failure of the Charterer (including any
Charter Event of Default arising from the Charterer's failure to pay interest in
respect of such overdue Base Charter Hire for the period commencing on the date
of such payment), but such cure shall not relieve the Charterer of any of its
obligations. If the Charterer shall fail to perform or observe any covenant,
condition or agreement to be performed or observed by it under the Charter or
any other Charter Event of Default shall exist (other than the failure to pay
Base Charter Hire), and if (but only if) the performance or observance of such
covenant, condition or agreement or the cure of such Charter Event of Default
can be effected by the payment of money alone (it being understood that actions
such as the obtaining of insurance can be so effected), then as long as no other
Indenture Event of Default (other than those arising from a Charter Event of
Default) shall have occurred and be continuing, the Owner Participant or the
Owner Trustee may (but need not), without consent or concurrence of the
Indenture Trustee or any Holder, pay to the Indenture Trustee (or to such other
person as may be entitled to receive the same), at any time prior to the day
which is the later of (x) the 11th day subsequent to notice of such failure or
such Charter Event of Default by the Indenture Trustee to the Owner Trustee or
the Owner Participant and (y) the 11th day subsequent to the expiration of the
grace period, if any, provided with respect to such failure or such Charter
Event of Default on the part of the Charterer in Section 17 of the Charter (and
the Indenture Trustee shall not (without the prior written consent of the Owner
Trustee) declare the Charter in default pursuant to Section 18 thereof or
exercise any of the rights, powers or remedies pursuant to such Section 18 or
Section 5.04 hereof prior to the occurrence of such later date), all sums
necessary to effect the performance or observance of such covenant or agreement
of the Charterer or to cure such Charter Event of Default, together with any
interest due thereon on account of the delayed payment thereof to, but not
including, the date of such payment, and such payment by the Owner Participant
or the Owner Trustee shall be deemed to cure as of the date of such payment any
Indenture Event of Default which arose from such failure of the Charterer or
such Charter Event of Default (including any Charter Event of Default arising
from the Charterer's failure to pay interest in respect of such overdue payment
for the period commencing on the date of such payment), but such cure shall not
relieve the Charterer of any of its obligations; provided that the Owner Trustee
--------
and the Owner Participant, collectively, shall not be entitled to cure any such
default or Charter Event of Default if the total amount previously expended and
not reimbursed by the Charterer or the Guarantor for curing such Charter Events
of Default and the amount which would be expended in connection with any such
Charter Event of Default would exceed in the aggregate 2% of the Total Vessel
Cost.
32
(b) To the extent of any payment made by the Owner Trustee or the
Owner Participant pursuant to Section 5.03(a), the Owner Trustee or the Owner
Participant, as the case may be, shall be subrogated to the rights of the
Indenture Trustee hereunder (or in the case of the second sentence of Section
5.03(a), to the rights of the Indenture Trustee or such other person, as the
case may be) to receive the payment of Base Charter Hire or other amount for
which such payment was made by the Owner Trustee or the Owner Participant, as
the case may be, and the Owner Trustee or the Owner Participant, as the case may
be, shall be entitled to receive such payment from the Indenture Trustee upon
receipt thereof by the Indenture Trustee; provided, however, that no such amount
-------- -------
shall be paid to the Owner Trustee or the Owner Participant, as the case may be,
unless all principal of and interest on the Secured Notes then due and payable
and any other amounts then due and payable under the Secured Notes and this
Indenture shall have been paid in full and no Indenture Default shall have
occurred and be continuing; provided that neither the Owner Participant nor the
--------
Owner Trustee shall attempt to recover any such amount paid by it on behalf of
the Charterer pursuant to Section 5.03(a) except by demanding of the Charterer
payment of such amount or by commencing an action against the Charterer to
require the payment of such amount.
(c) The Owner Trustee, upon exercising cure rights under Section
5.03(a) or rights under Section 6.08(a)(iii) or under Section 20(a) of the
Charter, shall not obtain any Lien on any part of the Indenture Estate or Trust
Estate on account of such payment for the costs and expenses incurred in
connection therewith, nor shall any claims of the Owner Trustee against the
Charterer or any other Person for the repayment thereof impair the prior right
and security interest of the Indenture Trustee in and to the Indenture Estate or
otherwise related to the Indenture Estate.
(d) If there shall occur an Indenture Event of Default pursuant to
Section 5.02(a) arising as a result of a failure by the Charterer to make any
payment of Base Charter Hire when due, the Indenture Trustee shall so notify the
Owner Trustee in writing promptly upon such occurrence.
SECTION 5.04. Remedies. (a) If an Indenture Event of Default shall
--------
have occurred and be continuing and so long as the same shall be unremedied,
then and in every such case the Indenture Trustee, subject to Sections 3.06,
5.03, 5.04(d), 5.05, 5.09, 6.01 and 6.08, may exercise any or all of the rights
and powers and pursue any and all of the remedies herein provided or available
under applicable law; provided, however, the Indenture Trustee must give the
-------- -------
Owner Trustee and the Charterer at least 10 Business Days' (other than in the
case of an automatic acceleration of the Secured Notes as provided in Section
5.04(c)) prior written notice of its intention to exercise remedies pursuant to
this Section 5.04 (it being understood that such notice may be given
concurrently with any notice of default given hereunder or under the Charter and
prior to the expiration of any applicable grace periods). Notwithstanding any
contrary provision herein, upon the occurrence and during the continuance of an
Indenture Event of
33
Default, the Indenture Trustee may exercise, subject to Sections 3.06, 5.03(a),
5.05, 5.09, 5.10 and 6.08, all rights and remedies of the Owner Trustee to the
exclusion of the Owner Trustee under the Charter (other than those rights and
remedies to the extent relating to Excepted Payments), including, without
limitation, the right to take possession of all or any part of the Indenture
Estate and exclude the Owner Trustee and all Persons (except the Charterer or
any Affiliate in respect of rights conveyed under the Conveyancing Instrument if
a Charter Event of Default shall not have occurred and be continuing) claiming
under the Owner Trustee wholly or partly therefrom. In addition to and without
limiting the foregoing, the Indenture Trustee, upon at least twenty-five (25)
days' prior written notice to the Owner Trustee, the Charterer and the Owner
Participant, may invoke and exercise the power of sale and sell (or cause to be
sold) any or all of the Indenture Estate in the manner required by law at public
auction, or in any other manner which shall be in accordance with applicable
law, or, in lieu of sale pursuant to the power of sale, the Indenture Estate may
be foreclosed, and the Indenture Trustee has and may exercise all rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
any applicable jurisdiction; provided, however, that if an Indenture Event of
-------- -------
Default has occurred and is continuing solely by virtue of one or more Charter
Events of Default (at a time when no other Indenture Events of Default shall
have occurred and be continuing), the Indenture Trustee shall not exercise
foreclosure remedies under this Indenture without exercising repossessory or
other substantial remedies provided in Section 18 of the Charter, unless
exercising such remedies under the Charter shall be prohibited by law,
governmental authority or court order, in which case the Indenture Trustee shall
not exercise foreclosure remedies under the Indenture until the later of (i) the
expiration of a period of sixty (60) days from the commencement of such
prohibition and (ii) the expiration of an additional period commencing on the
day immediately following the expiration of such 60-day period and ending on the
earlier of (x) the 180th day after the relevant stay or prohibition is imposed,
(y) the occurrence of any additional Indenture Event of Default during such
additional period and (z) rejection of the Charter; provided that such extended
--------
period will not apply unless, on the 60th day following the date upon which such
stay or prohibition becomes effective, all Indenture Events of Default
theretofore existing have been cured (except to the extent arising from the
bankruptcy or similar proceeding giving rise to the applicable stay or similar
prohibition) and to the extent the Owner Trustee exercises its right to cure any
Charter defaults or Charter Events of Default during such 180-day period, the
exercise of such rights will not limit the cure rights otherwise available to
Shipowner under Section 5.03(a); provided further that notwithstanding any
-------- -------
provision herein to the contrary, the Indenture Trustee shall not sell, assign,
transfer or deliver any of the Indenture Estate or take possession of the
Indenture Estate unless the Secured Notes shall have been accelerated pursuant
to Section 5.04(b) or 5.04(c). The Indenture Trustee shall notify the Owner
Trustee, the Owner Participant and the Charterer as soon as is reasonably
practicable after its commencement of the exercise of any remedy pursuant to
this Section 5.04.
(b) If an Indenture Event of Default (other than an Indenture Event of
Default specified in Section 5.02(e) or an Indenture Event of Default of the
type specified in Section
34
5.02(a) which arises as a result of any Charter Event of Default as is specified
in Section 17(a)(vi) of the Charter) shall have occurred and be continuing,
then, subject to Sections 5.03, 6.01 and 6.08, the Indenture Trustee may at any
time (or shall when instructed by a Majority Interest of Holders of Notes), by
five (5) days' written notice to the Owner Trustee, declare all (but not less
than all) of the Secured Notes to be due and payable. Upon such declaration,
the unpaid principal of all Secured Notes then Outstanding, together with
accrued but unpaid interest thereon and any other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest, further
notice of intention to accelerate maturity or other notice, all of which are
hereby waived.
(c) If an Indenture Event of Default of the type specified in Section
5.02(e), or an Indenture Event of Default of the type specified in Section
5.02(a) which arises as a result of any Charter Event of Default specified in
Section 17(a)(vi) of the Charter shall have occurred and be continuing, the
principal of all Secured Notes then Outstanding, together with accrued but
unpaid interest thereon and any other amounts due thereunder, shall become and
be due and payable automatically, without declaration, notice, demand, or any
other action on the part of the Indenture Trustee or any Holder, all of which
are hereby waived. Each of Section 5.04(a), Section 5.04(b) and this Section
5.04(c), however, is subject to the condition that, if at any time after the
principal of the Secured Notes shall have become due and payable upon a declared
or automatic acceleration thereof as provided herein, and before any judgment or
decree for the payment of the money so due, or any portion thereof, shall be
entered, all overdue payments of interest upon the Secured Notes and all other
amounts payable under the Secured Notes (except the principal of the Secured
Notes which by such declaration shall have become payable) shall have been duly
paid, and every other Indenture Event of Default with respect to any covenant or
provision of this Indenture shall have been cured or waived, then in every such
case a Majority in Interest of Holders of Notes, by written instrument filed
with the Indenture Trustee, may (but shall not be obligated to) rescind and
annul the Indenture Trustee's declaration and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Event of
Default or impair any right consequent thereon.
(d) Notwithstanding any provision in any document or instruction that
purports to require the Indenture Trustee to acquire title to any or all of the
Indenture Estate upon foreclosure, or pursuant to instructions, the Indenture
Trustee shall not be obligated to acquire any such title unless: (i) the
Indenture Trustee is provided with such security or indemnity as it shall deem
satisfactory to it; (ii) such acquisition of title complies with all applicable
Operative Documents, laws, rules and regulations, which shall be evidenced by an
opinion of counsel to such effect in form and substance satisfactory to the
Indenture Trustee; and (iii) the Indenture Trustee shall have obtained such
executed certificates, instruments or other documents, in accordance with its
reasonable inquiries or requests.
35
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate. (a)
-------------------------------------------------
The Owner Trustee agrees that, if an Indenture Event of Default shall have
occurred and be continuing and the Indenture Trustee shall be entitled to
exercise remedies hereunder as provided in Section 5.04, the Indenture Trustee
may take possession of all or any part of the Indenture Estate and may exclude
the Owner Trustee, and all Persons (except the Charterer or any Affiliate in
respect of the rights conveyed under the Conveyancing Instrument if a Charter
Event of Default shall not have occurred and be continuing) claiming under the
Owner Trustee, wholly or partly therefrom; provided, however, that at least ten
-------- -------
(10) Business Days' prior notice of such taking of possession shall be given to
the Owner Trustee. If an Indenture Event of Default shall have occurred and be
continuing and the Indenture Trustee shall be entitled to exercise remedies
hereunder as provided in Section 5.04, at the request of the Indenture Trustee,
the Owner Trustee shall promptly execute and deliver to the Indenture Trustee
such instruments of title and other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or any agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession of
all or any part of the Indenture Estate to which the Indenture Trustee shall at
the time be entitled hereunder. If the Owner Trustee shall for any reason fail
to execute and deliver such instruments and documents after such request by the
Indenture Trustee, the Indenture Trustee may (i) obtain a judgment conferring on
the Indenture Trustee the right to immediate possession of any property
comprising a portion of the Indenture Estate and requiring the Owner Trustee to
execute and deliver such instruments and documents to the Indenture Trustee, or
(ii) pursue all or part of such property wherever it may be found, and the
Indenture Trustee may enter any of the premises where such property or any
portion thereof may be or is supposed to be and search for such property. All
expenses of obtaining such judgment or of pursuing, searching for and taking
such property shall, until paid, be secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
but shall not be obligated to, make, from time to time and at the expense of the
Indenture Estate, 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, the Indenture Trustee shall
have the right to maintain, use, operate, store, lease, control or manage the
Indenture Estate and to exercise all rights and power of the Owner Trustee
relating to the Indenture Estate as the Indenture Trustee shall deem to be in
the best interest of the Holders; provided, however, the Indenture Trustee shall
-------- -------
not operate or use the Vessel in such a manner that disqualifies the Vessel from
engaging in U.S. coastwise trade. The Indenture Trustee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenue, issues,
income, products and profits of the Indenture Estate and every part thereof,
other than Excepted Payments. Such tolls, rents (including Charter Hire),
revenues, issues, income, products and profits shall be applied (i) to pay the
expenses of the use, operation, storage, leasing, control, management or
disposition of the Indenture Estate, (ii) to pay the expense of all maintenance,
repairs, replacements, alterations, additions and improvements, (iii) to make
all payments which
36
the 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
portion thereof, including, without limitation, the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee, and (iv) to pay amounts owing in respect of
the Secured Notes in accordance with the provisions thereof and hereof and to
make all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Indenture, as well as just and
reasonable compensation for the services of the Indenture Trustee and of all
Persons properly engaged and employed by the Indenture Trustee.
(c) Any of the Indenture Trustee, the Owner Trustee or the Owner
Participant may be a purchaser of the Indenture Estate or any portion thereof or
any interest therein at any sale thereof, whether pursuant to foreclosure or
power of sale or otherwise. The Indenture Trustee may apply against the
purchase price therefor the amount then due to it hereunder or under any of the
Secured Notes secured hereby and any Holder may apply against the purchase price
therefor the amount then due to it hereunder or under the Secured Notes held by
such Holder, to the extent of such portion of the purchase price as it would
have received had it been entitled to share in any distribution thereof. The
Indenture Trustee or any Holder or any nominee of any such Holder shall acquire,
upon any such purchase, good title to the property so purchased, free of the
Lien of this Indenture and, to the extent permitted by applicable law, free of
all rights of redemption in the Owner Trustee in respect of the property so
purchased.
(d) Any sale or other conveyance of any of the Indenture Estate by the
Indenture Trustee made pursuant to the terms of this Indenture or the Charter
shall bind the Owner Trustee, the Holders and the Owner Participant and shall be
effective to transfer or convey all right, title and interest of the Indenture
Trustee, the Owner Trustee, the Holders and the Owner Participant in and to such
Indenture Estate or portion thereof, as the case may be. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance, or as to the application of
any sale or other proceeds with respect thereto by the Indenture Trustee. In
the event of any such sale, the Owner Trustee shall execute any and all such
bills of sale and other documents, and perform and do all other acts and things
requested by the Indenture Trustee in order to permit continuation of such sale
and to effectuate the transfer or conveyance referred to in the first sentence
of this Section 5.05(d). The Owner Trustee shall ratify and confirm any such
sale or sales by executing and delivering to the Indenture Trustee or to such
purchaser or purchasers all instruments as may reasonably be requested for such
purpose. Any such sale or sales made hereunder shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of the Owner Trustee in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against the Owner Trustee and
against any and all persons claiming or who may claim the same, or any part
thereof from, through or under the Owner Trustee. Upon any sale or other
disposition of the Indenture Estate by the Indenture Trustee, the Indenture
37
Trustee will promptly account in writing, in reasonable detail, to the Owner
Trustee for the amount of such sale, the costs and expenses incurred in
connection therewith and any surplus proceeds.
(e) The Indenture Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any successor
or nominee thereof), at any time after an Indenture Event of Default either
before or after declaring due and payable the principal of all Secured Notes
then Outstanding, together with accrued but unpaid interest thereon and any
other amounts due thereunder, for all or any portion of the Indenture Estate,
whether such receivership be incidental to a proposed sale of the Indenture
Estate or the taking of possession thereof or otherwise, and, to the extent
permitted by applicable law, the Owner Trustee hereby consents to the
appointment of such a receiver, and agrees that it will not oppose any such
appointment. Any receiver appointed for all or any portion of the Indenture
Estate shall be entitled in addition to any powers available under applicable
law, to exercise all the rights and powers of the Indenture Trustee with respect
to the Indenture Estate.
(f) To the extent now or at any time hereafter enforceable under
applicable law, the Owner Trustee 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, extension, moratorium, any exemption from execution or
sale or other similar law or from any law now or hereafter in force providing
for the valuation or appraisement of the Indenture Estate or any part thereof,
prior to any sale or sales thereof to be made pursuant to any provision herein
contained, or prior to any applicable 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 any
right to have a portion of the Indenture Estate or the security for the Secured
Notes marshalled or otherwise 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 the Owner 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 use any such law or laws, 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 5.05(f) shall be deemed to be a
waiver by the Owner Trustee of its rights under Section 5.03 hereof.
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Secured Notes or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Indenture shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
38
(g) The Indenture Trustee may adjourn from time to time any sale to be
made under or by virtue of this Indenture for such sale or for such adjourned
sale or sales, and, except as otherwise provided by any applicable provision of
law, the Indenture Trustee, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.
(h) Any recovery of any judgment by the Indenture Trustee under the
Secured Notes and any levy of any execution under any such judgment upon the
Indenture Estate shall not affect in any manner or to any extent the security
title and security interest conveyed hereby upon the Indenture Estate or any
part thereof, or any conveyances, powers, rights and remedies of the Indenture
Trustee hereunder, but such conveyances, powers, rights and remedies shall
continue unimpaired as before.
(i) Notwithstanding anything contained herein, so long as any Pass
Through Trustee is a registered Holder, the Indenture Trustee is not authorized
or empowered to acquire title to all or any portion of the Indenture Estate or
take any action with respect to all or any portion of the Indenture Estate so
acquired by it if such acquisition or action would cause the related Pass
Through Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 5.06. Remedies Cumulative. Each and every right, power and
-------------------
remedy provided the Indenture Trustee specifically or otherwise in this
Indenture shall be cumulative and shall be in addition to every right, power and
remedy herein specifically provided or now or hereafter existing at law, in
equity or otherwise. Each and every such right, power and remedy may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Indenture Trustee, and the exercise or the beginning of the
exercise of any such right, power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other right,
power or remedy. No delay or omission by the Indenture Trustee in the exercise
of any right or power or in the pursuit of any remedy shall impair any such
right, power or remedy, or be construed to be a waiver of any Indenture Event of
Default or to be an acquiescence therein.
SECTION 5.07. Discontinuance of Proceedings. In case the Indenture
-----------------------------
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Indenture Trustee, then and in every such
case the Owner Trustee, the Indenture Trustee and the Charterer shall, subject
to any determination in such proceeding, be restored to their former positions
and rights hereunder with respect to the Indenture Estate, and all right, powers
and remedies of the Indenture Trustee shall continue as if no such proceeding
had been instituted.
39
SECTION 5.08. Waiver of Past Defaults. Upon written instruction of a
-----------------------
Majority in Interest of Holders of Notes, the Indenture Trustee shall waive any
Indenture Event of Default specified in such instruction and its consequences,
and upon any such waiver such Indenture Event of Default shall cease to exist
for every purpose of this Indenture; provided, however, that no such waiver
-------- -------
shall extend to any subsequent or other Indenture Event of Default or impair any
right or consequence thereof; and provided further, however, that in the absence
-------- ------- -------
of the written instruction of the Holders of all Secured Notes then Outstanding,
the Indenture Trustee shall not waive any Indenture Event of Default arising
from a default (i) in the payment of the principal of or interest on, or other
amounts due under, any Secured Note then Outstanding, or (ii) in respect of a
covenant or provision hereof which pursuant to the terms of Article IX cannot be
modified or amended without the consent of each Holder of a Secured Note then
Outstanding.
SECTION 5.09. No Action Contrary to Charterer's Rights Under the
--------------------------------------------------
Charter. Notwithstanding any other provision of this Indenture or any other
- -------
Operative Document, including, without limitation, Sections 5.04 and 5.05
hereof, unless a Charter Event of Default shall have occurred and be continuing
and the Charter shall have been declared to be in default pursuant to Section
18(a) thereof (and then only in accordance with the Charter), the Indenture
Trustee shall not take or cause to be taken any action contrary to the
Charterer's rights under the Charter, including, without limitation, the rights
of the Charterer under Section 5(e) thereof.
SECTION 5.10. Rights of Holders of Secured Notes. Notwithstanding
----------------------------------
any provision herein (including Section 5.11) to the contrary, the Holder of a
Secured Note shall have the absolute and unconditional right to receive payment
from the Indenture Estate of the principal of and interest on such Secured Note
on the dates and as specified in such Secured Note, and to institute suit
against the Owner Trustee for the enforcement of any such payment, subject to
Section 2.02, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.11. Limitation on Suits by Holders. A Holder may pursue a
------------------------------
remedy under this Indenture or under a Secured Note only if:
(i) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default under this Indenture;
(ii) the Holders of at least 25 percent (25%) of the Outstanding
principal amount of the Secured Notes instruct the Indenture Trustee to
pursue the remedy;
(iii) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or
expense to be, or which may be, incurred by the Indenture Trustee in
pursuing the remedy;
40
(iv) the Indenture Trustee does not comply with the request within 60
days after receipt of the instructions and the offer of indemnity; and
(v) during such 60-day period, a Majority in Interest of Holders do
not give the Indenture Trustee an instruction 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.
ARTICLE VI
DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.01. Certain Actions. If the Indenture Trustee shall have
---------------
Actual Knowledge of any Indenture Event of Default or any Indenture Default or
any failure on the part of the Charterer to make any payment of Charter Hire
when due or any Event of Loss or other material fact relating to the Vessel, the
Indenture Trustee shall (a) give prompt telephonic notice (promptly confirmed in
writing) to the Owner Trustee, the Owner Participant and the Charterer and (b)
within ninety (90) days after obtaining such Actual Knowledge, mail to each
Holder notice of all Indenture Events of Default unless, in each case, such
Indenture Event of Default has been remedied before the giving of such notice
and the Indenture Trustee has Actual Knowledge that such Indenture Default or
Indenture Event of Default has been so remedied; provided, however, that the
-------- -------
failure by the Indenture Trustee to provide such notice shall not invalidate any
actions subsequently taken by the Indenture Trustee in connection with such
Indenture Event of Default. Except in the case of a default in the payment of
the principal or interest on any Secured Note, the Indenture Trustee shall be
protected in withholding the notice required under clause (b) above if and so
long as Responsible Officers of the Indenture Trustee in good faith determine
that withholding such notice is in the interest of the Holders.
SECTION 6.02. Action upon Instructions. (a) The Indenture Trustee
------------------------
shall, upon the written instruction at any time and from time to time of a
Majority in Interest of Holders of Notes, give such notice, consent or direction
or exercise such right, remedy or power hereunder or under the Charter or any
other agreement constituting part of the Indenture Estate as shall be specified
in such instruction; provided, however, that nothing set forth in this Section
-------- -------
6.02(a) shall entitle the Holders to cause the Indenture Trustee to give any
notice or exercise any right, power or remedy that is not elsewhere authorized
by, or is otherwise restricted or prohibited by, this Indenture or any other
Operative Document. If the Indenture Trustee shall not have received
instructions as above provided within twenty (20) calendar days after mailing of
the notice pursuant to Section 6.01 to the Holders, the Indenture Trustee may
take such action, or refrain from taking such action, but shall be under no duty
to take or refrain from taking any action, with
41
respect to such Indenture Event of Default as it shall determine to be advisable
and in the best interest of the Holders. If the Indenture Trustee receives any
instructions after the expiration of the aforementioned 20-day period, the
Indenture Trustee shall use its best efforts to conform any action being taken
to comply with those instructions.
(b) The Indenture Trustee shall not consent to the assignment by the
Charterer of all or any material portion of its right, title and interest in, to
and under the Charter, except (i) with respect to an assignment permitted under
Section 16(b) of the Charter or (ii) upon the written instruction at any time
and from time to time of a Majority in Interest of Holders of Notes. Nothing
set forth herein shall be construed to permit such assignment without the
consent of the Owner Trustee or to adversely affect any right of the Owner
Trustee.
SECTION 6.03. Release of Lien of Indenture. (a) Release of
---------------------------- ----------
Indenture Estate. Upon satisfaction of the conditions for termination of this
- ----------------
Indenture set forth in Section 10.01, the Liens of the Indenture and of the Ship
Mortgage on the Indenture Estate shall terminate and the Indenture Trustee, upon
the written request of the Owner Trustee or the Charterer, shall execute and
deliver to, or as directed by, the Owner Trustee or the Charterer, all
appropriate instruments (in due form for recording or filing) releasing the
Indenture Estate from the Liens of this Indenture and of the Ship Mortgage, and
the Indenture Trustee shall pay all moneys or other properties or proceeds held
by it under this Indenture to the Owner Trustee and shall give notice to the
Charterer of such payment. The reasonable cost and expense associated with any
action taken by the Indenture Trustee pursuant to the provisions of this Section
6.03(a) shall be borne by the Charterer.
(b) Release of the Vessel upon Transfer. Upon any transfer by the
-----------------------------------
Owner Trustee of the Vessel pursuant to Sections 11, 12 or 15(a) of the Charter
or any retention by the Owner Trustee of the Vessel pursuant to Section 12 of
the Charter and receipt by the Indenture Trustee of all amounts of Charter Hire
therefor that constituted a part of the Indenture Estate due and payable by the
Charterer and the concurrent redemption of Secured Notes as set forth in
Sections 3.02 and 4.02 and the payment of any other amounts then due and owing
hereunder, the Liens of the Indenture and of the Ship Mortgage shall terminate
and the Indenture Trustee, upon the written request of the Owner Trustee or the
Charterer, shall execute and deliver to, or as directed by, the Owner Trustee or
the Charterer, all appropriate instruments (in due form for recording or filing)
releasing the Vessel, and all property relating thereto and then constituting a
portion of the Indenture Estate from the Liens of this Indenture and of the Ship
Mortgage. The cost and expense associated with any action taken by the
Indenture Trustee pursuant to the provisions of this Section 6.03(b) shall be
borne by the Charterer.
(c) Release of Lien upon Full Payment of Secured Notes. Upon payment
--------------------------------------------------
in full of the principal of and interest on and all other amounts due and
payable under the Secured Notes, and all other amounts due and payable to any
Holder or the Indenture Trustee hereunder
42
or under any other Operative Document, the Indenture Trustee, upon the written
request of the Owner Trustee, shall execute and deliver to, or as directed by,
the Owner Trustee or the Charterer, all appropriate instruments (in due form for
recording or filing) releasing the Vessel, and all other property relating
thereto and then constituting a portion of the Indenture Estate from the Liens
of this Indenture and of the Ship Mortgage. The cost and expense associated
with any action taken by the Indenture Trustee pursuant to the provisions of
this Section 6.03(c) shall be borne by the Charterer.
(d) Disposition, Substitution and Release of Vessel Included in the
---------------------------------------------------------------
Indenture Estate During Continuation of Charter. So long as the Charter is in
- -----------------------------------------------
effect, any alterations, improvements and Modifications in and additions to the
Vessel shall, to the extent required or specified by the Charter, become subject
to the Lien of this Indenture and of the Ship Mortgage and be leased to the
Charterer under the Charter; provided that, to the extent permitted by and as
--------
provided in the Charter, the Charterer shall have the right, at any time and
from time to time, without any release from or consent by the Owner Trustee or
the Indenture Trustee or any other Person, to remove and/or replace any item of
property constituting part of the Vessel and to make alterations, improvements
and Modifications in, and additions to, the Vessel to the extent set forth in
the Charter. Each of the Indenture Trustee and the Owner Trustee agrees that,
to the extent permitted by and as provided in the Charter, title to any such
removed or replaced item of property, shall vest in the Charterer. The
Indenture Trustee shall from time to time execute an appropriate written
instrument or instruments to confirm the release of the security interest of the
Indenture Trustee in any such replaced item of property, as provided in this
Section 6.03(d) in each case upon receipt by the Indenture Trustee of a request
of a Charterer stating that said action was duly taken by the Charterer in
conformity with this Section 6.03(d) and that the execution of such written
instrument or instruments is appropriate to evidence such release of a security
interest under this Section 6.03(d). The reasonable cost and expense associated
with any action taken by the Indenture Trustee pursuant to the provisions of
this Section 6.03(d) shall be borne by the Charterer.
SECTION 6.04. Indemnification. The Indenture Trustee shall not be
---------------
required to take any action or refrain from taking any action instructed to be
taken or refrained from being taken pursuant to Section 6.02 or under Article V
unless the Indenture Trustee shall have been indemnified to the Indenture
Trustee's reasonable satisfaction against any liability (including, without
limitation, environmental liability), cost or expense (including, without
limitation, the reasonable fees and expenses of counsel) which may be incurred
in connection therewith, other than any such liability, cost or expense which
results from the willful misconduct or gross negligence of the Indenture Trustee
and for the failure of the Indenture Trustee to exercise ordinary care in
distributing funds in accordance with the terms of the Operative Documents.
Except with respect to actions required by the first sentence of Section 6.01
hereof, the Indenture Trustee shall be under no obligation to take any action
under this Indenture and nothing contained in this Indenture shall require the
Indenture Trustee to expend or risk the Indenture
43
Trustee's own funds or otherwise incur any financial liability or any other
liability (including, without limitation, environmental liability) in the
performance of any of the Indenture Trustee's duties hereunder or in the
exercise of any of the Indenture Trustee's rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Indenture Trustee shall not be required to take any action under Section 6.02 or
Article V, nor shall any other provision of this Indenture be deemed to impose a
duty on any Indenture Trustee to take any action, if such Indenture Trustee
shall have reasonably determined or been advised by its counsel that such action
is contrary to the terms hereof or of any other Operative Document, or is
contrary to applicable law.
SECTION 6.05. No Implied Duties. No implied duties or obligations of
-----------------
the Indenture Trustee shall be read into this Indenture.
SECTION 6.06. Duties to Remove Certain Liens. The Indenture Trustee,
------------------------------
in its individual capacity, shall comply with Section 11.4(a) of the
Participation Agreement.
SECTION 6.07. No Action Except Under Operative Documents or
---------------------------------------------
Instructions. The Owner Trustee and the Indenture Trustee agree that they will
- ------------
not use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Vessel or any other part of the Indenture Estate except (a) in
accordance with the terms of the Charter or the other Operative Documents or (b)
in accordance with the powers granted to, or the authority conferred upon, the
Owner Trustee and the Indenture Trustee pursuant to the express terms of this
Indenture and the Trust Agreement.
SECTION 6.08. Certain Rights of the Owner Trustee and the Owner
-------------------------------------------------
Participant. Notwithstanding the Granting Clause or any other provision in this
- -----------
Indenture to the contrary:
(a) each of the Owner Trustee and the Owner Participant shall have the
right, to the exclusion of the Indenture Trustee, whether or not an
Indenture Event of Default is continuing and whether or not the Indenture
Trustee has foreclosed on the Lien of the Indenture, (i) to receive
Excepted Payments, (ii) to demand, collect, sue for or waive any notice of
default with respect to Excepted Payments, and (iii) to enforce the payment
of Excepted Payments due and payable to it by appropriate judicial
proceedings and to exercise other remedies as provided under any Operative
Document to the extent and with respect to any portion of the Indenture
Estate which shall have been released pursuant to the terms of this
Indenture; provided that the rights referred to in clause (iii) of this
--------
Section 6.08(a) shall not be deemed to include the exercise of any remedies
provided for in Section 18 of the Charter other than the right to proceed
by appropriate court action or actions, either at law or in equity, to
enforce performance by the Charterer of the applicable covenants or to
recover damages for breach thereof;
44
(b) at all times prior to the foreclosure of the Lien of the
Indenture, whether or not an Indenture Event of Default is continuing, each
of the Owner Trustee and the Owner Participant shall have the right, but
not to the exclusion of the Indenture Trustee, (i) to receive from the
Charterer all notices, financial statements, certificates, opinions of
counsel and other documents and information which the Charterer is
permitted or required to give or furnish to the Owner Trustee or the Owner
Participant pursuant to the terms of any Operative Document, (ii) to retain
all rights with respect to liability insurance which Section 10 of the
Charter specifically confers upon the Owner Trustee or the Owner
Participant, and (iii) to exercise inspection rights pursuant to Section
10.5 of the Participation Agreement and Section 6(b) of the Charter;
(c) prior to the foreclosure of the Lien of the Indenture and whether
or not an Indenture Event of Default shall have occurred and be continuing,
the Owner Trustee shall have the right, to the exclusion of the Indenture
Trustee, to adjust Base Charter Hire, Stipulated Loss Values and
Termination Values and the EBO Exercise Price pursuant to Section 2.12.1 of
the Participation Agreement but subject to the limitations set forth in
Section 3(h) of the Charter and 2.12.2 of the Participation Agreement; and
(d) so long as no Indenture Event of Default shall have occurred and
be continuing (subject to Section 9.02), the Owner Trustee shall retain (to
the exclusion of the Indenture Trustee) all rights of the "Shipowner" or
the "Owner Trustee" under the Charter or any other Operative Document, as
the case may be, other than the Indenture Trustee's right to receive any
funds assigned to the Indenture Trustee under the terms of this Indenture.
SECTION 6.09. Filing of Financing and Continuation Statements. The
-----------------------------------------------
Indenture Trustee shall, at the expense of the Owner Trustee, execute and file
any continuation or similar statement or document delivered to it by the Owner
Trustee or the Charterer in a form reasonably satisfactory to the Indenture
Trustee and proper for filing.
SECTION 6.10. Publishing of Notices. The Indenture Trustee will
---------------------
furnish to the Owner Trustee and the Owner Participant, promptly upon receipt
thereof, a duplicate or copy of each report, notice, request, demand,
instruction, certificate, financial statement or other instrument furnished to
the Indenture Trustee hereunder or under any other Operative Document.
SECTION 6.11. Taxes; Withholding; Information Reporting. The
-----------------------------------------
Indenture Trustee shall exclude and withhold from each distribution of principal
and interest and other amounts due hereunder or under the Secured Notes any and
all withholding taxes applicable thereto as required by law. The 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 Secured
Notes or otherwise
45
due hereunder, to withhold such taxes or charges and timely pay the same to the
appropriate authority in the name of and on behalf of the Loan Participants, (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 withheld
amounts, it will deliver to each Loan Participant appropriate documentation
showing the payment of such withheld amounts, together with such additional
documentary evidence as such Loan Participants may reasonably request from time
to time. The Indenture Trustee agrees to file any other information reports as
it may be required to file under United States law. No withholding or action
with respect thereto shall constitute or give rise to any Indenture Event of
Default or any other claims against the Owner Participant or the Owner Trustee.
Any tax withheld by the Indenture Trustee pursuant to this Section 6.11 shall be
deemed for all purposes of this Indenture and the Secured Notes to have been
paid to the Holder with respect to which such tax was withheld.
ARTICLE VII
THE INDENTURE TRUSTEE AND THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties. The Indenture Trustee
-------------------------------
accepts the duties hereby created and applicable to it and agrees to perform the
same upon the terms and conditions set forth in this Indenture and the
Participation Agreement. The Indenture Trustee further agrees to receive and
disburse all moneys constituting part of the Indenture Estate in accordance with
the terms hereof. The Indenture Trustee shall not be answerable or accountable
in its individual capacity under any circumstances, except (a) for its willful
misconduct or gross negligence, (b) for its failure to exercise reasonable care
in safeguarding the security held by it pursuant to the terms hereof, (c) in the
case of the inaccuracy of any representations or warranties, or the breach of
any covenants, made by the Indenture Trustee in its individual capacity and
contained in the Participation Agreement or any other Operative Document or
referred to by reference in Section 7.03 hereof, (d) as provided in Sections
2.03 and 6.06, (e) for any Tax based on or measured by any fees, commissions or
compensation received by it for acting as trustee hereunder, or (f) except as
otherwise expressly provided herein for its failure to use ordinary care in
disbursing funds in accordance with the terms hereof.
SECTION 7.02. Absence of Duties Except as Specified. Except in
-------------------------------------
accordance with written instructions pursuant to Section 6.01 or 6.02, and
except as provided in, and without limiting the generality of, Sections 6.04,
6.05, 6.06, 6.07, 7.01 and 7.03, the Indenture Trustee shall have no duty (a) to
record or file the Ship Mortgage, the Charter or this Indenture or any other
document, or to maintain any such recording or filing, or to rerecord or refile
any such document, (b) to effect or maintain any such insurance, whether or not
the Charterer shall be in default with respect thereto, (c) to discharge any
Lien of any kind against any part of the Trust Estate or the Indenture Estate,
or (d) to inspect the Vessel at any time, or to ascertain or inquire
46
as to the performance or observance of any of the Charterer's covenants pursuant
to the terms of the Charter.
SECTION 7.03. No Representations or Warranties. NEITHER THE OWNER
--------------------------------
TRUSTEE NOR THE INDENTURE TRUSTEE MAKES (a) ANY REPRESENTATION OR WARRANTY,
WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AS TO THE VALUE, COMPLIANCE WITH
SPECIFICATIONS, DURABILITY, OPERATION, CONSTRUCTION, PERFORMANCE, DESIGN OR
CONDITION OF THE VESSEL OR ANY PART THEREOF, THE MERCHANTABILITY THEREOF OR THE
FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE VESSEL OR ANY COMPONENT
OF THE VESSEL, THE QUALITY OF THE MATERIALS OR WORKMANSHIP THEREOF OR CONFORMITY
THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE VESSEL, OR ANY COMPONENT OF
THE VESSEL, or (b) any representation or warranty as to the validity, legality
or enforceability of this Indenture, any of the other Operative Documents or the
Secured Notes, or as to the correctness of any statement contained in any
thereof, except as set forth in Section 7.01 of this Indenture, Sections 7 and 8
of the Participation Agreement, respectively, and Section 7.3 of the Trust
Agreement.
SECTION 7.04. No Segregation of Moneys; No Interest; Investments.
--------------------------------------------------
Any moneys paid to or retained by the Indenture Trustee pursuant to any
provision hereof and not then required to be distributed to the Holders, the
Charterer or the Owner Trustee shall be deposited in a separate, interest
bearing cash collateral account; provided that any payments received or applied
--------
hereunder by the Indenture Trustee shall be accounted for by the Indenture
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof. Any amounts held by the Indenture
Trustee pursuant to the express terms of this Indenture or any other Operative
Document shall be invested and reinvested by the Indenture Trustee from time to
time in Permitted Investments at the written direction of (i) the Charterer if
such amounts would be payable to the Charterer upon satisfaction of any
applicable conditions; or (ii) the Owner Participant in the case of the
remaining portion of such amounts; provided, however, that in the event there
-------- -------
shall be continuing any Indenture Event of Default, such directions may be given
exclusively by a Majority in Interest of Holders of Notes provided further, that
-------- -------
in the event the Indenture Trustee shall not have received such written
direction from such appropriate party, such amounts shall be invested in
investments of the type described in clause (iv) of the definition of Permitted
Investments. The Indenture Trustee shall have no liability for any loss
resulting from any investment required to be made hereunder other than by reason
of its own willful misconduct or negligence in failing to comply with such
instructions. Any net income or gain realized as a result of any such investment
or reinvestment shall be held as part of the Indenture Estate and shall be
applied by the Indenture Trustee at the same time, on the same conditions and in
the same manner as the amounts in respect of which such income or
47
gain was realized are required to be distributed in accordance with the
provisions hereof. Any Permitted Investment may be sold or otherwise reduced to
cash (without regard to maturity) by the Indenture Trustee whenever necessary to
make any application as required by the terms of this Indenture or of any
applicable Operative Document.
SECTION 7.05. Reliance; Agents; Advice of Counsel. Neither the Owner
-----------------------------------
Trustee nor the Indenture Trustee (in their respective individual or trust
capacities for the purposes of this Section 7.05) shall incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and believed by it to be signed by the
proper party or parties. Either of the Owner Trustee or the Indenture Trustee
may accept a copy of a resolution of the Board of Directors or other governing
body of any party to the Participation Agreement or other Operative Agreement,
certified by the Secretary or any Assistant Secretary thereof as duly adopted
and in full force and effect, as conclusive evidence that such resolution has
been duly adopted and that the same is in full force and effect. As to any fact
or matter the manner of ascertainment of which is not specifically described
herein, the Owner Trustee and the Indenture Trustee may for all purposes hereof
rely on an Officer's Certificate of the relevant party as to such fact or
matter, and such Officer's Certificate shall constitute full protection to the
Owner Trustee or the Indenture Trustee (in their individual or trust
capacities), as the case may be, for any action taken or omitted to be taken by
it in good faith in reliance thereon. The Indenture Trustee shall assume, and
shall be fully protected in assuming, that the Owner Trustee is authorized by
the Trust Agreement to enter into this Indenture and to take all action to be
taken by the Owner Trustee pursuant to the provisions hereof, and shall not
inquire into the authorization of the Owner Trustee with respect thereto. The
Owner Trustee shall assume, and shall be fully protected in assuming, that the
Indenture Trustee is authorized to enter into this Indenture and to take all
action to be taken by the Indenture Trustee pursuant to the provisions hereof,
and shall not inquire into the authorization of the Indenture Trustee with
respect thereto. In the administration of the trusts hereunder, the Indenture
Trustee may execute any of the trusts or powers hereof and perform its powers
and duties hereunder directly or through agents or attorneys and at the expense
of the Indenture Estate may consult with counsel, accountants and other skilled
Persons to be selected and retained by it, and the Indenture Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountant or other
skilled Person acting within such Person's area of competence (so long as the
Indenture Trustee shall have exercised due care in selecting such Persons),
provided that, so long as no Charter Event of Default shall have occurred and be
- --------
continuing, no such Persons (other than counsel to the Indenture Trustee or its
accountants) shall be retained by the Indenture Trustee without the consent of
the Charterer, such consent not to be unreasonably withheld.
SECTION 7.06. No Compensation from Holders or Indenture Estate.
------------------------------------------------
Notwithstanding any other provision hereof, the Indenture Trustee shall have no
right against the
48
Holders, the Owner Trustee, the Owner Participant or, except as otherwise
provided in Section 4.03, the Indenture Estate for any fee as compensation for
its services hereunder.
SECTION 7.07. Right of the Indenture Trustee to Perform Covenants,
----------------------------------------------------
Etc. If the Owner Trustee or the Charterer shall fail to make any payment or
- ---
perform any act required to be made or performed by it hereunder or under any
Operative Document to which it is a party or if the Owner Trustee or the
Charterer shall fail to release any Lien affecting the Indenture Estate which it
is required to release by the terms of this Indenture or any other Operative
Document to which it is a party, and provided a Charter Event of Default shall
have occurred and be continuing and remedies be exercised under the Charter, the
Indenture Trustee, after notice to and demand upon the Owner Trustee or the
Charterer and affording the Owner Trustee and the Charterer a reasonable
opportunity to cure, and without waiving or releasing any obligation or Charter
Event of Default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account of and at the
expense of the Indenture Estate, and may enter upon any property for such
purpose and take all such action with respect thereto as, in the Indenture
Trustee's opinion, may be necessary or appropriate therefor. No such entry
shall be deemed an eviction. All sums so paid by the Indenture Trustee and all
costs and expenses (including, without limitation, legal fees and expenses) so
incurred, shall constitute additional indebtedness secured by this Indenture and
by the Ship Mortgage and shall be paid from the Indenture Estate to the
Indenture Trustee on demand. The Indenture Trustee shall not be liable for any
damages resulting from any such payment or action unless such damages shall be a
consequence of willful misconduct or gross negligence on the part of the
Indenture Trustee.
SECTION 7.08. Moneys for Payments in Respect of Notes to be Held in
-----------------------------------------------------
Trust. In case the Holder of any Secured Note shall fail to present the same for
- -----
payment on any date on which the principal thereof becomes payable, the
Indenture Trustee may set aside in trust the moneys then due thereon uninvested
and shall pay such moneys to any Holder of such Secured Note upon due
presentation for surrender thereof in accordance with the provisions of this
Indenture, subject to the provisions of Section 7.09.
SECTION 7.09. Disposition of Moneys Held for Payments of Notes. (a)
------------------------------------------------
Any money set aside under Section 7.08 and not paid to Holders under Section
7.08 shall be held by the Indenture Trustee in trust until the date three years
after the date of such setting aside, and thereafter shall be paid to the Owner
Trustee by the Indenture Trustee who then shall be released from all further
liability with respect to such moneys, and thereafter the Holders of the Secured
Notes in respect of which such moneys were so paid to the Owner Trustee shall
have no rights in respect thereof except to obtain payment of such moneys from
the Owner Trustee.
(b) All moneys and U.S. Government Obligations deposited with the
Indenture Trustee pursuant to Section 10.01 shall be held in trust and applied
by it, in accordance with the provisions of the Secured Notes and this
Indenture, to the payment to the Holders of all
49
sums due and to become due thereon for principal and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Indenture Trustee shall promptly pay or return to the Owner
Trustee upon the written request of the Owner Trustee any money or U.S.
Government Obligations held by it at any time that are not required for the
payment of the amounts described in the preceding sentence for which money or
U.S. Government Obligations have been deposited pursuant to Section 10.01.
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustees. In the case of any
----------------------------------
appointment of a successor to the Owner Trustee pursuant to the Trust Agreement,
or any merger, conversion or consolidation or transfer of substantially all of
the corporate trust business of the Owner Trustee, the successor Owner Trustee
shall give prompt written notice thereof to the Indenture Trustee.
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
------------------------------------------------
Successor. (a) The Indenture Trustee or any successor thereto may resign at any
- ---------
time without cause by giving at least thirty (30) days prior written notice to
the Owner Trustee, the Owner Participant, the Charterer and each Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee as provided in Section 8.02(b). In addition, a
Majority in Interest of Holders of Notes may at any time remove the Indenture
Trustee without cause by an instrument in writing delivered to the Owner
Trustee, the Owner Participant, the Charterer and the Indenture Trustee, such
removal to be effective upon the acceptance of the trusteeship by a successor
Indenture Trustee as provided in Section 8.02(b). The Owner Trustee (acting
pursuant to instructions from the Charterer) may remove the Indenture Trustee
if:
(1) the Indenture Trustee fails to comply with Sections 6.06 or
8.02(c) hereof;
(2) the Indenture Trustee is adjudged as bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Indenture Trustee
or its property; or
(4) the Indenture Trustee becomes incapable of acting.
50
In the case of the resignation or removal of the Indenture Trustee, the Owner
Trustee (acting pursuant to instructions from the Charterer) shall promptly
appoint a successor Indenture Trustee. If a successor Indenture Trustee shall
not have been appointed within thirty (30) days of such notice of resignation or
removal, the Indenture Trustee, the Owner Trustee, the Owner Participant, the
Charterer or a Majority in Interest of Holders may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee qualified under
Section 8.02(c) to act until such time, if any, as a successor shall have been
appointed as above provided in this Section 8.02. The successor Indenture
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as above provided in
this Section 8.02.
(b) Any successor Indenture Trustee, however appointed, shall execute
and deliver to the Owner Trustee and to the predecessor Indenture Trustee an
instrument accepting such appointment, and shall give the Owner Participant, the
Holders and the Charterer written notice of such acceptance. Upon the execution
and delivery of such instrument, such successor Indenture Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers and duties of the predecessor Indenture Trustee hereunder with like
effect as if originally named the Indenture Trustee herein. Notwithstanding and
without limiting the foregoing, the predecessor Indenture Trustee, upon the
written request of the successor Indenture Trustee, shall execute and deliver an
instrument transferring to such successor Indenture Trustee, upon the trusts
herein expressed applicable to it, all the estates, properties, rights and
powers of such predecessor Indenture Trustee, and such predecessor Indenture
Trustee shall duly assign, transfer, deliver and pay over to such successor
Indenture Trustee all moneys or other property then held by such predecessor
Indenture Trustee hereunder and all books and records relating to the
administration of the Indenture Estate.
(c) There shall at all times be an Indenture Trustee hereunder which
shall be a bank or trust company organized and doing business under the laws of
the United States of America or of any State thereof, authorized under such laws
to exercise corporate trust powers, subject to supervision or examination by
Federal or State authority, having a combined capital and surplus of at least
$75,000,000, regularly engaged in or having expertise in leveraged leasing. If
such bank or trust company publishes reports of condition at least annually,
pursuant to applicable law or to the requirements of the aforesaid supervising
or examining authority, then for purposes hereof the combined capital and
surplus of such bank or trust company shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
(d) Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation to which substantially all the corporate
trust business of the Indenture Trustee may be transferred,
51
shall, subject to the terms of paragraph (c) of this Section 8.02, be the
Indenture Trustee under this Indenture without further act.
SECTION 8.03. Co-Trustees and Separate Trustees. (a) If, at any
---------------------------------
time it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which property shall be held subject to the Lien of this
Indenture and of the Ship Mortgage, the Indenture Trustee shall be advised by
counsel that it is so necessary or prudent in the interest of the Holders, or a
Majority in Interest of Holders of Notes in writing shall so request the
Indenture Trustee and the Owner Trustee, the Indenture Trustee and the Owner
Trustee shall execute and deliver all instruments and agreements necessary or
proper either (i) to constitute another bank or trust company or one or more
Persons approved by the Charterer, the Indenture Trustee and the Owner Trustee,
either to act as co-trustee or co-trustees of all or any portion of the
Indenture Estate, jointly with the Indenture Trustee originally named herein or
any successor or successors, or to act as separate trustee or trustees of all or
any such portion of the Indenture Estate in each case with such rights, powers,
duties and obligations as may be provided in such supplemental indenture or such
instrument of appointment as the Indenture Trustee or a Majority in Interest of
Holders of Notes may deem necessary or advisable, or (ii) to clarify, add to or
subtract from the rights, powers, duties and obligations theretofore granted any
such additional or separate trustee, subject in each case to the remaining
provisions of this Section 8.03. In the event that the Charterer or Owner
Trustee shall not have joined in the execution of such instruments and
agreements within fifteen (15) days after the receipt of a written request from
the Indenture Trustee to do so, or if an Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee may act under the foregoing
provisions of this Section 8.03 without the concurrence of the Charterer or
Owner Trustee; and the Owner Trustee hereby appoints the Indenture Trustee its
agent and attorney-in-fact to act for it under the foregoing provisions of this
Section 8.03(a) in either of such contingencies. The Indenture Trustee may, in
such capacity, execute deliver and perform any such supplemental indenture, or
any such instrument, as may be required for the appointment of any such co-
trustee(s) or separate trustee(s) or for the clarification of, addition to or
subtraction from the rights, powers, duties or obligations theretofore granted
to any such co-trustee(s) or separate trustee(s). In case any co-trustees or
separate trustee(s) appointed under this Section 8.03(a) shall die, become
incapable of acting, resign or be removed, all the assets, property, rights,
powers, trusts, duties and obligations of such co-trustee(s) or separate
trustee(s) shall revert to and shall vest in and may be exercised by the
Indenture Trustee, to the extent permitted by law until a successor, additional
or separate trustee is appointed as provided in this Section 8.03(a).
(b) Every co-trustee and separate trustee hereunder shall, to the
extent permitted by law and except as otherwise expressly provided in any
Operative Document, be appointed and act, and the Indenture Trustee and its
successors shall act, subject to the following provisions and conditions:
52
(i) the Secured Notes shall be authenticated and delivered by the
Indenture Trustee, and all powers, duties, obligations and rights conferred
upon the Indenture Trustee in respect of the receipt, custody, control,
payment and management of moneys, papers or securities, shall be exercised,
solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such co-trustee or co-
trustees or separate trustee or trustees jointly, except to the extent that
under any applicable law or in any jurisdiction in which any particular act
or acts are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such co-
trustee or co-trustees or separate trustee or trustees; but subject to the
same limitations in any exercise of his, her or its power and authority as
those to which the Indenture Trustee is subject under the terms of this
Indenture;
(iii) notwithstanding anything herein contained to the contrary, no
power given hereby to, or which it is provided hereby may be exercised by,
any such co-trustee or co-trustees or separate trustee or trustees, shall
be exercised hereunder by such additional trustee or trustees except
jointly with, or with consent in writing of, the Indenture Trustee;
(iv) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder;
(v) the powers of any co-trustee(s) or separate trustee(s)
appointed pursuant to this Section 8.03 shall not in any case exceed those
of the Indenture Trustee hereunder; and
(vi) the Owner Trustee and the Indenture Trustee, at any time, by
an instrument in writing executed by them jointly, may remove any such
trustee, and in that case, by an instrument in writing executed by them
jointly, may appoint a successor or successors to such co-trustee or co-
trustees or separate trustee or trustees, as the case may be, acceptable to
the Charterer. In the event that the Owner Trustee shall not have joined in
the execution of any such instrument within fifteen (15) days after the
receipt of a written request from the Indenture Trustee to do so, the
Indenture Trustee shall have the power to remove any such co-trustee or
separate trustee and to appoint a successor co-trustee or separate trustee
without the concurrence of the Owner Trustee. In the event that the
Indenture Trustee alone shall have appointed a separate trustee or trustees
or co- trustee or co-trustees as above provided in this Section 8.03, it
may at any time, by an instrument in writing, remove any such separate
trustee or co-trustee, the successor to any
53
such separate trustee or co-trustee so removed to be appointed by the Owner
Trustee and the Indenture Trustee, or by the Indenture Trustee alone, as
provided in this Section 8.03.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Indenture Supplements Without Consent of Holders. The
------------------------------------------------
Owner Trustee and the Indenture Trustee, without the consent of any Holder and
at any time and from time to time, may enter into one or more amendments or
supplements to this Indenture, in form satisfactory to each of the Owner Trustee
and Indenture Trustee, for any of the following purposes:
(a) to subject to the Lien of this Indenture additional property
constituting part of the Indenture Estate pursuant to a supplement to this
Indenture substantially in the form of Exhibit D to this Indenture;
(b) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture;
(c) to add to the covenants of the Owner Trustee for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Owner Trustee, the Owner Participant or the Charterer;
(d) to cure any ambiguity, to correct or supplement any provision
herein or in the Secured Notes which may be defective or inconsistent with
any other provisions of this Indenture, to make any other changes not
inconsistent with the provisions hereof, provided that such action shall
--------
not adversely affect the interests of any Holder;
(e) to provide for the assumption by the Charterer of the obligations
of the Owner Trustee hereunder in accordance with the terms and conditions
applicable thereto specified in Section 3.04, including, without
limitation, such amendments to Exhibit C as may be necessary or desirable
in order to effectuate such assumption and accomplish the purposes thereof
(provided that such amendments to Exhibit C shall not adversely affect the
--------
interests of the Loan Participants);
(f) to evidence the succession of a new Owner Trustee in accordance
with the Trust Agreement or the succession of a new Indenture Trustee
hereunder or the appointment or removal of any co-trustee or separate
trustee thereunder or hereunder;
54
(g) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to make any other provisions with respect to
matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Loan Participants;
(h) to add to the rights of the Loan Participants;
(i) to include on the Secured Notes any legend as may be required by
law; or
(j) to provide for the establishment and issuance of (A) Additional
Notes pursuant to Section 14 of the Participation Agreement or Section 2.08
hereof or (B) Refunding Secured Notes in connection with a refunding or
refinancing pursuant to Section 15 of the Participation Agreement or
Section 3.05 hereof.
SECTION 9.02. Supplements and Amendments to Indenture With Consent of
-------------------------------------------------------
Holders of Notes. (a) Without the consent of a Majority in Interest of Holders
- ----------------
of Notes, the Owner Trustee may not modify, amend or supplement any of the
Charter, the Participation Agreement or the Trust Agreement, or give any
consent, waiver, authorization or approval thereunder, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
thereof or of modifying in any manner the rights of the respective parties
thereunder; provided, however, that the actions specified in Section 9.02(c) may
-------- -------
be taken without the consent of the Indenture Trustee or any Holder.
(b) Except as provided in Section 9.01 or 9.02(c) or 9.02(d), at any
time and from time to time, with the consent of a Majority in Interest of
Holders of Notes and, whether or not an Indenture Event of Default exists, upon
the written consent of the Owner Trustee and the Owner Participant, the
Indenture Trustee (x) shall execute an amendment or supplement to this Indenture
for the purpose of adding provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture, or (y) shall execute an
amendment or supplement to, or give a consent, waiver, authorization or
approval, for the purposes of adding any provisions to or changing in any manner
or eliminating any of the provisions of, the Participation Agreement, or (z)
shall consent to any amendment or supplement to, or give a consent, waiver,
authorization or approval, for the purposes of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Charter or
the Trust Agreement; provided, however, that no such amendment or supplement to
-------- -------
this Indenture, or consent, waiver, authorization, approval, amendment or
supplement to the Participation Agreement, the Charter or the Trust Agreement
(whether pursuant to subsection (a) or (c) of this Section 9.02, and anything in
such subsections or elsewhere in this Indenture to the contrary notwithstanding)
shall, without the consent of each Holder of a Secured Note then Outstanding:
55
(i) change the stated maturity of the principal of, or any
installment of interest on, or the amount of any payment upon any mandatory
or optional repayment, purchase or redemption of any Secured Note, or
change the principal amount thereof or any other amount payable in respect
thereof or reduce the Make-Whole Amount, if any, or interest thereon, or
change the place of payment where, or the coin or currency in which, any
Secured Note or the interest thereon is payable;
(ii) permit the creation of any Lien on the Indenture Estate not
otherwise permitted hereunder or deprive any Holder of the benefit of the
Lien of this Indenture upon the Indenture Estate, or any portion thereof,
for the security of its Secured Notes;
(iii) change the percentage of the aggregate principal amount of
Secured Notes required to take or approve any action hereunder or any other
Operative Document;
(iv) modify the definitions of "Indenture Default", "Indenture
Event of Default", "Majority in Interest of Holders of Notes", "Charter
Default" or "Charter Event of Default";
(v) modify the order of priorities in which distributions are to
be made under Article IV;
(vi) reduce the amount or change the time of any payment of Base
Charter Hire, Stipulated Loss Value, Early Buy-Out Purchase Price or
Termination Value, except as expressly permitted pursuant to the terms of
the Charter or the Participation Agreement as executed on the date hereof,
so that such payments would be insufficient to pay principal of and
interest on the outstanding Secured Notes as they become due hereunder;
(vii) modify, amend or supplement any of the provisions of this
Section 9.02;
(viii) modify, amend or supplement the Charter, or consent to any
assignment of the Charter (other than an assignment pursuant to Section
16(b) of the Charter), in either case releasing the Charterer from its
obligations in respect of the payment of Base Charter Hire, Supplemental
Charter Hire payable pursuant to Section 3(d) of the Charter, Stipulated
Loss Value, EBO Exercise Price or Termination Value, or changing the
absolute and unconditional character of such obligations as set forth in
Section 3(i) of the Charter; or
(ix) adversely affect any indemnities in favor of any Holder as
provided pursuant to the terms of any Operative Document, except as may be
consented to by each Person adversely affected thereby.
56
(c) Notwithstanding anything to the contrary contained in Section
9.02(b) (except as provided in the proviso to Section 9.02(b)), (x) without the
necessity of the consent of any of the Holders or the Indenture Trustee, the
Owner Trustee may and (y) in the case of clauses (iii) and (iv) of this Section
9.02(c), without the consent of any of the Holders, the Indenture Trustee may,
at the request of the Owner Trustee:
(i) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Charter, or give any
consent, waiver, authorization or approval with respect thereto, except
that without compliance with Section 9.02(b), the Owner Trustee shall not
modify, amend or supplement, or give any consent, waiver, authorization or
approval for the purposes of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect to the
following provisions of the Charter as originally executed: Section 2(a)
(if the result thereof would be to shorten the term of the Charter to a
period shorter than the period ending with the maturity date of the Secured
Notes), Sections 3(b), 3(c), 3(d), (except to the extent such Section
relates to amounts payable (whether directly or pursuant to the Indenture)
to persons other than the Loan Participants and the Indenture Trustee in
its individual capacity), Section 3(f) (except insofar as it relates to the
address or account information of the Charterer, the Owner Trustee or the
Indenture Trustee) (other than as such as Section 3(b), 3(c) or 3(d) of the
Charter may be amended pursuant to Sections 3(h) and 9(b) of the Charter),
Section 3(h), Section 3(i), Section 12 (except that the procedures for
soliciting bids may be modified and further restrictions may be imposed on
the ability of the Charterer to terminate the Charter with respect to the
Vessel pursuant to such Section 12), Section 5(e), Section 9(a), Sections
6(a), 6(b), 8(a), the proviso to Section 8(b) (other than with respect to
"limited use property" characterization), Section 8(c)(ii) or 8(b) (except
that additional requirements may be imposed on the Charterer), Section 11
(other than Sections 11(c) and 11(b), and except that additional
requirements may be imposed on the Charterer), Section 10 (except that
additional insurance requirements may be imposed on the Charterer), Section
16, Section 17, Section 18, Section 20(a), Section 21(c) and any definition
of terms used in the Charter, to the extent that any modification of such
definition would result in a modification of the Charter not permitted
pursuant to this Section 9.02(c), provided that, subject to the next
--------
proviso, in the event an Indenture Event of Default shall have occurred and
be continuing, the Indenture Trustee shall have all rights of the Owner
Trustee as "Shipowner" under the Charter to modify, amend or supplement the
Charter or give any consent, waiver, authorization or approval thereunder,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the "Shipowner" thereunder; provided further that, without the
-------- -------
prior consent of the Owner Trustee, and subject to the Indenture Trustee's
rights hereunder to exercise remedies under Section 18 of the Charter
without the prior consent of the Owner Trustee, whether or not an
57
Indenture Event of Default shall have occurred and be continuing, no such
action shall be taken with respect to any of the provisions of Sections 1
(if any modification of a definition contained therein would result in a
modification of the Charter not permitted by this proviso), 3, 4(a), 9(a),
9(b), 12, 14, 15, (to the extent such action would reduce Charterer's
obligations), 6, 8, 11, 10 (except to increase the amounts or types of
insurance the Charterer must provide thereunder at its expense), 16, 17,
19, 20 and 21 of the Charter, or any other Section of the Charter
(including Section 18 of the Charter) to the extent such action shall
affect the amount or timing of any amounts payable by the Charterer under
the Charter as originally executed (or as subsequently modified with the
consent of the Owner Trustee) which, absent the occurrence and continuance
of an Indenture Event of Default, would be distributable to the Owner
Trustee or the Owner Participant under Article IV;
(ii) modify, amend or supplement the Trust Agreement, or give any
consent, waiver, authorization or approval with respect thereto, except
that without compliance with Section 9.02(b), the Owner Trustee shall not
modify, amend or supplement, or give any consent, waiver, authorization or
approval for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect to the
following provisions of the Trust Agreement as originally executed:
Section 1, Section 3.2, Section 5.1, Section 9.1, Section 10, Section 11.1,
Section 12.7 and any definition of terms used in the Trust Agreement, to
the extent that any modification of such definition would result in a
modification of the Trust Agreement not permitted pursuant to this Section
9.02(c), and in each case only to the extent any such action shall
adversely impact the interests of the Holders;
(iii) modify, amend or supplement the Participation Agreement, or
give any consent, waiver, authorization or approval with respect thereto,
except that without compliance with Section 9.02(b), the Owner Trustee and
the Indenture Trustee shall not modify, amend or supplement, or give any
consent, waiver, authorization or approval for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the
respective parties thereunder, with respect to the following provisions of
the Participation Agreement as originally executed: Section 5, Section 6,
Section 8, Section 10 (other than an amendment to add to the covenants of
the Charterer and other than Section 10.10), Section 11.1, Section 11.2,
Section 11.4, Section 11.6, Section 12 (insofar as such Section 12 relates
to the Indenture Trustee, the Indenture Estate and the Holders) and, to the
extent the Loan Participants would be adversely affected thereby, Section
15 and Section 16 and any definition of terms used in the Participation
Agreement to the extent that any modification of such definition would
result in a modification of the Participation Agreement not permitted
pursuant to this Section 9.02(c); and
58
(iv) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders unless such provision corrects a mistake or cures an
ambiguity.
(d) The Indenture Trustee, without the consent of any Holder and
at any time and from time to time, may enter into one or more amendments or
supplements to the Participation Agreement, in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to add to the covenants of any other party thereto for the
benefit of the Indenture Trustee or the Holders or to surrender any right
or power therein conferred upon any other party thereto;
(ii) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provisions
thereof, to make any other changes not inconsistent with the provisions
thereof, provided that such action shall not adversely affect the interest
--------
of any Holder;
(iii) to provide for the assumption by the Charterer of the
obligations of the Owner Trustee under this Indenture in accordance with
the terms and conditions applicable thereto specified in Section 3.04,
including, without limitation, such amendments to Exhibit C to this
Indenture or the Participation Agreement as may be necessary or desirable
in order to effectuate such assumption and accomplish the purposes thereof
(provided that such amendments to such Exhibit C or the Participation
--------
Agreement shall not adversely affect the interests of the Loan
Participants);
(iv) to evidence the succession of a new Owner Trustee in
accordance with the Trust Agreement or the succession of a new Indenture
Trustee hereunder or the appointment or removal of any co-trustee or
separate trustee thereunder or hereunder;
(v) to make any other provisions with respect to matters or
questions arising under the Participation Agreement so long as such action
shall not adversely affect the interests of the Loan Participants;
(vi) to add to the rights of the Indenture Trustee or the Holders;
or
59
(vii) to provide for the establishment and issuance of (1)
Additional Notes pursuant to Section 14 of the Participation Agreement or
Section 2.08 hereof or (2) Refunding Secured Notes in connection with a
refunding or refinancing pursuant to Section 15 of the Participation
Agreement or Section 3.05 hereof.
(e) It shall not be necessary for Holders to approve the
particular form of any proposed amendment or supplement to this Indenture, or
any amendment, consent, waiver or other modification of any other Operative
Document, but it shall be sufficient if such action shall approve the substance
thereof.
SECTION 9.03. Execution of Indenture Supplement, Amendments, Etc. In
--------------------------------------------------
executing or accepting the additional trusts created by any amendment or
supplement to this Indenture, or any amendment, consent, waiver or other
modification permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, each of the Indenture Trustee and the Owner
Trustee shall be entitled to receive, and (subject to Section 6.01 and Section
6.02) shall be fully protected in relying upon, an opinion of independent
counsel stating that the execution of such amendment or supplement to this
Indenture, or of such amendment, consent, waiver or modification, is authorized
or permitted by this Indenture. Either of the Indenture Trustee or the Owner
Trustee may, but shall not be obligated to, enter into any such amendment or
supplement to this Indenture which affects its own rights, duties or immunities
under this Indenture or otherwise.
SECTION 9.04. Effect of Indenture Supplement. Upon the execution of
------------------------------
any amendment or supplement to this Indenture pursuant to this Article IX, this
Indenture shall be modified in accordance therewith, and such amendment or
supplement shall form a part of this Indenture for all purposes; and every
Holder of a Secured Note theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.05. Reference in Secured Notes to Indenture Supplements.
---------------------------------------------------
Secured Notes authenticated and delivered after the execution of any amendment
or supplement pursuant to this Article IX may, and shall if required by the
Indenture Trustee, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such amendment or supplement. If the amendment or
supplement to this Indenture shall so provide, new Secured Notes so modified as
to conform, in the opinion of the Indenture Trustee and the Owner Trustee, to
any such amendment or supplement may be prepared and executed by the Owner
Trustee and authenticated and delivered by the Indenture Trustee in exchange for
outstanding Secured Notes.
SECTION 9.06. Notices of Indenture Supplements and Amendments, Etc.
----------------------------------------------------
Promptly after the execution by the Owner Trustee and the Indenture Trustee of
any amendment or supplement to this Indenture, or any amendment, consent, waiver
or other modification pursuant to the provisions hereof, the Indenture Trustee
shall send a conformed copy of such
60
instrument to the Charterer, the Owner Trustee and the Owner Participant but the
failure of the Indenture Trustee to send such a conformed copy shall not impair
or affect the validity of such document.
SECTION 9.07. Charterer's Rights. Without the consent of the
------------------
Charterer, no amendment or supplement to this Indenture or amendment, waiver or
other modification of any provision of this Indenture shall alter or modify the
provisions of Section 3.04, 3.05, 3.10, 5.09 or 9.02(c) or this Section 9.07 (to
the extent that the Charterer's rights or obligations under the Participation
Agreement would be adversely affected).
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Indenture. Except as provided in this
------------------------
Section 10.01, this Indenture and the trusts created hereby shall terminate,
and this Indenture shall be of no further force or effect, when:
(a) the principal of and interest on and all other amounts due and
payable under all Secured Notes and all other amounts due and payable to
any Holder or the Indenture Trustee hereunder or under any other Operative
Document shall have been paid in full; or
(b) the Indenture Trustee shall have sold or made other final
disposition of all property and all moneys or other property or proceeds
constituting part of the Indenture Estate in accordance with the terms
hereof; or
(c) all Secured Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable (whether upon stated
maturity, as a result of redemption or upon acceleration), or will become
due and payable (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Secured Notes not theretofore
canceled by the Indenture Trustee or delivered to the Indenture Trustee for
cancellation, an amount in cash sufficient without reinvestment thereof to
discharge such indebtedness, including the principal of and interest on the
Secured Notes to the date of such deposit (in the case of Secured Notes
which have become due and payable), or to the maturity thereof, as the case
may be; or
61
(d) (i) the Owner Trustee has deposited or caused to be deposited
irrevocably (except as provided in Section 7.09(b)) with the Indenture
Trustee as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders, (A) money in an amount, or
(B) U.S. Government Obligations which, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide
(not later than one Business Day before the due date or any payment
referred to below in this clause) money in an amount, or (C) a combination
of money and U.S. Government Obligations referred to in the foregoing
clause (B), sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to pay and
discharge each installment of principal of and interest on the Outstanding
Secured Notes on the dates such payments of principal or interest are due
(including as a result of redemption in respect of which irrevocable notice
has been given to the Indenture Trustee on or prior to the date of such
deposit), and no Charter Event of Default under Section 17(a)(vi) of the
Charter shall have occurred and be continuing on the date of such deposit
or at any time during the period ending on the 91st day after such date;
provided, however, that upon the making of the deposit referred to above in
-------- -------
clause (A), the right of the Owner Trustee to cause the redemption of
Secured Notes (except a redemption in respect of which irrevocable notice
has theretofore been given) shall terminate; and (ii) (A) such deposit will
not constitute an Indenture Event of Default under this Indenture or a
default or event of default under any other agreement or instrument to
which the Owner Trustee or the Charterer is a party or by which it is bound
and (B) the Charterer has delivered to the Indenture Trustee an Officer's
Certificate to the effect that all conditions precedent relating to the
termination of this Indenture under this Section 10.01(d) have been
complied with; and (iii) the Charterer has delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel to the effect
that there has been published by the Internal Revenue Service a ruling to
the effect that Loan Participants will not recognize income, gain or loss
for Federal income tax purposes as a result of the exercise by the Owner
Trustee of its option under this Section 10.01(d) and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised; and (iv) all other amounts then due and payable hereunder to any
Holder or the Indenture Trustee have been paid;
provided, however, that the obligations of the Indenture Trustee contained in
- -------- -------
Sections 2.01 through 2.11, 6.11 and 7.09 shall survive.
Except as otherwise provided in the preceding sentence, this Indenture
and the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 10.02. 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,
62
of any Secured Note or other right, title and interest of any Holder in and to
the Indenture Estate or hereunder shall operate to terminate this Indenture or
entitle such Holder or any successor or transferee of such Holder to an
accounting or to the transfer to it of any legal title to any part of the
Indenture Estate.
SECTION 10.03. Power of Attorney. The Owner Trustee does hereby
-----------------
constitute the Indenture Trustee its true and lawful attorney-in-fact,
irrevocably and coupled with the interest of the Indenture Trustee created by
this Indenture, so long as any Secured Notes are Outstanding and so long as
there are any other amounts due hereunder, under any other Operative Documents,
or under the Secured Notes, with full power (in the name of and as attorney-in-
fact for the Owner Trustee or otherwise) to ask for, require, demand and receive
any and all moneys and claims for moneys, and all other property, which now or
hereafter constitutes part of the Indenture Estate, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or to
take any action, or to institute any proceedings, which the Indenture Trustee
may deem to be necessary or advisable in the premises. The Owner Trustee has
directed the Indenture Trustee to make all necessary conveyances, assignments,
transfers and deliveries of the Indenture Estate and any rights hereunder
pursuant to the provisions of this Indenture, and for that purpose the Indenture
Trustee may execute all necessary instruments of conveyance, assignment and
transfer, and may substitute one or more persons with like power, and the Owner
Trustee hereby ratifies and confirms all that the Indenture Trustee, acting as
its attorney, or any such substitute, shall lawfully do by virtue hereof and
whether pursuant to the exercise of any remedies hereunder or otherwise.
SECTION 10.04. Regarding the Owner Trustee. (a) Except as expressly
---------------------------
provided herein, all and each of the representations, warranties, undertakings
and agreements herein made on the part of the Owner Trustee are made and
intended not as personal representations, warranties, undertakings and
agreements by or for the purpose or with the intention of binding the Owner
Trustee personally but are made and intended for the purpose of binding only the
Trust Estate, and this Indenture is executed and delivered by the Owner Trustee
solely in the exercise of the powers expressly conferred upon it as trustee
under the Trust Agreement; and no personal liability or responsibility is
assumed hereunder by, or at any time shall be enforceable against, the Owner
Trustee or any successor in trust on account of any representation, warranty,
undertaking or agreement hereunder of the Owner Trustee, either expressed or
implied, all such personal liability, if any, being expressly waived by the
Indenture Trustee; provided, however, that (a) the Indenture Trustee or any
-------- -------
Person claiming by, through or under it, making claim hereunder, may subject to
the terms and conditions hereof, look to the Trust Estate for satisfaction of
such liability or responsibility and (b) the Owner Trustee or its successor in
trust, as applicable, shall be personally liable, for its own gross negligence
and willful misconduct and for the matters described in clauses (i) through (v)
of the last sentence of Section 7.1 of the Trust Agreement and the provisos
contained in Section 16.10(a) of the Participation Agreement. Subject to the
terms and conditions hereof, each time a successor
63
Owner Trustee is appointed in accordance with the terms of the Trust Agreement,
such successor Owner Trustee shall, without further act, succeed to all the
rights, duties, immunities and obligations of its predecessor Owner Trustee
hereunder and under the other Operative Documents, and the predecessor Owner
Trustee shall be released from all further duties and obligations hereunder and
under the other Operative Documents, all without the necessity of any consent or
approval by the Indenture Trustee and without in any way altering the terms of
this Indenture or such other Operative Documents or the obligations of the
Indenture Trustee hereunder or thereunder.
(b) As to the aggregate unpaid principal amount of Secured Notes
Outstanding as of any date, the Owner Trustee may rely on an Officer's
Certificate of the Indenture Trustee.
(c) No Recourse Against Others. No director, officer, employee or
--------------------------
stockholder, as such, of the Charterer, the Guarantor, the Owner Trustee or the
Owner Participant, as the case may be, shall have any liability for any
obligations of the Charterer, the Guarantor, the Owner Trustee or the Owner
Participant, 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 Loan
Participant by accepting a Secured Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Secured Notes.
SECTION 10.05 Notices. All communications, notices and consents
-------
provided for in this Indenture shall be in writing and shall be given in person
or by courier or by means of telex, telecopy or other wire transmission (with
request for assurance of receipt in a manner typical with respect to
communications of that type), or mailed by first class mail or overnight
courier, addressed, in the case of the Owner Trustee, to First Security Bank, 79
South Main Street, Salt Lake City, Utah 84111, Attention: Corporate Trust
Services (telephone: (801) 246-5819; telecopier: (801) 246-5053) in the case
of the Indenture Trustee, to State Street Bank and Trust Company, Two
International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Department (telephone: (617) 664-5340; telecopier: (617) 664-
5371); and, in the case of all other parties, as set forth in Schedule 1 to the
Participation Agreement or at such other address as any such Person may from
time to time designate by notice duly given in accordance with the provisions of
this Section 10.05 to the other parties hereto and shall be deemed given when
received by (or when proffered to, if receipt is not accepted) the party to whom
it is addressed.
SECTION 10.06 Severability of Provisions. Any provision of this
--------------------------
Indenture which may be determined by competent authority to be invalid or
unenforceable in such jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable any remaining terms and provisions
hereof, and any such invalidity or unenforceability in any jurisdiction shall
not
64
invalidate or render unenforceable such provision in any other jurisdiction.
The parties shall negotiate in good faith to replace such provision with an
appropriate legal provision. To the extent permitted by applicable law, the
parties hereto waive any provision thereof that renders any term or provision
hereof invalid or unenforceable in any respect.
SECTION 10.07 No Oral Modification or Continuing Waivers. No term or
------------------------------------------
provision of this Indenture or the Secured Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party or the person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof or of any
Secured Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 10.08 Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon each of the parties hereto and their
respective successors and permitted assigns, and inure to the benefit of each of
the parties hereto and their respective successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of such
Holder. This Indenture and the Indenture Estate shall not be affected by any
amendment or supplement to the Trust Agreement or by any other action taken
under or in respect of the Trust Agreement, except as otherwise provided in or
permitted by this Indenture. Each Holder by its acceptance of a Secured Note
agrees to be bound by this Indenture and all provisions of the Operative
Documents applicable to it.
SECTION 10.09 Headings; Table of Contents. The division of this
---------------------------
Indenture into Articles, Sections, subsections and paragraphs, the provision of
a table of contents and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation hereof.
SECTION 10.10 Normal Commercial Relations. Notwithstanding anything
---------------------------
contained in this Indenture to the contrary, any Participant, the Indenture
Trustee, the Owner Trustee, or bank or other affiliate of any such Person may
conduct any banking or other financial transactions and have banking or other
commercial relationships with the Charterer or the Guarantor fully to the same
extent as if this Indenture were not in effect.
SECTION 10.11 Governing Law. THIS INDENTURE HAS BEEN DELIVERED IN
-------------
THE STATE OF NEW YORK AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.12 Execution. This Indenture may be executed in separate
---------
counterparts by the parties thereto, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
65
SECTION 10.13 Security Agreement. This Indenture shall constitute a
------------------
security agreement and, in addition to all other rights of the Indenture Trustee
hereunder, the Indenture Trustee shall have for the benefit of the Holders all
of the rights conferred upon secured parties by the UCC.
SECTION 10.14 Benefits of Indenture. Nothing in this Indenture,
---------------------
whether express or implied, shall be construed to give to any Person other than
the parties hereto, the Holders, (to the extent expressly provided herein) the
Owner Participant and the Charterer any legal or equitable right, remedy or
claim under or in respect of this Indenture or the Secured Notes, and this
Indenture shall be held for the sole and exclusive benefit of the parties
hereto, the Holders, (to the extent expressly provided herein) the Owner
Participant and the Charterer.
66
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all effective as of the date first written above, but actually
executed by the parties on the dates of their respective acknowledgments set
forth below.
FIRST SECURITY BANK
NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee
By:
------------------------------------
Its:
THE STATE OF
_________________ (S)
(S)
COUNTY OF
_____________________ (S)
This instrument was acknowledged before me on
-----------------------
, 1997 by
---------------, -----------------------------------
[Name of Officer] [Title of Officer]
of First Security Bank, National Association, a national banking association, on
behalf of said national banking association.
----------------------------
Notary Public in and for
The State of
---------------
- ------------------------------------------------
(Affix Notary's Seal) My Commission Expires:
STATE STREET BANK & TRUST
COMPANY, not in its individual
capacity, except as expressly
provided herein, but solely as
Indenture Trustee
By:
---------------------------
Its:
THE STATE OF
--------------------- (S)
(S)
COUNTY OF
----------------------- (S)
This instrument was acknowledged before me on 1997 by
-----------------,
- -------------------, ---------------------------------- of
[Name of Officer] [Title of Officer]
State Street Bank and Trust Company, a Massachusetts trust company, on behalf of
said trust company.
------------------------------
Notary Public in and for
The State of
-------------------
- -----------------------------------------------
(Affix Notary's Seal) My Commission Expires:
Schedule 1
to Indenture
------------
DESCRIPTION OF VESSEL
---------------------
The Vessel is described below:
See definition of "Vessel" in Appendix A.
SCH-2-1
Exhibit A
to Indenture
------------
FORM OF SERIES 1997-B SECURED NOTE
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee under the Trust Agreement
Series 1997-B Secured Non-Recourse Note
Due _____
Sale and Charter of One Double Hulled Product Tanker
----------------------------------------------------
Registered No. ___________
$ ____________ New York, New York
_________, 199__
Interest Rate Per Annum: _____%
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
in its individual capacity but solely as Owner Trustee under the Trust
Agreement, dated as of September 30, 1997, as amended (the "Trust Agreement"),
---------------
among the Owner Participant named therein and the Owner Trustee, for value
received hereby promises to pay to State Street Bank and Trust Company, or
registered assigns, on or before July 31, 2015, as herein provided, the
principal sum of ($ __________), and to pay interest on this
Secured Note from time to time from the date hereof until the principal amount
hereof shall have been paid in full, at the rate of _____% per annum (based on a
360-day year of twelve 30-day months), and (to the extent not prohibited by
applicable law) to pay interest on any overdue principal and interest at the
Overdue Rate. The principal of this Secured Note shall be payable on each
January 31 or July 31, or both, in accordance with the schedule annexed hereto.
The first payment of accrued and unpaid interest on this Secured Note shall be
payable on January 31, 1998. Thereafter, subject to Section 2.03(b) of the
Indenture (as defined below), all accrued and unpaid interest on this Secured
Note shall be payable on each January 31, and July 31 in each year.
This Secured Note has been issued by the Owner Trustee pursuant to the terms of
the Trust Indenture, Mortgage, Assignment of Charter and Security Agreement,
dated as of September 30, 1997 (the "Indenture"), between the Owner Trustee and
---------
State Street Bank and Trust Company, not in its individual capacity but solely
as Indenture Trustee thereunder (the "Indenture Trustee"). Capitalized terms
-----------------
used in this Secured Note and not otherwise defined shall have the respective
meanings assigned to them in the Indenture.
A-1-2
Each payment of principal and interest shall be due and payable at the times,
places and in the manner as specified herein and in the Indenture.
Each payment on this Secured Note shall be applied, first, to the payment of
-----
accrued interest on this Secured Note to the date of such payment, and second,
------
to the payment of any principal on this Secured Note then due hereunder.
This Secured Note is the Series 1997-B Secured Note of the Owner Trustee, issued
pursuant to the Indenture, which, together with, any Additional Notes and any
note or notes issued upon a transfer in exchange or substitution for
respectively therefor in accordance with the terms of the Indenture, are equally
and ratably secured by the Indenture, except as expressly provided therein. The
property of the Owner Trustee (excluding Excepted Payments) included in the
Indenture Estate is pledged or mortgaged to the Indenture Trustee to the extent
provided in the Indenture as security for the payment of the principal of and
interest on this Secured Note under the Indenture. Reference is hereby made to
the Indenture for a description of the Indenture Estate, and for a statement of
the rights of the Holders of, and the nature and extent of the security for,
this Secured Note and of the rights of, and the nature and extent of the
security for, the Holders of the other Secured Notes and of certain rights of
the Owner Trustee and the Owner Participant, as well as for a statement of the
terms and conditions of the trust created by the Indenture, to all of which
terms and conditions in the Indenture the Holder agrees by its acceptance of
this Secured Note.
This Secured Note is subject to redemption, in whole, all as specified in
Article III of the Indenture. This Secured Note is also subject to refunding,
assumption or purchase, all as specified in Sections 3.02, 3.04, 3.05 and 3.06
of the Indenture.
In the event an Indenture Event of Default shall occur and be continuing, the
unpaid balance of the principal of the Secured Note, together with all accrued
but unpaid interest, may be declared or may otherwise become due and payable in
the manner and with the effect provided in Article V of the Indenture.
The Secured Note is issuable only as a registered note. There shall be
maintained a note register for the purpose of registering transfers and
exchanges of the Secured Note at the principal corporate trust office of the
Indenture Trustee, or of any successor Indenture Trustee, in the manner provided
in Section 2.05 of the Indenture. The Owner Trustee and the Indenture Trustee
shall deem and treat the Person in whose name this Secured Note is registered on
the Note Register as the absolute owner hereof (whether or not this Secured Note
shall be overdue) for the purpose of receiving payments of principal and
interest and for all other purposes, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by any notice to the contrary.
A-1-3
All payments of principal and interest to be made by the Owner Trustee and,
except as otherwise provided in the Operative Documents, all payments of any
other amounts payable by or on behalf of the Owner Trustee under the Secured
Note or under the Indenture, shall be made only from the income and proceeds
from the Indenture Estate, and only to the extent that the Indenture Trustee
shall have received sufficient income and proceeds from the Indenture Estate to
make such payments in accordance with the Indenture. The Holder, by its
acceptance of this Secured Note, agrees that it will look solely to the income
and proceeds from the Indenture Estate to the extent available for payment as
provided in the Indenture, and that none of the Owner Participant, the Owner
Trustee, the Trust Company, or the Indenture Trustee (whether in its individual
or trust capacity) shall be personally liable to the Indenture Trustee or to the
Holder for any amounts payable under this Secured Note, nor, except as
specifically provided in the Indenture or any other Operative Document, for any
amounts payable or any liability, under the Indenture.
This Secured Note shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the certificate of
authentication hereon shall have been signed by the Indenture Trustee.
No delay or omission of the Holder to exercise its rights hereunder shall impair
any such right or power or shall be construed to be a waiver of any Indenture
Event of Default, or an acquiescence therein. No waiver of any Indenture Event
of Default shall be construed, taken or held to be a waiver of any other
Indenture Event of Default, or a waiver, acquiescence in, or consent to any
further or succeeding Indenture Event of Default. The Owner Trustee waives
demand, notice and protest in any defense by reason of extension of time for
payment or other indulgence granted by the Holder.
THIS SECURED NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
A-1-4
IN WITNESS WHEREOF, the Owner Trustee has caused this Secured Note to be duly
executed.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Owner Trustee under the Trust
Agreement
By: ______________________________
Title: _____________________________
Certificate of Authentication
-----------------------------
This is the Series 1997-B Secured Note of FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Owner Trustee described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: _________________________
Title: ________________________
Series 1997-B Secured Note
Amortization Schedule
---------------------
Schedule of Principal Payments
- ------------------------------------------------------
- ------------------------------------------------------
SERIES 1997-B SECURED NOTE
- ------------------------------------------------------
Regular Scheduled Payment Scheduled
Distribution Date as a Percentage of Payments
- ------------------- Unpaid Principal of Principal
Amount ------------
- ------------------------------------------------------
January 31, 1998 0.75499537 277,189
- ------------------------------------------------------
July 31, 1998 0 0
- ------------------------------------------------------
January 31, 1999 2.54474246 927,223
- ------------------------------------------------------
July 31, 1999 0 0
- ------------------------------------------------------
January 31, 2000 2.52891135 898,006
- ------------------------------------------------------
July 31, 2000 0 0
- ------------------------------------------------------
January 31, 2001 2.81707146 975,033
- ------------------------------------------------------
July 31, 2001 0 0
- ------------------------------------------------------
January 31, 2002 3.08321166 1,037,086
- ------------------------------------------------------
July 31, 2002 0 0
- ------------------------------------------------------
January 31, 2003 3.39586269 1,107,033
- ------------------------------------------------------
July 31, 2003 0 0
- ------------------------------------------------------
January 31, 2004 3.74998690 1,180,962
- ------------------------------------------------------
July 31, 2004 0.17099139 51,830
- ------------------------------------------------------
January 31, 2005 3.96536138 1,199,904
- ------------------------------------------------------
July 31, 2005 0.01095330 3,183
- ------------------------------------------------------
January 31, 2006 5.08333215 1,477,041
- ------------------------------------------------------
July 31, 2006 0.18376686 50,682
- ------------------------------------------------------
January 31, 2007 6.01508353 1,655,882
- ------------------------------------------------------
July 31, 2007 0 0
- ------------------------------------------------------
Schedule of Principal Payments
- ------------------------------------------------------
- ------------------------------------------------------
SERIES 1997-B SECURED NOTE
- ------------------------------------------------------
Regular Scheduled Payment Scheduled
Distribution Date as a Percentage of Payments
Unpaid Principal of Principal
Amount
January 31, 2008 8.48319322 2,194,852
- ------------------------------------------------------
July 31, 2008 0 0
- ------------------------------------------------------
January 31, 2009 8.74609671 2,070,909
- ------------------------------------------------------
July 31, 2009 9.06748380 1,959,228
- ------------------------------------------------------
January 31, 2010 14.16159960 2,782,465
- ------------------------------------------------------
July 31, 2010 0 0
- ------------------------------------------------------
January 31, 2011 15.00340458 2,530,398
- ------------------------------------------------------
July 31, 2011 0 0
- ------------------------------------------------------
January 31, 2012 0.23895204 34,254
- ------------------------------------------------------
July 31, 2012 28.50390606 4,076,298
- ------------------------------------------------------
January 31, 2013 26.54485648 2,714,090
- ------------------------------------------------------
July 31, 2013 0 0
- ------------------------------------------------------
January 31, 2014 47.90577185 3,597,940
- ------------------------------------------------------
July 31, 2014 0 0
- ------------------------------------------------------
January 31, 2015 52.78399146 2,065,180
- ------------------------------------------------------
July 31, 2015 100.00000000 1,847,332
- ------------------------------------------------------
Exhibit B
to Indenture
Maturity Date, Aggregate Principal Amount, Interest Rate,
and Premium Termination Date of Secured Note
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Maturity Aggregate Interest Rate Premium
Date Principal Amount Per Annum Termination Date
- -------------------------------------------------------------------------------
Series 1997-B July 31, 2015 $36,714,000 6.654% June 11, 2009
Secured Note
- -------------------------------------------------------------------------------
EXHB-1
Exhibit B-1
to Indenture
------------
Schedule of Principal Payments
- ------------------------------------------------------
- ------------------------------------------------------
SERIES 1997-B SECURED NOTE
- ------------------------------------------------------
Regular Scheduled Payment Scheduled
Distribution Date as a Percentage of Payments
- ------------------- Unpaid Principal of Principal
Amount ------------
- ------------------------------------------------------
January 31, 1998 0.75499537 277,189
- ------------------------------------------------------
July 31, 1998 0 0
- ------------------------------------------------------
January 31, 1999 2.54474246 927,223
- ------------------------------------------------------
July 31, 1999 0 0
- ------------------------------------------------------
January 31, 2000 2.52891135 898,006
- ------------------------------------------------------
July 31, 2000 0 0
- ------------------------------------------------------
January 31, 2001 2.81707146 975,033
- ------------------------------------------------------
July 31, 2001 0 0
- ------------------------------------------------------
January 31, 2002 3.08321166 1,037,086
- ------------------------------------------------------
July 31, 2002 0 0
- ------------------------------------------------------
January 31, 2003 3.39586269 1,107,033
- ------------------------------------------------------
July 31, 2003 0 0
- ------------------------------------------------------
January 31, 2004 3.74998690 1,180,962
- ------------------------------------------------------
July 31, 2004 0.17099139 51,830
- ------------------------------------------------------
January 31, 2005 3.96536138 1,199,904
- ------------------------------------------------------
July 31, 2005 0.01095330 3,183
- ------------------------------------------------------
January 31, 2006 5.08333215 1,477,041
- ------------------------------------------------------
July 31, 2006 0.18376686 50,682
- ------------------------------------------------------
January 31, 2007 6.01508353 1,655,882
- ------------------------------------------------------
July 31, 2007 0 0
- ------------------------------------------------------
EXHB1-1
Schedule of Principal Payments
- ------------------------------------------------------
- ------------------------------------------------------
SERIES 1997-B SECURED NOTE
- ------------------------------------------------------
Regular Scheduled Payment Scheduled
Distribution Date as a Percentage of Payments
- ------------------- Unpaid Principal of Principal
Amount ------------
January 31, 2008 8.48319322 2,194,852
- ------------------------------------------------------
July 31, 2008 0 0
- ------------------------------------------------------
January 31, 2009 8.74609671 2,070,909
- ------------------------------------------------------
July 31, 2009 9.06748380 1,959,228
- ------------------------------------------------------
January 31, 2010 14.16159960 2,782,465
- ------------------------------------------------------
July 31, 2010 0 0
- ------------------------------------------------------
January 31, 2011 15.00340458 2,530,398
- ------------------------------------------------------
July 31, 2011 0 0
- ------------------------------------------------------
January 31, 2012 0.23895204 34,254
- ------------------------------------------------------
July 31, 2012 28.50390606 4,076,298
- ------------------------------------------------------
January 31, 2013 26.54485648 2,714,090
- ------------------------------------------------------
July 31, 2013 0 0
- ------------------------------------------------------
January 31, 2014 47.90577185 3,597,940
- ------------------------------------------------------
July 31, 2014 0 0
- ------------------------------------------------------
January 31, 2015 52.78399146 2,065,180
- ------------------------------------------------------
July 31, 2015 100.00000000 1,847,332
- ------------------------------------------------------
EXHB1-2
Exhibit B-2
to Indenture
------------
Issuance of Series 1997-B Secured Note
--------------------------------------
The issuance of the Series 1997-B Secured Note issued hereunder shall
be issued, and shall be payable, to the Pass Through Trustee under the Pass
Through Trust Agreement with respect to the grantor trust created thereby, as
set forth below.
1997-B Pass Through Trust:
Series 1997-B Secured Note
EXHB2-1
Exhibit C
to Indenture
------------
RELEVANT AMENDMENT
------------------
TABLE OF CONTENTS
LISTED BELOW ARE THE DOCUMENTS WHICH ARE AMENDED OR REPLACED BY THE RELEVANT
AMENDMENT AND THE CORRESPONDING PAGE NUMBERS OF THE RELEVANT AMENDMENT ON WHICH
THE AMENDMENT THERETO OR REPLACEMENT THEREOF, AS THE CASE MAY BE, IS MADE. THIS
TABLE OF CONTENTS IS FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE
CONSTRUCTION OR INTERPRETATION OF THE RELEVANT AMENDMENT.
Document Page
------------------------- ----
Definitions C-2
Indenture C-6
Participation Agreement C-39
Pass Through Trust C-40
Agreement
RELEVANT AMENDMENT
------------------
As provided for in Section 3.04 of the Indenture (to which this is
Exhibit C) and in Section 11.6 of the Participation Agreement, the Indenture,
the other Operative Documents (as defined as amended in (A)(I) below) and the
Pass Through Trust Agreement will, subject to the satisfaction of the conditions
specified in such Section 3.04 (including, without limitation, the execution and
delivery of the Relevant Date Supplement), be deemed to have been amended,
automatically and without the requirement of further action by any Person
effective as of the Relevant Date (provided that such amendments shall not
---------
constitute a waiver by any party to the Operative Documents (as defined in
Appendix A to the originally executed documents) of any claims or rights to
indemnity such party has against any other party to the Operative Documents (as
defined in Appendix A to the originally executed documents) accrued in favor of
such party prior to the Relevant Date arising under the Operative Documents (as
defined in Appendix A to the originally executed documents) as in existence
prior to the Relevant Date) and so that:
(A) (I) Capitalized terms used but not defined in this Relevant
Amendment shall have the meanings described thereto in Appendix A to each of the
Indenture and the other Operative Documents and, otherwise, the following
defined terms in such Appendix A and, to the extent applicable, in Section 1.01
of the Pass Through Trust Agreement shall read as follows:
"Additional Notes" shall mean notes issued pursuant to Section 2.08 of
----------------
the Indenture.
"Appraisal Procedure" shall mean a procedure for determining any
-------------------
amount, value or period. Such procedure shall be commenced by the delivery
of written notification as specified in the Operative Documents by Mobil
Transport Finance Company Inc. ("MTFC") to the Indenture Trustee, or by the
----
Indenture Trustee to MTFC, that it desires to obtain an appraisal with
respect to such amount, value or period. If required by the relevant
provisions of the applicable Operative Document, such parties shall first
attempt to agree on such matter. If such parties are unable to agree on
such matter within the time period specified in the applicable Operative
Document, or if such parties are not required to attempt to agree, such
parties shall thereupon consult for the purpose of selecting a mutually
acceptable Independent appraiser. If within ten (10) days from the date
the parties are required to so consult, they are unable to agree upon the
appointment of a mutually acceptable Independent appraiser, then each of
such parties shall appoint an Independent appraiser, and such Independent
appraisers shall jointly determine such matter. If one party does not so
appoint an Independent appraiser, then the Independent appraiser appointed
by the other shall determine such matter as the sole appraiser. If such
two Independent appraisers cannot agree on such matter within twenty (20)
days after their appointment, such matters shall be determined by such two
Independent appraisers and a third Independent appraiser chosen within ten
(10) days after such twenty (20) day period by such two Independent
appraisers or, if such three (3) Independent appraisers fail to reach an
agreement, the determination of the appraiser that differs most from the
second highest determination shall be excluded (unless such difference is
less than 10% from either of the other determinations), the
EXHC-2
remaining two determinations shall be averaged (or all three (3) shall be
averaged, if the third determination is not discarded due to the preceding
parenthetical) and such average shall constitute the determination of the
appraisers. If such two Independent appraisers fail to agree upon the
appointment of a third Independent appraiser within the allotted time
period, such appointment shall be made by the New York City office of the
American Arbitration Association or any organization successor thereto,
upon the request of any such parties from a panel of arbitrators having
familiarity with assets similar to the assets comprised by the Vessel. The
determination of the appraisers so chosen shall be given within twenty (20)
days of the appointment of such third appraiser. Except to the extent
expressly provided otherwise in any Operative Document, fees and expenses
of the appraisers appointed in connection with an Appraisal Procedure shall
be paid by MTFC.
"Business Day" shall mean any day other than a Saturday or Sunday or
------------
any other day on which banks located in New York, New York, Fairfax,
Virginia or, so long as any Pass Through Certificate is outstanding, the
city in which the Corporate Trust Office of the Pass Through Trustee is
located, are required or authorized to remain closed.
"Charter Event of Default" shall mean an Indenture Event of Default.
------------------------
"Event of Loss" shall mean any of the following events: (a) the (i)
-------------
actual or constructive loss, theft, destruction or disappearance of, or
(ii) occurrence of damage to the Vessel (which, in MTFC's reasonable, good
faith opinion, renders repair or replacement uneconomic); (b) the permanent
condemnation, confiscation or seizure of, or requisition of title to, the
Vessel by any Governmental Authority; (c) the requisition of use of the
Vessel by any Governmental Authority for a period (i) which has been
ongoing for one year and which is reasonably expected to exceed the
Maturity Date or (ii) which extends beyond the date which is twelve months
prior to the Maturity Date; or (d) the receipt of insurance proceeds based
upon an actual or constructive total loss of the Vessel.
"Fair Market Sales Value" of any property or services as of any date
-----------------------
shall mean the cash rent or cash price that would be obtained in an arm's-
length lease or sale, respectively, between an informed and willing lessee
or buyer (under no compulsion to lease or purchase) and an informed and
willing lessor or seller (under no compulsion to lease or sell) of the
property or service in question disregarding the renewal option set forth
in the Charter and shall be determined on an "as-is" basis, except that
such determination shall assume that the Vessel has been maintained in
accordance with the requirements of the Indenture and in the condition
required by Section 11.01 of Article XI of the Indenture (but otherwise on
an "as-is" basis).
"Independent" shall mean, when used with respect to any specified
-----------
Person, a Person who (1) is in fact independent; (2) does not have any
direct financial interest in MTFC, the Indenture Trustee or any Affiliate
of any of them and (3) is not connected with MTFC, the Indenture Trustee or
any Affiliate of any of them as an officer, employee, promoter,
EXHC-3
underwriter, trustee, partner, director or person performing similar
functions. Whenever it is provided that any Independent Person's opinion
or certificate shall be furnished to the Indenture Trustee, such Person
shall be appointed by MTFC and approved by the Indenture Trustee in the
exercise of reasonable care and such opinion or certificate shall state
that the signer has read this definition and that the signer is Independent
within the meaning hereof.
"Operative Documents" shall mean the Guaranty, the Indenture, each
-------------------
Indenture Supplement and the Participation Agreement.
"Outstanding" shall mean, when used with respect to the Secured Notes
-----------
as of any date of determination, all Secured Notes theretofore
authenticated and delivered under the Indenture, except:
(i) Secured Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) Secured Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Loan Participants with respect to
such Secured Notes; provided that if such Secured Notes are to be
--------
redeemed or purchased, notice of such redemption or purchase has been
duly given (or provision thereof satisfactory to the Indenture Trustee
has been made) and not revoked or otherwise withdrawn pursuant to the
Indenture; and
(iii) Secured Notes paid or in exchange for or in lieu of which other
Secured Notes have been authenticated and delivered pursuant to the
Indenture;
provided, however, that in determining whether the Holders of the requisite
-------- -------
principal amount of Secured Notes Outstanding have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Secured Notes owned or pledged to MTFC or any Affiliate thereof, shall be
disregarded and deemed not to be Outstanding, unless such Person owns 100%
of the Secured Notes owned or pledged by all Persons. In determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Secured Notes which the Indenture Trustee knows to be so owned or pledged
shall be so disregarded. Secured Notes so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Secured Notes and that the pledgee is not MTFC or any
Affiliate thereof, and;
(b) when used with respect to Pass Through Certificates, shall mean,
as of the date of determination, all Pass Through Certificates theretofore
authenticated and delivered under the Pass Through Trust Agreement, except:
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(i) Pass Through Certificates theretofore cancelled by the
Registrar or delivered to the Pass Through Trustee or the Registrar
for cancellation;
(ii) all of the Pass Through Certificates if money in the full
amount required to make the final distribution payment to be made
pursuant to Section 11.01 of the Pass Through Trust Agreement has been
theretofore deposited with the Pass Through Trustee in trust for the
Certificateholders as provided in Section 4.01 of the Pass Through
Trust Agreement, pending distribution of such money to the
Certificateholders pursuant to such final distribution payment; and
(iii) Pass Through Certificates in exchange for or in lieu of which
other Pass Through Certificates have been authenticated and delivered
pursuant to the Pass Through Trust Agreement.
"Overdue Rate" shall mean a rate per annum equal to (i) with respect
------------
to amounts owing to any Loan Participant constituting payments or
prepayments of any Secured Note, the rate of interest on such Secured Note;
and (ii) with respect to amounts owing to MTFC, the rate of interest
publicly announced from time to time by Citibank, N.A. in New York City as
its "prime" or "base" rate plus 1% (computed on the basis of the actual
days elapsed during the relevant period and a 365-day year).
"Permitted Liens" shall have the meaning set forth in Appendix A to
---------------
the Participation Agreement.
"Relevant Amendment" shall have the meaning specified in Section 3.04
------------------
of the Indenture, as originally executed.
"Relevant Date" shall have the meaning specified in Section 3.04 of
-------------
the Indenture, as originally executed.
"Responsible Officer", when used with respect to the Indenture Trustee
-------------------
or the Pass Through Trustee, shall mean an officer in its corporate trust
administration department (or any successor group of the Indenture Trustee
or the Pass Through Trustee, as the case may be) or any other officer
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Severable Modification" shall mean any Modification to the Vessel
----------------------
permitted under Section 11 of Article XI of the Indenture and which can be
readily removed from the Vessel without causing material damage to the
Vessel.
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(B) (I) Section 2.01(e) of the Indenture shall read as follows:
(e) Each Secured Note issued after the Relevant Date shall be signed
on behalf of MTFC by the Chairman, the President, any Senior Vice President,
any Vice President, any Assistant Vice President, the Controller, the Treasurer
or the Secretary (or any other officer or employee authorized in writing by one
of the foregoing officers) of MTFC, manually. No Secured Note shall be secured
by or entitled to any benefit under this Indenture, or be valid for any purpose,
unless there appears thereon a certificate of authentication executed by or on
behalf of the Indenture Trustee by the manual signature of a Responsible Officer
of the Indenture Trustee, and such certificate on any Secured Note shall be
conclusive evidence that such Secured Note has been duly authenticated and
delivered hereunder. Notwithstanding any provision to the contrary contained
herein, any Secured Note issued after the Relevant Date shall be issued
substantially in the form set forth in Exhibit A to Exhibit C hereto.
(II) Sections 2.02 and 2.08 of the Indenture shall read as
follows:
SECTION 2.02. Payments from Indenture Estate and MTFC. All payments
---------------------------------------
of principal, Make-Whole Amount, if any, and interest to be made by MTFC and,
except as otherwise provided in the Operative Documents, all payments of any
other amounts payable by, or on behalf of MTFC under the Secured Notes and this
Indenture, shall be payable from the income and proceeds from the Indenture
Estate and shall be direct obligations of MTFC. Each Holder, by its acceptance
of a Secured Note, agrees that it will look solely to MTFC, the Guarantor and
the income and proceeds from the Indenture Estate to the extent available for
payment as herein provided and that the Indenture Trustee (whether in its
individual or trust capacity) shall not be personally liable to such Holder for
any amounts payable under the Secured Notes, or, except as specifically provided
herein or in the other Operative Documents, for any amounts payable or any
liability under this Indenture.
SECTION 2.08. Additional Notes. (a) So long as no Indenture Event
----------------
of Default shall have occurred and be continuing, Additional Notes of one or
more series may be issued under and secured by this Indenture at any time or
from time to time, and subject to the conditions hereinafter provided in this
Section 2.08, for the purpose of financing all or a portion of the cost of any
Modification to the Vessel.
(b) Prior to the issuance of any Additional Notes of any series
pursuant to this Section 2.08, MTFC shall have delivered to the Indenture
Trustee, not less than thirty (30) days prior to the proposed date of issuance
of such Additional Notes, a request and authorization to issue Additional Notes
(a "Request"), which Request shall include the amount and series of such
-------
Additional Notes, the proposed date of issuance of such Additional Notes, and
other details with respect thereto which are not inconsistent with this Section
2.08. Such Additional Notes shall have a designation so as to distinguish such
Additional Notes from the Initial Secured Notes and Additional Notes of any
other series, but otherwise shall be substantially similar in form to the
Initial Secured Notes, with such omissions therefrom, variations therein and
additions thereto as shall be
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appropriate. Such Additional Notes shall not rank senior in any respect to, but
may be subordinate to the Initial Secured Notes and other Secured Notes issued
pursuant to the terms hereof.
(c) The terms, conditions and designations of such Additional
Notes (which shall be consistent with the Request and with the terms of this
Indenture) shall be set forth in a supplement to this Indenture, substantially
in the Form of Exhibit D, which shall be executed by MTFC and the Indenture
Trustee. Such indenture supplement shall set forth:
(i) after giving effect to the issuance of the Additional Notes,
the aggregate principal amount outstanding of all Secured Notes which shall
not exceed 85% of the total Fair Market Sales Value of the Vessel at such
time (as determined pursuant to the Appraisal Procedure) after giving
effect to such Modifications;
(ii) the text of such Additional Notes (which, except for the terms
of payment thereof, shall be of substantially the same effect as the text
of the Initial Secured Notes set forth in this Indenture, with such changes
as are consistent with and permitted by this Indenture and which in all
events shall provide that such Additional Notes are never more than pari
passu in priority of payment, in right of security and in all other
respects with the Initial Secured Notes);
(iii) the date of maturity of such Additional Notes;
(iv) the date from which, and the date or dates on which, interest
is payable (which shall be Interest Payment Dates);
(v) the terms for the repayment of the principal amount of such
Additional Notes (each regularly scheduled payment of principal shall be an
Interest Payment Date);
(vi) the terms, if any, as to prepayment or redemption of such
Additional Notes at the option of MTFC, and as to the premium, if any,
payable on any redemption or prepayment of such Additional Notes; and
(vii) any other terms and agreements in respect thereof as required
or permitted by this Indenture or necessary to specify the terms and
conditions on which such Additional Notes shall be issued.
(d) Such Additional Notes shall be executed by MTFC as provided in
Section 2.01 and deposited with the Indenture Trustee for authentication and
delivery, but before such Additional Notes shall be authenticated and delivered
by the Indenture Trustee, there shall be delivered to or deposited with the
Indenture Trustee the following:
(i) the Request;
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(ii) the supplement to this Indenture described in Section 2.08(c),
duly executed by MTFC;
(iii) such instruments as may be necessary to perfect the security
interest in such Modification under this Indenture;
(iv) such evidence of the due filing of financing statements and
other filings with respect to the Modification as may be required to
subject such property to the Lien of this Indenture, subject to no Liens
except Permitted Liens;
(v) originals or certified copies of all corporate actions
necessary for the due and valid issue of such Additional Notes, the due and
valid authorization, execution, delivery and performance by MTFC of the
supplement to this Indenture relating thereto, and the creation of the Lien
and security interest thereon referred to above, all of which corporate
actions shall have been duly obtained and shall be in full force and
effect; together with reasonable evidence as to the due occurrence of all
such authorization, execution, delivery and performance;
(vi) documentation, duly executed and delivered to the extent
practicable, by the respective parties thereto, whereby the proposed
holders of the Additional Notes agree to be bound by the terms of the
Operative Documents (including, without limitation, representations and
covenants corresponding to those contained in Section 7 of the
Participation Agreement);
(vii) an Officer's Certificate of MTFC certifying as to the cost of
such Modification; and
(viii) opinions of counsel to MTFC as to the due authorization,
execution, delivery and enforceability of such supplement to the Indenture
and such Additional Notes and the creation and perfection of the security
interest in such Modification (subject to usual or customary exceptions,
qualifications and assumptions) and such Additional Notes and such other
certificates and other documents as may be reasonably requested by the
Indenture Trustee to evidence the validity and binding effect of such
supplement to this Indenture and such Additional Notes and compliance with
this Section 2.08.
(e) When the documents referred to in Section 2.08(d) shall have
been delivered to or deposited with the Indenture Trustee and when such
Additional Notes described in the Request and the supplement to this Indenture
have been executed by MTFC as required by this Indenture, the Indenture Trustee
shall authenticate and deliver such Additional Notes in the manner described in
such Request, but only upon payment to MTFC of the sum or sums specified in such
Request.
SECTION 2.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, Sections 2.01, 2.03, 2.05, 2.06
and 2.07 shall be deemed amended
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to provide that any reference to, or right or obligation of the Owner Trustee
contained in such Sections shall after the Relevant Date be deemed to be a
reference to, or right or obligation of MTFC.
(C) Sections 3.02, 3.04, 3.06, 3.08 and 3.11 of the Indenture shall
read as follows:
SECTION 3.02. Mandatory Redemption. Casualty Redemption. (i) If an
-------------------- -------------------
Event of Loss shall occur with respect to the Vessel, unless MTFC shall have
elected to rebuild or replace the Vessel in accordance with Section 12.02(b) of
Article XI, then, MTFC shall redeem on the date of payment of the amount
required to be paid as a result of such Event of Loss pursuant to Section 12.02
of Article XI (the date of any redemption under this Section 3.02 being herein
called a "Casualty Redemption Date") the entire unpaid principal amount of the
------------------------
Secured Notes Outstanding on such Casualty Redemption Date, at a redemption
price equal to 100% of such unpaid principal amount of such Secured Notes,
together with any accrued and unpaid interest thereon to, but not including,
such Casualty Redemption Date and without Make-Whole Amount or any other
premium.
SECTION 3.04. [Intentionally Omitted]
SECTION 3.06. [Intentionally Omitted]
SECTION 3.08. [Intentionally Omitted]
SECTION 3.11. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, Sections 3.05 and 3.10 shall be
deemed amended to provide that any reference to, or right or obligation of the
Owner Trustee contained in such Section shall after the Relevant Date be deemed
to be a reference to, or right or obligation of MTFC.
(D) Article IV of the Indenture shall read as follows:
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 4.01. [Intentionally Omitted]
SECTION 4.02. Certain Distributions. (a) Any payment received by
---------------------
the Indenture Trustee (i) pursuant to Section 12 of Article XI as a result of
the occurrence of an Event of Loss with respect to the Vessel or (ii) pursuant
to Section 3.05, shall be distributed on the Redemption Date in the following
order of priority:
first, in the manner provided in clause "first" of Section 4.03;
-----
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second, so much of the proceeds remaining as shall be required to pay
------
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and Make-Whole Amount, if any, and all accrued but unpaid
interest thereon to, but not including, the date of distribution, shall be
distributed to the Holder of such Secured Note, and if the proceeds
remaining are insufficient to pay all such amounts in full, they shall be
distributed to all Holders ratably, without priority of any Holder over any
other Holder (except as otherwise expressly provided herein), in the
proportion that the aggregate amount due each such Holder under this clause
"second" bears to the aggregate amount due all such Holders under this
------
clause "second";
------
third, in the manner provided in clause "second" of Section 4.03;
-----
fourth, in the manner provided in clause "fourth" of Section 4.03; and
------
fifth, in the manner provided in clause "fifth" of Section 4.03.
-----
(b) The portion of each payment referred to in this Section 4.02
distributed to a Holder on account of principal or interest on any Secured Note
held by such Holder shall be applied by such Holder in payment of such Secured
Note in accordance with the terms of Section 4.04.
(c) Notwithstanding Section 4.03, any amounts held by the Indenture
Trustee, including, without limitation, pursuant to Section 12 of Article XI
herein, which are payable to MTFC pursuant to the terms of this Indenture or
held by the Indenture Trustee in accordance with Section 7.04 herein shall be
(i) so paid to MTFC, or (ii) held by the Indenture Trustee as security for the
obligations of MTFC.
SECTION 4.03. Distribution After Indenture Event of Default. Except
---------------------------------------------
as otherwise provided in Section 4.02(c) or in Section 4.05, if (a) an Indenture
Event of Default shall have occurred and be continuing, and (b) either the
Indenture Trustee shall have given notice to declare this Indenture to be in
default pursuant to Section 5.04(a), or any of the Secured Notes shall have been
declared or otherwise shall have become immediately due and payable pursuant to
Section 5.04 then, to the extent that each such declaration shall not have been
rescinded or the Secured Notes shall remain immediately due and payable, (i) all
amounts then held by the Indenture Trustee pursuant to Section 4.01 or otherwise
under the Indenture (but not including funds described in Sections 4.02(c) and
4.05 excluded from the operation of this 4.03) in each case hereunder or under
any Operative Document (other than amounts held for its own account), and (ii)
all payments and amounts thereafter realized by the Indenture Trustee through
the exercise of remedies hereunder or under any of the agreements assigned or
pledged to the Indenture Trustee under this Indenture or otherwise as trustee
under this Indenture (for purposes of this Section 4.03, all such amounts and
payments held or realized being herein called "proceeds"), other than amounts
--------
expressly paid to it for its own account, shall be distributed forthwith by the
Indenture Trustee in the following order of priority:
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first, so much of such proceeds as shall be required to reimburse the
-----
Indenture Trustee for any unpaid fees for its services under this Indenture
and any unreimbursed tax, expense (including reasonable legal fees) or
other loss incurred by it (in each case to the extent reimbursable under
the Operative Documents) shall be distributed to the Indenture Trustee for
application to itself;
second, so much of the remaining proceeds as shall be required to
------
reimburse the then existing or prior Holders for amounts paid or advanced
by the Holders pursuant to Section 6.04 (to the extent not previously
reimbursed), shall be distributed to the then existing and prior Holders as
their respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any recipient over any other recipient (except
as otherwise expressly provided herein), in the proportion the aggregate
amount due each such Person under this clause "second" bears to the
aggregate amount and interest due all such Persons under this clause
"second";
third, so much of the proceeds remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and all accrued but unpaid interest thereon to, but not
including, the date of distribution, shall be distributed to the Holder of
such Secured Note, and if the proceeds remaining are insufficient to pay
all such principal and/or interest (as the case may be) amounts in full,
they shall be distributed to all Holders ratably, without priority of any
Holder over any other Holder (except as otherwise expressly provided
herein), in the proportion that the aggregate amount due each such Holder
under this clause "third" bears to the aggregate amount due all such
Holders under this clause "third";
fourth, so much of the proceeds remaining as shall be required to pay
------
to each Holder all other amounts payable pursuant to the indemnification
provisions of Section 12 of the Participation Agreement or pursuant to any
other provision of any Operative Document and secured hereunder to such
Holder or to its predecessors and remaining unpaid shall be distributed to
such Holder for distribution to itself and such predecessors, as their
respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any Holder over any other Holder (except as
otherwise expressly provided herein), in the proportion that the aggregate
amount due each such Holder under this clause "fourth" bears to the
aggregate amount due all such Holders under this clause "fourth"; and
fifth, the balance, if any, of the proceeds remaining shall be
-----
distributed to MTFC.
For the avoidance of doubt, no Make-Whole Amount or any other premium
shall be due and payable on the Secured Notes as a consequence of the
acceleration of the Secured Notes as a result of an Indenture Event of Default.
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All amounts distributed to any Holder pursuant to clause "third" of
-----
this Section 4.03 shall be applied by such Holder in payment of the Secured
Notes held by it in accordance with the terms of Section 4.04.
SECTION 4.04. Application of Payments on Secured Notes. Each payment
----------------------------------------
on a Secured Note shall be applied, first, to the payment of accrued interest on
-----
such Secured Note to the date of such payment, and second, to the payment of any
------
principal on such Secured Note then due thereunder.
SECTION 4.05. Applications of Payments According to Applicable
------------------------------------------------
Operative Document Provisions. (a) Notwithstanding Section 4.03 or any other
- -----------------------------
provision of this Indenture to the contrary, any payments or amounts received by
the Indenture Trustee, provision for the application of which is made in any
Operative Document, shall be applied promptly as provided in such Operative
Document.
SECTION 4.06. Amounts Received for Which No Provision Is Made. (a)
-----------------------------------------------
Any payment received or amounts realized by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Indenture or
in any other Operative Document, except as provided in Section 4.03, and (b) all
payments received and amounts realized by the Indenture Trustee under this
Indenture including, without limitation, Section 11.7 of Article XI or otherwise
with respect to the Vessel, to the extent received or realized at any time after
payment in full of the principal of and interest on all Secured Notes issued
hereunder or the conditions set forth in Section 10.01 for the defeasance of the
Secured Notes shall have been satisfied, as well as any other amounts remaining
as part of or as proceeds of the Indenture Estate after payment in full of the
principal of and interest on all such Secured Notes or the conditions set forth
in Section 10.01 for the defeasance of the Secured Notes shall have been
satisfied, shall be distributed forthwith by the Indenture Trustee in the
following order of priority:
first, so much of such aggregate amount as shall be required to pay
-----
the Indenture Trustee all amounts then due it pursuant to Section 6.04
shall be applied to pay the Indenture Trustee such amounts; and
second, the balance, if any, of such aggregate amount remaining
------
thereafter shall be distributed to MTFC to be held or distributed in
accordance with the terms of the Participation Agreement.
SECTION 4.07. Payment Procedures. All amounts which are
------------------
distributable from time to time by the Indenture Trustee to MTFC or any Holder
shall be paid by the Indenture Trustee in immediately available funds promptly
after such amounts become immediately available to it, and the Indenture Trustee
shall not be obligated to see to the application of any such payment made by it.
All payments made by the Indenture Trustee to MTFC shall be made in the manner
and to the address set forth in Schedule 1 to the Participation Agreement or to
such other address as may be specified from time to time by notice to the
Indenture Trustee from MTFC.
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SECTION 4.08. Application of Payments Under Guaranty. All payments
--------------------------------------
received by the Indenture Trustee pursuant to the Guaranty shall be distributed
forthwith by the Indenture Trustee in the same order of priority, and in the
same manner, as it would have distributed the payment on the underlying
obligation in respect of which such payment under the Guaranty was received.
(E) Sections 5.01, 5.02, 5.03, 5.04, 5.05, 5.09 and 5.12 of the
Indenture shall read as follows:
SECTION 5.01. [Intentionally Omitted]
SECTION 5.02. Indenture Events of Default. "Indenture Event of
--------------------------- -------------------
Default" means any of the following events (whatever the reason for such
- -------
Indenture Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or be pursuant to
or in compliance with any judgment, decree or order of any court or any
Governmental Rule):
(a) any payment of principal of, Make-Whole Amount, if any, or
interest on any Secured Note shall not have been made on or prior to the
tenth (10th) Business Day after the same shall have become due and payable;
or
(b) MTFC shall fail to maintain the insurance required to be
maintained pursuant to Section 13.01(a) of Article XI of this Indenture; or
(c) MTFC shall fail in any material respect to perform or observe
any material covenant or agreement to be performed or observed by it under
this Indenture or any other Operative Document (but in the case of the
Participation Agreement, only as such covenant or agreement relates to the
Indenture Trustee and the Loan Participants and other than any failure to
make any payment referred to in Section 5.02(a)) and such failure shall
continue for a period of thirty (30) days after receipt by MTFC of a
written notice from the Indenture Trustee or from Holders of Secured Notes
owning at least 25% in principal amount of Outstanding Secured Notes
specifying such failure and requiring it to be remedied; provided, however,
-------- -------
that the continuation of any such failure for such period of thirty (30)
days or such longer period (not to exceed 365 days) after receipt of such
notice shall not constitute an Indenture Event of Default so long as (i)
such failure is curable or correctable and (ii) MTFC is diligently pursuing
the cure or correction of such failure; or
(d) the Guarantor shall fail in any material respect to perform or
observe any covenant or agreement to be performed or observed by it under
the Guaranty (other than any covenant or agreement in respect of MTFC's
obligations under the Operative Documents) and such failure shall continue
for a period of thirty (30) days after receipt by the Guarantor of a
written notice from the Indenture Trustee or from Holders of Secured Notes
owning at
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least 25% in principal amount of Outstanding Secured Notes specifying such
failure and requiring it to be remedied; provided, however, that the
-------- -------
continuation of any such failure for such period of thirty (30) days or
such longer period (not to exceed 365 days) after receipt of such notice
shall not constitute an Indenture Event of Default so long as (i) such
failure is curable or correctable and (ii) the Guarantor is diligently
pursuing the cure or correction of such failure; or
(e) any material representation or warranty made by MTFC in Section 5
of the Participation Agreement or in any Officer's Certificate of MTFC
delivered pursuant to the Participation Agreement shall prove to have been
inaccurate in any material respect when made, unless such inaccuracy shall
not be material to the recipient at the time when the notice referred to
below shall have been received by MTFC or any adverse material impact
thereof shall have been cured within thirty (30) days after receipt by MTFC
of a written notice thereof from the Indenture Trustee or from Holders of
Secured Notes owning at least 25% in principal amount of Outstanding
Secured Notes; provided, however, that the continuation of any such
-------- -------
inaccuracy for such period of thirty (30) days or such longer period (not
to exceed 365 days) after receipt of such notice shall not constitute an
Indenture Event of Default so long as (i) any material adverse impact of
such inaccuracy is curable or correctable and (ii) MTFC is diligently
pursuing the cure or correction of such material adverse impact; or
(f) any material representation or warranty made by the Guarantor in
the Guaranty or in any Officer's Certificate of the Guarantor delivered
pursuant to the Participation Agreement shall prove to have been inaccurate
in any material respect when made, unless such inaccuracy shall not be
material to the recipient at the time when the notice referred to below
shall have been received by the Guarantor or any material adverse impact
thereof shall have been cured or corrected within thirty (30) days after
receipt by MTFC of a written notice thereof from the Indenture Trustee;
provided, however, that the continuation of any such inaccuracy for such
-------- -------
period of thirty (30) days or such longer period (not to exceed 365 days)
after receipt of such notice shall not constitute an Indenture Event of
Default so long as (i) any material adverse impact of such inaccuracy is
curable or correctable and (ii) the Guarantor is diligently pursuing the
cure or correction of such material adverse impact;
(g) MTFC or the Guarantor shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to
the appointment or taking possession by any such official or agency in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall take any
corporate action to authorize any of the foregoing, or an involuntary case
or other proceeding shall be commenced against MTFC or the Guarantor
seeking liquidation,
EXHC-14
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official or agency of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90) days; or
(h) the Guaranty shall cease to be in full force and effect or to be
valid, binding and enforceable agreement of the Guarantor;
provided, however, that notwithstanding anything to the contrary contained in
- -------- -------
this Section 5.02, any failure of MTFC to perform or observe any covenant or
agreement specified in Section 5.02(c) shall not constitute an Indenture Event
of Default if such failure is caused solely by reason of any event that
constitutes an Event of Loss to the Vessel (or any event which with lapse of
time would constitute such an Event of Loss) so long as MTFC is continuing to
comply with all the applicable terms of Section 12 of Article XI.
SECTION 5.03. [Intentionally Omitted]
SECTION 5.04. Remedies. (a) If an Indenture Event of Default shall
--------
have occurred and be continuing and so long as the same shall be unremedied,
then and in every such case the Indenture Trustee subject to Sections 5.04(d),
5.05 and 6.01 may declare this Indenture to be in default by written notice to
such effect given to MTFC, and at any time thereafter; provided that such
--------
declaration shall not have been rescinded, the Indenture Trustee, to the extent
permitted by applicable law and subject to Sections 5.05 and 5.09 may: (i) upon
at least ten (10) days' written notice, exercise any or all of the rights and
powers and pursue any and all of the remedies herein provided or available under
applicable law, (ii) upon at least ten (10) days' written notice, take
possession of all or any part of the Indenture Estate and exclude MTFC and all
Persons claiming under MTFC wholly or partly therefrom, (iii) upon at least 25
days' prior written notice to MTFC, invoke and exercise the power of sale and
sell (or cause to be sold) any or all of the Indenture Estate in the manner for
non-judicial foreclosure sales pursuant to the applicable law, or, in lieu of
sale pursuant to the power of sale, foreclose the Indenture Estate and (iv)
exercise all rights and remedies of a secured party under the Uniform Commercial
Code as in effect in any applicable jurisdiction. The Indenture Trustee shall
notify MTFC as soon as is reasonably practicable after its commencement of the
exercise of any remedy pursuant to this Section 5.04.
(b) If an Indenture Event of Default (other than an Indenture Event of
Default specified in Section 5.02(g)) shall have occurred and be continuing,
then the Indenture Trustee may at any time (or shall when instructed by a
Majority Interest of Holders of Notes), by five (5) days' written notice to
MTFC, declare all (but not less than all) of the Secured Notes to be due and
payable. Upon such declaration the unpaid principal of all Secured Notes then
Outstanding, together with accrued but unpaid interest thereon and any other
amounts due thereunder, shall immediately become due and payable without
presentment, demand, protest further notice of intention to
EXHC-15
accelerate maturity or other notice of intention to accelerate maturity or other
or notice, all of which are hereby waived.
(c) If an Indenture Event of Default of the type specified in Section
5.02(g) shall have occurred and be continuing, the principal of all Secured
Notes then Outstanding, together with accrued but unpaid interest thereon and
any other amounts due thereunder, shall become and be due and payable
automatically, without declaration, notice, demand or any other action on the
part of the Indenture Trustee or any Holder, all of which are hereby waived.
Each of Section 5.04(a), Section 5.04(b) and this Section 5.04(c), however, is
subject to the condition that, if at any time after the principal of the Secured
Notes shall have become due and payable upon a declared or automatic
acceleration thereof as provided herein, and before any judgment or decree for
the payment of the money so due, or any portion thereof, shall be entered, all
overdue payments of interest upon the Secured Notes and all other amounts
payable under the Secured Notes (except the principal of the Secured Notes which
by such declaration shall have become payable) shall have been duly paid, and
every other Indenture Event of Default with respect to any covenant or provision
of this Indenture shall have been cured or waived, then and in every such case a
Majority in Interest of Holders of Notes, by written instrument filed with the
Indenture Trustee, may (but shall not be obligated to) rescind and annul the
Indenture Trustee's declaration and its consequences; but no such rescission or
annulment shall extend to or affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
(d) Notwithstanding any provision in any document or instruction that
purports to require the Indenture Trustee to acquire title to any or all of the
Indenture Estate upon foreclosure, or pursuant to instructions, the Indenture
Trustee shall not be obligated to acquire any such title unless: (i) the
Indenture Trustee is provided with such security or indemnity as it shall deem
satisfactory to it, (ii) such acquisition of title complies with all applicable
Operative Documents, laws, rules and regulations, which shall be evidenced by an
opinion of counsel to such effect in form and substance satisfactory to the
Indenture Trustee and (iii) the Indenture Trustee shall have obtained such
executed certificates, instruments or other documents, in accordance with its
reasonable inquiries or requests.
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate. (a)
-------------------------------------------------
MTFC agrees that, if an Indenture Event of Default shall have occurred and be
continuing and the Indenture Trustee shall be entitled to exercise remedies
hereunder as provided in Section 5.04, the Indenture Trustee may take possession
of all or any part of the Indenture Estate and may exclude MTFC, and all Persons
claiming under MTFC, wholly or partly therefrom; provided, however, that at
-------- --------
least ten (10) Business Days' prior notice of such taking of possession shall be
given to MTFC. If an Indenture Event of Default shall have occurred and be
continuing and the Indenture Trustee shall be entitled to exercise remedies
hereunder as provided in Section 5.04, at the request of the Indenture Trustee,
MTFC shall promptly execute and deliver to the Indenture Trustee such
instruments of title and other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or any agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession of
all or any
EXHC-16
part of the Indenture Estate to which the Indenture Trustee shall at the time be
entitled hereunder. If MTFC shall for any reason fail to execute and deliver
such instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee may (i) obtain a judgment conferring on the Indenture Trustee
the right to immediate possession of any property, comprising a portion of the
Indenture Estate and requiring MTFC to execute and deliver such instruments and
documents to the Indenture Trustee or (ii) pursue all or part of such property
wherever it may be found, and the Indenture Trustee may enter any of the
premises where such property or any portion thereof may be or is supposed to be
and search for such property; provided, further, that notwithstanding any
-------- -------
provision herein to the contrary, the Indenture Trustee shall not sell, assign,
transfer or deliver any of the Indenture Estate or take possession of the
Indenture Estate unless the Secured Notes shall have been accelerated pursuant
to Section 5.04(b) or 5.04(c). All expenses of obtaining such judgment or of
pursuing, searching for and taking such property shall, until paid, be secured
by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may
make, from time to time and at the expense of the Indenture Estate, 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, the Indenture Trustee shall have the right to maintain, use,
operate, store, lease, control or manage the Indenture Estate and to exercise
all rights and power of MTFC relating to the Indenture Estate as the Indenture
Trustee shall deem to be in the best interest of the Holders. The Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents,
revenue, issues, income, products and profits of the Indenture Estate and every
part thereof, other than Excepted Payments. Such tolls, rents, revenues,
issues, income, products and profits shall be applied (i) to pay the expenses of
the use, operation, storage, leasing, control, management or disposition of the
Indenture Estate, (ii) to pay the expense of all maintenance, repairs,
replacements, alterations, additions and improvements, (iii) to make all
payments which the 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 portion thereof, including, without limitation, the
employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of MTFC, and (iv) to pay amounts owing
in respect of the Secured Notes in accordance with the provisions thereof and
hereof and to make all other payments which the Indenture Trustee may be
required or authorized to make under any provision of this Indenture, as well as
just and reasonable compensation for the services of the Indenture Trustee and
of all Persons properly engaged and employed by the Indenture Trustee.
(c) Any of the Indenture Trustee, any Holder or MTFC may be a
purchaser of the Indenture Estate or any portion thereof or any interest therein
at any sale thereof, whether pursuant to foreclosure or power of sale or
otherwise. The Indenture Trustee may apply against the purchase price therefor
the amount then due to it hereunder or under any of the Secured Notes secured
hereby and any Holder may apply against the purchase price therefor the amount
then due to it hereunder or under the Secured Notes held by such Holder, to the
extent of such portion of the purchase price as it would have received had it
been entitled to share in any distribution thereof. The Indenture Trustee or
any Holder or any nominee of any such Holder shall acquire, upon any such
purchase,
EXHC-17
good title to the property so purchased, free of the Lien of this Indenture and,
to the extent permitted by applicable law, free of all rights of redemption in
MTFC in respect of the property so purchased.
(d) Any sale or other conveyance of any of the Indenture Estate by the
Indenture Trustee made pursuant to the terms of this Indenture shall bind MTFC
and the Holders and shall be effective to transfer or convey all right, title
and interest of the Indenture Trustee, MTFC and the Holders in and to such
Indenture Estate or portion thereof, as the case may be. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance, or as to the application of
any sale or other proceeds with respect thereto by the Indenture Trustee. In
the event of any such sale, MTFC shall execute any and all such bills of sale
and other documents, and perform and do all other acts and things requested by
the Indenture Trustee in order to permit continuation of such sale and to
effectuate the transfer or conveyance referred to in the first sentence of this
Section 5.05 (d). MTFC shall ratify and confirm any such sale or sales by
executing and delivering to the Indenture Trustee or to such purchaser or
purchasers all instruments as may reasonably be requested for such purpose. Any
such sale or sales made hereunder shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
MTFC in and to the properties and rights so sold, and shall be a perpetual bar
both at law and in equity against MTFC and against any and all persons claiming
or who may claim the same, or any part thereof from, through or under MTFC.
Upon any sale or other disposition of the Indenture Estate by the Indenture
Trustee, the Indenture Trustee will promptly account in writing, in reasonable
detail, to MTFC for the amount of such sale, the costs and expenses incurred in
connection therewith and any surplus proceeds.
(e) The Indenture Trustee shall as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any successor
or nominee thereof), at any time after an Indenture Event of Default either
before or after declaring due and payable the principal of all Secured Notes
then Outstanding, together with accrued but unpaid interest thereon and any
other amounts due thereunder, for all or any portion of the Indenture Estate,
whether such receivership be incidental to a proposed sale of the Indenture
Estate or the taking of possession thereof or otherwise, and, to the extent
permitted by applicable law, MTFC hereby consents to the appointment of such a
receiver, and agrees that it will not oppose any such appointment. Any receiver
appointed for all or any portion of the Indenture Estate shall be entitled in
addition to any powers available under applicable law, to exercise all the
rights and powers of the Indenture Trustee with respect to the Indenture Estate.
(f) To the extent now or at any time hereafter enforceable under
applicable law, MTFC 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, extension, moratorium, any exemption from execution or sale or other
similar law or from any law now or hereafter in force providing for the
valuation or appraisement of the Indenture Estate or any part thereof, prior to
any sale or sales thereof to be made pursuant to any provision herein contained,
or prior to any applicable 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 any right to have a
portion of the
EXHC-18
Indenture Estate or the security for the Secured Notes marshalled or otherwise
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 MTFC 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 use
any such law or laws, but will suffer and permit the execution of every such
power as though no such law or laws had been made or enacted.
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Secured Notes or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Indenture shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
(g) The Indenture Trustee may adjourn from time to time any sale to be
made under or by virtue of this Indenture for such sale or for such adjourned
sale or sales, and, except as otherwise provided by any applicable provision of
law, the Indenture Trustee, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.
(h) Any recovery of any judgment by the Indenture Trustee under the
Secured Notes and any levy of any execution under any such judgment upon the
Indenture Estate shall not affect in any manner or to any extent the security
title and security interest conveyed hereby upon the Indenture Estate or any
part thereof, or any conveyances, powers, rights and remedies of the Indenture
Trustee hereunder, but such conveyances, powers, rights and remedies shall
continue unimpaired as before.
(i) Notwithstanding anything contained herein, so long as the relevant
Pass Through Trustee or a registered Holder, the Indenture Trustee is not
authorized or empowered to acquire title to all or any portion of the Indenture
Estate or take any action with respect to all or any portion of the Indenture
Estate so acquired by it if such acquisition or action would cause the relevant
Pass Through Trust to fail to qualify as a "grantor trust" for federal income
tax purposes.
(j) MTFC shall be liable for all reasonable legal fees and other
reasonable costs and expenses incurring by each Loan Participant and the
Indenture Trustee by reason of the occurrence of any Indenture Event of Default
or the exercise of remedies with respect thereto.
SECTION 5.09. Quiet Enjoyment. Notwithstanding any other provision
---------------
of this Indenture or any other Operative Document, including, without
limitation, Sections 5.04 and 5.05, unless an Indenture Event of Default shall
have occurred and be continuing and this Indenture shall have been declared in
default pursuant to Section 5.04 (a), MTFC shall be entitled to the quiet use
and enjoyment of the benefits of the Vessel including the right to uninterrupted
possession, use and operation of the Vessel, and the Indenture Trustee shall not
take or permit any Person claiming by,
EXHC-19
through or under it to take any action inconsistent with MTFC's rights hereunder
or under any of the other Operative Documents or otherwise, through its own
actions or inactions, interfere or permit any such Person to interfere with such
quiet use or enjoyment or such possession, use or operation or the rights of any
permitted sublessee or assignee to such quiet use or enjoyment or such
possession, use or operation under any sublease or assignment permitted
hereunder (including, without limitation, the rights of the Operator under the
Initial Subcharter).
SECTION 5.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, (a) the reference to the
Charterer in Section 5.07 shall after the Relevant Date be deemed to be deleted
and (b) Sections 5.07 and 5.10 shall be deemed amended to provide that any
reference to, or right or obligation of the Owner Trustee contained in such
Sections shall after the Relevant Date be deemed to be a reference to, or right
or obligation of MTFC.
(F) Sections 6.01, 6.02, 6.03, 6.07, 6.08, 6.10 and 6.12 of the
Indenture shall read as follows:
SECTION 6.01. Certain Actions. If the Indenture Trustee shall
---------------
have Actual Knowledge of any Indenture Event of Default or any Indenture Default
or any material fact relating to the Vessel, the Indenture Trustee shall (a)
give prompt telephonic notice (promptly confirmed in writing) to MTFC and (b)
within 90 days after obtaining such Actual Knowledge, mail to each Holder,
notice of all Indenture Events of Default unless, in each case, such Indenture
Event of Default has been remedied before the giving of such notice and the
Indenture Trustee has Actual Knowledge that such Indenture Event of Default has
been so remedied; provided, however, that the failure by the Indenture Trustee
-------- -------
to provide such notice shall not invalidate any actions subsequently taken by
the Indenture Trustee in connection with such Indenture Event of Default.
Except in the case of a default in the payment of the principal or interest on
any Secured Note, the Indenture Trustee shall be protected in withholding the
notice required under clause (b) above if and so long as Responsible Officers of
the Indenture Trustee in good faith determine that withholding such notice is in
the interest of the Holders.
SECTION 6.02. Action Upon Instructions. The Indenture Trustee shall,
------------------------
upon the written instruction at any time and from time to time of a Majority in
Interest of Holders of Notes, give such notice, consent or direction or exercise
such right, remedy or power hereunder or any other agreement constituting part
of the Indenture Estate as shall be specified in such instruction; provided,
--------
however, that nothing set forth in this Section 6.02 shall entitle the Holders
- -------
to cause the Indenture Trustee to give any notice or exercise any right, power
or remedy that is not elsewhere authorized by, or is otherwise restricted or
prohibited by, this Indenture or any other Operative Document. If the Indenture
Trustee shall not have received instructions as above provided within twenty
(20) calendar days after mailing of the notice pursuant to Section 6.01 to the
Holders, the Indenture Trustee may take such action, or refrain from taking such
action, but shall be under no duty to take or refrain from taking any action,
with respect to such Indenture Event of Default or fact as it shall determine to
be advisable and in the best interest of the Holders. If the Indenture Trustee
receives
EXHC-20
any instructions after the expiration of the aforementioned 20 day period, the
Indenture Trustee shall use its best efforts to conform any action being taken
to comply with those instructions.
SECTION 6.03. Release of Lien of Indenture. (a) Release of
---------------------------- ----------
Indenture Estate. Upon satisfaction of the conditions for termination of this
- ----------------
Indenture set forth in Section 10.01, the Lien of the Indenture on the Indenture
Estate shall terminate and the Indenture Trustee, upon the written request of
MTFC, shall execute and deliver to, or as directed by, MTFC, all appropriate
instruments provided by MTFC (in due form for recording or filing) releasing the
Indenture Estate from the Lien of this Indenture, and the Indenture Trustee
shall pay all moneys or other properties or proceeds held by it under this
Indenture to MTFC. The reasonable cost and expense associated with any action
taken by the Indenture Trustee pursuant to the provisions of this Section
6.03(a) shall be borne by MTFC.
(b) Release of Vessel Upon Event of Loss. Upon the occurrence of an
------------------------------- ----
Event of Loss with respect to the Vessel and receipt by the Indenture Trustee of
all or any amounts due and payable by MTFC as a result of such Event of Loss
pursuant to Section 12.02 of Article XI and the concurrent redemption of Secured
Notes as set forth in Section 3.02, the Indenture Trustee, upon the written
request of MTFC, shall execute and deliver to, or as directed by, MTFC, all
appropriate instruments provided by MTFC (in due form for recording or filing)
releasing the Vessel and all other property solely relating thereto and then
constituting a portion of the Indenture Estate (or if not solely relating
thereto, but such other property can be reasonably partitioned without undue
burden or delay, such other property), as the case may be, from the Lien of this
Indenture. The reasonable cost and expense associated with any action taken by
the Indenture Trustee pursuant to the provisions of this Section 6.03 (b) shall
be borne by MTFC.
(c) Release of Liens Upon Full Payment of Secured Notes. Upon payment
---------------------------------------------------
in full of the principal of and interest on and all other amounts due and
payable under the Secured Notes, and all other amounts due and payable to any
Holder or the Indenture Trustee hereunder or under any other Operative Document,
the Indenture Trustee, upon the written request of MTFC, shall execute and
deliver to, or as directed by, MTFC, all appropriate instruments provided by
MTFC (in due form for recording or filing) releasing the Vessel, and all other
property relating thereto and then constituting a portion of the Indenture
Estate from the Lien of this Indenture. The cost and expense associated with
any action taken by the Indenture Trustee pursuant to the provisions of this
Section 6.03 (c) shall be borne by MTFC.
(d) Disposition, Substitution and Release of Vessel Included in the
---------------------------------------------------------------
Indenture Estate. Any alterations, improvements and modifications in and
- ----------------
additions to the Vessel shall, to the extent required or specified in Section
11.07 of Article XI, become subject to the Lien of this Indenture; provided
--------
that, to the extent permitted by and as provided in Section 11.07 of Article XI,
MTFC shall have the right, at any time and from time to time, without any
release from or consent by the Indenture Trustee, to remove and/or replace any
item of property constituting part of the Vessel, and, to make alterations,
improvements and Modifications in, and additions to, the Vessel. The Indenture
Trustee agrees that, to the extent permitted by and as provided in Section 11.07
of
EXHC-21
Article XI, the title to any such removed or replaced item of property, shall
vest in MTFC. The Indenture Trustee shall from time to time execute an
appropriate written instrument or instruments to confirm the release of the
security interest of the Indenture Trustee in any replaced item of property, as
provided in this Section 6.03(d) in each case upon receipt by the Indenture
Trustee of a request of MTFC stating that said action was duly taken by MTFC in
conformity with this Section 6.03(d) and that the execution of such written
instrument or instruments is appropriate to evidence such release of a security
interest under this Section 6.03(d). The reasonable cost and expense associated
with any action taken by the Indenture Trustee pursuant to the provisions of
this Section 6.03(d) shall be borne by MTFC.
SECTION 6.07. No Action Except Under Operative Documents or
---------------------------------------------
Instructions. The Indenture Trustee agrees that it will not use, operate, store,
- ------------
lease, control, manage, sell, dispose of or otherwise deal with the Vessel or
any other part of the Indenture Estate except (a) in accordance with the terms
of the Operative Documents or (b) in accordance with the powers granted to, or
the authority conferred upon, the Indenture Trustee pursuant to the express
terms of this Indenture.
SECTION 6.08. [Intentionally Omitted]
SECTION 6.10. [Intentionally Omitted]
SECTION 6.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, (a) the reference to the
Charterer in Section 6.09 shall after the Relevant Date be deemed to be deleted,
(b) Sections 6.09 and 6.11 shall be deemed amended to provide that any reference
to, or right or obligation of the Owner Trustee contained in any such Section
shall after the Relevant Date be deemed to be a reference to, or right or
obligation of MTFC and (c) the phrase "the Owner Participant or" in Section 6.11
shall after the Relevant Date be deemed to be deleted.
(G) Sections 7.02, 7.03, 7.04, 7.05, 7.07 and 7.10 of the Indenture
shall read as follows:
SECTION 7.02. Absence of Duties Except as Specified. Except in
-------------------------------------
accordance with written instructions furnished pursuant to Section 6.01 or 6.02,
and except as provided in, and without limiting the generality of, Sections
6.04, 6.05, 6.06, 6.07, 7.01 and 7.03, the Indenture Trustee shall have no duty
(a) to record or file this Indenture, the Ship Mortgage or any other document,
or to maintain any such recording or filing, or to rerecord or refile any such
document, (b) to effect or maintain any such insurance, whether or not MTFC
shall be in default with respect thereto, (c) to discharge any Lien of any kind
against any part of the Indenture Estate, or (d) to inspect the Vessel at any
time, or to ascertain or inquire as to the performance or observance of any of
MTFC's covenants hereunder.
SECTION 7.03. No Representations or Warranties. NEITHER MTFC NOR
--------------------------------
THE INDENTURE TRUSTEE MAKES (a) ANY REPRESENTATION OR WARRANTY, WHETHER
EXHC-22
WRITTEN, ORAL, EXPRESS OR IMPLIED, AS TO THE VALUE, COMPLIANCE WITH
SPECIFICATIONS, DURABILITY, OPERATION, CONSTRUCTION, PERFORMANCE, DESIGN OR
CONDITION OF THE FACILITY OR ANY COMPONENT THEREOF, THE MERCHANTABILITY THEREOF
OR THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE VESSEL OR ANY
PART THEREOF, THE QUALITY OF THE MATERIALS OR WORKMANSHIP THEREOF OR CONFORMITY
THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE VESSEL, OR ANY PART THEREOF,
except, in the case of MTFC, as expressly provided in Section 5 of the
Participation Agreement, or (b) any representation or warranty as to the
validity, legality or enforceability of this Indenture, any of the other
Operative Documents or the Secured Notes, or as to the correctness of any
statement contained in any thereof, except as set forth in Section 7.01 of this
Indenture, or Sections 5 and 9 of the Participation Agreement.
SECTION 7.04. No Segregation of Moneys; No Interest; Investments.
--------------------------------------------------
Any moneys paid to or retained by the Indenture Trustee as security hereunder
that would be payable to MTFC upon satisfaction of any applicable conditions
shall be invested and reinvested by the Indenture Trustee from time to time in
Permitted Investments at the written direction of MTFC. The Indenture Trustee
shall have no liability for any loss resulting from any investment required to
be made hereunder other than by reason of its own willful misconduct or
negligence in failing to comply with such instructions. Any net income or gain
realized as a result of any such investment or reinvestment shall be held as
part of the Indenture Estate and shall be applied by the Indenture Trustee at
the same time, on the same conditions and in the same manner as the amounts in
respect of which such income or gain was realized are required to be distributed
in accordance with the provisions hereof. MTFC shall be responsible for any net
loss realized as a result of any such investment or reinvestment and shall
reimburse the Indenture Trustee therefor on demand. Any Permitted Investment
may be sold or otherwise reduced to cash (without regard to maturity) by the
Indenture Trustee whenever necessary to make any application as required by the
terms of this Indenture or of any applicable Operative Document.
SECTION 7.05. Reliance; Agents; Advice of Counsel. The Indenture
-----------------------------------
Trustee (in its individual or trust capacity) shall not incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Indenture Trustee may accept a copy of a
resolution of the Board of Directors or other governing body of any party to the
Participation Agreement or other Operative Document, certified by the Secretary
or any Assistant Secretary thereof as duly adopted and in full force and effect,
as conclusive evidence that such resolution has been duly adopted and that the
same is in full force and effect. As to any fact or matter relating to MTFC the
manner of ascertainment of which is not specifically described herein, the
Indenture Trustee may for all purposes hereof rely on an Officer's Certificate
of MTFC as to such fact or matter, and such Officer's Certificate shall
constitute full protection to the Indenture Trustee (in its individual or trust
capacity), for any action
EXHC-23
taken or omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Indenture Trustee may execute any of
the trusts or powers hereof and perform its powers and duties hereunder directly
or through agents or attorneys and at the expense of the Indenture Estate may
consult with counsel, accountants and other skilled Persons to be selected and
retained by it, and the Indenture Trustee shall not be liable for anything done,
suffered or omitted in good faith by, it in accordance with the advice or
opinion of any such counsel, accountant or other skilled Person acting within
such Person' s area of competence (so long as the Indenture Trustee shall have
exercised due care in selecting such Persons, provided that, so long as no
-------------
Indenture Event of Default shall have occurred and be continuing, no such
Persons (other than counsel to the Indenture Trustee or its accountants) shall
be retained by the Indenture Trustee without the consent of MTFC, such consent
not to be unreasonably withheld.
SECTION 7.10. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, Sections 7.06 and 7.09 shall be
deemed amended to provide that any reference to, or right or obligation of the
Owner Trustee contained in such Section shall after the Relevant Date be deemed
to be a reference to, or right or an obligation of MTFC.
(H) Sections 8.01 and 8.04 of the Indenture shall read as follows:
SECTION 8.01. [Intentionally Omitted]
SECTION 8.04. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, (a) Sections 8.02 and 8.03 shall
be deemed amended to provide that any reference to, or right or obligation of
the Owner Trustee contained in any such Section shall after the Relevant Date be
deemed to be a reference to, or right or obligation of MTFC and (b) Section 8.02
shall be deemed amended to provide that any reference to the Charterer or the
Owner Participant contained in such Section shall be deemed to be deleted.
(I) (I) Sections 9.02(a), 9.02(b) and 9.02(c) of the Indenture shall
read as follows:
(a) [Intentionally Omitted]
(b) Except as provided in Section 9.01 or 9.02(c) or 9.02(d), at any
time and from time to time, with the written consent of a Majority in Interest
of Holders of Notes and, whether or not an Indenture Event of Default exists,
upon the written consent of MTFC, the Indenture Trustee (x) shall execute an
amendment or supplement to this Indenture for the purpose of adding provisions
to, or changing in any manner or eliminating any of the provisions of, this
Indenture or (y) shall execute an amendment or supplement to, or give a consent,
waiver, authorization or approval, for the purposes of adding any provisions to
or changing in any manner or eliminating any of the provisions of, the
Participation Agreement; provided, however, that no such amendment or
-------- -------
supplement to this Indenture, or consent, waiver, authorization, approval,
amendment or supplement to the Participation Agreement shall, without the
consent of each Holder of a Secured Note then Outstanding:
EXHC-24
(i) change the stated maturity of the principal of, or any
installment of interest on, or the amount of any payment upon any mandatory
or optional repayment, purchase or redemption of any Secured Note, or
change the principal amount thereof or any other amount payable in respect
thereof or reduce the Make-Whole Amount, if any, or interest thereon, or
change the place of payment where, or the coin or currency in which, any
Secured Note or the interest thereon is payable;
(ii) permit the creation of any Lien on the Indenture Estate not
otherwise permitted hereunder or deprive any Holder of the benefit of the
Lien of this Indenture upon the Indenture Estate, or any portion thereof,
for the security of its Secured Notes;
(iii) change the percentage of the aggregate principal amount of
Secured Notes required to take or approve any action hereunder or any other
Operative Document or to waive compliance therewith;
(iv) modify the definitions of "Indenture Default", "Indenture
Event of Default" or "Majority in Interest of Holders of Notes";
(v) modify the order of priorities in which distributions are to
be made under Article IV;
(vi) [Intentionally Omitted]
(vii) modify, amend or supplement any of the provisions of this
Section 9.02;
(viii) [Intentionally Omitted]
(ix) adversely affect any indemnities in favor of any Holder as
provided pursuant to the terms of any Operative Document, except as may be
consented to by each Person adversely affected thereby.
(c) Notwithstanding anything to the contrary contained in Section
9.02(b) (except as provided in the proviso to Section 9.02(b)), without the
necessity of the consent of any of the Holders, the Indenture Trustee shall, at
the request of MTFC:
(i) [Intentionally Omitted]
(ii) [Intentionally Omitted]
(iii) modify, amend or supplement the Participation Agreement, or
give any consent, waiver, authorization or approval with respect thereto,
except that without compliance with Section 9.02(b), the Indenture Trustee
shall not modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purpose of adding
EXHC-25
any provisions to or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the
respective parties thereunder, with respect to the following provisions of
the Participation Agreement as originally executed: Section 5 (insofar as
such Section 5 relates to the Indenture Trustee, the Indenture Estate and
the Holders), Section 10 (other than an amendment to add to the covenants
of MTFC and other than Section 10.10), Section 11.4, Section 12 (insofar as
such Section 12 relates to the Indenture Trustee, the Indenture Estate and
the Holders) and, to the extent the Loan Participant would be adversely
affected thereby, Section 15 and any definitions of terms used in the
Participation Agreement to the extent that any modification of such
definition would result in a modification of the Participation Agreement
not permitted pursuant to this Section 9.02(c);
(iv) [Intentionally Omitted]
(v) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders unless such provision corrects a mistake.
(II) Sections 9.07 and 9.08 of the Indenture shall read as follows:
SECTION 9.07. [Intentionally Omitted]
SECTION 9.08. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein:
(a) the phrase "the assumption by the Charterer of the obligations
of the Owner Trustee hereunder in accordance with the terms and conditions
applicable thereto specified in Section 3.04, including, without limitation, in
Sections 9.01(e) and 9.02(d), and the phrases "the succession of a new Owner
Trustee in accordance with the Trust Agreement or" and "thereunder or" in each
of Sections 9.01(f) and 9.02(d) (iv) shall after the Relevant Date be deemed to
be deleted;
(b) the reference to the Charterer in each of Sections 9.01(c),
9.02(d)(iii) and 9.06 shall after the Relevant Date be deemed to be deleted; and
Sections 9.01, 9.03, 9.05 and 9.06 shall be deemed amended to provide that any
reference to, or right or obligation of the Owner Trustee contained in such
Sections shall after the Relevant Date be deemed to be a reference to, or right
or obligation of MTFC; and
(c) all provisions requiring delivery of documents to the Owner
Participant in Section 9.06 shall be deemed to be deleted.
EXHC-26
(J) Sections 10.01, 10.04, 10.05, 10.08, 10.10, and 10. 14 of the
Indenture shall read as follows:
SECTION 10.01. Termination of Indenture. This Indenture and the
------------------------
trusts created hereby shall terminate, and this Indenture shall be of no further
force or effect, when:
(a) the principal of and interest on and all other amounts due and
payable under all Secured Notes and all other amounts due and payable to
any Holder or the Indenture Trustee hereunder or under any other Operative
Document shall have been paid in full; or
(b) the Indenture Trustee shall have sold or made other final
disposition of all property and all moneys or other property or proceeds
constituting part of the Indenture Estate in accordance with the terms
hereof; or
(c) all Secured Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable (whether upon stated
maturity, as a result of redemption or upon acceleration), or will become
due and payable (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Secured Notes not theretofore
cancelled by the Indenture Trustee or delivered to the Indenture Trustee
for cancellation, an amount in cash sufficient without reinvestment thereof
to discharge such indebtedness, including the principal of and interest on
the Secured Notes to the date of such deposit (in the case of Secured Notes
which have become due and payable), or to the maturity thereof, as the case
may be; or
(d) (i) MTFC has deposited or caused to be deposited irrevocably
(except as provided in Section 7.09(b)) with the Indenture Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Loan Participants, (A) money in an amount, or (B)
United States Government Obligations which, through the payment of interest
and principal in respect thereof in accordance with their terms, will
provide (not later than one Business Day before the due date or any payment
referred to below in this clause) money in an amount, or (C) a combination
of money and United States Government Obligations referred to in the
foregoing clause (B), sufficient, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to pay and
discharge each installment of principal of and interest on the Outstanding
Secured Notes on the dates such payments of principal or interest are due
(including as a result of redemption in respect of which irrevocable notice
has been given to the Indenture Trustee on or prior to the date of such
deposit), and no Indenture Event of Default under Section 5.02(g) shall
have occurred and be continuing on the date of such deposit or at any time
during the period ending on the 91st day after such date; provided,
--------
however, that upon the making of the deposit referred to above in clause
(A), the right of MTFC to cause the redemption of Secured Notes (except
EXHC-27
a redemption in respect of which irrevocable notice has theretofore been
given) shall terminate; and (ii) MTFC has delivered to the Indenture
Trustee an Officer's Certificate of MTFC to the effect that (A) such
deposit will not constitute an Indenture Event of Default under this
Indenture or a default or event of default under any other agreement or
instrument to which MTFC is a party or by which it is bound and (B) all
conditions precedent relating to the termination of this Indenture under
this Section 10.01(d) have been complied with; and (iii) MTFC has delivered
to the Indenture Trustee an Officer's Certificate of MTFC and an Opinion of
Counsel to the effect that there has been published by the Internal Revenue
Service a ruling to the effect that Loan Participants will not recognize
income, gain or loss for Federal income tax purposes as a result of the
exercise by MTFC of its option under this Section 10.01(d) and will be
subject to Federal income tax in respect of the interest received from such
deposit on the same amount and in the same manner and at the same times as
would have been the case if such option had not been exercised; and (iv)
all other amounts then due and payable hereunder to any Holder or the
Indenture Trustee have been paid;
provided, however, that the obligations of the Indenture Trustee contained in
- -------- -------
Sections 2.01 through 2.11, 6.11 and 7.09 shall survive. Except as otherwise
provided in the preceding sentence, this Indenture and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
SECTION 10.03. [Intentionally Omitted]
SECTION 10.04. (a) Aggregate Unpaid Principal Amount of Secured Notes
--------------------------------------------------
Outstanding. As to the aggregate unpaid principal amount of Secured Notes
- -----------
Outstanding as of any date, MTFC may rely on an Officer's Certificate of the
Indenture Trustee.
(b) No director, officer, employee or stockholder (other than the
Guarantor as stockholder of MTFC), as such, of MTFC or the Guarantor, as the
case may be, shall have any liability for any obligations of MTFC or the
Guarantor, 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 Loan
Participant by accepting a Secured Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Secured Notes.
SECTION 10.05. Notices. All communications, notices and consents
-------
provided for in this Indenture shall be in writing and shall be given in person
or by courier or by means of telex, telecopy or other wire transmission (with
request for assurance of receipt in a manner typical with respect to
communications of that type), or mailed by first class mail, addressed, in the
case of MTFC, to Mobil Transport Finance Company Inc., 3225 Gallows Road,
Fairfax, Virginia 22037- 0001 Attention: Treasurer; telecopier (703) 846-1469,
in the case of the Indenture Trustee, to State Street Bank and Trust Company,
Two International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Department (telephone: (617) 664-5340; telecopier: (617) 664-
5371); and, in the case of all other parties, as set forth in Schedule 1 to the
Participation Agreement or at such other address as any such Person may from
time to time designate by notice duly given in
EXHC-28
accordance with the provisions of this Section 10.05 to the other parties hereto
and shall be deemed given when received by (or when proffered to, if receipt is
not accepted) the party to whom it is addressed.
SECTION 10.08. Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon each of the parties hereto and their
respective successors and permitted assigns, and inure to the benefit of each of
the parties hereto and their respective successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of such
Holder. Each Holder by its acceptance of a Secured Note agrees to be bound by
this Indenture and all provisions of the Operative Documents applicable to it.
SECTION 10.10. Normal Commercial Relations. Notwithstanding anything
---------------------------
contained in this Indenture to the contrary, any Loan Participant, the Indenture
Trustee or bank or other affiliate of any such Person may conduct any banking or
other financial transactions and have banking or other commercial relationships
with MTFC fully to the same extent as if this Indenture were not in effect.
SECTION 10.14. Benefits of Indenture. Nothing in this Indenture,
---------------------
whether express or implied, shall be construed to give to any Person other than
the parties hereto and the Holders any legal or equitable right, remedy or claim
under or in respect of this Indenture or the Secured Notes, and this Indenture
shall be held for the sole and exclusive benefit of the parties hereto and the
Holders.
(K) The Indenture shall include the following Article XI:
ARTICLE XI
CERTAIN ADDITIONAL PROVISIONS
This Article XI consists of Sections 10 through 14 and 20. Sections 1
through 9 and 15 through 19 are intentionally omitted.
SECTION 10. LIENS.
-----
MTFC will not, directly or indirectly, create, incur, assume or suffer
to exist any Liens on or with respect to all or any part of the Vessel or the
Indenture Estate title thereto or any interest therein, other than Permitted
Liens, and MTFC promptly, at its own expense, will take such actions as may be
necessary duly to discharge any such Lien not excepted above.
SECTION 11. OPERATION AND MAINTENANCE;
EXHC-29
INSPECTION; REPLACEMENTS AND
MODIFICATIONS.
-------------
11.01 Vessel Maintenance, Compliance with Governmental Rules. MTFC
------------------------------------------------------
shall throughout the Charter Term, maintain the Vessel, or cause it to be
maintained, at its own cost and expense, in accordance with the established
maintenance and repair programs of MTFC or any Affiliate thereof for similar
vessels owned or chartered thereby so as to keep the Vessel in (i) good working
order and condition, ordinary wear and tear excepted, and (ii) in compliance, in
all material respects, with applicable Governmental Rules or ABS requirements;
provided, however, that MTFC will not be required to comply with any
- -------- -------
Governmental Rule or ABS requirement:
(A) whose application or validity is being contested diligently and
in good faith by appropriate proceedings;
(B) compliance with which shall have been excused or exempted by a
nonconforming use permit, waiver, extension or forbearance exempting it
from such Governmental Rule or ABS requirement but only to the extent that
MTFC's noncompliance is in accordance with such permit, waiver, extension
or forbearance; or
(C) if good faith efforts and appropriate steps are being taken to
comply;
so long as, if in the case of clauses (A) and (B) above, neither such
failure of compliance nor such contest shall result in the material risk of
(I) sale, forfeiture or loss of the Vessel or title thereto;
(II) any interference with the payment of Base Charter Hire
when due; or
(III) the imposition of any criminal liability on the Owner
Participant or the Indenture Trustee.
11.02 Indenture Trustee's Inspection. Subject to any applicable laws
------------------------------
and regulations, the Indenture Trustee shall have the right, at its risk and
expense (including, without limitation, as to personal injury and death) and
under conditions reasonably acceptable to MTFC (including, without limitation,
with respect to time and place of inspection, the execution of waivers of
liability reasonably acceptable to MTFC and the provision of proof of insurance
reasonably acceptable to MTFC) and subject to confidentiality provisions, to
visit and inspect the Vessel, and MTFC will use reasonable efforts to make
available its books and records related thereto, all upon reasonable notice and
at such reasonable times during normal business hours and as may be reasonably
requested; provided, however, that unless there is an existing Indenture Event
-------- -------
of Default, the Indenture Trustee may not make more than one (1) inspection in
any calendar year without MTFC's prior written consent; provided, further, that
-------- -------
such inspection rights must be exercised subject to the supervision of MTFC or
its designee. Unless a Indenture Event of Default shall have occurred and be
EXHC-30
continuing, MTFC shall not be required to disclose any confidential information
or allow anyone to inspect confidential materials. For the purposes of this
Section 11.02, the Vessel's logs shall not be deemed to be confidential
materials.
11.03 Required Modifications. MTFC shall make or cause to be made at
----------------------
its sole cost and expense all Severable and Nonseverable Modifications to the
Vessel as may be required from time to time to meet the requirements of clause
(ii) of Section 11.01 of this Article XI (all such Modifications, "Required
Modifications"). MTFC shall complete (or cause to be completed) all such
Required Modifications in a good and workmanlike manner, with reasonable
dispatch and (but only to the extent practicable) in a manner which does not
decrease the Fair Market Sales Value and utility of the Vessel or the remaining
useful life or residual value of the Vessel or cause the Vessel to become
"limited use property" within the meaning of Revenue Procedure 76-30, and any
amendment or modification thereto.
11.04 Optional Modifications. In addition to any Required
----------------------
Modifications, MTFC shall have the right to make (or cause or allow to be made)
such alterations, modifications, additions and improvements to the Vessel as
MTFC, in its sole discretion, deems desirable in the proper conduct of its
business (all such Modifications, "Optional Modifications"); provided that such
--------
Optional Modifications (i) are done in a good and workmanlike manner, (ii) shall
not reduce the Fair Market Sales Value and utility, or the remaining useful life
or residual value (except, in each case, to a de minimus extent) of the Vessel,
-- -------
and (iii) shall not cause the Vessel to become limited use property within the
meaning of Revenue Procedure 76-30.
11.05. Title to Modifications. (a) Title to all Severable
----------------------
Modifications to the Vessel not required by any Governmental Rule or
Governmental Action shall vest in MTFC or any Person designated by MTFC, free
and clear of the Lien of this Indenture. MTFC may remove (or allow to be
removed) any such Severable Modification prior to or on the latest Maturity
Date.
(b) All of (i) Severable Modifications to the Vessel required by any
Governmental Rule or Governmental Action and (ii) Nonseverable Modifications to
the Vessel shall without further act be subject to the Lien of this Indenture.
11.06. Payment for Modifications and Replacement Components. (a)
----------------------------------------------------
MTFC shall be permitted at any time to finance its share of the cost of any
Severable Modification to the Vessel not required by any Governmental Rule or
Governmental Action, directly or indirectly, including, without limitation, on a
third party ownership basis.
(b) MTFC shall be permitted at any time to finance its share of the
cost of any Modification whether or not any such Modification is required by any
Governmental Rule or Governmental Action to be made to the Vessel through the
issuance of Additional Notes in accordance with Section 2.08 or any alternative
means of financing; provided, however, that such alternative financing does not
-------- -------
and will not result in any Lien (other than Permitted Liens) on or with respect
to the Vessel as modified by such Modification.
EXHC-31
11.07 Removal of Property. (a) In the ordinary course of
-------------------
maintenance, service, repair or testing, any item of property constituting a
part of the Vessel may be removed and replaced with an item of property which is
free and clear of all Liens, except Permitted Liens, and in as good operating
condition as, and with a value and utility, and remaining useful life and
residual value at least equal to, the item of property replaced, assuming such
item of property replaced was in at least the operating condition and repair
required to be maintained hereunder. Immediately upon any item of property
becoming incorporated in the Vessel, without further act, (A) title to such item
of property thereupon shall vest in the Indenture Trustee and be subject to the
Lien of the Indenture, (B) such item of property shall become subject to the
Charter and be deemed a part of the Vessel for all purposes hereof to the same
extent as the item of property it replaced and (C) title to such removed item of
property shall vest in MTFC or such Person as shall be designated by MTFC, free
and clear of all rights of the Indenture Trustee and any Person claiming through
the Indenture Trustee, and shall no longer be subject to the Charter or
considered to be a part of the Vessel.
(b) If, at any time during the Charter Term, MTFC shall conclude that
any item of property constituting a part of the Vessel is obsolete, redundant or
unnecessary and can be removed without diminution of the Fair Market Sales
Value, utility, reduction of the remaining useful life, or residual value of the
Vessel and without causing the Vessel to become "limited use property" within
the meaning of Revenue Procedure 76-30, MTFC may remove (or allow to be removed)
such property and upon such removal, without further act, title to such property
shall vest in MTFC in such Person as shall be designated by MTFC, free of the
Lien of this Indenture. In addition, notwithstanding anything contained in the
Charter to the contrary but subject to Section 4 thereof, if an event occurs
with respect to any item of property constituting part of the Vessel (or any
item of property replaced) which would constitute an Event of Loss if such event
occurred with respect to the Vessel, MTFC shall have no obligation to redeem or
pay any amounts with respect to a redemption (including without limitation,
principal, Make-Whole Amount, if any, or interest) of any Secured Note in
respect of, or to otherwise replace, repair or rebuild, such item of property,
so long as the absence or condition of such item of property is not material to
the overall operation of the Vessel.
SECTION 12. EVENT OF LOSS.
-------------
12.01. Notice of Event of Loss. If there shall occur an Event of
-----------------------
Loss with respect to the Vessel during the Charter Term, MTFC shall promptly,
upon the obtaining of Actual Knowledge thereof, notify the Owner Participant and
the Indenture Trustee of the occurrence thereof.
12.02. Payment Upon Event of Loss, Etc. (a) If an Event of Loss
-------------------------------
with respect to the Vessel shall occur, unless MTFC shall have elected to
rebuild the Vessel pursuant to Section 12.02(b), MTFC shall pay to the Indenture
Trustee as compensation for such Event of Loss, on the date which is the latest
monthly anniversary of the Base Charter Term Commencement Date not later than
180 days after the date of such Event of Loss, an amount in cash which is
sufficient to pay the
EXHC-32
entire unpaid principal amount of the Secured Notes Outstanding pursuant to
Section 3.02 as a result of such Event of Loss.
(b) Upon the occurrence of an Event of Loss, except an Event of Loss
of the type described in clause (vii) of the definition thereof, MTFC shall have
the option, in lieu of making payments pursuant to Section 12.02(a), within 180
days of the Event of Loss, of substituting a vessel of at least equal Fair
Market Sales Value and utility and with a remaining useful life and residual
value as the Vessel had immediately prior to such Event of Loss (assuming the
Vessel has been maintained in accordance with the terms of the Charter), and
which is not "limited use property" within the meaning of Revenue Procedure 76-
30 and any amendment or modification thereof. In the event that MTFC shall have
elected the option set forth in this Section 12.02(b), no amounts shall be
payable under Section 11(b)(i), and the Vessel shall remain subject to the Lien
of this Indenture. Prior to or at the time that MTFC determines to substitute a
vessel in accordance with this Section 12.02(b), MTFC will (A) enter into such
amendments to the Operative Documents as may be reasonably necessary to effect
such substitution, (B) furnish the Indenture Trustee with an appraisal as to the
Fair Market Sales Value, utility, residual value and remaining useful life of
such vessel and (C) so long as the Indenture shall not have been satisfied and
discharged, cause a financing statement or statements with respect to such
substitute vessel or other requisite documents or instruments to be filed in
such place or places as may be necessary in order to perfect the security
interest created by or pursuant to the Indenture or the Ship Mortgage.
12.03. Application of Other Payments upon the Occurrence of an Event
-------------------------------------------------------------
of Loss. Any amounts of condemnation or requisition proceeds received at any
- -------
time by the Indenture Trustee, MTFC or the Operator as a result of the
occurrence of an Event of Loss shall be paid over to or retained, as the case
may be, by MTFC.
12.04. Application of Payments Not Relating to an Event of Loss.
--------------------------------------------------------
Payments (except for payments under insurance policies described in Section 13
of this Article XI) received at any time by the Indenture Trustee, MTFC or the
Operator from any Governmental Authority or other Person with respect to any
destruction, damage, loss, condemnation, confiscation, theft or seizure of or
requisition of title to or use of the Vessel or any part thereof not
constituting an Event of Loss shall be paid over to MTFC or as it may direct.
12.05. Other Dispositions. Notwithstanding the foregoing provisions
------------------
of this Section 12, so long as any Indenture Event of Default described in
Section 5.02(a) [and (b)] shall have occurred and be continuing, any amount
(except for payments under insurance policies described in Section 13) that
otherwise would be payable to or for the account of, or that otherwise would be
retained by, MTFC pursuant to this Section 12 shall be paid to the Indenture
Trustee as security for the obligations of MTFC under this Indenture and, at
such time thereafter as no Indenture Event of Default described in Section
5.02(a) [and (b)] shall be continuing, such amount shall be paid promptly to
MTFC or as it may direct; provided that if any such amount has been so held as
--------
security for more than ninety (90) days after an Indenture Event of Default
described in Section 5.02(a) [and (b)] shall have occurred and during which
period, (i) the Indenture Trustee shall not have been
EXHC-33
limited by operation of law or otherwise from exercising remedies hereunder or
(ii) the Indenture Trustee shall not have commenced to exercise any remedy
available to it under Section 5.04, then such amount shall be paid to MTFC or as
it may direct.
SECTION 13. INSURANCE.
---------
13.01. Coverage. (i) MTFC, at its own cost and expense, shall carry
--------
and maintain or cause to be carried and maintained at all times during the
Charter Term protection and indemnity insurance (including pollution liability
insurance), to the extent such insurance is commercially available, on or with
respect to the Vessel and the operation thereof in such amounts, and with such
deductibles or self-insurance amounts, and in such forms as is consistent with
MTFC's practices for other similar vessels owned or chartered by it or its
Affiliates. The provisions of Rule 16 (Fleet Entry) of the Britannia Steam Ship
Insurance Association Limited (the "Association") will apply (or similar
requirements of any other insurer providing protection and indemnity insurance
with respect to the Vessel may apply) to the entry of the Vessel with the
Association save that the Association may not require the Owner Participant or
the Shipowner to pay outstanding calls on other ships in the fleet;
(ii) Any liability insurance carried in accordance with Section 13.01
shall provide in the policy or by special endorsement that :
(A) the Shipowner, the Owner Participant, the Indenture Trustee
and the Pass Through Trustee are included as additional insureds in
respect of all public liability policies, if any, carried in
accordance with Section 13.01(i);
(B) such insurance shall be primary without right of contribution
of any other insurance carried by or on behalf of the Shipowner, the
Indenture Trustee, the Owner Participant and the Loan Participant;
13.02 Adjustment of Losses. Losses, if any, with respect to the
--------------------
Vessel under all insurances or entires in protection and indemnity association,
whether or not required to be carried under Section 10.01, shall be adjusted
with the insurance companies, including the filing of appropriate proceedings,
by MTFC.
13.03. Application of Insurance Proceeds. All proceeds of insurance
---------------------------------
maintained pursuant to Section 13.01(i) on account of any damage to or
destruction of the Vessel or any part thereof shall be paid over to MTFC or as
it may direct.
13.04. Additional Insurance. Nothing in this Section 13 shall
--------------------
prohibit MTFC, the Owner Participant, the Indenture Trustee, the Pass Through
Trustee or the Operator from acquiring or maintaining, at its own expense,
additional insurance in such amounts with respect to such risks as each such
Person, as the case may be, shall determine; provided that no such insurance
carried by the Indenture Trustee, the Pass Through Trustee or the Owner
Participant shall prevent MTFC or the
EXHC-34
Operator or any subcharterer from, or increase the cost to MTFC or the Operator
or any subcharter of, obtaining insurance respecting the Vessel as MTFC or the
Operator or any subcharterer wishes. The proceeds of any such additional
insurance will be for the account of the party maintaining such additional
insurance.
SECTION 14. RIGHTS TO SUBCHARTER.
--------------------
14.01. [Intentionally Omitted]
14.02. MTFC may, without the consent of the Indenture Trustee, at any
time and from time to time, subcharter the Vessel to another Person (including
to Operator pursuant to the Initial Subcharter); provided that (i) such
--------
subcharter shall be subject and subordinate to this Indenture (and such
subcharter shall contain a provision providing that any subcharter permitted
thereunder shall be so subject and subordinate), (ii) MTFC shall remain
primarily liable under this Indenture, and all terms and conditions hereof and
of the other Operative Documents shall be complied with as though no such
subcharter was in existence and (iii) the Guaranty shall remain in full force
and effect. Any subcharterer under a subcharter permitted hereunder may sub-
subcharter the Vessel to another Person under a sub-subcharter that otherwise
complies with the provisions hereunder applicable to a subcharter hereunder.
MTFC shall give prompt written notice to the Indenture Trustee of any subcharter
or sub-subcharter of the Vessel.
18.01. [Intentionally Omitted]
18.02 Performance by Affiliates, Etc.; Rights. Any payment by the
---------------------------------------
Operator, Guarantor, any Affiliate of MTFC, or any subcharterer of any amount
payable by MTFC under any Operative Document shall constitute, as between the
Indenture Trustee and MTFC, payment of such amount by MTFC for all purposes of
this Indenture (including, without limitation, Section 5.02), and any
performance by the Operator, Guarantor, any Affiliate of the MTFC, or any
subcharterer of any obligation required to be performed by MTFC under any
Operative Document shall constitute, as between MTFC and the Indenture Trustee,
performance by MTFC of such obligation for all purposes of this Indenture.
Except as otherwise expressly provided herein, any right granted to MTFC in this
Indenture shall grant MTFC the right to exercise such right or permit such right
to be exercised by any assignee, subcharterer or transferee or MTFC permitted
hereunder or the Operator. The inclusion of specific references to obligations
or rights of any such assignee, subcharterer or transferee or the Operator in
certain provisions of this Indenture shall not in any way prevent or diminish
the application of the provisions of the sentences immediately preceding with
respect to obligations or rights in respect of which specific reference to any
such assignee, subcharterer or transferee or the Operator has not been made in
this Indenture.
SECTION 20. General. (a) As provided in the Relevant Date
-------
Supplement, effective upon the execution and delivery by MTFC and the Indenture
Trustee of the Relevant Date Supplement on the Relevant Date, MTFC assumed on a
full recourse basis all of the obligations of the Owner Trustee under this
Indenture and the Secured Notes and shall be entitled to all the rights
EXHC-35
and benefits of the Owner Trustee hereunder and thereunder, in each case to the
extent provided for in Exhibit C hereto, and the Owner Trustee is, effective
upon such execution and delivery on the Relevant Date, released from all
obligations and rights under this Indenture and the Secured Notes; provided,
--------
however, that any obligations or liabilities of the Owner Trustee in its
- -------
individual capacity incurred on or prior to the Relevant Date or arising out of
or based upon events occurring on or prior to the Relevant Date, shall remain
the responsibility of the Owner Trustee.
(b) As provided in Section 2 of the Relevant Date Supplement, MTFC
confirmed and ratified the security interest which the Owner Trustee granted to
the Indenture Trustee pursuant to the Granting Clause of this Indenture in all
of the Owner Trustee's right, title and interest in and to the Indenture Estate
and MTFC explicitly agreed that MTFC is acquiring the Vessel identified in such
Section 2 subject to such security interest, which shall remain in full force
and effect until the Lien of this Indenture on the Vessel is discharged in
accordance with the terms hereof, and the Indenture Trustee acknowledges that
the Charter and the obligations of MTFC thereunder as the Charterer have been
terminated, except as specifically provided for therein. Each of MTFC and the
Indenture Trustee hereby agree that: MTFC is acquiring the Vessel identified in
such Section 2 subject to such security interest, which shall remain in full
force and effect until the Lien of this Indenture on the Vessel is discharged in
accordance with the terms hereof, and the Indenture Trustee acknowledges that
the Charter and the obligations of MTFC thereunder as the Charterer have been
terminated, except as specifically provided for therein. Each of MTFC and the
Indenture Trustee hereby agrees that:
(i) the comma at the end of clause (i) of the paragraph preceding the
Granting Clause of this Indenture shall after the Relevant Date be deemed
to be "and"; the reference to the Owner Trustee in clause (ii) of the
paragraph preceding the Granting Clause of this Indenture shall after the
Relevant Date be deemed to be a reference to MTFC; the phrase "(other than
the Tax Indemnity Agreement)" shall after the Relevant Date be deleted, the
phrase ", and (iii) the performance and observance by the Owner Participant
of its covenants and agreements in the Operative Documents (other than the
Tax Indemnity Agreement)" in the paragraph preceding the Granting Clause of
this Indenture shall after the Relevant Date be deemed to be deleted; and
the phrase "(the obligations described in the above clauses (i), (ii) and
(iii) collectively, the "Indenture Indebtedness")" in the paragraph
----------------------
preceding the Granting Clause of this Indenture shall after the Relevant
Date be deemed to be "(the obligations described in the above clauses (i)
and (ii) collectively, the "Indenture Indebtedness")";
----------------------
(ii) the paragraph preceding clause (a) of the Granting Clause of this
Indenture shall be deemed amended to provide that any reference to the
Owner Trustee contained in such paragraph shall after the Relevant Date be
deemed to be a reference to MTFC;
(iii) clauses (a) through (j) of the Granting Clause of this
Indenture and the two paragraphs following clause (j) of such Granting
Clause shall be deemed amended to read as follows after the Relevant Date:
EXHC-36
(a) the Vessel, which is both (x) described in Schedule 1 or as
may be described in any Indenture Supplement or any other supplement to
this Indenture and (y) as to which MTFC agrees, pursuant to Section 2 of
the Relevant Date Supplement, is subject to the security interest and Lien
of the Indenture, including, without limitation, any Component or
Replacement Component thereof or Modification thereto which, pursuant to
the terms of Article XI of this Indenture, are at any time subject to the
Lien of this Indenture; and
(b) all rights or property which may be received upon the
exercise of any remedy or option contained in any of the above-described
instruments and all proceeds in whatever form of all or any part of any of
the foregoing;
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
(e) [Intentionally Omitted]
(f) [Intentionally Omitted]
(g) [Intentionally Omitted]
(h) [Intentionally Omitted]
SUBJECT to the rights of MTFC hereunder.
Section 21. Statement of Intention. The Indenture Trustee, MTFC and
----------------------
the Owner Trustee acknowledge that the intent of the provisions contained in
this Article XI is, following the termination of the Charter pursuant to Section
6.1 thereof or 16.2(d) of the Participation Agreement, to provide for the
Indenture Trustee to have rights similar to those enjoyed by the Owner Trustee
under the Charter and for MTFC to have rights similar to those enjoyed by it
under the Charter. The Indenture Trustee and MTFC hereby agree that this
Article XI shall be construed and interpreted in a manner consistent with the
intent expressed in this Section 21.
(L) Sections 10.6 and 14 of the Participation Agreement shall read as
follows:
10.6. Further Assurances. MTFC, at its own cost and expense, will
------------------
cause to be promptly and duly taken, executed, acknowledged and delivered all
such further acts, documents and assurances as the Owner Trustee, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee reasonably may
request from time to time in order to carry out more effectively the intent and
purposes of this Agreement, the Pass Through Trust Agreement and the other
Operative Documents and the transactions contemplated hereby and thereby. MTFC,
at its own cost and expense, will cause the Indenture and supplements or
amendments thereto and restatements thereof
EXHC-37
and all financing statements, fixture filings and other documents, to be
recorded or filed at such places and times and in such manner, as may be
necessary or as may be reasonably requested so long as any Secured Notes are
Outstanding, by the Indenture Trustee or the Pass Through Trustees in order to
establish, preserve, protect and perfect the mortgage and security interest of
the Indenture Trustee in the Indenture Estate granted or intended to be created
under the Indenture and the Indenture Trustee's rights under this Agreement and
the other Operative Documents, subject only to Permitted Liens.
10.13. Certain References and Obligations. (a) After the Relevant
----------------------------------
Date, the provisions of Section 10 which require or permit any action by, any
consent, approval or authorization of, the furnishing of any document, paper or
information to, or the performance of any other obligation to, the Owner Trustee
or the Owner Participant shall not be effective, and the Sections containing
such provisions shall be read as though there were no such references to any
such requirements or permissions.
Section 14. [Intentionally Omitted]
(M) (I) Section 1.4(c) of the Pass Through Trust Agreement shall read
as follows:
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates Outstanding have given any
direction, consent or waiver (a "Direction"), under this Agreement, Certificates
---------
owned by the Guarantor, MTFC or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding for purposes of any such determination. In
determining whether the Trustee shall be protected in relying upon any such
Direction, only Certificates about which the Trustee knows to be so owned shall
be so disregarded. Notwithstanding the foregoing, (i) if any such Person owns
100% of the Certificates Outstanding, such Certificates shall not be so
disregarded as aforesaid, and (ii) if any amount of Certificates so owned by any
such Person have been pledged in good faith, such Certificates shall not be
disregarded as aforesaid if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Certificates and that
the pledgee is not the Guarantor, MTFC or any Affiliate thereof.
(II) Sections 6.3 and 12.12 of the Pass Through Trust Agreement shall
read as follows:
Section 6.03. Judicial Proceedings Instituted by Trustee
------------------------------------------
(a) Trustee May Bring Suit. If there shall be a failure to make
----------------------
payment of the principal of or interest on any Secured Note held in the Trust
when due and payable, then the Trustee, in its own name, and as trustee of an
express trust, as holder of such Secured Notes, shall be, to the extent
permitted by and in accordance with the terms of the Note Documents, entitled
and empowered to institute any suits, actions or proceedings at law, in equity
or otherwise, for the collection of the sums so due and unpaid on such Secured
Notes and may prosecute any such claim
EXHC-38
or proceeding to judgment or final decree with respect to the whole amount of
any such sums so due and unpaid.
(b) Trustee May File Proofs of Claim; Appointment of Trustee as
-----------------------------------------------------------
Attorney-in-Fact in Judicial Proceedings. The Trustee in its own name, or as
- ----------------------------------------
trustee of an express trust, or as attorney-in-fact for the Certificateholders,
or in any one or more of such capacities (irrespective of whether distributions
on the Certificates shall then be due and payable, or the payment of the
principal on the Secured Notes shall then be due and payable, as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand to the Indenture Trustee for the payment of overdue
principal, premium (if any) or interest on the Secured Notes), shall be entitled
and empowered to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Certificateholders allowed in any receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or any other judicial proceedings
relative to the Guarantor or the Indenture Trustee, their respective creditors
or property. Any receiver, assignee, trustee, liquidator, sequestrator (or
similar official) in any such judicial proceeding is hereby authorized by each
Certificateholder to make payments in respect of such claim to the Trustee, and
in the event that the Trustee shall consent to the making of such payments
directly to the Certificateholders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel. Nothing contained in this Agreement shall be
deemed to give to the Trustee any right to accept or consent to any plan of
reorganization or otherwise by action of any character for any such proceeding
to waive or change in any way any right of any Certificateholder.
Section 12.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein:
(a) The phrase "(with the consent of the Owner Trustee, if any,
relating to such Certificates, which consent shall not be unreasonably
withheld)" in Section 9.2 shall after the Relevant Date be deemed to be deleted;
and
(b) Sections 1.2, 7.2, 7.8(b), 7.8(c), 7.8(e), 7.8(f), 7.11(a),
7.11(d), 9.2, 11.1 and 12.3 shall be deemed amended to provide that any
reference to the Owner Trustee contained in such Sections (but not any reference
to the "Owner Trustee or its designee the Company" in such Sections) shall after
the Relevant Date be deemed to be deleted.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
All provisions of this Indenture, the other Operative Documents and
the Pass Through Trust Agreement not specifically amended by operation of this
Exhibit C shall remain in full force and effect.
EXHC-39
Exhibit A to Exhibit C
to Indenture
------------
(FORM OF SERIES 1997-B SECURED NOTE)
MOBIL TRANSPORT FINANCE COMPANY INC.
Series 1997-B Secured Non-Recourse Note
Due _________ __, ____
Sale and Charter of Certain Double-Hulled Product Tanker
--------------------------------------------------------
Registered No. _____
$ New York, New York
________, 199__
Interest Rate Per Annum: ___%
MOBIL TRANSPORT FINANCE COMPANY INC., a Delaware Corporation ("MTFC"),
----
for value received hereby promises to pay to State Street Bank and Trust
Company, or registered assigns, on or before _________ __, ____, as herein
provided, the principal sum of ____ DOLLARS ($_____), and to pay interest on
this Secured Note from time to time from the date hereof until the principal
amount hereof shall have been paid in full at the rate of [ ]% per annum (based
on a 360-day year of twelve 30-day months), and (to the extent not prohibited by
applicable law) to pay interest on any overdue principal and interest at the
Overdue Rate. The principal of this Secured Note shall be payable on each
January 31 and July 31, or both, in accordance with the schedule annexed hereto.
Subject to 2.03(b) of the Indenture, all accrued and unpaid interest on this
Secured Note shall be payable on each January 31 and July 31 in each year
commencing _________ __, ____.
This Secured Note is one of the Secured Notes issued by MTFC pursuant
to the terms of the Trust Indenture, Mortgage, Assignment of Charter and
Security Agreement, dated as of September 30, 1997, between the Owner Trustee
and State Street Bank and Trust Company, not in its individual capacity but
solely as Indenture Trustee thereunder for the Holder of this Secured Note and
the Holders of all other Secured Notes Outstanding thereunder (the "Indenture
---------
Trustee"), as such Trust Indenture, Mortgage, Assignment of Charter and Security
- -------
Agreement has been assumed by MTFC pursuant to the Indenture Supplement dated
the date hereof between MTFC and the Indenture Trustee and as such Trust
Indenture, Mortgage, Assignment of Charter and Security Agreement has been
amended pursuant to the Relevant Amendment (such Trust Indenture, Mortgage,
Assignment of Charter and Security Agreement as so assumed and amended, the
"Indenture"). Capitalized terms
- ----------
EXHC-40
used in this Secured Note and not otherwise defined shall have the respective
meanings assigned to them in the Indenture.
Each payment of principal and interest shall be due and payable at the
times, places and in the manner as specified herein and in the Indenture.
Each payment on this Secured Note shall be applied, first, to the
-----
payment of accrued interest on this Secured Note to the date of such payment and
second, to the payment of any principal on this Secured Note then due hereunder.
- ------
This is MTFC's Series 1997-B Secured Notes issued pursuant to the
Indenture, which together with any Additional Notes and any note or notes issued
upon a transfer of, in exchange or substitution respectively therefor in
accordance with the terms of the Indenture, are equally and ratably secured by
the Indenture, except as expressly provided therein. The property of MTFC
(excluding Excepted Payments) included in the Indenture Estate are pledged or
mortgaged to the Indenture Trustee to the extent provided in the Indenture as
security for the payment of the principal of and interest on this Secured Note
and all other Secured Notes issued and Outstanding from time to time under the
Indenture. Reference is hereby made to the Indenture for a description of the
Indenture Estate, and for a statement of the rights of the Holders of, and the
nature and extent of the security for, this Secured Note and of the rights of,
and the nature and extent of the security for, the Holders of the other Secured
Notes and of certain rights of MTFC, as well as for a statement of the terms and
conditions of the trust created by the Indenture, to all of which terms and
conditions in the Indenture the Holder agrees by its acceptance of this Secured
Note.
This Secured Note is subject to redemption, in whole, all as specified
in Article III of the Indenture. This Secured Note is also subject to
refunding, or purchase, all as specified in Sections 3.02 and 3.05 of the
Indenture.
In the event an Indenture Event of Default shall occur and be
continuing, the unpaid balance of the principal of the Secured Notes, together
with all accrued but unpaid interest, may be declared or may otherwise become
due and payable in the manner and with the effect provided in Article V of the
Indenture.
The Secured Notes are issuable only as registered notes. There shall
be maintained a note register for the purpose of registering transfers and
exchanges of the Secured Notes at the principal corporate trust office of the
Indenture Trustee, or of any successor Indenture Trustee, in the manner provided
in Section 2.05 of the Indenture. MTFC and the Indenture Trustee shall deem and
treat the Person in whose name this Secured Note is registered on the Note
Register as the absolute owner hereof (whether or not this Secured Note shall be
overdue) for the purpose of receiving payments of principal and interest and for
all other purposes, and neither MTFC nor the Indenture Trustee shall be affected
by any notice to the contrary.
EXHC-41
All payments of principal and interest to be made by MTFC and, except
as otherwise provided in the Operative Documents, all payments of any other
amounts payable by or on behalf of MTFC under the Secured Notes or under the
Indenture, shall be made only from the income and proceeds from the Indenture
Estate, and only to the extent that the Indenture Trustee shall have received
sufficient income and proceeds from the Indenture Estate to make such payments
in accordance with the Indenture. The Holder, by its acceptance of this Secured
Note, agrees that it will look solely to the income and proceeds from the
Indenture Estate to the extent available for payment as provided in the
Indenture, and that the Indenture Trustee (whether in its individual or trust
capacity) shall not be personally liable to the Indenture Trustee or to the
Holder for any amounts payable under this or any Secured Note, nor, except as
specifically provided in the Indenture or any other Operative Document, for any
amounts payable or any liability, under the Indenture.
This Secured Note shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been signed by the Indenture
Trustee.
No delay or omission of the Holder to exercise its rights hereunder
shall impair any such right or power or shall be construed to be a waiver of any
Indenture Event of Default, or an acquiescence therein. No waiver of any
Indenture Event of Default shall be construed, taken or held to be a waiver of
any other Indenture Event of Default, or a waiver, acquiescence in, or consent
to any further or succeeding Indenture Event of Default. MTFC waives demand,
notice and protest in any defense by reason of extension of time for payment or
other indulgence granted by the Holder.
THIS SECURED NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
EXHC-42
IN WITNESS WHEREOF, Mobil Transport Finance Company Inc. has caused
this Secured Note to be duly executed.
MOBIL TRANSPORT FINANCE COMPANY INC.
By:
--------------------------------
Title:
-----------------------------
EXHC-43
Certificate of Authentication
-----------------------------
This is the Series 1997-B Secured Note of Mobil Transport Finance
Company Inc. described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity but solely as Indenture
Trustee
By:
-------------------------------------------------
Title:
----------------------------------------------
EXHC-44
Series 1997-B Secured Note
Amortization Schedule
---------------------
Regular Scheduled Payment
Distribution Percentage of Remaining
Date Unpaid Principal Amount
---- -----------------------
EXHC-45
Exhibit D
to Indenture
------------
TRUST INDENTURE, MORTGAGE, ASSIGNMENT OF
CHARTER AND SECURITY AGREEMENT
SUPPLEMENT NO. ____
This Trust Indenture Supplement No. ____, dated ____________, between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as expressly provided herein, but solely as Owner
Trustee under the Trust Agreement (the "Owner Trustee") and STATE STREET BANK
-------------
AND TRUST COMPANY, a Massachusetts trust company, not in its individual
capacity, except as expressly provided herein, but solely as Indenture Trustee
(the "Indenture Trustee"):
-----------------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, terms used herein and not otherwise defined shall have the respective
meanings assigned to them in the Indenture;
WHEREAS, the Indenture was recorded in [ ]; and
WHEREAS, the Indenture provides for the execution and delivery of one or more
supplements substantially in the form of this Indenture Supplement, which
supplement shall describe the property from time to time included in the
Indenture Estate;
NOW, THEREFORE, THIS INDENTURE SUPPLEMENT WITNESSETH, that, to secure (i) the
prompt payment when and as due and payable of the principal of and interest on
all the Secured Notes from time to time Outstanding under the Indenture and all
other amounts payable to the Holders thereunder, under the Participation
Agreement and under the Secured Notes, (ii) the performance and observance by
the Owner Trustee of all its covenants and agreements for the benefit of the
Indenture Trustee or the Holders in the Indenture, in the Participation
Agreement and in the Secured Notes contained, and (iii) the performance and
observance by the Owner Participant of its covenants and agreements in the
Participation Agreement contained, and for the uses and purposes and subject to
the terms and provisions of the Indenture, and in consideration of the premises
and of the covenants contained in the Indenture and of the acceptance of the
Secured Notes by the Holders thereof, the Owner Trustee, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, has
granted, assigned, bargained, released, conveyed, transferred, mortgaged,
hypothecated, pledged, confirmed and created a security interest in and hereby
presently grants, assigns, bargains, releases, conveys, transfers, mortgages,
hypothecates, pledges, confirms and creates a security interest in, to and for
the benefit of the Indenture Trustee in all of the estate right, title and
interest of the Owner Trustee in and to the Vessel described in Annex I to this
Indenture Supplement, including, without limitation, any Component or
Replacement Component
thereof or Modification thereto which, pursuant to the terms of the Charter, are
at any time the property of the Owner Trustee, and any Charter Supplement
covering such Asset.
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee, its
successors and assigns, for the benefit and security of the Holders, without any
priority of any Secured Note over any other except as otherwise expressly
provided in the Indenture, and for the uses and purposes and subject to the
terms and provisions set forth in the Indenture.
This Indenture Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference in this Indenture Supplement and is hereby ratified, approved and
confirmed.
This Indenture Supplement may be executed by the Owner Trustee and the Indenture
Trustee in separate counterparts, each of which, when so executed and delivered,
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
This Indenture Supplement has been delivered in the State of New York and shall
be governed by, and shall be construed in accordance with, the laws of the State
of New York.
EXHD-2
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
Supplement to be duly executed, all as of the date first written above.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in
its individual capacity, except as expressly
provided herein, but solely as Owner Trustee
By:________________________________
Its:________________________________
STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity, except as expressly provided
herein, but solely as Indenture Trustee
By:________________________________
Its: ________________________________
EXHD-3
Exhibit E
to Indenture
------------
RELEVANT DATE SUPPLEMENT
This Relevant Date Supplement, dated _________, between Mobil
Transport Finance Company Inc., a Delaware corporation ("MTFC"), and STATE
----
STREET BANK AND TRUST COMPANY, a Massachusetts trust company, not in its
individual capacity, except as expressly provided herein, but solely as
Indenture Trustee (the "Indenture Trustee"):
-----------------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Indenture;
WHEREAS, the Indenture was recorded in [ ]; and
WHEREAS, the Indenture provides for the execution and delivery of a
supplement substantially in the form of this Supplement, which supplement shall
provide for certain matters relating to the assumption by MTFC of the
obligations of the Owner Trustee pursuant to Section 3.04 of the Indenture;
NOW, THEREFORE, the parties hereto agree as follows:
1. Effective as of the date of this Supplement (the "Relevant Date"),
-------------
MTFC assumes on a full recourse basis all of the obligations of the Owner
Trustee under the Indenture and the Secured Notes and shall be entitled to all
the rights and benefits of the Owner Trustee thereunder, in each case to the
extent provided for in Exhibit C thereto, and the Owner Trustee is, effective
upon the Relevant Date, released from all obligations and rights under the
Indenture and the Secured Notes; provided, however, that any obligations or
-------- -------
liabilities of the Owner Trustee in its individual capacity incurred on or prior
to the Relevant Date or arising out of or based upon events occurring on or
prior to the Relevant Date, shall remain the responsibility of the Owner
Trustee.
2. MTFC confirms and ratifies the security interest and Lien which the
Owner Trustee granted to the Indenture Trustee pursuant to the Granting Clause
of the Indenture in all of the Owner Trustee's right, title and interest in and
to the Indenture Estate and MTFC explicitly agrees that MTFC is acquiring the
Vessel, and all property relating thereto, constituting a portion of the
Indenture Estate, subject to such security interest and Lien, which shall remain
in full force and effect until the Lien of the Indenture on the Vessel is
discharged in accordance with the terms thereof, and the Indenture Trustee
acknowledges that the Charter and the obligations of MTFC thereunder as the
Charterer have been terminated, except as specifically provided for therein.
2. MTFC confirms and ratifies the security interest and Lien which
the Owner Trustee granted to the Indenture Trustee pursuant to the Granting
Clause of the Indenture in all of the Owner Trustee's right, title and interest
in and to its undivided interest in the Vessel and MTFC explicitly agrees that
MTFC is acquiring the Owner Trustee's interest in the Vessel, and all property
relating thereto subject to the Lien of the Indenture, subject to such security
interest and Lien, which shall remain in full force and effect until the Lien of
the Indenture in the Vessel is discharged in accordance with the terms thereof,
and the Indenture Trustee acknowledges that the Charter and the obligations of
MTFC thereunder as the Charterer have been terminated, except as specifically
provided for therein.
3. This Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference in this Supplement and is hereby ratified, approved
and confirmed.
4. This Supplement may be executed by MTFC, and the Indenture Trustee
in separate counterparts, each of which, when so executed and delivered, shall
be an original, but all such counterparts shall together constitute but one and
the same instrument.
5. This Supplement has been delivered in the State of New York and
shall be governed by, and shall be construed in accordance with, the laws of the
State of New York.
EXHE-2
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
Supplement to be duly executed, all as of the date first written above.
MOBIL TRANSPORT FINANCE COMPANY INC.
By:________________________________
Its:________________________________
STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity, except as expressly provided herein, but solely as Indenture
Trustee
By:________________________________
Its: ________________________________
EXHE-3