Exhibit 4.22.18
RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:
XXXXX X. XXXX, ESQ.
SKADDEN, ARPS, SLATE, XXXXXXX & XXXX, LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036
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INDENTURE OF TRUST, DEED OF TRUST,
ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FINANCING STATEMENT
Dated as of October 18, 2001
between
SOUTH POINT OL-4, LLC
and
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
as Indenture Trustee and Account Bank
-----------------------------------------
SOUTH POINT FACILITY
===============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................. 10
SECTION 2. THE LESSOR NOTES........................................................ 11
Section 2.1. Limitation on Lessor Notes....................................... 11
Section 2.2. Initial Lessor Notes............................................. 11
Section 2.3. Execution and Authentication of Lessor Notes..................... 12
Section 2.4. Issuance and Terms of the Initial Lessor Notes................... 12
Section 2.5. Payments from Indenture Estate Only; No Personal Liability of
the Owner Lessor, the Owner Participant or the Indenture
Trustee.......................................................... 13
Section 2.6. Method of Payment................................................ 14
Section 2.7. Application of Payments.......................................... 15
Section 2.8. Registration, Transfer and Exchange of Lessor Notes.............. 16
Section 2.9. Mutilated, Destroyed, Lost or Stolen Lessor Notes................ 17
Section 2.10. Redemptions; Assumption.......................................... 17
Section 2.11. Payment of Expenses on Transfer.................................. 22
Section 2.12. Additional Lessor Notes.......................................... 23
Section 2.13. Restrictions of Transfer Resulting from Federal Securities
Laws; Legend..................................................... 26
Section 2.14. Security for and Parity of Lessor Notes.......................... 26
Section 2.15. Acceptance of the Indenture Trustee.............................. 26
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM INDENTURE ESTATE... 27
Section 3.1. Distribution of Periodic Rent.................................... 27
Section 3.2. Payments Following Event of Loss or Other Early Termination...... 29
Section 3.3. Payments After Lease Indenture Event of Default.................. 30
Section 3.4. Investment of Certain Payments Held by the Indenture Trustee..... 31
Section 3.5. Application of Certain Other Payments............................ 31
Section 3.6. Other Payments................................................... 32
Section 3.7. Excepted Payments................................................ 32
Section 3.8. Distributions to the Owner Lessor................................ 33
Section 3.9. Payments Under Assigned Documents................................ 33
Section 3.10. Disbursement of Amounts Received by the Indenture Trustee........ 33
i
SECTION 4. COVENANTS OF OWNER LESSOR; DEFAULTS; REMEDIES OF
INDENTURE TRUSTEE....................................................... 37
Section 4.1. Covenants of Owner Lessor........................................ 37
Section 4.2. Lease Indenture Events of Default................................ 38
Section 4.3. Remedies of the Indenture Trustee................................ 40
Section 4.4. Right to Cure Certain Lease Events of Default.................... 43
Section 4.5. Rescission of Acceleration....................................... 46
Section 4.6. Return of Indenture Estate, Etc.................................. 47
Section 4.7. Power of Sale and Other Remedies................................. 48
Section 4.8. Appointment of Receiver.......................................... 50
Section 4.9. Remedies Cumulative.............................................. 51
Section 4.10. Waiver of Various Rights by the Owner Lessor..................... 51
Section 4.11. Discontinuance of Proceedings.................................... 52
Section 4.12. No Action Contrary to the Facility Lessee's Rights Under the
Facility Lease................................................... 52
Section 4.13. Right of the Indenture Trustee to Perform Covenants, Etc......... 53
Section 4.14. Further Assurances............................................... 53
Section 4.15. Waiver of Past Defaults.......................................... 53
SECTION 5. DUTIES OF INDENTURE TRUSTEE; CERTAIN RIGHTS AND
DUTIES OF OWNER LESSOR.................................................. 54
Section 5.1. Notice of Action Upon Lease Indenture Event of Default........... 54
Section 5.2. Actions Upon Instructions Generally.............................. 54
Section 5.3. Action Upon Payment of Lessor Notes or Termination of
Facility Lease................................................... 55
Section 5.4. Compensation of the Indenture Trustee; Indemnification........... 55
Section 5.5. No Duties Except as Specified; No Action Except Under
Facility Lease, Indenture or Instructions........................ 55
Section 5.6. Certain Rights of the Owner Lessor............................... 56
Section 5.7. Restrictions on Dealing with Indenture Estate.................... 59
Section 5.8. Filing of Financing Statements and Continuation Statements....... 59
SECTION 6. INDENTURE TRUSTEE AND OWNER LESSOR...................................... 60
Section 6.1. Acceptance of Trusts and Duties.................................. 60
Section 6.2. Absence of Certain Duties........................................ 62
Section 6.3. Representations and Warranties................................... 63
Section 6.4. No Segregation of Moneys; No Interest............................ 63
Section 6.5. Reliance; Agents; Advice of Experts.............................. 64
ii
SECTION 7. SUCCESSOR INDENTURE TRUSTEES AND SEPARATE
TRUSTEES................................................................ 65
Section 7.1. Resignation or Removal of the Indenture Trustee; Appoin-
tment of Successor............................................... 65
Section 7.2. Appointment of Additional and Separate Trustees.................. 67
SECTION 8. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS..................................................... 69
Section 8.1. Supplemental Indenture and Other Amendment With Consent;
Conditions and Limitations....................................... 69
Section 8.2. Supplemental Indentures and other Amendments Without
Consent.......................................................... 70
Section 8.3. Conditions to Action by the Indenture Trustee.................... 72
SECTION 9. MISCELLANEOUS........................................................... 72
Section 9.1. Surrender, Defeasance and Release................................ 72
Section 9.2. Conveyances Pursuant to the Site Lease........................... 73
Section 9.3. Appointment of the Indenture Trustee as Attorney; Further
Assurances....................................................... 73
Section 9.4. Indenture for Benefit of Certain Persons Only.................... 73
Section 9.5. Notices; Xxxxxxxxxx Documents, etc............................... 74
Section 9.6. Severability..................................................... 76
Section 9.7. Limitation of Liability.......................................... 76
Section 9.8. Written Changes Only............................................. 76
Section 9.9. Counterparts..................................................... 76
Section 9.10. Successors and Permitted Assigns................................. 77
Section 9.11. Headings and Table of Contents................................... 77
Section 9.12. Governing Law.................................................... 77
Section 9.13. Reorganization Proceedings with Respect to the Lessor Estate..... 77
Section 9.14. Withholding Taxes: Information Reporting......................... 78
Section 9.15. Fixture Financing Statement...................................... 80
iii
EXHIBITS
Exhibit A Description of Facility Site
Exhibit B Form of Lessor Note
Exhibit C Form of Certificate of Authentication
Exhibit D Description of the Facility
APPENDIX A Definitions
iv
INDENTURE OF TRUST, DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY
AGREEMENT AND FINANCING STATEMENT
This INDENTURE OF TRUST, DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FINANCING STATEMENT (as amended, supplemented or
otherwise modified from time to time in accordance with the provisions hereof,
this "Indenture"), dated as of October 18, 2001, between SOUTH POINT OL-4, LLC,
a Delaware limited liability company created for the benefit of the Owner
Participant referred to below, as trustor (as such term is defined in Arizona
Revised Statutes, Section 33-801, et seq.) (the "Owner Lessor"), having an
address as set forth in Section 9.5 of this Indenture, STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION as beneficiary and trustee
(as such term is defined in Arizona Revised Statutes, Section 33-801, et seq.)
on behalf of the Noteholders (the "Indenture Trustee") and as the Account Bank,
having an address as set forth in Section 9.5 of this Indenture.
WITNESSETH:
WHEREAS, Calpine Construction Finance Company ("CCFC") has assigned the
Undivided Interest and the Ground Interest to the Owner Lessor pursuant to the
certain Assignment Agreement, a memorandum of which shall be recorded with this
Indenture in the appropriate registry of land records described in Exhibit A
attached hereto;
WHEREAS, the Owner Lessor has entered into the Facility Lease, dated as
of the date hereof (as amended, supplemented or otherwise modified from time to
time in accordance with the provisions thereof, the "Facility Lease"), with
South Point Energy Center, LLC (the "Facility Lessee") pursuant to which the
Facility Lessee has subleased from the Owner Lessor for a term of years the
Owner Lessor's Undivided Interest in the Facility;
WHEREAS, the Owner Lessor has entered into the Facility Site Lease,
dated as of the date hereof (as amended, supplemented or otherwise modified from
time to time in accordance with the provisions thereof, the "Facility Site
Lease"), with the Facility Lessee pursuant to which the Facility Lessee has
subleased the Ground Interest from the Owner Lessor for a term of years;
1
WHEREAS, the Facility is more particularly described on Exhibit D hereto
and made a part hereof and the Facility Site is more particularly described on
Exhibit A hereto and made a part hereof;
WHEREAS, in accordance with this Indenture, the Owner Lessor will (i)
execute and deliver the Lessor Notes, the proceeds of which will be used by the
Owner Lessor to finance a portion of the Assumption Price for the Undivided
Interest assumed from CCFC and (ii) grant to the Indenture Trustee the security
interests herein provided;
WHEREAS, this Indenture is regarded as and shall constitute a deed of
trust under the laws of the State of Arizona, as an absolute and current
assignment of rents, leases, income, issues, royalties and profits pursuant to
the laws of the State of Arizona including, among other provisions, Arizona
Revised Statutes ("A.R.S.") Section(s) ("[sec]") 33-702.B, 33-807(C) and 12-241,
et seq. as a security agreement and grant by the Owner Lessor, as debtor, to and
in favor of the Indenture Trustee, as the Secured Party, of a security interest
in the Indenture Estate (as such term is hereinafter defined) under the Uniform
Commercial Code as enacted and in effect from time to time in the State of
Arizona and under the Uniform Commercial Code as enacted and in effect from time
to time in the States of New York and Delaware, and as a fixture filing and a
financing statement under the laws of the Uniform Commercial Code as enacted and
in effect in the State of Arizona from time to time;
WHEREAS, the Owner Lessor and the Indenture Trustee desire to enter
into this Indenture, to, among other things, provide for (a) the issuance by the
Owner Lessor of the Lessor Notes to be issued on the Closing Date, and
Additional Lessor Notes from time to time, (b) the conveyance and assignment to
the Indenture Trustee on the Closing Date of the Undivided Interests conveyed to
the Owner Lessor and the Owner Lessor's right, title and interest in and under
the Operative Documents executed in connection therewith and all payments and
other amounts received hereunder or thereunder in accordance herewith (excluding
Excepted Payments) and (c) security for the payment and performance of the
obligations described or referred to in this Indenture;
WHEREAS, all things have been done to make the Lessor Notes, when
executed by the Owner Lessor, authenticated and delivered hereunder and issued,
the valid obligations of the Owner Lessor; and
WHEREAS, all things necessary to make this Indenture the valid, binding
and legal obligation of the Owner Lessor, for the uses and purposes herein set
forth, in accordance with its terms, have been done and performed and have
happened.
2
NOW THEREFORE, in consideration of the foregoing premises, the mutual
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in order to secure
(i) the prompt payment when and as due of the principal of and the Make-Whole
Amount, if any, and interest on the Lessor Notes and of all other amounts owing
with respect to all Lessor Notes from time to time outstanding hereunder, and
the prompt payment when and as due of any and all other amounts from time to
time owing in respect of the Secured Indebtedness and (ii) the performance and
observance by the Owner Lessor for the benefit of the holders of the Lessor
Notes and the Indenture Trustee of all other obligations, agreements, and
covenants of the Owner Lessor set forth hereinafter and in the Lessor Notes, the
Operative Documents and the other documents, certificates and agreements
delivered in connection therewith:
GRANTING CLAUSE:
The Owner Lessor hereby irrevocably grants, conveys, assigns,
transfers, pledges, bargains, sells and confirms unto the Indenture Trustee as
trustee under ARS [sec] 33-801, et seq., in trust, with power of sale, for the
benefit of the holders of the Lessor Notes from time to time, a first priority
security interest in and deed of trust lien on all estate, right, title and
interest of the Owner Lessor in, to and under the following described real and
personal property, rights, interests and privileges, whether now held or
hereafter acquired and all easements, rights of way, access agreements,
leasehold interests, leasehold and other estates, ground leases, hereditaments
and other rights now or hereafter existing, covering all or part thereof, or
appurtenant or attaching thereto, together with all structures, buildings and
other improvements now or hereafter upon, constructed upon or located in whole
or in part upon the same; together with all fixtures, machinery, and all
articles and items of property now or hereafter attached to, or used or adapted
for use in the operation, maintenance or use thereof; together with all rents,
issues, royalties, income and profits thereof under present and future leases,
occupancy and use agreements (which collectively, including all property
hereafter specifically subjected to the security interest created by this
Indenture by any supplement hereto, exclusive of Excepted Payments) are included
within, and are hereafter referred to as, the "Indenture Estate"):
(1) the Undivided Interest, the Owner Lessor's interest in any
Components; the Owner Lessor's interest in any Improvements; the Ground
Interest; the Facility Lease and all payments of any kind by the Facility Lessee
thereunder (including Rent); any rights of the Owner Lessor as assignee of the
Facility Lessee under the Facility Lease; the Facility Site Lease and all
payments of any kind by the Facility Lessee thereunder; the Assignment Agreement
(and all rights with respect to the Ground Lease conveyed
3
thereby); the Owner Lessor's interest in all tangible property located on or at
or attached to the Facility Site as to which an interest in such tangible
property arises under applicable real estate law ("fixtures"); the Calpine
Guaranty, the South Point Ground Lease, the Ownership and Operation Agreement
and all and any interest in any property now or hereafter granted to the Owner
Lessor pursuant to any provision of the Facility Lease; and each other
Operative Document to which the Owner Lessor is a party other than the Tax
Indemnity Agreement and the LLC Agreement (the Undivided Interest, the Owner
Lessor's interest in any Components, the Owner Lessor's interest in any
fixtures, Improvements and the Ground Interest are collectively referred to as
the "Property Interest" and the documents specifically referred to above in
this paragraph (1) are collectively referred to as the "Assigned Documents"),
including, without limitation, (x) all rights of the Owner Lessor to receive
any payments or other amounts or, subject to Section 5.6 hereof, to exercise
any election or option or to make any decision or determination or to give or
receive any notice, consent, waiver or approval or to make any demand or to
take any other action under or in respect of any such document, to accept
surrender or redelivery of the Property Interest or any part thereof, as well
as all the rights, powers and remedies on the part of the Owner Lessor, whether
acting under any such document or by statute or at law or in equity or
otherwise, arising out of any Lease Default or Lease Event of Default and (y)
any right to restitution from the Facility Lessee, any sublessee or any other
person in respect of any determination of invalidity of any such document;
(2) all rents (including Periodic Rent and Supplemental Rent),
royalties, issues, profits, revenues, proceeds, damages, claims, warranties and
other income from the property described in this Granting Clause, including,
without limitation, all payments or proceeds payable to the Owner Lessor as the
result of the sale of the Property Interest or the lease or other disposition of
the Property Interest, and all estate, right, title and interest of every nature
whatsoever of the Owner Lessor in and to such rents, issues, profits, revenues
and other income and every part thereof (the "Revenues");
(3) any sublease of the Facility and any assignment thereof now or
hereafter in effect, including, without limitation, (i) all rents or other
amounts or payments of any kind paid or payable by the obligor(s) thereunder or
in respect thereof and all collateral security or credit support with respect
thereto (whether cash or in the nature of a guarantee, letter of credit, credit
insurance, lien on or security interest in property or otherwise) for the
obligations of the sublessee thereunder as well as all rights of the Owner
Lessor to enforce payment of any such rents, amounts or payments, (ii) all
rights of the Owner Lessor to exercise any election or option or to make any
decision or determination or to give or receive any notice, consent, waiver or
approval or to take any other action under or in respect of any sublease of the
Facility and any assignment thereof
4
or to accept surrender or redelivery of the Facility or any part thereof, as
well as all the rights, powers and remedies on the part of the Owner Lessor,
whether acting under any sublease of the Facility or any assignment thereof or
by statute or at law or in equity, or otherwise, arising out of any default
under such sublease or any assignment thereof, and (iii) any right to
restitution from the Facility Lessee, the applicable sublessee or any guarantor
of such sublessee in respect of any determination of invalidity of any sublease
of the Facility or any assignment thereof;
(4) all condemnation proceeds with respect to the Property Interest or
any part thereof (to the extent of the Owner Lessor's interest therein), and all
proceeds (to the extent of the Owner Lessor's interest therein) of all insurance
maintained pursuant to Section 11 of the Facility Lease or otherwise;
(5) all other property of every kind and description and interests
therein now held or hereafter acquired by the Owner Lessor pursuant to the terms
of any Assigned Document, wherever located; and
(6) all of Owner Xxxxxx's right, title and interest conveyed to the
Indenture Trustee in and relating to the following :
(i) The real property that is described in and made subject to
this Indenture (the "Real Property") the fee simple owner of which is
the United States of America, in trust for the Fort Mojave Indian Tribe
("Owner"), as evidenced by patent of record in Mohave County, Arizona
which is on file with the United States Department of Interior, Bureau
of Indian Affairs, Albuquerque, New Mexico Regional Office (the "BIA");
and
(ii) The leasehold estate interest in the Real Property which was
created pursuant to the terms and conditions of that certain Amended and
Restated Ground Lease Agreement, being BIA Lease No. B-1778-FM, approved as
of August 19, 1999, by and between Owner and Calpine South Point, LLC, a
Delaware limited liability company, as Lessee, and Fort Mojave Indian
Tribe, a federally recognized Indian Tribe, as Lessor, a memorandum of
which Ground Lease, as amended, was recorded on October 29, 1999 in Book
3399 of Official Records, page 822, Records of Mohave County, Arizona and
filed in the Land Titles and Records Office as document number 000-000-00
and certificate of merger filed in the Land Titles and Records Office as
document number 000-000-00 (collectively the "Ground Lease"). The Lessee's
interests in and to the Ground Lease have been duly, properly and
effectively assigned to the Owner Lessor, pursuant to that certain
Assignment Agreement, dated as of the date
5
hereof, which shall have been recorded in the records of Mohave County,
Arizona and filed with the BIA; and
(7) all proceeds of the foregoing;
BUT EXCLUDING from such property, rights and privileges all Excepted
Payments and SUBJECT TO the rights of the Owner Lessor and the Owner Participant
hereunder, including under Sections 4.3(d), 4.4 and 5.6 hereof;
TO HAVE AND TO HOLD the Indenture Estate and all parts, rights, members
and appurtenances thereof, unto the Indenture Trustee and the successors and
permitted assigns, for the benefit of the Indenture Trustee and for the benefit
and security of the Noteholders from time to time;
TO HAVE AND TO HOLD to said Indenture Trustee, as Trustee under A.R.S.
Section 33-801, et seq., its successors, heirs or assigns, the Indenture Estate
and all of the Owner Lessor's interests therein, including, without limitation,
the leasehold interest pursuant to the South Point Ground Lease;
PROVIDED, HOWEVER, that if the principal of and the Make-Whole Amount,
if any, and interest on the Lessor Notes, and all other Secured Indebtedness
hereunder shall have been paid and the Owner Lessor shall have performed and
complied with all the covenants, agreements, terms and provisions hereof, then
this Indenture and the rights hereby granted shall terminate and cease.
Subject to the terms and conditions hereof, the Owner Lessor does
hereby irrevocably constitute and appoint the Indenture Trustee the true and
lawful attorney of the Owner Lessor (which appointment is coupled with an
interest) with full power (in the name of the Owner Lessor or otherwise) to ask,
require, demand and receive any and all moneys and claims for moneys (in each
case, including, without limitation, insurance and requisition proceeds to the
extent of the Owner Lessor's interest therein but excluding in all cases
Excepted Payments) due and to become due under or arising out of the Assigned
Documents and all other property which now or hereafter constitutes part of the
Indenture Estate and, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or to take any action or to
institute any proceedings (other than in connection with the enforcement or
collection of Excepted Payments) which the Indenture Trustee may deem to be
necessary or advisable. Pursuant to the Facility Lease, the Facility Lessee is
directed to make all payments of Rent required to be paid or deposited with the
Owner Lessor (other than Excepted Payments) and all other amounts which are
required to be paid
6
to or deposited with the Owner Lessor pursuant to the Facility Lease (other
than Excepted Payments) directly to the Indenture Trustee at such address or
addresses as the Indenture Trustee shall specify, for application as provided
in this Indenture. Further, the Owner Lessor agrees that promptly on receipt
thereof, it will transfer to the Indenture Trustee any and all moneys from time
to time received by it constituting part of the Indenture Estate, whether or
not expressly referred to in the immediately preceding sentence, for
distribution pursuant to this Indenture.
Concurrently with the delivery of this Indenture, the Owner Lessor is
delivering to the Indenture Trustee the chattel paper originally-executed
counterpart of the Facility Lease. All property referred to in this Granting
Clause, whenever acquired by the Owner Lessor, shall secure all obligations
under and with respect to the Lessor Notes at any time outstanding. Any and all
properties referred to in this Granting Clause which are hereafter acquired by
the Owner Lessor, shall, without further conveyance, assignment or act by the
Owner Lessor or the Indenture Trustee thereby become and be subject to the
security interest hereby granted as fully and completely as though specifically
described herein.
This Indenture is intended to and does hereby constitute and create a
security agreement as required under the Uniform Commercial Codes from time to
time enacted and effective under the laws of the States of New York, Delaware
and Arizona. Pursuant to such security agreement, Owner Lessor does hereby grant
to Indenture Trustee a security interest in all that portion of the Indenture
Estate that is now or shall or may be or become personal property and/or
fixtures and in or with respect to which a security interest may be granted
(collectively the "Personal Property") pursuant to the Uniform Commercial Code
as enacted and effective from time to time in all and each of the States of New
York, Delaware and Arizona. Such security interest shall be and is a first and
prior security interest in all such Personal Property and Indenture Trustee, its
successors and assigns, shall have and enjoy all rights, remedies and benefits
available to a secured party under the said Uniform Commercial Code as enacted
and effective from time to time in the aforementioned States, with respect to
the Indenture Estate.
The Indenture Trustee, for itself and its successors and permitted
assigns, hereby agrees that it shall hold the Indenture Estate, in trust for the
benefit and security of (i) the holders from time to time of the Lessor Notes
from time to time outstanding, without any priority of any one Lessor Note over
any other except as herein otherwise expressly provided and (ii) the Indenture
Trustee, and for the uses and purposes and subject to the terms and provisions
set forth in this Indenture. It is expressly agreed that anything herein
contained to the contrary notwithstanding, the
7
Owner Lessor shall remain liable under the Assigned Documents to perform all of
the obligations assumed by it thereunder, all in accordance with and pursuant
to the terms and provisions thereof, and the Indenture Trustee and the
Noteholders shall have no obligation or liability under any Assigned Document
by reason of or arising out of the assignment hereunder, nor shall the
Indenture Trustee or the Noteholders be required or obligated in any manner,
except as herein expressly provided, to perform or fulfill any obligation of
the Owner Lessor under or pursuant to any such Assigned 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.
The Owner Lessor does hereby warrant and represent that it has not
assigned, pledged, granted or permitted a lien, mortgage or deed of trust or
security interest in, to or under, and hereby covenants that, so long as this
Indenture shall remain in effect and the Lien hereof shall not have been
released pursuant to Section 9.1 hereof, it will not assign, pledge or xxxxx x
xxxx or security interest in any of its estate, right, title or interest in, to
or under, the Indenture Estate to anyone other than the Indenture Trustee for
the benefit of the Noteholders. The Owner Lessor hereby further covenants that
with respect to its estate, right, title and interest in, to or under the
Indenture Estate, it will not, except as provided in this Indenture and except
as to Excepted Payments, (i) accept any payment from the Facility Lessee or any
sublessee or enter into any agreement amending, modifying or supplementing any
of the Assigned Documents, execute any waiver or modification of, or consent
under (other than pursuant to Section 4.2 of the South Point Ground Lease or
Sections 5.20 or 13.3 of the Participation Agreement (subject to the conditions
set forth in Sections 5.20 or 13.3, as applicable, of the Participation
Agreement)), the terms of any of the Assigned Documents or revoke or terminate
any of the Assigned Documents, (ii) settle or compromise any claim arising under
any of the Assigned Documents, or (iii) submit or consent to the submission of
any dispute, difference or other matter arising under or in respect of any of
the Assigned Documents to arbitration thereunder (except with respect to any
action pursuant to Section 4.2 of the South Point Ground Lease or Sections 5.20
or 13.3 of the Participation Agreement (subject to the conditions set forth in
Sections 5.20 or 13.3, as applicable, of the Participation Agreement)).
Except as provided herein, the Owner Lessor hereby ratifies and
confirms its obligations under the Assigned Documents and does hereby agree that
it will not take or omit to take any action, the taking or omission of which
might result in an alteration or impairment of any of the Assigned Documents or
of any of the rights created
8
by any such Assigned Document or the assignment (subject to the previous)
paragraph hereunder.
Accordingly, the Owner Lessor, for itself and its successors and
permitted assigns, agrees that all Lessor Notes are to be issued and delivered
and that all property subject or to become subject hereto is to be held subject
to the further covenants, conditions, uses and trusts hereinafter set forth, and
the Owner Lessor, for itself and its successors and permitted assigns, hereby
covenants and agrees with the Indenture Trustee, for the benefit and security of
the holders from time to time of the Lessor Notes from time to time outstanding
and to protect the security of this Indenture; and the Indenture Trustee agrees
to accept the trusts and duties hereinafter set forth, as follows:
THIS INDENTURE AND CONVEYANCE IS MADE IN TRUST, however, with POWER OF
SALE for the benefit of the Indenture Trustee to secure the payment of the
Secured Indebtedness.
This Indenture and conveyance is also made in trust to further secure:
(a) Payment and performance of the obligations, covenants and agreements
contained in the Lessor Notes and other documents and/or instruments referred
to, defined or described in the definition of Secured Indebtedness and any and
all modifications, extensions or renewals of any such documents or instruments;
(b) Payment and performance of the obligations, covenants and agreements
contained in that certain Participation Agreement, the terms and conditions of
which are incorporated herein by this reference; and
(c) Payment of all other sums becoming due or payable under, and the
performance of all other obligations, covenants and agreements contained in (i)
the Lessor Notes; (ii) any Additional Lessor Notes; (iii) any and all Assignment
Documents and Assumption Documents; and (iv) any other instrument given as
security for the Secured Indebtedness or entered into with respect to this
Indenture, including without limitation, the Participation Agreement and all
other documents and instruments (all the foregoing documents and instruments
being collectively referred to herein as the "Collateral Documents").
SECTION 1.
DEFINITIONS
9
(a) Unless the context hereof shall otherwise require, capitalized
terms used, including those in the recitals, and not otherwise defined herein
shall have the respective meanings set forth in Appendix A to the Participation
Agreement (a copy of which is attached hereto for reference), dated as of the
date hereof, among the Facility Lessee, the Owner Lessor the Lessor Manager, the
Guarantor, the Indenture Trustee and the Pass Through Trustee (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "Participation Agreement"). The general provisions of
such Appendix A to the Participation Agreement shall apply to the terms used in
this Indenture and specifically defined herein.
(b) In addition, the following terms shall have the following meanings.
"Assumption Documents" has the meaning set forth in Section 2.10(b).
"Facility" means the 530 MW nameplate capacity gas-fired combined cycle
merchant power plant located near Bullhead, Arizona and more fully described in
Exhibit D to this Indenture. The Facility does not include the Facility Site.
"Secured Indebtedness" means principal of and the Make-Whole Amount, if
any, and interest on and other amounts due under all Lessor Notes and all other
sums payable to the Indenture Trustee or the Noteholders from time to time
hereunder and under the Participation Agreement and the other Operative
Documents by the Facility Lessee, the Owner Participant and the Owner Lessor,
including:
(i) The indebtedness evidenced by the Lessor Notes, together with
interest thereon at the rate provided in each Lessor Note and the
Make-Whole Amount thereon and together with any and all renewals,
modifications, consolidations and extensions of the indebtedness
evidenced by such Lessor Notes, and principal of such Lessor Notes
being due and payable as provided in such Lessor Notes;
(ii) Any and all other indebtedness now owing or which may
hereafter be owing by the Owner Lessor to or for the benefit of the
Indenture Trustee under the Operative Documents including indemnities
and other Supplemental Rent payable by the Facility Lessee under the
Operative Documents, whether evidenced by Additional Lessor Notes
issued pursuant to Section 2.12 hereof or otherwise, however and
whenever incurred or evidenced, whether direct or indirect, absolute or
contingent, due or to become due, together with interest thereon at the
rate provided in each Additional
10
Lessor Note and the Make-Whole Amount thereon (if any) and together with
any and all renewals, modifications, consolidations and extensions of the
indebtedness evidenced by such Additional Lessor Notes, and principal of
such Additional Lessor Notes being due and payable as provided in each
such Additional Lessor Note.
(iii) Any and all additional advances made by the Indenture Trustee
to protect or preserve the Indenture Estate or the security interest and
other interests created hereby on the Indenture Estate or for taxes,
assessments or insurance premiums as hereinafter provided or for
performance of any of the Owner Lessor's obligations hereunder or for any
other purpose provided herein, including advances made pursuant to Section
4.13 hereof (whether or not the Owner Lessor remains the
owner of the Indenture Estate at the time of such advances); and
(iv) Any and all expenses incident to the collection of the
Secured Indebtedness and the foreclosure hereof by action in any court
or by exercise of the power of sale herein contained.
"Undivided Interest" means the Owner Lessor's 25% undivided leasehold
interest in the Facility.
SECTION 2.
THE LESSOR NOTES
Section 2.1. Limitation on Lessor Notes. No Lessor Notes may be issued
under the provisions of, or become secured by, this Indenture except in
accordance with the provisions of this Section 2. The aggregate principal amount
of the Lessor Notes which may be authenticated and delivered and outstanding at
any one time under this Indenture shall be limited to the principal amount of
the Initial Lessor Notes issued on the Closing Date to the Pass Through Trustees
plus the aggregate principal amount of Additional Lessor Notes issued pursuant
to Section 2.12.
Section 2.2. Initial Lessor Notes. There are hereby created and
established hereunder two series of Lessor Notes consisting of the Series A
Lessor Notes and the Series B Lessor Notes, each in substantially the form set
forth in Exhibit B to this Indenture and each such series in the aggregate
principal amount, having installments payable on the dates and in the amounts
and having the final maturity date and interest rate set forth in Schedule I to
this Indenture (respectively, the "Series A Lessor Notes" and the "Series B
Lessor Notes", collectively, the "Initial Lessor Notes"
11
or, individually, an "Initial Lessor Note".
Section 2.3. Execution and Authentication of Lessor Notes. Each Lessor
Note issued hereunder shall be executed and delivered on behalf of the Owner
Lessor by one of its authorized signatories, be in fully registered form, be
dated the date of original issuance of such Lessor Note and be in denominations
of not less than $1,000. Any Lessor Note may be signed by a Person who, at the
actual date of the execution of such Xxxxxx Note, is an authorized signatory of
the Owner Lessor although at the nominal date of such Lessor Note such Person
may not have been an authorized signatory of the Owner Lessor. No Lessor Note
shall be secured by or be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears thereon a certificate
of authentication in the form contained in Exhibit C (or in the appropriate form
provided for in any supplement hereto executed pursuant to Section 2.12 hereof),
executed by the Indenture Trustee by the manual signature of one of its
authorized officers, and such certificate upon any Lessor Note shall be
conclusive evidence that such Lessor Note has been duly authenticated and
delivered hereunder. The Indenture Trustee shall authenticate and deliver the
Initial Lessor Notes for original issue on the Closing Date in the principal
amount specified in Section 2.2, upon a written order of the Owner Lessor signed
by the Lessor Manager. The Indenture Trustee shall authenticate and deliver
Additional Lessor Notes, upon a written order of the Owner Lessor executed by
the Lessor Manager and satisfaction of the conditions specified in Section 2.12.
Such order shall specify the principal amount of the Additional Lessor Notes to
be authenticated and the date on which the original issue of Additional Lessor
Notes is to be authenticated.
Section 2.4. Issuance and Terms of the Initial Lessor Notes.
(a) Issuance of the Lessor Notes at the Closing. On the Closing Date,
the Initial Lessor Notes shall be issued to the applicable Pass Through Trustee
in the amounts set forth in Schedule I hereto, and shall be dated the Closing
Date.
(b) Principal and Interest. The principal amount of each series of
Initial Lessor Notes shall be due and payable in a series of installments having
final payment dates set forth in Schedule I hereto. The principal of each
Initial Lessor Note shall be due and payable in installments on the dates and in
the amounts set forth in Schedule I hereto. Schedule I hereto to the contrary
notwithstanding, the last payment made under such Initial Lessor Note shall be
equal to the then unpaid balance of the principal of such Lessor Note plus all
accrued and unpaid interest on, and any other amounts due under, such Initial
Lessor Note. Each Initial Lessor Note shall bear interest on the principal from
time to time outstanding from and including the date of
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issuance thereof (computed on the basis of a 360-day year of twelve 30-day
months) until paid in full at the rate set forth in such Initial Lessor Note
and Schedule I hereto. Each Initial Lessor Note shall accrue additional
interest under the circumstances and at the rate per annum set forth in the
third paragraph of each Initial Lessor Note. Interest on each Initial Lessor
Note shall be due and payable in arrears semi-annually commencing on May 30,
2002, and on each May 30 and November 30 thereafter until paid in full. If any
day on which principal, Make-Whole Amount, if any, or interest on the Initial
Lessor Notes are payable is not a Business Day, payment thereof shall be made
on the next succeeding Business Day with the same effect as if made on the date
on which such payment was due.
(c) Overdue Payments. Interest (computed on the basis of a 360-day year
of twelve 30-day months) on any overdue principal, Make-Whole Amount (if any)
and, to the extent permitted by Applicable Law, interest and any other amounts
payable shall be paid on demand at the Overdue Rate.
(d) Indemnity Amounts. The Owner Lessor agrees to pay to the Indenture
Trustee for distribution in accordance with Section 3.5 hereof any and all
indemnity amounts received by the Owner Lessor which are payable by the Facility
Lessee to (i) the Indenture Trustee, (ii) the Pass Through Trusts, or (iii) the
Pass Through Trustees.
Section 2.5. Payments from Indenture Estate Only; No Personal Liability
of the Owner Lessor, the Owner Participant or the Indenture Trustee. Except as
otherwise specifically provided in this Indenture or the Participation
Agreement, all payments in respect of the Lessor Notes or under this Indenture
shall be made only from the Indenture Estate, and the Owner Lessor shall have no
obligation for the payment thereof except to the extent that there shall be
sufficient income or proceeds from the Indenture Estate to make such payments in
accordance with the terms of Section 3 hereof; and the Owner Participant shall
not have any obligation for payments in respect of the Lessor Notes or under
this Indenture. The Indenture Trustee and each Noteholder, by its acceptance
thereof, agrees that it will look solely to the income and proceeds from the
Indenture Estate to the extent available for distribution to the Indenture
Trustee or such Noteholder, as the case may be, as herein provided and that,
except as expressly provided in this Indenture, the Participation Agreement or
any other Operative Document, none of the Owner Participant, the Owner Lessor,
the Trust Company, the Lease Indenture Company, nor the Indenture Trustee, nor
any Affiliate of any thereof, shall be personally liable to such Noteholder or
the Indenture Trustee for any amounts payable hereunder, under such Lessor Note
or for any performance to be rendered under any Assigned Document or for any
liability under
13
any Assigned Document. Without prejudice to the foregoing, the Owner Lessor
will duly and punctually pay or cause to be paid the principal of, Make-Whole
Amount, if any, and interest on all Lessor Notes according to their terms and
the terms of this Indenture. Nothing contained in this Section 2.5 limiting the
liability of the Owner Lessor shall derogate from the right of the Indenture
Trustee and the Noteholders to proceed against the Indenture Estate and the
Calpine Guaranty to secure and enforce all payments and obligations due
hereunder and under the Assigned Documents and the Lessor Notes.
(a) In furtherance of the foregoing, to the fullest extent permitted by
law, each Noteholder (and each assignee of such Person), by its acceptance
thereof, agrees that neither it nor the Indenture Trustee will exercise any
statutory right to negate the agreements set forth in this Section 2.5.
(b) Nothing herein contained shall be interpreted as affecting the
representations, warranties or agreements of the Owner Lessor set forth in the
Participation Agreement or the LLC Agreement.
Section 2.6. Method of Payment. The Owner Lessor shall maintain an
office or agency where Lessor Notes may be presented for payment (the "Paying
Agent"). The Owner Lessor may have one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent. The Owner Lessor
initially appoints the Indenture Trustee as Paying Agent in connection with the
Lessor Notes.
(a) The Owner Lessor shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Owner
Lessor shall require each Paying Agent (other than the Indenture Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Noteholders or the Indenture Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Lessor Notes and shall notify
the Indenture Trustee of any default by the Owner Lessor in making any such
payment.
(b) The principal of and the Make-Whole Amount, if any, and interest on
each Lessor Note shall be paid by the Paying Agent from amounts available in the
Indenture Estate on the dates provided in the Lessor Notes by mailing a check
for such amount, payable in New York Clearing House funds, to each Noteholder at
the last address of each such Noteholder appearing on the Note Register, or by
whichever of the following methods shall be specified by notice from a
Noteholder to the Indenture Trustee: (i) by crediting the amount to be
distributed to such Noteholder to
14
an account maintained by such Noteholder with the Indenture Trustee, (ii) by
making such payment to such Noteholder in immediately available funds at the
Indenture Trustee Office, or (iii) in the case of the Initial Lessor Notes and
in the case of Additional Lessor Notes, if such Noteholder is the Pass Through
Trustee, or a bank or other institutional investor, by transferring such amount
in immediately available funds for the account of such Noteholder to the
banking institution having bank wire transfer facilities as shall be specified
by such Noteholder, such transfer to be subject to telephonic confirmation of
payment. Any payment made under any of the foregoing methods shall be made free
and clear of and without reduction for or on account of all wire and like
charges and without any presentment or surrender of such Lessor Note, unless
otherwise specified by the terms of the Lessor Note, except that, in the case
of the final payment in respect of any Lessor Note, such Lessor Note shall be
surrendered to the Indenture Trustee for cancellation after such payment. All
payments in respect of the Lessor Notes shall be made (1) as soon as
practicable prior to the close of business on the date the amounts to be
distributed by the Indenture Trustee are actually received by the Indenture
Trustee if such amounts are received by 12:00 noon New York City time, on a
Business Day, or (2) on the next succeeding Business Day if received after such
time or on any day other than a Business Day. One or more of the foregoing
methods of payment may be specified in a Lessor Note. Prior to due presentment
for registration of transfer of any Lessor Note, the Owner Lessor and the
Indenture Trustee may deem and treat the Person in whose name any Lessor Note
is registered on the Note Register as the absolute owner and holder of such
Lessor Note for the purpose of receiving payment of all amounts payable with
respect to such Lessor Note and for all other purposes, and neither the Owner
Lessor nor the Indenture Trustee shall be affected by any notice to the
contrary. All payments made on any Lessor Note in accordance with the
provisions of this Section 2.6 shall be valid and effective to satisfy and
discharge the liability on such Lessor Note to the extent of the sums so paid
and (except as provided herein) neither the Indenture Trustee nor the Owner
Lessor shall have any liability in respect of such payment.
Section 2.7. Application of Payments. Each payment on any outstanding
Lessor Note shall be applied as required under Arizona law; and thereafter in
the following order: first, to the payment of accrued interest (including
interest on overdue principal and the Make-Whole Amount, if any, and, to the
extent permitted by Applicable Law, overdue interest) on such Lessor Note to the
date of such payment, second, to the payment of the principal amount of, and the
Make-Whole Amount, if any, on such Lessor Note then due (including any overdue
installments of principal) thereunder and third, to the extent permitted by
Section 2.10 of this Indenture, the balance, if any, remaining thereafter, to
the payment of the principal amount of, and the Make-Whole Amount, if any, on
such Lessor Note. The order of
15
application of payments prescribed by this Section 2.7 shall not be deemed to
supersede any provision of Section 3 hereof regarding application of funds.
Section 2.8. Registration, Transfer and Exchange of Lessor Notes. The
Owner Lessor shall maintain an office or agency where Lessor Notes may be
presented for registration of transfer or for exchange (the "Registrar"). The
Registrar shall keep a register of the Lessor Notes and of their transfer and
exchange. The Owner Lessor may have one or more co-registrars. The Owner Lessor
initially appoints the Indenture Trustee as Registrar in connection with the
Lessor Notes. The Indenture Trustee shall maintain at the Indenture Trustee
Office a register in which it will provide for the registration, registration of
transfer and exchange of Lessor Notes (such register being referred to herein as
the "Note Register"). If any Lessor Note is surrendered at said office for
registration of transfer or exchange (accompanied by a written instrument of
transfer duly executed by or on behalf of the holder thereof, together with the
amount of any applicable transfer taxes), the Owner Lessor will execute and the
Indenture Trustee will authenticate and deliver, in the name of the designated
transferee or transferees, if any, one or more new Lessor Notes (subject to the
limitations specified in Sections 2.3 and 2.13 hereof) in any denomination or
denominations not prohibited by this Indenture, as requested by the Person
surrendering the Lessor Note, dated the same date as the Lessor Note so
surrendered and of like tenor and aggregate unpaid principal amount. Any Lessor
Note or Lessor Notes issued in a registration of transfer or exchange shall be
valid obligations of the Owner Lessor entitled to the same security and benefits
to which the Lessor Note or Lessor Notes so transferred or exchanged were
entitled, including rights as to interest accrued but unpaid and to accrue so
that there will not be any loss or gain of interest on the Lessor Note or Lessor
Notes surrendered. Every Lessor Note presented or surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Indenture Trustee
duly executed by the holder thereof or his attorney duly authorized in writing,
and the Indenture Trustee may require an opinion of counsel as to compliance of
any such transfer with the Securities Act. The Indenture Trustee shall make a
notation on each new Lessor Note of the amount of all payments of principal
previously made on the old Lessor Note or Lessor Notes with respect to which
such new Lessor Note is issued and the date on which such new Lessor Note is
issued and the date to which interest on such old Lessor Note or Lessor Notes
shall have been paid. The Indenture Trustee shall not be required to register
the transfer or exchange of any Lessor Note during the 10 days preceding the due
date of any payment on such Lessor Note.
Each Noteholder, by its acceptance of a Lessor Note, shall be deemed to
have
16
consented to, and agreed to be bound by, the terms and conditions hereof, of
such Lessor Note (and any instrument of assignment or transfer) and of the
other Operative Documents.
Section 2.9. Mutilated, Destroyed, Lost or Stolen Lessor Notes. Upon
receipt by the Owner Lessor and the Indenture Trustee of evidence satisfactory
to each of them of the loss, theft, destruction or mutilation of any Lessor Note
and, in case of loss, theft or destruction, of indemnity satisfactory to each of
them, and upon reimbursement to the Owner Lessor and the Indenture Trustee of
all reasonable expenses incidental thereto and payment or reimbursement for any
transfer taxes, and upon surrender and cancellation of such Lessor Note, if
mutilated, the Owner Lessor will execute and the Indenture Trustee will
authenticate and deliver in lieu of such Lessor Note, a new Lessor Note, dated
the same date as such Lessor Note and of like tenor and principal amount. Any
indemnity provided by the holder of a Lessor Note pursuant to this Section 2.9
must be sufficient in the reasonable judgment of the Owner Lessor and the
Indenture Trustee to protect the Owner Lessor, the Indenture Trustee, the Paying
Agent, the Registrar and any co-registrar or co-paying agent from any loss which
any of them may suffer if a Lessor Note is replaced.
Section 2.10. Redemptions; Assumption.
(a) Except as provided in paragraphs (c) and (d) of this Section 2.10 or
as provided in any indenture supplemental hereto, all Lessor Notes outstanding
under this Indenture shall be redeemed, in whole but not in part, at a price
equal to the principal amount thereof, together with accrued interest thereon,
if any, on the earliest to occur on the date of redemption, but without any
Make-Whole Amount or other premium:
(i) if the Facility Lease is terminated pursuant to Section 10
thereof as a result of the occurrence of an Event of Loss (other than a
Regulatory Event of Loss or an Event of Loss described in clause (v) or
(vii) of the definition of "Event of Loss"), on the applicable
Termination Date provided in Section 10.2(a) of the Facility Lease;
(ii) if the Facility Lease is terminated pursuant to Section 10
thereof as a result of a Regulatory Event of Loss, unless the Facility
Lessee effects an assumption of the applicable Lessor Notes in accordance
with paragraph (b) of this Section 2.10, on the applicable Termination
Date provided in Section 10.2(a) of the Facility Lease;
(iii) if the Facility Lease is terminated pursuant to Section 13.1
17
thereof, unless the Facility Lessee purchases the Facility and effectuates
an assumption of the applicable Lessor Notes in accordance with paragraph
(b) of this Section 2.10, on the applicable Termination Date provided in
Section 13.1 of the Facility Lease; and
(iv) if the Facility Lease is terminated pursuant to clause (a) of
Section 14.1 thereof, on the Obsolescence Termination Date.
Any such redemption shall be made in accordance with the applicable provisions
of Section 3 hereof.
(b) Unless a Significant Lease Default or a Lease Event of Default shall
have occurred and be continuing after giving effect to such assumption, the
obligations and liabilities of the Owner Lessor hereunder and under all of the
Lessor Notes may be assumed in whole (but not in part) by the Facility Lessee
in the event of the occurrence of (i) a Regulatory Event of Loss, or (ii) a
termination by the Facility Lessee pursuant to Section 13.1 or 13.2 of the
Facility Lease, where in connection with such termination the Facility Lessee
acquires the Undivided Interest pursuant to an assumption agreement (which
assumption agreement may be combined with the indenture supplemental to this
Indenture hereinafter referred to in this Section 2.10(b), and shall provide
for the assumption by the Facility Lessee of the obligations and liabilities of
the Owner Lessor and the Owner Participant under the Operative Documents
pertaining to the Undivided Interest) which shall make such obligations and
liabilities fully recourse to the Facility Lessee and shall otherwise be in
form and substance acceptable to the Indenture Trustee and the Owner Lessor.
The Facility Lessee will execute and deliver, and the Indenture Trustee will
authenticate, to each Noteholder in exchange for such old Lessor Note a new
Lessor Note, in a principal amount equal to the outstanding principal amount of
such old Lessor Note and otherwise in substantially similar form and tenor to
such old Lessor Note but indicating that the Facility Lessee is the issuer
thereof. When such assumption agreement becomes effective, the Owner Lessor
shall be released and discharged without further act from all obligations and
liabilities assumed by the Facility Lessee. All documentation in connection
with any such assumption (including an indenture supplemental to this Indenture
which shall, among other things, contain provisions appropriately amending
references to the Facility Lease in this Indenture and contain covenants by the
Facility Lessee similar to those contained in the Facility Lease (other than
any covenants which were solely for the benefit of the Owner Participant),
changed as appropriate, and amendments or supplements to the other Operative
Documents, officers' certificates, opinions of counsel and regulatory
approvals) shall be prepared by and at the expense of the Facility Lessee
acceptable in form and substance to the
18
Indenture Trustee.
As a condition to the effectiveness of the assumption by the Facility
Lessee and the release of the Owner Lessor and the Indenture Estate thereby
effected:
(i) the Indenture Trustee shall have received an Opinion of Counsel
of the Facility Lessee including, in the case of clause (5) below, a
nationally recognized outside counsel selected by the Facility Lessee and
reasonably acceptable to the Noteholders (it being acknowledged and agreed
that the Facility Lessee's counsel on the Closing Date shall be deemed
acceptable), addressed to the Indenture Trustee and the Noteholders, to the
effect that (1) the assumption agreement and each other instrument,
document or agreement executed and delivered by the Facility Lessee in
connection with the assumption contemplated by the assumption agreement
(collectively, the "Assumption Documents") have been duly authorized,
executed and delivered by the Facility Lessee, (2) each Assumption Document
and the assumptions contemplated thereby do not contravene (x) the Organic
Documents of the Facility Lessee, (y) any provision of any security issued
by the Facility Lessee or of any agreement, instrument or other undertaking
to which the Facility Lessee is a party or by which it or any of its
property is bound or (z) any Applicable Law, (3) no Governmental
Approval is necessary or required in connection with any Assumption
Document or the assumption contemplated thereby (or, if any such
Governmental Approval is necessary or required, that the same has been
duly obtained and is final and in full force and effect and any period
for the filing of notice of rehearing or application for judicial
review of the issuance of such Governmental Approval has expired
without any such notice or application having been made), (4) each
Assumption Document is a legal, valid and binding obligation of the
Facility Lessee, enforceable in accordance with its terms, (5) such
assumption agreement and the assumption of the Lessor Notes thereunder
shall not cause a Tax Event to occur as to any holder of any Lessor
Note or any Certificateholder and (6) the lien of this Indenture will
continue to be a first priority perfected lien on the Indenture Estate;
(ii) the Facility Lessee shall have provided the Indenture Trustee
with (x) an indemnity against the risk that such assumption of the Lessor
Notes will cause a Tax Event to occur as to any holder of any Lessor Note
or any Certificateholder or (y) an opinion of counsel to the Facility
Lessee, which opinion of counsel shall be reasonably acceptable to the
Indenture Trustee, confirming that such assumption shall not cause any
adverse tax consequence to any holder of any Lessor Note or any
Certificateholder;
19
(iii) Xxxxx'x and S&P shall have confirmed that such assumption
will not result in a downgrading of the rating on the Certificates;
(iv) the Indenture Trustee shall have received copies of all
Governmental Approvals (if any) referred to in the opinion of counsel
referred to in clause (i) above; and
(v) the Indenture Trustee shall have received UCC lien searches,
supplemental title reports and such other evidence as may reasonably be
required by the Indenture Trustee demonstrating that no impairment exists
or will exist of the first-priority perfected lien and secured interest
in the Undivided Interest.
(c) The Owner Lessor may, at its option, redeem any Additional Lessor
Notes in whole, or in part, on any date to the extent permitted by, and at the
prices set forth in, the supplemental indenture establishing the terms,
conditions and designations of such Additional Lessor Notes, together with the
accrued interest on such principal amount plus the Make Whole Amount, if any, so
redeemed to the date of redemption.
(d) The Lessor Notes shall be redeemed, in whole but not in part, as
provided below, at the redemption price equal to the principal amount thereof,
together with accrued and unpaid interest thereon, if any, to the date of
redemption plus the Make-Whole Amount, as follows:
(i) All of the Lessor Notes outstanding under this Indenture shall
be redeemed at such redemption price upon an optional refinancing pursuant
to Section 11.2 of the Participation Agreement. The Owner Lessor's failure
to consummate such redemption as a result of an event described in this
clause (i) following delivery of such notice shall not constitute a Lease
Indenture Event of Default or any other default under the Operative
Documents.
(ii) All of the Lessor Notes outstanding under this Indenture shall
be redeemed at such redemption price on the Termination Date or
Obsolescence Termination Date, as applicable, if the Facility Lease is
terminated as a result of an event described in Section 13.2 or clause
(b) of Section 14.1 of the Facility Lease. The Owner Lessor's failure
to consummate such redemption as a result of an event described in this
clause (ii) following delivery of such notice shall not constitute a
Lease Indenture Event of Default or any other
20
default under the Operative Documents.
(iii) The Lessor Notes shall be redeemed at such redemption price
upon termination of the Facility Lease pursuant to Section 10 thereof as
a result of the occurrence of an Event of Loss described in clause (v) or
(vii) of the definition of "Event of Loss".
The Make-Whole Amount, if any, payable with respect to the Lessor Notes will be
determined by an investment banking institution of national standing in the
United States (the "Investment Banker") selected by the Facility Lessee or, if
the Owner Lessor or the Indenture Trustee does not receive notice of such
selection at least ten days prior to a scheduled prepayment date or if a Lease
Event of Default under the Facility Lease shall have occurred and be continuing,
selected by the Owner Lessor.
(e) If the Owner Lessor elects to redeem Lessor Notes, or Lessor Notes
are otherwise required to be redeemed pursuant to this Section 2.10, the Owner
Lessor shall notify the Indenture Trustee in writing of the date of redemption,
the Section of this Indenture pursuant to which the redemption will occur. The
Owner Lessor shall give each notice to the Indenture Trustee provided for in
this Section 2.10 at least 30 days before the date of redemption unless the
Indenture Trustee consents in writing to a shorter period. Such notice shall be
accompanied by an Officers' Certificate and an opinion of counsel from the
Facility Lessee to the effect that such redemption will comply with the
conditions herein.
(f) At least 20 days but not more than 60 days before a date of
redemption, the Indenture Trustee shall deliver notification of such redemption
by first-class mail to each Noteholder to be redeemed at such Noteholder's
registered address; provided, that no notice shall be required so long as the
Pass Through Trustee and the Indenture Trustee are the same entity. Each such
notice shall state:
(i) the date of redemption;
(ii) the redemption price;
(iii) the name and address of the Paying Agent;
(iv) that Lessor Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(v) that, unless the Owner Lessor defaults in making such redemp-
21
tion payment, interest on Lessor Notes called for redemption ceases to
accrue on and after the redemption date; and
(vi) the paragraph of this Indenture pursuant to which the Lessor
Notes called for redemption are being redeemed.
(h) With respect to any notice of redemption of the Lessor Notes such
notice shall state that such redemption shall be conditional upon the receipt by
the Indenture Trustee, on or prior to the date fixed for such redemption, of
money sufficient to pay the principal of and Make-Whole Amount, if any, and
interest on such Notes and that, if such money shall not have been so received,
such notice shall be of no force or effect and the Owner Lessor shall not be
required to redeem such Lessor Notes. In the event that such notice of
redemption contains such a condition and such money is not so received, the
redemption shall not be made and, within a reasonable time thereafter, notice
shall be given, in the manner in which the notice of redemption was given, that
such money was not so received and such redemption was not required to be made.
(i) Upon surrender to the Paying Agent, such Lessor Notes shall be paid
at the redemption price stated in the notice, plus accrued interest to the date
of redemption. Failure to give notice or any defect in the notice to any
Noteholder shall not affect the validity of the notice to any other Noteholder.
Section 2.11. Payment of Expenses on Transfer. Upon the issuance of a
new Lessor Note or Lessor Notes pursuant to Section 2.8 or 2.9 hereof, the Owner
Lessor or the Indenture Trustee may require from the party requesting such new
Lessor Note or Lessor Notes payment of a sum to reimburse the Owner Lessor and
the Indenture Trustee for, or to provide funds for, the payment on an After-Tax
Basis to the Owner Lessor, the Indenture Trustee and the Owner Participant of
any tax or other governmental charge in connection therewith or any charges and
expenses connected with such tax or governmental charge paid or payable by the
Owner Lessor or the Indenture Trustee.
Section 2.12. Additional Lessor Notes.
(a) Additional Lessor Notes (each, an "Additional Lessor Note") of the
Owner Lessor may be issued under and secured by this Indenture, at any time or
from time to time, in addition to the Initial Lessor Notes and subject to the
conditions hereinafter provided in this Section 2.12, for cash in the amount
equal to the original principal amount of such Additional Lessor Notes, for the
purpose of (i) providing
22
funds in connection with Supplemental Financing pursuant to Section 11.1 of the
Participation Agreement for the payment of all or any portion of Modifications
to the Facility pursuant to Section 8 of the Facility Lease, or (ii) redeeming
any previously issued Lessor Notes pursuant to an optional refinancing pursuant
to Section 11.2 of the Participation Agreement and providing funds for the
payment of all reasonable costs and expenses in connection therewith.
(b) Before any Additional Lessor Notes shall be issued under the
provisions of this Section 2.12, the Owner Lessor shall have delivered to the
Indenture Trustee, not less than fifteen (15) (unless a shorter period shall be
satisfactory to the Indenture Trustee) days nor more than thirty (30) days prior
to the proposed date of issuance of any Additional Lessor Notes, a request and
authorization to issue such Additional Lessor Notes, which request and
authorization shall include the amount of such Additional Lessor Notes, the
proposed date of issuance thereof and (except in connection with a refinancing
of all of the Lessor Notes pursuant to Section 11.2 of the Participation
Agreement) a certification that terms thereof are not inconsistent with this
Indenture. Additional Lessor Notes shall have a designation so as to distinguish
such Additional Lessor Notes from the Initial Lessor Notes theretofore issued,
but otherwise shall rank pari passu with any Lessor Notes then outstanding, be
entitled to the same benefits and security of this Indenture as the other Lessor
Notes issued pursuant to the terms hereof, be dated the date of original
issuance of such Additional Lessor Notes, bear interest at such rates as shall
be agreed between the Facility Lessee and the Owner Lessor and indicated in the
aforementioned request and authorization, and shall be stated to be payable by
their terms not later than the final maturity date of the Initial Lessor Notes
issued on the closing date. The Additional Lessor Notes shall not be subject to
(i) purchase except as provided in Section 4.4(e) hereof or (ii) redemption or
assumption except as provided in Section 2.10 hereof.
(c) The terms, conditions and designations of such Additional Lessor
Notes (which shall be consistent with this Indenture), except in the case of a
refinancing of all of the Lessor Notes pursuant to Section 11.2 of the
Participation Agreement) shall be set forth in an indenture supplemental to this
Indenture executed by the Owner Lessor and the Indenture Trustee. Such
Additional Lessor Notes shall be executed as provided in Section 2.3 hereof and
deposited with the Indenture Trustee for authentication, but before such
Additional Lessor Notes shall be authenticated and delivered by the Indenture
Trustee there shall be filed with the Indenture Trustee the following, all of
which shall be dated as of the date of the supplemental indenture:
(i) a copy of such supplemental indenture (which shall include the
form of such Additional Lessor Notes and the certificate of authentication
in
23
respect thereof);
(ii) an Officer's Certificate from the Facility Lessee (1) stating
that no Significant Lease Default or Lease Event of Default has occurred
and is continuing under the Facility Lease, (2) stating that the conditions
in respect of the issuance of such Additional Lessor Notes contained in
this Section 2.12 have been satisfied, (3) specifying the amount of the
costs and expenses relating to the issuance and sale of such Additional
Lessor Notes, (4) stating that payments pursuant to the Facility Lease and
all supplements thereto of Periodic Rent and Termination Value, together
with all other amounts payable pursuant to the terms of the Facility Lease,
are calculated to be sufficient to pay when due all of the principal of
and interest on the outstanding Lessor Notes, after taking into account the
issuance of such Additional Lessor Notes and any related redemption of
Lessor Notes theretofore outstanding and (5) all conditions to the
Supplemental Financing or refinancing contained in Section 11.1 or ll.2 of
the Participation Agreement or in any other provision of the Operative
Documents have been satisfied;
(iii) with respect to any Supplemental Financing, an Officer's
Certificate from the Owner Lessor and an Officer's Certificate from the
Lessor Manager stating that no Indenture Default under clauses (b)
through (f) of Section 4.2 hereof or Lease Indenture Event of Default
as to the Owner Lessor or the Lessor Manager, as the case may be, has
occurred and is continuing;
(iv) such additional documents, certificates and opinions as shall
be reasonably required by the Indenture Trustee, and as shall be reasonably
acceptable to the Indenture Trustee;
(v) a request and authorization to the Indenture Trustee by the
Owner Lessor to authenticate and deliver such Additional Lessor Notes to
or upon the order of the Person or Persons noted in such request at the
address set forth therein, and in such principal amounts as are stated
therein, upon payment to the Indenture Trustee, but for the account of the
Owner Lessor, of the sum or sums specified in such request and
authorization;
(vi) the consent of the Facility Lessee to such request and
authorization; and
(vii) an opinion of counsel to the Owner Lessor who shall be
reasonably satisfactory to the Indenture Trustee, as to the
authorization, validity and
24
enforceability of the Additional Lessor Notes and that all conditions
hereunder to the authentication and delivery of such Additional Lessor
Notes have been complied with.
(d) When the documents referred to in the foregoing clauses (i) through
(vii) above shall have been filed with the Indenture Trustee and when the
Additional Lessor Notes described in the above mentioned request and
authorization shall have been executed and authenticated as required by this
Indenture and the related supplemental indenture, the Indenture Trustee shall
deliver such Additional Lessor Notes in the manner described in clause (v)
above, but only upon payment to the Indenture Trustee of the sum or sums
specified in such request and authorization.
(e) This Indenture is an open-end deed of trust and mortgage which
secures existing indebtedness, "future advances", "protective advances,"
"authorized advances"and "contingent obligations" as such terms are under or
referred to under applicable Arizona law. The maximum principal indebtedness
secured by this Indenture, including future advances and contingent obligations
but excluding protective advances, shall not at any time exceed the total amount
of Two Hundred Twenty Million Five Hundred Thousand Dollars ($220,500,000);
provided, however, that nothing herein contained shall limit the amount secured
by this Indenture if the Secured Indebtedness is increased by protective
advances; and provided, further, such limitation as to such future advances and
contingent obligations shall only pertain to the record priority of the amount
thereof secured hereby pursuant to applicable law and does not otherwise limit
the amount of total indebtedness of Owner Lessor secured hereby or limit the
liability of Owner Lessor to Indenture Trustee for such total indebtedness,
including future advances and contingent obligations. The future advances
secured hereby shall be made to or for the account of Owner Lessor and may be
made under the Additional Lessor Notes, or pursuant to promissory notes or other
instruments evidencing such future advances which may be hereafter executed and
delivered by Owner Lessor to Indenture Trustee. In the event that any notice is
recorded or is received by Indenture Trustee, any commitment, agreement, or
obligation to make future advances to or for the benefit of Owner Lessor shall
immediately terminate.
Section 2.13. Restrictions of Transfer Resulting from Federal
Securities Laws; Legend. Each Lessor Note shall be delivered to the initial
Noteholder thereof without registration of such Lessor Note under the Securities
Act and without qualification of this Indenture under the Trust Indenture Act of
1939, as amended. Prior to any transfer of any such Lessor Note, in whole or in
part, to any Person, the Noteholder thereof shall furnish to the Facility
Lessee, the Indenture Trustee and the
25
Owner Lessor an opinion of counsel, which opinion and which counsel shall be
reasonably satisfactory to the Indenture Trustee, the Owner Lessor and the
Facility Lessee, to the effect that such transfer will not violate the
registration provisions of the Securities Act or require qualification of this
Indenture under the Trust Indenture Act of 1939, as amended, and all Lessor
Notes issued hereunder shall be endorsed with a legend which shall read
substantially as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH
ACT.
Section 2.14. Security for and Parity of Lessor Notes. All Lessor Notes
issued and outstanding hereunder shall rank on a parity with each other and
shall as to each other be secured equally and ratably by this Indenture, without
preference, priority or distinction of any thereof over any other by reason of
difference in time of issuance or otherwise.
Section 2.15. Acceptance of the Indenture Trustee. Each Noteholder, by
its acceptance of a Lessor Note, shall be deemed to have consented to the
appointment of the Indenture Trustee.
SECTION 3.
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM INDENTURE ESTATE
Section 3.1. Distribution of Periodic Rent.
(a) Periodic Rent Distribution. Except as otherwise provided in Section
3.1(c), 3.2, 3.3 or 3.7 of this Indenture, each installment of Periodic Rent and
any payment of Supplemental Rent constituting interest on overdue installments
of Periodic Rent received by the Indenture Trustee shall be distributed by the
Indenture Trustee in the following order of priority:
First, so much of such amounts as shall be required to pay in full the
aggregate principal and accrued interest (as well as any interest on
overdue principal and, to the extent permitted by Applicable Law, on
overdue interest) then due and payable under the Lessor Notes shall be
distributed to the Noteholders ratably, without priority of any
Noteholder over any other Noteholder, in the proportion that the amount
of such payment then due and payable under each
26
such Lessor Note bears to the aggregate amount of the payments then due
and payable under all such Lessor Notes; and
Second, the balance, if any, of such amounts remaining shall be
distributed to the Owner Lessor for distribution by it in accordance
with the terms of the LLC Agreement.
(b) Application of Other Amounts Held by the Indenture Trustee upon
Rent Default. If, as a result of any failure by the Facility Lessee to pay
Periodic Rent in full on any date when an installment of Periodic Rent is due,
there shall not have been distributed on any date (or within any applicable
period of grace) pursuant to Section 3.1(a) hereof the full amount then
distributable pursuant to clause "First" of Section 3.1(a) of this Indenture,
the Indenture Trustee shall distribute other payments of the character referred
to in Sections 3.5 and 3.6 hereof then held by it, or thereafter received by it,
to all Noteholders to the extent necessary to enable it to make all the
distributions then due pursuant to such clause "First." To the extent the
Indenture Trustee thereafter receives the deficiency in Periodic Rent, the
amount so received shall, unless a Significant Lease Default or Lease Indenture
Event of Default shall have occurred and be continuing, be applied to restore
the amounts held by the Indenture Trustee under Section 3.5 or 3.6 hereof and
distributed pursuant to this Section 3.1(b), as the case may be. The portion of
each such payment made to the Indenture Trustee which is to be distributed by
the Indenture Trustee in payment of Lessor Notes shall be applied in accordance
with Section 2.7 hereof. Any payment received by the Indenture Trustee pursuant
to Section 4.3 hereof as a result of payment by the Owner Lessor of principal or
interest or both (as well as any interest on overdue principal and, to the
extent permitted by Applicable Law, on overdue interest) then due on all Lessor
Notes shall be distributed to the Noteholders, ratably, without priority of one
over the other, in the proportion that the amount of such payment or payments
then due and unpaid on all Lessor Notes held by each such Noteholder bears to
the aggregate amount of the payments then due and unpaid on all Lessor Notes
outstanding; and the Owner Lessor shall (to the extent of such payment made by
it) be subrogated to the rights of the Noteholders under this Section 3.1 to
receive the payment of Periodic Rent or Supplemental Rent with respect to which
its payment under Sections 4.3(a) and (b) hereof relates, and the payment of
interest on account of such Periodic Rent or Supplemental Rent being overdue, to
the extent provided in and subject to the provisions of Section 4.3(a) and (b)
hereof.
(c) Retention of Amounts by the Indenture Trustee. If at the time of
receipt by the Indenture Trustee of an installment of Periodic Rent (whether or
not then overdue) or of payment of interest on any overdue installment of
Periodic Rent,
27
there shall have occurred and be continuing a Lease Indenture Event of Default,
the Indenture Trustee shall retain such installment of Periodic Rent or payment
of interest (to the extent not then required to be distributed pursuant to
clause "First" of Section 3.1(a)) as part of the Indenture Estate and shall not
distribute any such payment of Periodic Rent or interest pursuant to clause
"Second" of Section 3.1(a) until such time as such Lease Indenture Event of
Default shall be cured or waived or until such time as the Indenture Trustee
shall have received written instructions from a Majority in Interest of
Noteholders to make such a distribution; provided that such amounts must be
returned to the Owner Lessor within six (6) months from the receipt thereof by
the Indenture Trustee unless (i) the Indenture Trustee has declared the unpaid
principal of all Lessor Notes due and payable (or such amounts shall have
automatically become due and payable), pursuant to Section 4.2(a) and the
Indenture Trustee is diligently pursuing any dispossessary remedies available
under Section 4.3 hereof (unless such remedies are stayed or prevented by
operation of law) or (ii) any other Lease Indenture Event of Default shall have
occurred during the intervening period and be continuing, in which case, such
six-month period will be restarted from the date such other Lease Indenture
Event of Default shall have occurred. Upon the cure or waiver of such Lease
Indenture Event of Default, withheld Periodic Rent shall, subject to clause
(ii) of the immediately preceding sentence, be distributed to the Owner Lessor
(to the extent that all payments to be distributed pursuant to clause "First"
of Section 3.1(a) have been made), and no further withholding of Periodic Rent
on account of such Lease Indenture Event of Default shall be effected.
Section 3.2. Payments Following Event of Loss or Other Early
Termination. Any payment received by the Indenture Trustee as a result of (x)
an Event of Loss (other than a Regulatory Event of Loss in respect of which the
Facility Lessee shall, pursuant to Section 2.10(b) hereof, assume the
obligations and liabilities of the Owner Lessor hereunder, in which event only
clauses "First" and "Fourth" below shall be applicable), (y) early termination
of the Facility Lease pursuant to Section 13 thereof (other than a termination
in respect of which the Facility Lessee shall, pursuant to Section 2.10(b)
hereof assume the obligations and liabilities of the Owner Lessor hereunder, in
which event only clauses "First" and "Fourth" below shall be applicable), or
(z) any early termination of the Facility Lease, in whole or in part, pursuant
to Section 14 thereof, shall be distributed on the applicable date of
redemption to the extent of available funds, in the following order of priority:
First, so much of such payments and amounts as shall be required to
reimburse the Indenture Trustee for any unpaid fees for its services
under this Indenture and any cost, fee and expense (including any legal
fees and disbursements) or loss incurred by it (to the extent incurred
in connection with its duties as the
28
Indenture Trustee and to the extent reimbursable and not previously
reimbursed) shall be distributed to the Indenture Trustee for application
to itself;
Second, so much of such payments or amounts as shall be required to pay in
full the applicable redemption price (as described in Section 2.10(a) or
2.10(d) hereof or any supplemental indenture hereto) (including, interest
on overdue principal and, to the extent permitted by Applicable Law,
overdue interest) upon all of the Lessor Notes which shall be distributed
to the holders of such Lessor Notes, in each case ratably, without priority
of any Noteholder over any other, in the proportion that the aggregate
unpaid principal amount of all such Lessor Notes held by each such holder,
plus the Make-Whole Amount, if any, and accrued but unpaid interest thereon
to the scheduled date of distribution to the Noteholders bears to the
aggregate unpaid principal amount of all such Lessor Notes held by all such
holders, together with the Make-Whole Amount, if any, plus accrued but
unpaid interest thereon to the date of scheduled distribution to the
Noteholders;
Third, so much of such payments and amounts as shall be required to pay
the then existing or prior Noteholders all other amounts then payable and
unpaid to them as holders of the Lessor Notes which this Indenture by its
terms secures shall be distributed to such existing or prior holders of
Lessor Notes, ratably to each such holder, without priority of any such
holder over any other, in the proportion that the amount of such payments
or amounts to which each such holder is so entitled bears to the aggregate
amount of such payments and amounts to which all such holders are so
entitled; and
Fourth, the balance, if any, of such payment remaining shall be distributed
to the Owner Lessor for distribution in accordance with the LLC Agreement.
Section 3.3. Payments After Lease Indenture Event of Default. All
payments received and all amounts held or realized by the Indenture Trustee
after a Lease Indenture Event of Default shall have occurred and be continuing
(including any amounts realized by the Indenture Trustee from the exercise of
any remedies pursuant to Section 17 of the Facility Lease or from the
application of Section 4.3 hereof) and after either (a) the Indenture Trustee
has declared the Facility Lease to be in default pursuant to Section 17 thereof
or (b) the entire principal amount of Lessor Notes shall have been declared or
shall automatically have become due and payable, together with all payments or
amounts then held or thereafter received by the Indenture Trustee hereunder,
shall, so long as such declaration shall not have been rescinded, be distributed
forthwith by the Indenture Trustee in the following order of
29
priority:
First, so much of such payments and amounts as shall be required to
reimburse the Indenture Trustee for any unpaid fees for its services
under this Indenture and any cost, fee and expense (including any legal
fees and disbursements) or loss incurred by it (to the extent incurred
in connection with its duties as the Indenture Trustee and to the
extent reimbursable and not previously reimbursed) shall be distributed
to the Indenture Trustee for application to itself;
Second, so much of such payments or amounts as shall be required to pay
the aggregate unpaid principal amount of all Lessor Notes then
outstanding and all accrued but unpaid interest on such Lessor Notes to
the date of such distribution (including interest on overdue principal
and, to the extent permitted by Applicable Law, overdue interest) shall
be distributed to the holders of such Lessor Notes, in each case
ratably, without priority of any Noteholder over any other, in the
proportion that the aggregate unpaid principal amount of all such
Lessor Notes held by each such holder and accrued but unpaid interest
thereon to the scheduled date of distribution to the Noteholders bears
to the aggregate unpaid principal amount of all such Lessor Notes held
by all such holders and accrued but unpaid interest thereon to the date
of scheduled distribution to the Noteholders;
Third, so much of such payments and amounts as shall be required to pay
the then existing or prior Noteholders all other amounts then payable
and unpaid to them as holders of the Lessor Notes which this Indenture
by its terms secures, including the Make-Whole Amount, if any, required
to be paid pursuant to Section 2.10(d) hereof, in respect of such
Lessor Notes required to be paid pursuant to Section 4.3(a) hereof,
shall be distributed to such existing or prior holders of Lessor Notes,
ratably to each such holder, without priority of any such holder over
any other, in the proportion that the amount of such payments or
amounts to which each such holder is so entitled bears to the aggregate
amount of such payments and amounts to which all such holders are so
entitled; and
Fourth, the balance, if any, of such payments and amounts remaining
shall be distributed to the Owner Lessor for distribution by it in
accordance with the terms of the LLC Agreement.
Section 3.4. Investment of Certain Payments Held by the Indenture
Trustee. Upon the written direction and at the risk and expense of the Owner
Lessor, the
31
Indenture Trustee shall invest and reinvest any moneys held by the Indenture
Trustee pursuant to Section 3.1(c), 3.5 or 3.6 hereof in such Permitted
Investments as may be specified in such direction. The proceeds received upon
the sale or at maturity of any Permitted Investment and any interest received
on such Permitted Investment and any payment in respect of a deficiency
contemplated by the following sentence shall be held as part of the Indenture
Estate and applied by the Indenture Trustee in the same manner as the moneys
used to buy such Permitted Investment, and any Permitted Investment may be sold
(without regard to maturity date) by the Indenture Trustee whenever necessary
to make any payment or distribution required by this Section 3. If the proceeds
received upon the sale or at maturity of any Permitted Investment (including
interest received on such Permitted Investment) shall be less than the cost
thereof (including accrued interest), the Owner Lessor will pay or cause to be
paid to the Indenture Trustee an amount equal to such deficiency.
Section 3.5. Application of Certain Other Payments. Except as otherwise
provided in Section 3.1(b) or 3.1(c) hereof, any payment received by the
Indenture Trustee for which provision as to the application thereof is made in
an Operative Document, but not elsewhere in this Indenture (including payments
received by the Indenture Trustee under the Calpine Guaranty), shall, unless a
Lease Indenture Event of Default shall have occurred and be continuing, be
applied forthwith to the purpose for which such payment was made in accordance
with the terms of such Operative Document. If at the time of the receipt by the
Indenture Trustee of any payment referred to in the preceding sentence there
shall have occurred and be continuing a Lease Indenture Event of Default, the
Indenture Trustee shall hold such payment as part of the Indenture Estate, but
the Indenture Trustee shall, except as otherwise provided in Section 3.1(b) or
3.1(c) hereof, cease to hold such payment and shall apply such payment to the
purpose for which it was made in accordance with the terms of such Operative
Document if and whenever there is no longer continuing any Lease Indenture Event
of Default; provided, however, that any such payment received by the Indenture
Trustee which is payable to the Facility Lessee shall not be held by the
Indenture Trustee unless a Significant Lease Default or Lease Event of Default
shall have occurred and be continuing.
Section 3.6. Other Payments. Except as otherwise provided in Section 3.5
hereof:
(a) any payment received by the Indenture Trustee for which no provision
as to the application thereof is made in the Participation Agreement, the
Facility Lease or elsewhere in this Section 3; and
32
(b) all payments received and amounts realized by the Indenture Trustee
with respect to the Indenture Estate (including all amounts realized after the
termination of the Facility Lease), to the extent received or realized at any
time after payment in full of the principal of and, Make-Whole Amount, if any,
and interest on all Lessor Notes then outstanding and all other amounts due the
Indenture Trustee or the Noteholders, as well as any other amounts remaining as
part of the Indenture Estate after such payment in full of the principal of,
Make-Whole Amount, if any, and interest on all Lessor Notes outstanding;
shall be distributed forthwith by the Indenture Trustee in the order of
priority set forth in Section 3.3 hereof, omitting clause "Third" thereof.
Section 3.7. Excepted Payments. Notwithstanding any other provision of
this Indenture including this Section 3 or any provision of any of the Operative
Documents to the contrary, any Excepted Payments received or held by the
Indenture Trustee at any time shall promptly be paid or distributed by the
Indenture Trustee to the Person or Persons entitled thereto.
Section 3.8. Distributions to the Owner Lessor. Unless otherwise
directed in writing by the Owner Lessor, all amounts from time to time
distributable by the Indenture Trustee to the Owner Lessor in accordance with
the provisions hereof shall be paid by the Indenture Trustee in immediately
available funds to the Owner Participant's Account. Any amounts payable to the
Trust Company in its individual capacity shall be paid to the Trust Company.
Section 3.9. Payments Under Assigned Documents. Notwithstanding
anything to the contrary contained in this Indenture, until the discharge and
satisfaction of the Lien of this Indenture, all payments due or to become due
under any Assigned Document to the Owner Lessor (except so much of such payments
as constitute Excepted Payments) shall be made directly to the Indenture
Trustee's Account and the Owner Lessor shall give all notices as shall be
required under the Assigned Documents to direct payment of all such amounts to
the Indenture Trustee hereunder. The Owner Lessor agrees that if it should
receive any such payments directed to be made to the Indenture Trustee or any
proceeds for or with respect to the Indenture Estate or as the result of the
sale or other disposition thereof or otherwise constituting a part of the
Indenture Estate to which the Owner Lessor is not entitled hereunder, it will
promptly forward such payments to the Indenture Trustee or in accordance with
the Indenture Trustee's instructions. The Indenture Trustee agrees to apply
payments from time to time received by it (from the Facility Lessee, the Owner
Lessor or otherwise) with respect to the Facility Lease, any other Assigned
Document
33
or the Facility in the manner provided in Section 2.7 hereof, and this
Section 3.
Section 3.10. Disbursement of Amounts Received by the Indenture Trustee.
Subject to the last sentence of this Section 3.10 and Section 3.2, amounts to
be distributed by the Indenture Trustee pursuant to this Section 3 shall be
distributed on the date such amounts are actually received by the Indenture
Trustee. Notwithstanding anything to the contrary contained in this Section 3,
in the event the Indenture Trustee shall be required or directed to make a
payment under this Section 3 on the same date on which such payment is
received, any amounts received by the Indenture Trustee after 12:00 noon, New
York City time, or on a day other than a Business Day, may be distributed on
the next succeeding Business Day.
Section 3.11 Establishment of the Indenture Trustee's Account; and Lien
and Security Interest; Etc.
(a) The Account Bank hereby confirms that it has established a
securities account entitled the "Indenture Trustee's Account" (the "Indenture
Trustee's Account"), which Indenture Trustee's Account shall be maintained by
the Account Bank until the date this Indenture is terminated pursuant to Section
7.1 hereof. The account number of the Indenture Trustee's Account established
hereunder is specified in Schedule II hereto. The Indenture Trustee's Account
shall not be evidenced by passbooks or similar writings. This Indenture governs
and shall be the only agreement governing the Indenture Trustee's Account.
(b) All amounts from time to time held in the Indenture Trustee's
Account shall be maintained (i) in the name of the Owner Lessor subject to the
lien and security interest of the Indenture Trustee for the benefit of the
Indenture Trustee and each of the Noteholders as set forth herein and (ii) in
the custody of the Account Bank for and on behalf of the Indenture Trustee for
the benefit of the Indenture Trustee and each of the Noteholders for the
purposes and on the terms set forth in this Indenture. All such amounts shall
constitute a part of the Indenture Trustee Account Collateral and shall not
constitute payment of any Indebtedness or any other obligation of the Owner
Lessor until applied as hereinafter provided.
(c) As collateral security for the prompt payment in full when due of
the Lessor Secured Obligations owed to the Indenture Trustee and each
Noteholder, the Owner Lessor hereby pledges, assigns, hypothecates and transfers
to the Indenture Trustee for the benefit of the Indenture Trustee and each of
the Noteholders, and hereby grants to the Indenture Trustee for the benefit of
the Indenture Trustee and each of the Noteholders, a lien on and security
interest in and to, (i) the Indenture
34
Trustee's Account and any successor account thereto and (ii) all cash,
investments, investment property, securities or other property at any time on
deposit in or credited to the Indenture Trustee's Account, including all income
or gain earned thereon and any proceeds thereof (the "Indenture Trustee Account
Collateral").
Section 3.12 The Account Bank; Limited Rights of the Owner Lessor
(a) The Account Bank.
(i) Establishment of Securities Account. The Account Bank hereby
agrees and confirms that (A) the Account Bank has established the
Indenture Trustee's Account as set forth in Section 3.11, (B) the Indenture
Trustee's Account is and will be maintained as a "securities account"
(within the meaning of Section 8-501(a) of the UCC), (C) the Owner Lessor
is the "entitlement holder" (within the meaning of Section 8-102(a)(7) of
the UCC) in respect of the "financial assets" (within the meaning of
Section 8-102(a)(9) of the UCC) credited to the Indenture Trustee's
Account, (D) all property delivered to the Account Bank pursuant to this
Indenture or any other Operative Document will be held by the Account Bank
and promptly credited to the Indenture Trustee's Account by an appropriate
entry in its records in accordance with this Indenture, (E) all "financial
assets" (within the meaning of Section 8-102(a)(9) of the UCC) in
registered form or payable to or to the order of and credited to the
Indenture Trustee's Account shall be registered in the name of, payable to
or to the order of, or indorsed to, the Account Bank or in blank, or
credited to another securities account maintained in the name of the
Account Bank, and in no case will any financial asset credited to the
Indenture Trustee's Account be registered in the name of, payable to or to
the order of, or indorsed to, the Owner Lessor except to the extent the
foregoing have been subsequently indorsed by the Owner Lessor to the
Account Bank or in blank, (F) the Account Bank shall not change the name
or account number of the Indenture Trustee's Account without the prior
written consent of the Indenture Trustee, (G) the Account Bank is acting
and shall at all times act as and perform all of the duties of the
"securities intermediary," within the meaning of Article 8 of the UCC, with
respect to the Indenture Trustee's Account and the financial assets
credited thereto and (H) the Account Bank shall not enter into any other
agreement governing, or with respect to, the Indenture Trustee's
Account without the prior written consent of the Indenture Trustee.
(ii) Financial Assets Election. The Account Bank agrees that each
35
item of property (including any security, instrument or obligation, share,
participation, interest, cash or cash equivalent or other property
whatsoever) credited to the Indenture Trustee's Account shall be treated
as a "financial asset" within the meaning of Section 8-l02(a)(9) of the
UCC.
(iii) Entitlement Orders. Notwithstanding anything in this
Indenture to the contrary, if at any time the Account Bank shall
receive any "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) or any other order from the Indenture Trustee
directing the transfer or redemption of any financial asset relating to
the Indenture Trustee's Account or with respect to any "security
entitlements" (within the meaning of Section 8-102(a)(17) of the UCC)
carried or to be carried in the Indenture Trustee's Account, the
Account Bank shall comply with such entitlement order or other order
without further consent by the Owner Lessor or any other Person. The
parties hereto hereby agree that the Indenture Trustee shall have
"control" (within the meaning of Section 8-106(d) of the UCC) of (A)
the Indenture Trustee's Account, (B) all security entitlements carried
or to be carried in the Indenture Trustee's Account and (C) the Owner
Lessor's security entitlements with respect to the financial assets
credited to the Indenture Trustee's Account and the Owner Lessor hereby
disclaims any entitlement to claim "control" of such "security
entitlements". Unless a Lease Indenture Event of Default shall have
occurred and is continuing, the Indenture Trustee shall not deliver any
entitlement order directing the transfer or redemption of any financial
asset relating to the Indenture Trustee's Account.
(iv) Subordination of Lien; Waiver of Set-Off. In the event that the
Account Bank has or subsequently obtains by agreement, operation of law or
otherwise a lien or security interest in the Indenture Trustee's Account or
any security entitlement credited thereto, the Account Bank agrees that
such lien or security interest shall be subordinate to the lien and
security interest of the Indenture Trustee for the benefit of the Indenture
Trustee and each Noteholder. The financial assets standing to the credit
of the Indenture Trustee's Account will not be subject to deduction,
set-off, banker's lien, or any other right in favor of any Person other
than the Indenture Trustee for the benefit of the Indenture Trustee and
each Noteholder (except for the face amount of any checks which have been
credited to the Indenture Trustee's Account but are subsequently returned
unpaid because of uncollected or insufficient funds).
(v) No Other Agreements. The Account Bank and the Owner
36
Lessor have not entered into any agreement governing or with respect to
the Indenture Trustee's Account or any financial assets credited to the
Indenture Trustee's Account other than this Indenture. The Account Bank
has not entered into any agreement with the Owner Lessor or any other
Person purporting to limit or condition the obligation of the Account Bank
to comply with entitlement orders originated by the Indenture Trustee in
accordance with Section 3.12(a)(iii) hereof. In the event of any conflict
between this Section 3.12 or any other agreement now existing or hereafter
entered into, the terms of this Section 3.12 shall prevail.
(vi) Notice of Adverse Claims. Except for the claims and interest
of the Indenture Trustee for the benefit of the Indenture Trustee and each
Noteholder and the Owner Lessor in the Indenture Trustee's Account, the
Account Bank does not know of any claim to, or interest in, the Indenture
Trustee's Account or in any financial asset credited thereto. If any Person
asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Indenture Trustee's Account or in any financial asset credited
thereto, the Account Bank will promptly notify the Indenture Trustee and
the Owner Lessor in writing thereof.
(vii) Rights and Powers of the Indenture Trustee. The rights and
powers granted by the Indenture Trustee to the Account Bank have been
granted in order to perfect its lien and security interests in the
Indenture Trustee's Account, are powers coupled with an interest and
will neither be affected by the bankruptcy of the Owner Lessor nor the
lapse of time.
(b) Limited Rights of the Owner Lessor. The Owner Lessor shall not have
any rights against or to monies held in the Indenture Trustee's Account, as
third party beneficiary or otherwise, or any right to direct the Account Bank or
the Indenture Trustee to apply or transfer monies in the Indenture Trustee's
Account, except the right to receive or make requisitions of monies held in the
Indenture Trustee's Account, as expressly provided in this Indenture, and to
direct the investment of monies held in the Indenture Trustee's Account as
expressly provided in Section 3.7 hereof. Except as expressly provided in this
Indenture, in no event shall any amounts or Permitted Investments deposited in
or credited to the Indenture Trustee's Account be registered in the name of the
Owner Lessor, payable to the order of the Owner Lessor or specially indorsed to
the Owner Lessor except to the extent that the foregoing have been specially
indorsed to the Indenture Trustee or in blank.
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SECTION 4.
COVENANTS OF OWNER XXXXXX; DEFAULTS;
REMEDIES OF INDENTURE TRUSTEE
Section 4.1. Covenants of Owner Lessor. The Owner Lessor hereby
covenants and agrees as follows:
(a) the Owner Lessor will duly and punctually pay the principal of,
Make-Whole Amount, if any, and interest on and other amounts due under the
Lessor Notes and hereunder in accordance with the terms of the Lessor Notes and
this Indenture and all amounts payable by it to the Noteholders under the
Participation Agreement; and
(b) the Owner Lessor will not, except as provided in this Indenture
(including Sections 4.4, 5.6, 8.1 and 8.2) and except as to Excepted Payments
(i) enter into any agreement amending, modifying or supplementing any of the
Assigned Documents, or exercise any election or option, or make any decision or
determination, or give any notice, consent, waiver or approval, or take any
other action, under or in respect of any Assigned Document, (ii) accept and
retain any payment from, or settle or compromise any claim arising under, any of
the Assigned Documents, except that it may forward any payment to the Indenture
Trustee in accordance with Section 3.9, (iii) give any notice or exercise any
right or take any action under any of the Assigned Documents, or (iv) submit or
consent to the submission of any dispute, difference or other matter arising
under or in respect of any of the Assigned Documents to arbitration thereunder.
Section 4.2. Lease Indenture Events of Default. Subject to Section 4.4
hereof, the term "Lease Indenture Event of Default," wherever used herein, shall
mean any of the following events (whatever the reason for such Lease Indenture
Event of Default and whether it shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) any Lease Event of Default (other than the failure of the Facility
Lessee to pay any amount which shall constitute an Excepted Payment unless the
Facility Lessee has been declared in default pursuant to Section 17 thereof by
the Owner Lessor and the Indenture Trustee has consented to such event
constituting a Lease Indenture Event of Default pursuant to Section 4.3(e)
hereof) and other than a Lease Event of Default in consequence of the Facility
Lessee's failure to maintain the
38
insurance required by Section 11 of the Facility Lease if, and so long as, (i)
such Lease Event of Default is waived by the Owner Lessor and the Owner
Participant and (ii) the insurance maintained by the Facility Lessee still
constitutes Prudent Industry Practice); or
(b) the Owner Lessor shall fail to make any payment in respect of the
principal of, or Make-Whole Amount, if any, or interest on, or any scheduled
fees due and payable under or with respect to any Lessor Note within five
Business Days after the same shall have become due or any other amounts due and
payable under or with respect to any Lessor Note within ten Business Days after
the Owner Lessor receives notice that such amount is due and payable; or
(c) the Owner Lessor shall fail to perform or observe any covenant,
obligation or agreement to be performed or observed by it under this Indenture
(other than any covenant, obligation or agreement contained in clause (b) of
this Section 4.2), the Owner Lessor or the Lessor Manager shall fail to perform
or observe any covenant, obligation or agreement to be performed by it under
Section 6 of the Participation Agreement, the Owner Participant shall fail to
perform or observe any covenant, obligation or agreement to be performed by it
under Section 7 of the Participation Agreement, the OP Guarantor shall fail to
perform or observe any covenant, obligation or agreement to be performed by it
under the OP Guaranty, in each case, in any material respect, which failure
shall continue unremedied for 30 days after receipt by such party of written
notice thereof; provided, however, that if such condition cannot be remedied
within such 30-day period, then the period within which to remedy such condition
shall be extended up to 180 days, so long as such party diligently pursues such
remedy and such condition is reasonably capable of being remedied within such
extended period;
(d) any representation or warranty made by the Lessor Manager or the
Owner Lessor in Section 3.2 or 3.3 of the Participation Agreement or in the
certificate delivered by the Lessor Manager or the Owner Lessor at the Closing
pursuant to Section 4.6 of the Participation Agreement or any representation or
warranty made by the Owner Participant in Section 3.4 of the Participation
Agreement (other than Section 3.4(i)) or the certificate delivered by the Owner
Participant at the Closing pursuant to Section 4.6 of the Participation
Agreement, or any representation or warranty made by the OP Guarantor (provided
the OP Guaranty shall not have been terminated or released) under the OP
Guaranty or in the certificate delivered by such OP Guarantor at the Closing
pursuant to Section 4.6 of the Participation Agreement, shall prove to have been
incorrect in any material respect when made and continues to be material and
unremedied for a period of 30 days after receipt by such party of
39
written notice thereof; provided, however, that if such condition cannot be
remedied within such 30-day period, then the period within which to remedy such
condition shall be extended up to an additional 120 days, so long as such party
diligently pursues such remedy and such condition is reasonably capable of
being remedied within such extended period;
(e) the Owner Participant, the Owner Lessor or the OP Guarantor
(provided the OP Guaranty shall not have been terminated or released) shall (i)
commence a voluntary case or other proceeding seeking relief under Title 11 of
the Bankruptcy Code or 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 apply for or consent to the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or (ii) consent to, or fail to controvert in a
timely manner, any such relief or the appointment of or taking possession by any
such official in any voluntary case or other proceeding commenced against it, or
(iii) file an answer admitting the material allegations of a petition filed
against it in any such proceeding; or (iv) make a general assignment for the
benefit of creditors; or (v) become unable, admit in writing its inability or
fail generally to pay its debts as they become due; or (vi) take corporate
action for the purpose of effecting any of the foregoing; or
(f) an involuntary case or other proceeding shall be commenced against
the Owner Participant, the Owner Lessor or the OP Guarantor (provided the OP
Guaranty shall not have been terminated or released) seeking (i) liquidation,
reorganization or other relief with respect to it or its debts under Title 11 of
the Bankruptcy Code or any bankruptcy, insolvency or other similar law now or
hereafter in effect, or (ii) the appointment of a trustee, receiver, liquidator,
custodian or other similar official with respect to it or any substantial part
of its property or (iii) the winding-up or liquidation of the Owner Lessor; and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days.
Section 4.3. Remedies of the Indenture Trustee.
(a) In the event that a Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee in its discretion may, or upon
receipt of written instructions from a Majority in Interest of Noteholders shall
declare, by written notice to the Owner Lessor and the Owner Participant, the
unpaid principal amount of all Lessor Notes, with accrued interest thereon, to
be immediately due and payable, upon which declaration such principal amount and
such accrued interest shall immediately become due and payable (except in the
case of a Lease Indenture
40
Event of Default under Section 4.2(e) or (f), such principal and interest shall
automatically become due and payable immediately without any such declaration
or notice) without further act or notice of any kind. If any Make-Whole amount
is due and payable pursuant to Section 2.10(c) or (d) at the time of any such
acceleration, such Make-Whole Amount shall also be due and payable in
connection with such acceleration.
(b) If a Lease Indenture Event of Default shall have occurred and be
continuing, then and in every such case, the Indenture Trustee, as assignee
under the Facility Lease or hereunder or otherwise, may, and where required
pursuant to the provisions of Section 5 hereof shall, upon written notice to
the Owner Lessor, exercise any or all of the rights and powers and pursue any
or all of the remedies pursuant to this Section 4 and, in the event such Lease
Indenture Event of Default shall be a Lease Event of Default, any and all of
the remedies provided pursuant to this Section 4 and Section 17 of the Facility
Lease and, subject to Section 4.4, may thereupon or at any time thereafter, in
its own name or by or through an agent or receiver appointed by a court,
without regard to the adequacy of any security for the Secured Indebtedness,
enter into or upon the Indenture Estate and take possession of all or any part
of the Indenture Estate and may exclude therefrom the Owner Participant, the
Owner Lessor and, in the event such Lease Indenture Event of Default shall be a
Lease Event of Default, the Facility Lessee and all persons claiming under
them, and with or without any entry or taking of possession, may in its own
name or in the name of the Owner Lessor or any other Person, sue for or
otherwise collect all issues, rents, income, royalties and profits
(collectively, "Real Property Rents"), including those past due and unpaid as
well as those due, coming due or to be paid, and apply the Payments, less
costs, expenses, attorneys' fees and other expenses toward payment or partial
payment of the Secured Indebtedness in accordance with this Indenture and
Applicable Law. Further, the Indenture Trustee may exercise all remedies
available to a secured party under the Uniform Commercial Code or any other
provision of Applicable Law. The Indenture Trustee may proceed to enforce the
rights of the Indenture Trustee and of the Noteholders by directing payment to
it of all moneys payable under any agreement or undertaking constituting a part
of the Indenture Estate, by proceedings in any court of competent jurisdiction
to recover damages for the breach hereof or for the appointment of a receiver
or for sale of all or any part of the Property Interest or for foreclosure of
the Property Interest, together with the Owner Lessor's interest in the
Assigned Documents, and by any other action, suit, remedy or proceeding
authorized or permitted by this Indenture, at law or in equity, or whether for
the specific performance of any agreement contained herein, or for an
injunction against the violation of any of the terms hereof, or in aid of the
exercise of any power granted hereby or by law, and in addition may foreclose
upon,
41
sell, assign, transfer and deliver, from time to time to the extent permitted
by Applicable Law, all or any part of the Indenture Estate or any interest
therein, at any private sale or public auction with or without demand,
advertisement or notice (except as herein required or as may be required by
law) of the date, time and place of sale and any adjournment thereof, for cash
or credit or other property, for immediate or future delivery and for such
price or prices and on such terms as the Indenture Trustee, in its unfettered
discretion, may determine, or as may be required by Applicable Law, so long as
the Owner Participant and the Owner Lessor are afforded a commercially
reasonable opportunity to bid for all or such part of the Indenture Estate in
connection therewith unless Section 4.7 shall otherwise be applicable; provided
that 20 days shall be deemed to be a commercially reasonable opportunity to bid
for purposes of this Section 4.3(b). The Indenture Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee and of the Noteholders
asserted or upheld in any bankruptcy, receivership or other judicial
proceedings. The collection of such Real Property Rents, or the entering upon
and taking possession of the Indenture Estate, or the application of the Real
Property Rents as aforesaid, shall not cure or waive any default or notice of
default hereunder or invalidate any act done in response to such default or
pursuant to such notice of default. The Owner Lessor also hereby authorizes the
Indenture Trustee upon such entry, at its option, to take over and assume the
management, operation and maintenance of the Indenture Estate and to perform
all acts Indenture Trustee in its sole discretion deems necessary and proper
and to expend such sums out of Real Property Rents as may be needed in
connection therewith, in the same manner and to the same extent as the Owner
Lessor theretofore could do. It is not the intention of the parties hereto that
an entry by the Indenture Trustee upon the Indenture Estate under the terms of
this instrument shall make the Indenture Trustee a party in possession in
contemplation of the law, except at the option of the Indenture Trustee.
(c) All rights of action and rights to assert claims under this
Indenture or under any of the Lessor Notes may be enforced by the Indenture
Trustee without the possession of the Lessor Notes at any trial or other
proceedings instituted by the Indenture Trustee, and any such trial or other
proceedings shall be brought in its own name as mortgagee of an express trust,
and any recovery or judgment shall be for the ratable benefit of the Noteholders
as herein provided. In any proceedings brought by the Indenture Trustee (and
also any proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the
Noteholders, and it shall not be necessary to make any such Persons parties to
such proceedings.
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(d) Anything herein to the contrary notwithstanding, neither the
Indenture Trustee nor any Noteholder shall at any time, including at any time
when a Lease Indenture Event of Default shall have occurred and be continuing
and there shall have occurred and be continuing a Lease Event of Default, be
entitled to exercise any remedy under or in respect of this Indenture which
could or would divest the Owner Lessor of title to, or its ownership interest
in, any portion of the Indenture Estate unless, in the case of a Lease Indenture
Event of Default as a consequence of a Lease Event of Default under Section 16
of the Facility Lease, the Indenture Trustee shall have, to the extent it is
then entitled to do so hereunder and is not then stayed or otherwise prevented
from doing so by operation of law, commenced the exercise of one or more
remedies under the Facility Lease intending to dispossess the Facility Lessee of
its leasehold interest in the Undivided Interest and is using good faith efforts
in the exercise of such remedies (and not merely asserting a right or claim to
do so); provided that, during any period that the Indenture Trustee is stayed or
otherwise prevented by operation of law from exercising such remedies, the
Indenture Trustee will not divest the Owner Lessor of title to any portion of
the Indenture Estate until the earlier of (a) the expiration of the 180-day
period following the date of commencement of a stay or other prevention or (b)
the date of repossession of the Facility under the applicable Facility Lease.
(e) Any provisions of the Facility Lease or this Indenture to the
contrary notwithstanding, if the Facility Lessee shall fail to pay any Excepted
Payment to any Person entitled thereto as and when due, such Person shall have
the right at all times, to the exclusion of the Indenture Trustee, to demand,
collect, sue for, enforce performance of obligations relating to, or otherwise
obtain all amounts due in respect of such Excepted Payment or to declare a Lease
Event of Default under Section 16 of the Facility Lease solely to enforce such
obligations in respect of any Excepted Payments (provided that any such
declaration shall not be deemed to constitute a Lease Indenture Event of Default
hereunder without the consent of the Indenture Trustee).
Section 4.4. Right to Cure Certain Lease Events of Default.
(a) If the Facility Lessee shall fail to make any payment of Periodic
Rent due on any Rent Payment Date when the same shall have become due, and if
such failure of the Facility Lessee to make such payment of Periodic Rent shall
not constitute the fourth consecutive such failure or the eighth cumulative
failure of the Facility Lessee, then the Owner Lessor may (but need not) pay to
the Indenture Trustee, at any time prior to the expiration of ten (10) Business
Days after the Owner Lessor and the Owner Participant shall have received notice
from the Indenture Trustee or have Actual Knowledge of the failure of the
Facility Lessee to make such
43
payment of Periodic Rent, an amount equal to the principal of, Make-Whole
Amount, if any, and interest on the Lessor Notes, then due (otherwise than by
declaration of acceleration) on such Rent Payment Date, together with any
interest due thereon on account of the delayed payment thereof, and such
payment by the Owner Lessor shall be deemed (for purposes of this Indenture) to
have cured any Lease Indenture Event of Default which arose or would have
arisen from such failure of the Facility Lessee.
(b) If the Facility Lessee shall fail to make any payment of
Supplemental Rent when the same shall become due or otherwise fail to perform
any obligation under the Facility Lease or any other Operative Document, then
the Owner Lessor may (but need not) make such payment on the date such
Supplemental Rent was payable, together with any interest due thereon on account
of the delayed payment thereof, or perform such obligation at any time prior to
the expiration of ten (10) Business Days after the Owner Lessor or the Owner
Participant shall have received notice or have Actual Knowledge of the
occurrence of such failure, and such payment or performance by the Owner Lessor
shall be deemed to have cured any Lease Indenture Event of Default which arose
or would have arisen from such failure of the Facility Lessee.
(c) The Owner Lessor, upon exercising its rights under paragraph (a) or
(b) of this Section 4.4 to cure the Facility Lessee's failure to pay Periodic
Rent or Supplemental Rent or to perform any other obligation under the Facility
Lease or any other Operative Document, shall not obtain any Lien on any part of
the Indenture Estate on account of such payment or performance nor, except as
expressly provided in the next sentence, pursue any claims against the Facility
Lessee or any other party, for the repayment thereof if such claims would impair
the prior right and security interest of the Indenture Trustee in and to the
Indenture Estate. Upon such payment or performance by the Owner Lessor, the
Owner Lessor shall (to the extent of such payment made by it and the costs and
expenses incurred in connection with such payments and performance thereof
together with interest thereon and so long as no event which would, with the
passing of time or giving of notice or both, become a Lease Indenture Event of
Default under Section 4.2(b), (e) or (f), or any Lease Indenture Event of
Default hereunder shall have occurred and be continuing) be subrogated to the
rights of the Indenture Trustee and the Noteholders to receive the payment of
Periodic Rent or Supplemental Rent, as the case may be, with respect to which
the Owner Lessor made such payment and interest on account of such Periodic Rent
payment or Supplemental Rent payment being overdue in the manner set forth in
the next two sentences. If the Indenture Trustee shall thereafter receive such
payment of Periodic Rent, Supplemental Rent or such interest, the Indenture
Trustee shall, notwithstanding the requirements of Section 3.1 hereof,
forthwith, remit such
44
payment of Periodic Rent or Supplemental Rent, as the case may be (to the
extent of the payment made by the Owner Lessor pursuant to this Section 4.4)
and such interest to the Owner Lessor in reimbursement for the funds so
advanced by it, provided that if (A) any event which, with the passing of time
or giving of notice or both, would become a Lease Indenture Event of Default
under Section 4.2(b), (e) or (f) hereof, or any Lease Indenture Event of
Default hereunder shall have occurred and be continuing or (B) any payment of
principal, interest, or Make-Whole Amount, if any, on any Lessor Note then
shall be overdue, such payment shall not be remitted to the Owner Lessor but
shall be held by the Indenture Trustee as security for the obligations secured
hereby and distributed in accordance with Section 3.1 hereof. The Owner Lessor
shall not attempt to recover any amount paid by it on behalf of the Facility
Lessee pursuant to this Section 4.4 except by demanding of the Facility Lessee
payment of such amount or by commencing an action against the Facility Lessee
for the payment of such amount, and except where a Lease Indenture Event of
Default (other than a Lease Event of Default) has occurred and is continuing,
the Owner Lessor shall be entitled to receive the amount of such payment and
the costs and expenses incurred in connection with such payments and
performance thereof together with interest thereon from the Facility Lessee
(but neither the Owner Lessor nor the Owner Participant shall have any right to
collect such amounts by exercise of any of the remedies under Section 17 of the
Facility Lease) or, if paid by the Facility Lessee to the Indenture Trustee,
from the Indenture Trustee to the extent of funds actually received by the
Indenture Trustee.
(d) Until the expiration of the period during which the Owner Lessor or
the Owner Participant shall be entitled to exercise rights under paragraph (a)
or (b) of this Section 4.4 with respect to any failure by the Facility Lessee
referred to therein, neither the Indenture Trustee nor any Noteholder shall take
or commence any action it would otherwise be entitled to take or commence as a
result of such failure by the Facility Lessee, whether under this Section 4 or
Section 17 of the Facility Leases or otherwise.
(e) Each Noteholder agrees, by acceptance thereof, that if (i) (x) a
Lease Indenture Event of Default, which also constitutes a Lease Event of
Default, shall have occurred and be continuing for a period of at least 90 days
without the Lessor Notes having been accelerated or the Indenture Trustee having
exercised any remedy under the Facility Lease intended to dispossess the
Facility Lessee of the Facility, (y) the Lessor Notes have been accelerated
pursuant to Section 4.3(a) and such acceleration has not theretofore been
rescinded, or (z) an Enforcement Notice giving notice of the intent of the
Indenture Trustee to dispossess the Facility Lessee of the Facility under the
Facility Lease has been given pursuant to Section 5.1 within the
45
previous 30 days, (ii) no Lease Indenture Event of Default of the nature
described in any of clauses (b) through (f) of Section 4.2 hereof shall have
occurred and be continuing and (iii) the Owner Lessor shall give written notice
to the Indenture Trustee of the Owner Lessor's intention to purchase all of the
Lessor Notes in accordance with this paragraph, then, upon receipt within 10
Business Days after such notice from the Owner Lessor of an amount equal to the
sum of (x) the aggregate unpaid principal amount of any unpaid Lessor Notes
then held by the Noteholders, together with accrued but unpaid interest thereon
to the date of such receipt (as well as any interest on overdue principal and,
to the extent permitted by Applicable Law, overdue interest), plus (y) the
aggregate amount, if any, of all sums which, if Section 3.3 were then
applicable, such Noteholder would be entitled to be paid before any payments
were to be made to the Owner Lessor but excluding any Make-Whole Amount, such
Noteholder will forthwith (and upon its receipt of the payment referred to in
clause (1) below, will be deemed to) sell, assign, transfer and convey to the
Owner Lessor (without recourse or warranty of any kind other than of title to
the Lessor Notes so conveyed) all of the right, title and interest of such
Noteholder in and to the Indenture Estate, this Indenture, all Lessor Notes
held by such Noteholder and the Assigned Documents, and the Owner Lessor shall
thereupon assume all such Noteholder's rights and obligations in such
documents; provided, that no such holder shall be required to so convey unless
(1) the Owner Lessor shall have simultaneously tendered payment on all other
Lessor Notes issued by the Owner Lessor at the time outstanding pursuant to
this paragraph and (2) such conveyance is not in violation of any Applicable
Law. All charges and expenses required to be paid in connection with the
issuance of any new Lessor Note or Lessor Notes in connection with this
paragraph shall be borne by the Owner Lessor. Notwithstanding the foregoing,
the Owner Lessor may exercise the right set forth in this clause (e) prior to
the end of the 90 day period set forth above but, in such case, the Make-Whole
Amount, if any, shall also be payable.
Section 4.5. Rescission of Acceleration. If at any time after the
outstanding principal amount of the Lessor Notes shall have become due and
payable by acceleration pursuant to Section 4.3 hereof, (a) all amounts of
principal, Make-Whole Amount, if any, and interest which are then due and
payable in respect of all the Lessor Notes other than pursuant to Section 4.3
hereof shall have been paid in full, together with interest on all such overdue
principal and (to the extent permitted by Applicable Law) overdue interest at
the rate or rates specified in the Lessor Notes, and an amount sufficient to
cover all costs and expenses of collection incurred by or on behalf of the
holders of the Lessor Notes (including counsel fees and expenses and all
expenses and reasonable compensation of the Indenture Trustee) and (b) every
other Lease Indenture Event of Default shall have been remedied, then a
Majority in
46
Interest of Noteholders may, by written notice or notices to the Owner Lessor,
the Indenture Trustee and the Facility Lessee, rescind and annul such
acceleration and any related declaration of default under the Facility Lease
and their respective consequences, but no such rescission and annulment shall
extend to or affect any subsequent Lease Indenture Event of Default or impair
any right consequent thereon, and no such rescission and annulment shall
require any Noteholder to repay any principal or interest actually paid as a
result of such acceleration.
Section 4.6. Return of Indenture Estate, Etc.
(a) If at any time the Indenture Trustee has the right to take
possession of the Indenture Estate pursuant to Section 4.3 hereof, at the
request of the Indenture Trustee, the Owner Lessor promptly shall (i) execute
and deliver to the Indenture Trustee such instruments of title and other
documents and (ii) make all such demands and give all such notices as are
permitted by the terms of the Facility Lease to be made or given by the Owner
Lessor upon the occurrence and continuance of a Lease Event of Default, in each
case as the Indenture Trustee may deem necessary or advisable to enable the
Indenture Trustee or an 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 the
possession of which the Indenture Trustee shall at the time be entitled to
hereunder. If the Owner Lessor 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 and requiring the Owner Lessor to execute and
deliver such instruments and documents to the Indenture Trustee, to the entry of
which judgment the Owner Lessor hereby specifically consents, and (ii) pursue
all or any part of the Indenture Estate wherever it may be found and enter any
of the premises wherever all or part of the Indenture Estate may be or is
supposed to be and search for all or part of the Indenture Estate and take
possession of and remove all or part of the Indenture Estate.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, as a charge against proceeds of the Indenture Estate, make
all such expenditures with respect to the Indenture Estate as it may deem
proper. In each such case, the Indenture Trustee shall have the right to deal
with the Indenture Estate and to carry on the business and exercise all rights
and powers of the Owner Lessor relating to the Indenture Estate, as the
Indenture Trustee shall deem best, and, the Indenture Trustee shall be entitled
to collect and receive all rents (including Periodic Rent and Supplemental
Rent), revenues, issues, income, products and profits of the Indenture Estate
and every part thereof (without prejudice to the right of the Indenture Trustee
under any provision of this Indenture to collect and receive cash held by, or
required
47
to be deposited with, the Indenture Trustee hereunder) and to apply the same to
the management of or otherwise dealing with the Indenture Estate and of
conducting the business thereof, and of all expenditures with respect to the
Indenture Estate and the making of 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 part thereof (including
the employment of engineers and accountants to examine, inspect and make
reports upon the properties and books and records of the Owner Lessor and the
Facility Lessee relating to the Indenture Estate and the Operative Documents),
or 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.
Section 4.7. Power of Sale and Other Remedies.
(a) In addition to all other remedies provided for herein if a Lease
Indenture Event of Default shall have occurred and be continuing, the Indenture
Trustee shall, subject to Sections 4.3 and 4.4 and to provisions of Applicable
Law, have the right(s) to (i) sell the Indenture Estate or any part of the
Indenture Estate at one or more public sale or sales; or (ii) commence an action
or actions to foreclose the lien of this Indenture as a mortgage; and/or (iii)
specifically enforce any of the covenants and agreements hereof, in each case in
order to pay the Secured Indebtedness, and all impositions, if any, with accrued
interest thereon, and all expenses of the sale and of all proceedings in
connection therewith, including reasonable attorney's fees, if incurred, and do
any acts that it deems necessary or desirable to preserve the value,
marketability or rentability of the Indenture Estate, or any part thereof or
interest therein, increase the income therefrom or protect the security hereof.
If the Indenture Trustee elects to exercise the power of sale herein contained,
the Indenture Trustee shall cause to be recorded, published and delivered to the
Owner Lessor such notice of sale as then required by Applicable Law. The
Indenture Trustee shall, without demand on the Owner Lessor, after lapse of such
time as may then be required by law and after recordation of such notice of sale
and notice of sale having been given as required by Applicable Law, sell the
Indenture Estate at the time and place of sale fixed by it in said notice of
sale, either as a whole, or in separate lots or parcels or items as the
Indenture Trustee shall deem expedient, and in such order as it may determine,
at public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. The Indenture Trustee shall deliver to such
purchaser or purchasers thereof its good and sufficient deed or deeds conveying
the property so sold, but without any covenant or warranty, express or implied.
The recitals in such deed of any matters or facts shall be conclusive proof of
the truthfulness thereof. Any person, including, without limitation, the Owner
Lessor,
48
may bid at and be a purchaser at any such sale. The Indenture Trustee shall
apply the proceeds of sale as required by Applicable Law and in accordance with
the terms of this Indenture. Subject to A.R.S. Section 33-810.B, the Indenture
Trustee may postpone sale of all or any portion of the Indenture Estate by
public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement or subsequently
noticed sale, and without further notice make such sale at the time fixed by
the last postponement, or may, in its discretion, give a new notice of sale.
The Owner Lessor hereby requests that a copy of any notice of default and any
notice of sale hereunder be mailed to it at its address set forth in Section
9.5 of this Indenture. At any such public sale, the Indenture Trustee may
execute and deliver to the purchaser a conveyance of the Indenture Estate or
any part of the Indenture Estate, and to this end, the Owner Lessor hereby
constitutes and appoints the Indenture Trustee the agent(s) and attorney(s) in
fact of the Owner Lessor to make such sale and conveyance, and thereby to
divest the Owner Lessor of all right, title or equity that the Owner Lessor may
have in and to the Indenture Estate and to vest the same in the purchaser or
purchasers at such sale or sales, and all the acts and doings of said agent and
attorney in fact are hereby ratified and confirmed and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be
binding upon the Owner Lessor. The aforesaid power of sale and agency hereby
granted are coupled with an interest and are irrevocable by death or otherwise,
are granted as cumulative of the other remedies provided hereby or by law for
collection of the Secured Indebtedness and shall not be exhausted by one
exercise thereof but may be exercised until full payment of the Secured
Indebtedness. Further, if a Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee may, in addition to and not
in abrogation of other rights and remedies provided in this Section, either
with or without entry or taking possession as herein provided or otherwise,
proceed by a suit or suits in law or in equity or by any other appropriate
proceeding or remedy (i) to enforce payment of the Lessor Notes or the
performance of any term, covenant, condition or agreement of this Indenture or
any other right, and (ii) to pursue any other remedy available to it, all as
the Indenture Trustee shall determine most effectual for such purposes. Upon
any foreclosure sale, the Indenture Trustee may bid for and purchase the
Indenture Estate and shall be entitled to apply all or any part of the Secured
Indebtedness as a credit to the purchase price. In the event of a foreclosure
sale of the Indenture Estate, the proceeds of said sale shall be applied as
provided in Section 3.3 hereof. In the event of any such foreclosure sale by
the Indenture Trustee, the Owner Lessor shall be deemed a tenant holding over
and shall forthwith deliver possession to the purchaser or purchasers at such
sale or be summarily dispossessed according to provisions of law applicable to
tenants holding over. The Indenture Trustee, at the Indenture Trustee's option,
is authorized to foreclose this Indenture subject to the rights of any tenants
of the
49
Indenture Estate, and the failure to make any such tenants parties to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted to be by the Owner Lessor, a defense to any proceedings instituted by
the Indenture Trustee to collect the Secured Indebtedness.
(b) In amplification of, and not in limitation of paragraph (a) of this
Section 4.7, the Owner Lessor represents and warrants that this Indenture is
given primarily for a business, commercial or agricultural purpose. Owner
Lessor, therefore, agrees that the Indenture Trustee, its successors and
permitted assigns, shall have THE STATUTORY POWER OF SALE pursuant to the
applicable provisions of A.R.S. Sections 12-1241, et seq., 33-702.B; and 33-807,
et seq. as said statutes have been and shall be amended, which POWER is
expressly incorporated herein by reference. Such Statutory Power of Sale and
other rights, power, remedies and authorities shall be in addition to all rights
and remedies set forth herein or available under Applicable Law. In the exercise
of the Statutory Power of Sale, the Indenture Trustee, its successors and
assigns or its agents or attorneys, may sell the Indenture Estate or such
portion thereof as may remain subject to the Indenture in case of any partial
release thereof, either as a whole or in parcels, together with all improvements
that may be thereon, by a public sale on or near any part of the Indenture
Estate then subject to this Indenture or at the Indenture Trustee's principal
place of business or at any other office of the Indenture Trustee or any
attorney or agent thereof located in the same county in which any part of the
Indenture Estate is located, and the Indenture Trustee, its successors and
permitted assigns; and such sale shall forever bar the Owner Lessor and all
persons claiming under it from all right and interest in the Indenture Estate,
whether at law or in equity. In the exercise of THE STATUTORY POWER OF SALE
herein given, if the Indenture Trustee elects to sell in parts or parcels, such
sales may be held from time to time, and the POWER shall not be fully executed
until all of the Indenture Estate not previously sold shall have been sold.
Section 4.8. Appointment of Receiver and Assignment of Real Property
Rents. The Owner Lessor hereby assigns and transfers to the Indenture Trustee
all of the Real Property Rents, of the Indenture Estate, and hereby gives to and
confers upon the Indenture Trustee the right, power and authority to collect the
Real Property Rents. From and after any Lease Indenture Event of Default, the
Owner Lessor appoints the Indenture Trustee its true and lawful
attorney-in-fact, at the option of the Indenture Trustee at any time and from
time to time, to demand, receive and enforce payment, to give receipts, releases
and satisfactions. From and after any Lease Indenture Event of Default, the
Owner Lessor hereby authorizes and directs the lessees, tenants and occupants to
make all payments under any leases directly to the Indenture Trustee upon
written demand by the Indenture Trustee, without further
50
consent of the Owner Lessor. If the outstanding principal amount of the Lessor
Notes shall have been declared due and payable pursuant to Section 4.3 hereof,
as a matter of right, the Indenture Trustee shall be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any successor or
nominee thereof) for all or any part 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 the Owner Lessor hereby consents
to the appointment of such a receiver and will not oppose any such appointment.
Any receiver appointed for all or any part of the Indenture Estate shall be
entitled to exercise all available rights and powers with respect to the
Indenture Estate to the extent instructed to do so by the Indenture Trustee.
Section 4.9. Remedies Cumulative. Each and every right, power and remedy
herein specifically given to the Indenture Trustee or otherwise in this
Indenture shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any 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, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Participant,
the Owner Lessor or the Facility Lessee or to be an acquiescence therein.
Section 4.10. Waiver of Various Rights by the Owner Lessor. The Owner
Lessor hereby waives and agrees, to the extent permitted by Applicable Law, that
it will never seek or derive any benefit or advantage from any of the following,
whether now existing or hereafter in effect, in connection with any proceeding
under or in respect of this Lease Indenture:
(a) any stay, extension, moratorium or other similar law;
(b) any Applicable Law providing for the valuation of or appraisal of
any portion of the Indenture Estate in connection with a sale thereof; or
(c) any right to have any portion of the Indenture Estate or other
security for the Lessor Notes marshaled.
The Owner Lessor covenants not to hinder, delay or impede the exercise of any
right
51
or remedy under or in respect of this Lease Indenture, and agrees, to the
extent permitted by Applicable Law, to suffer and permit its exercise as though
no laws or rights of the character listed above were in effect; provided that
this shall not affect or reduce Owner Lessor's rights under Sections 4.3 and
4.4 hereof. Owner Lessor agrees for itself, its successors and assigns, that
the acceptance, before the expiration of the right of redemption and after the
commencement of foreclosure proceedings of this Indenture, of insurance
proceeds, eminent domain awards, rents or anything else of value to be applied
on or to the Secured Indebtedness by Indenture Trustee or any person or party
holding under it shall not constitute a waiver of such foreclosure or a waiver
or relinquishment of any right (s) to foreclose or to have a receiver appointed
for and take possession of the Indenture Estate or any part thereof. This
agreement by Owner Lessor is intended to apply to the acceptance and such
application of any such proceeds, awards, rents and other sums or anything else
of value whether the same shall be accepted from, or for the account of, Owner
Lessor or from any other source whatsoever by Indenture Trustee or by any
person or party holding under Indenture Trustee at any time or times in the
future while any of the obligations secured hereby shall remain outstanding.
Section 4.11. Discontinuance of Proceedings. In case the Indenture
Trustee or any Noteholder shall have proceeded to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Indenture Trustee or the Noteholder, then
and in every such case the Owner Lessor, the Indenture Trustee and the Facility
Lessee shall be restored to their former positions and rights hereunder with
respect to the Indenture Estate, and all rights, remedies and powers of the
Indenture Trustee or the Noteholder shall continue as if no such proceedings had
taken place.
Section 4.12. No Action Contrary to the Facility Xxxxxx's Rights Under
the Facility Lease. Notwithstanding any other provision of any of the Operative
Documents, so long as no Lease Event of Default under the Facility Lease shall
have been declared (or deemed to have been declared), the Indenture Trustee and
the Noteholders shall be subject to the Facility Lessee's rights under the
Facility Lease, and neither the Indenture Trustee nor any Noteholders shall take
or cause to be taken any action contrary to the right of the Facility Lessee,
including its rights to quiet use and possession of the Facility.
Section 4.13. Right of the Indenture Trustee to Perform Covenants, Etc.
If the Owner Lessor shall fail to make any payment or perform any act required
to be made or performed by it hereunder or under the Assigned Documents, or if
the Owner
52
Lessor shall fail to release any Lien affecting the Indenture Estate which it
is required to release by the terms of this Indenture or the Participation
Agreement or the LLC Agreement, the Indenture Trustee, without notice to or
demand upon the Owner Lessor and without waiving or releasing any obligation or
defaults may (but shall be under no obligation to, and, except as provided in
the last sentence hereof, shall incur no liability in connection therewith) at
any time thereafter make such payment or perform such act for the account and
at the expense of the Indenture Estate and may take all such action with
respect thereto (including entering upon the Facility Site or any part thereof,
or the Facility for such purpose) as 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 legal fees and expenses) so
incurred, together with interest thereon from the date of payment or
incurrence, shall constitute additional indebtedness secured by this Indenture
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 4.14. Further Assurances. The Owner Lessor covenants and agrees
from time to time to do all such acts and execute all such instruments of
further assurance as shall be reasonably requested by the Indenture Trustee for
the purpose of fully carrying out and effectuating this Indenture and the intent
hereof.
Section 4.15. Waiver of Past Defaults. Any past Lease Indenture Event of
Default and its consequences may be waived by the Indenture Trustee or a
Majority in Interest of Noteholders, except a Lease Indenture Event of Default
(i) in the payment of the principal of, Make-Whole Amount, if any, and or
interest on any Lessor Note, subject to the provisions of Sections 5.1 and 8.1
hereof, or (ii) in respect of a covenant or provision hereof which, under
Section 8.1 hereof, cannot be modified or amended without the consent of each
Noteholder. Upon any such waiver and subject to the terms of such waiver, such
Lease Indenture Event of Default shall cease to exist, and any other Lease
Indenture Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Lease Indenture Event of Default or impair any right
consequent thereon.
SECTION 5.
DUTIES OF INDENTURE TRUSTEE;
CERTAIN RIGHTS AND DUTIES OF OWNER XXXXXX
53
Section 5.1. Notice of Action Upon Lease Indenture Event of Default.
The Indenture Trustee shall give prompt written notice to the Owner Lessor and
the Owner Participant of any Lease Indenture Event of Default with respect to
which the Indenture Trustee has Actual Knowledge and will give the Facility
Lessee and the Owner Participant not less than 30 days' prior written notice of
the date on or after which the Indenture Trustee intends to exercise remedies
under Section 4.3 (an "Enforcement Notice"), which notice may be given
contemporaneously with any notice contemplated by Section 4.3(a) or 4.3(b). The
Indenture Trustee shall take such action, or refrain from taking such action,
as the Majority in Interest of Noteholders shall instruct in writing.
Section 5.2. Actions Upon Instructions Generally. Subject to the terms
of Sections 5.4, 5.5 and 5.6 hereof, upon written instructions at any time and
from time to time of a Majority in Interest of Noteholders, the Indenture
Trustee shall take such action, or refrain from taking such action, including
any of the following actions as may be specified in such instructions: (a) give
such notice, direction or consent or exercise such right, remedy or power or
take such action hereunder or under any Assigned Document, or in respect of any
part of or all the Indenture Estate, as it shall be entitled to take and as
shall be specified in such instructions; (b) take such action with respect to or
to preserve or protect the Indenture Estate (including the discharge of Liens)
as it shall be entitled to take and as shall be specified in such instructions;
and (c) waive, consent to, approve (as satisfactory to it) or disapprove all
matters required by the terms of any Operative Document to be satisfactory to
the Indenture Trustee. The Indenture Trustee may, and upon written instructions
from a Majority in Interest of Noteholders, the Indenture Trustee shall, execute
and file or cause to be executed and filed any financing statement (and any
continuation statement with respect to such financing statement) or any similar
instrument or document relating to the security interest or the assignment
created by this Indenture or granted by the Owner Lessor herein as may be
necessary to protect and preserve the security interest or assignment created by
or granted pursuant to this Indenture, to the extent otherwise entitled to do so
and as shall be specified in such instructions.
Section 5.3. Action Upon Payment of Lessor Notes or Termination of
Facility Lease. Subject to the terms of Section 5.4 hereof, upon payment in full
of the principal of and interest on all Lessor Notes then outstanding and all
other amounts then due all Noteholders hereunder, and all other sums secured
hereby or otherwise required to be paid hereunder, under the Participation
Agreement and under the Facility Lease, the Indenture Trustee shall execute and
deliver to, or as directed in writing by, the Owner Lessor and the Facility
Lessee an appropriate instrument in due form for recording, releasing the
Indenture Estate from the Lien of this Indenture.
54
Nothing in this Section 5.3 shall be deemed to expand the instances in which
the Owner Lessor is entitled to prepay the Lessor Notes.
Section 5.4. Compensation of the Indenture Trustee; Indemnification.
(a) The Owner Lessor will from time to time, on demand, pay to the
Indenture Trustee such compensation for its services hereunder as shall be
agreed to by the Owner Lessor and the Indenture Trustee, or, in the absence of
agreement, reasonable compensation for such services (which compensation shall
include reasonable fees and expenses of its outside counsel and shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Indenture Trustee agrees that it shall have no right
against the Noteholders or, except as provided in Section 3 and Section 4.3
hereof or this Section 5, the Indenture Estate, for any fee as compensation for
its services hereunder.
(b) The Indenture Trustee shall not be required to take any action or
refrain from taking any action under Section 4, 5.2 or 9.1 hereof unless it and
any of its directors, officers, employees or agents shall have been indemnified
in manner and form satisfactory to the Indenture Trustee. The Indenture Trustee
shall not be required to take any action under Section 4 or Section 5.2, 5.3 or
9.1 hereof, nor shall any other provision of this Indenture be deemed to impose
a duty on the Indenture Trustee to take any action, if it shall have been
advised by counsel (who shall not be an employee of the Indenture Trustee) that
such action is contrary to the terms hereof or is otherwise contrary to
Applicable Law or (unless it shall have been indemnified in manner and form
satisfactory to the Indenture Trustee) may result in personal liability to the
Indenture Trustee.
Section 5.5. No Duties Except as Specified; No Action Except Under
Facility Lease, Indenture or Instructions.
(a) The Indenture Trustee shall not have any duty or obligation to
manage, control, use, sell, dispose of or otherwise deal with any part of the
Indenture Estate or otherwise take or refrain from taking any action under or in
connection with this Indenture or the other Assigned Documents except as
expressly provided by the terms of this Indenture or as expressly provided in
written instructions from a Majority in Interest of Noteholders in accordance
with Section 5.2 hereof; and no implied duties or obligations shall be read into
this Indenture against the Indenture Trustee.
(b) The Indenture Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Indenture Estate except (a) as
required by the
55
terms of the Facility Lease, to the extent applicable to the Indenture Trustee
as assignee of the Owner Lessor, (b) in accordance with the powers granted to,
or the authority conferred upon, the Indenture Trustee pursuant to this
Indenture or in accordance with the express terms hereof or with written
instructions from a Majority in Interest of Noteholders in accordance with
Section 5.2 hereof.
Section 5.6. Certain Rights of the Owner Lessor. Notwithstanding any
other provision of this Indenture or any provision of any Operative Document to
the contrary, and in addition to any rights conferred on the Owner Lessor
hereby:
(a) The Owner Lessor shall at all times, to the exclusion of the
Indenture Trustee, (i) retain all rights to demand and receive payment of, and
to commence an action for payment of, Excepted Payments but the Owner Lessor
shall have no remedy or right with respect to any such payment against the
Indenture Estate nor any right to collect any such payment by the exercise of
any of the remedies under Section 17 of the Facility Lease except as expressly
provided in this Section 5.6; (ii) retain all rights with respect to insurance
that Section 11 of the Facility Lease and Schedule 5.31 of the Participation
Agreement specifically confers upon the Owner Lessor and to waive any failure by
the Facility Lessee to maintain the insurance required by Section 11 of the
Facility Lease before or after the fact so long as the insurance maintained by
the Facility Lessee still conforms to Prudent Industry Practice; (iii) retain
all rights to adjust Periodic Rent and Termination Value as provided in Section
3.4 of the Facility Lease, Section 12 of the Participation Agreement or the Tax
Indemnity Agreement; provided, however, that after giving effect to any such
adjustment (x) the amount of Periodic Rent payable on each Rent Payment Date
shall be at least equal to the aggregate amount of all principal and accrued
interest payable on such Rent Payment Date on all Lessor Notes then outstanding
and (y) Termination Value shall in no event be less (when added to all other
amounts required to be paid by the Facility Lessee in respect of any early
termination of the Facility Lease) than an amount sufficient, as of the date of
payment, to pay in full the principal of, and interest on all Lessor Notes
outstanding on and as of such date of payment; (iv) except in connection with
the exercise of remedies pursuant to the Facility Lease, retain all rights to
exercise the Owner Lessor's rights relating to the Appraisal Procedure and to
confer and agree with the Facility Lessee on Fair Market Rental Value, or any
Renewal Lease Term; and (v) retain the right to declare the Facility Lease to be
in default with respect to any Excepted Payment pursuant to Section 17 of the
Facility Lease.
(b) The Owner Lessor shall have the right, together with or
independently of the Indenture Trustee, (i) to receive from the Facility Lessee
and the Guarantor all notices, certificates, reports, filings, opinions of
counsel and other documents and all
56
information that the Facility Lessee is permitted or required to give or
furnish to the Owner Lessor or the Owner Participant, as the case may be,
pursuant to the Facility Lease or any other Operative Document; (ii) to inspect
the Facility and the records relating thereto pursuant to Section 12 of the
Facility Lease; (iii) to provide such insurance as may be permitted by Section
11 of the Facility Lease; (iv) to provide notices to the Facility Lessee or the
Guarantor to the extent otherwise permitted by the Operative Documents; and (v)
to perform for the Facility Lessee as provided in Section 20 of the Facility
Lease.
(c) So long as the Lessor Notes have not been accelerated pursuant to
Section 4.3(a) hereof (or, if accelerated, such acceleration has theretofore
been rescinded) or the Indenture Trustee shall not have exercised any of its
rights pursuant to Section 4 hereof to take possession of, foreclose, sell or
otherwise take control of all or any part of the Indenture Estate, the Owner
Lessor shall retain the right to the exclusion of the Indenture Trustee to
exercise the rights of the Owner Lessor under, and to determine compliance by
the Facility Lessee with, the provisions of Sections 10 (other than Section 10.3
thereof), 13, 14 and 15 of the Facility Lease; provided, however, that if a
Lease Indenture Event of Default shall have occurred and be continuing, the
Owner Lessor shall cease to retain such rights upon notice from the Indenture
Trustee stating that such rights shall no longer be retained by the Owner
Lessor;
(d) Except as expressly provided in this Section 5.6, so long as the
Lessor Notes have not been accelerated pursuant to Section 4.3(a) hereof (or, if
accelerated, such acceleration has theretofore been rescinded) or the Indenture
Trustee shall not have exercised any of its rights pursuant to Section 4 hereof
to take possession of, foreclose, sell or otherwise take control of all or any
part of the Indenture Estate, the Owner Lessor shall have the right, to be
exercised jointly with the Indenture Trustee, (i) to exercise the rights with
respect to the Facility Lessee's use and operation, modification or maintenance
of the Undivided Interest, (ii) to exercise the Owner Lessor's right under
Section 13.1 of the Participation Agreement to withhold or grant its consent to
an assignment by the Facility Lessee of its rights under the Facility Lease, and
(iii) to exercise the rights of the Owner Lessor under Section 10.3 of the
Facility Lease; provided, however, that if a Lease Indenture Event of Default
shall have occurred and be continuing, the Owner Lessor shall cease to exercise
such rights under this clause (iii) upon notice from the Indenture Trustee
stating that such rights shall no longer be retained by the Owner Lessor;
provided further, however, that (A) the Owner Lessor shall have no right to
receive any Periodic Rent or other payments other than Excepted Payments payable
to the Owner Lessor, or the Owner Participant and (B) no determination by the
Owner Lessor or the Indenture Trustee
57
that the Facility Lessee is in compliance with the provisions of any applicable
Assigned Document shall be binding upon or otherwise affect the rights
hereunder of the Indenture Trustee or any Noteholder on the one hand or the
Owner Lessor or the Owner Participant on the other hand;
(e) So long as the Lessor Notes have not been accelerated pursuant to
Section 4.3(a) hereof and the Indenture Trustee shall not have exercised any of
its rights pursuant to Section 4 hereof to take possession of, foreclose, sell
or otherwise take control of all or any part of the Indenture Estate, the Owner
Lessor shall have the right, together with the Indenture Trustee and to the
extent permitted by the Operative Documents and Applicable Law, to seek specific
performance of the covenants of the Facility Lessee under the Operative
Documents relating to the protection, insurance, maintenance, possession, use
and return of the Property Interest, the performance by the Facility Lessee of
the Owner Lessor's obligations under the South Point Ground Lease, the exercise
of any renewal or extension rights with respect to the South Point Ground Lease
and any action pursuant to Sections 5.20 or 13.3 of the Participation Agreement
(subject to the conditions set forth in Section 5.20 or 13.3, as applicable, of
the Participation Agreement); and
(f) Nothing in this Indenture shall give to, or create in, or otherwise
provide the benefit of to, the Indenture Trustee, any rights of the Owner
Participant under or pursuant to the Tax Indemnity Agreement or any other
Operative Document and nothing in this Section 5.6 or elsewhere in this
Indenture shall give to the Owner Lessor the right to exercise any rights
specifically given to the Indenture Trustee pursuant to any Operative Document;
and nothing in this Indenture shall give to, or create in, the Indenture Trustee
the right to, and the Indenture Trustee shall not, release the Guarantor of its
obligations under the Calpine Guaranty in respect of payment of the Equity
Portion of Termination Value, unpaid amounts of the Equity Portion of Periodic
Rent (and all amounts of overdue interest relating to such amount) and other
amounts constituting Excepted Payments, unless such release results in payment
in full to the Owner Lessor of all such unpaid amounts as certified to the
Indenture Trustee by the Owner Lessor, and all claims of the Noteholders;
but nothing in clauses (a) through (f) above shall deprive the Indenture Trustee
of the exclusive right, so long as this Indenture shall be in effect, to declare
the Facility Lease to be in default under Section 16 thereof and thereafter to
exercise the remedies pursuant to Section 17 of the Facility Lease (except as
expressly set forth in the proviso of Section 5.6(b)).
Section 5.7. Restrictions on Dealing with Indenture Estate. Except as
58
provided in the Operative Documents, but subject to the terms of this Indenture,
the Owner Lessor shall not use, operate, store, lease, control, manage, sell,
dispose of or otherwise deal with the Facility, the Facility Site, any part of
the Facility Site or any other part of the Indenture Estate.
Section 5.8. Filing of Financing Statements and Continuation Statements.
Pursuant to Section 5.10 of the Participation Agreement, the Facility Lessee
has covenanted to maintain the priority of the Lien of this Indenture on the
Indenture Estate. The Owner Lessor hereby expressly authorizes the Indenture
Trustee to prepare, file, record, obtain, execute and deliver, from time to
time, such financing statements, continuation statements, control agreements
and recognition agreements as Indenture Trustee shall deem appropriate. The
Owner Lessor hereby further authorizes any account holder or bank or financial
institution to execute and deliver from time to time such control agreements
and recognition agreements as shall be requested or required by Indenture
Trustee. The Indenture Trustee shall, at the written request and expense of the
Facility Lessee, as provided in the Participation Agreement, execute and
deliver to the Facility Lessee and the Facility Lessee will file or record, if
not already filed or recorded, such financing statements or other documents and
such continuation statements or other documents with respect to financing
statements or other documents previously filed relating to the Lien created by
this Indenture in the Indenture Estate as may be supplied to the Indenture
Trustee by the Facility Lessee. At any time and from time to time, upon the
request of the Facility Lessee or the Indenture Trustee, at the expense of the
Facility Lessee (and upon receipt of the form of document so to be executed),
the Owner Lessor shall promptly and duly execute and deliver any and all such
further instruments and documents as the Facility Lessee or the Indenture
Trustee may request in obtaining the full benefits of the security interest and
assignment created or intended to be created hereby and of the rights and
powers herein granted. Upon the reasonable instructions (which instructions
shall be accompanied by the form of document to be filed) at any time and from
time to time of the Facility Lessee or the Indenture Trustee, the Owner Lessor
shall authorize, execute, file or record any financing statement (and any
continuation statement with respect to any such financing statement), and any
other document relating to the security interest and assignment created by this
Indenture as may be specified in such instructions. In addition, the Indenture
Trustee and the Owner Lessor will authorize or execute such continuation
statements with respect to financing statements and other documents relating to
the Lien created by this Indenture in the Indenture Estate as may be specified
from time to time in written instructions of any Noteholder (which instructions
may, by their terms, be operative only at a future date and which shall be
accompanied by the form of such continuation statement or other document to be
filed). Neither the Indenture Trustee nor, except as
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otherwise herein expressly provided, the Owner Lessor shall have responsibility
for the protection, perfection or preservation of the Lien created by this
Indenture.
SECTION 6.
INDENTURE TRUSTEE AND OWNER LESSOR
Section 6.1. Acceptance of Trusts and Duties. The Indenture Trustee
accepts the trusts hereby created and applicable to it and agrees to perform the
same but only upon the terms of this Indenture, and agrees to receive and
disburse all moneys constituting part of the Indenture Estate in accordance with
the provisions hereof. If any Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee shall, subject to the
provisions of Sections 4 and 5 hereof, exercise such of the rights and remedies
vested in it by this Indenture and shall at all times use the same degree of
care in their exercise as a prudent person would exercise or use in the
circumstances in the conduct of its own affairs. The Indenture Trustee shall not
be liable under any circumstances, except (a) for its own negligence or willful
misconduct, (b) in the case of any inaccuracy of any representation or warranty
of the Indenture Trustee or the Lease Indenture Company contained in Section 3.5
of the Participation Agreement, in the certificate delivered by the Indenture
Trustee at the Closing pursuant to Section 4.6 of the Participation Agreement,
or (c) for the performance of its obligations under Section 8 of the
Participation Agreement; and the Lease Indenture Company and the Indenture
Trustee shall not be liable for any action or inaction of the Owner Trust;
provided, however, that:
(i) Prior to the occurrence of a Lease Indenture Event of Default of
which a Responsible Officer of the Indenture Trustee shall have Actual
Knowledge, and after the curing of all such Indenture Events of Default
which may have occurred, the duties and obligations of the Indenture
Trustee shall be determined solely by the express provisions of the
Operative Documents to which it is a party, the Indenture Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in the Operative Documents, no implied covenants or
obligations shall be read into the Operative Documents against the
Indenture Trustee and, in the absence of bad faith on the part of the
Indenture Trustee, the Indenture Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any notes or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture;
(ii) The Indenture Trustee shall not be liable in its individual
capacity for an error of judgment made in good faith by a Responsible
Officer or other
60
officers of the Indenture Trustee, unless it shall be proven that the
Indenture Trustee was negligent in ascertaining the pertinent facts;
(iii) The Indenture Trustee shall not be liable in its individual
capacity with respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with this Indenture or at the direction
of the Majority in Interest of Noteholders, relating to the time, method
and place of conducting any proceeding or remedy available to the Indenture
Trustee, or exercising or omitting to exercise any trust or power conferred
upon the Indenture Trustee, under this Indenture;
(iv) The Indenture Trustee shall not be required to take notice or
be deemed to have notice or knowledge of any default, Lease Event of
Default, Significant Lease Default or Lease Indenture Event of Default
(except for a Lease Indenture Event of Default resulting from an event of
nonpayment) unless a Responsible Officer of the Indenture Trustee shall
have received written notice thereof. In the absence of receipt of such
notice, the Indenture Trustee may conclusively assume that there is no
default or Lease Indenture Event of Default;
(v) The Indenture Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability for the performance
of any of its duties hereunder or the exercise of any of its rights or
powers if there is reasonable ground for believing that the repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this
Indenture shall in any event require the Indenture Trustee to perform, or
be responsible for the manner of performance of, any of the obligations of
the Owner Lessor, under this Indenture; and
(vi) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and the
Indenture Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
Section 6.2. Absence of Certain Duties. Except in accordance with
written instructions furnished pursuant to Section 5.2 hereof and except as
provided in Section 5.5 and 5.8 hereof, the Indenture Trustee shall have no duty
(a) to see to any registration, recording or filing of any Operative Document
(or any financing or continuation statements in respect thereto) or to see to
the maintenance of any such
61
registration, recording or filing, (b) to see to any insurance on the
Facilities or the Facilities or to effect or maintain any such insurance, (c)
except as otherwise provided in Section 5.5 hereof or in Section 10 of the
Participation Agreement, to see to the payment or discharge of any Tax or any
Lien of any kind owing with respect to, or assessed or levied against, any part
of the Indenture Estate, (d) to confirm or verify the contents of any report,
notice, request, demand, certificate, financial statement or other instrument
of the Facility Lessee, (e) to inspect the Facility at any time or ascertain or
inquire as to the performance or observance of any of the Facility Lessee's
covenants with respect to the Facility or (f) to exercise any of the trusts or
powers vested in it by this Indenture or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction
of any of the Noteholders, pursuant to the provisions of this Indenture, unless
such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby (which in the case of the Majority in Interest of
Noteholders will be deemed to be satisfied by a letter agreement with respect
to such costs from such Majority in Interest of Noteholders). Notwithstanding
the foregoing, the Indenture Trustee shall furnish to each Noteholder and to
the Owner Lessor and the Owner Participant promptly upon receipt thereof
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and other instruments furnished to the Indenture Trustee
hereunder or under any of the Operative Documents unless the Indenture Trustee
shall reasonably believe that each such Noteholder, the Owner Lessor and the
Owner Participant shall have received copies thereof.
Section 6.3. Representations and Warranties.
(a) The Owner Lessor represents and warrants that it has not assigned
or pledged any of its estate, right, title or interest subject to this
Indenture, to anyone other than the Indenture Trustee.
(b) NEITHER THE OWNER LESSOR NOR THE INDENTURE TRUSTEE MAKES, NOR SHALL
BE DEEMED TO HAVE MADE (i) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
AS TO THE TITLE, VALUE, COMPLIANCE WITH PLANS OR SPECIFICATIONS, QUALITY,
DURABILITY, SUITABILITY, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE OF THE FACILITY, OR ANY PART
THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE FACILITIES OR ANY OTHER PART OF THE INDENTURE ESTATE, except
that the Owner Lessor represents and warrants that on
62
the Closing Date it shall have received whatever title or interest to the
Undivided Interests and the Facility Site as were conveyed to it by the
Facility Lessee and that on the Closing Date the Undivided Interests shall be
free of Owner Lessor's Liens and the Owner Participant's Liens; or (ii) any
representation or warranty as to the validity, legality or enforceability of
this Indenture, the Lessor Notes or any of the other Operative Documents, or as
to the correctness of any statement contained in any thereof, except that each
of the Owner Lessor and the Indenture Trustee represents and warrants that this
Indenture and the Participation Agreement have been, and, in the case of the
Owner Lessor, the other Operative Documents to which it is or is to become a
party have been or will be, executed and delivered by one of its officers who
is and will be duly authorized to execute and deliver such document on its
behalf.
Section 6.4. No Segregation of Moneys; No Interest. All moneys and
securities deposited with and held by the Indenture Trustee under this Indenture
for the purpose of paying, or securing the payment of, the principal of or
Make-Whole Amount or interest on the Lessor Notes shall be held in trust. Except
as specifically provided herein or in the Facility Lease, any moneys received by
the Indenture Trustee hereunder need not be segregated in any manner except to
the extent required by Applicable Law and may be deposited under such general
conditions as may be prescribed by Applicable Law, and neither the Owner Lessor
nor the Indenture Trustee shall be liable for any interest thereon; provided,
however, subject to Section 6.5 hereof, 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 to the extent known to the Indenture
Trustee.
Section 6.5. Reliance; Agents; Advice of Experts. The Indenture Trustee
shall be authorized and protected and incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed to be
genuine and believed to be signed by the proper party or parties. The Indenture
Trustee may accept in good faith a certified copy of a resolution of the
managing member (or equivalent body) of the Facility Lessee as conclusive
evidence that such resolution has been duly adopted by such Board and that the
same is in full force and effect. As to the amount of any payment to which any
Noteholder is entitled pursuant to clause "Third" of Section 3.2 or clause
"Fourth" of Section 3.3 hereof, and as to the amount of any payment to which any
other Person is entitled pursuant to Section 3.5 or Section 3.7 hereof, the
Indenture Trustee for all purposes hereof may rely on and shall be authorized
and protected in acting or refraining from acting upon an Officer's Certificate
of such
63
Noteholder or other Person, as the case may be. As to any fact or matter
the manner of ascertainment of which is not specifically described herein, the
Indenture Trustee for all purposes hereof may rely on an Officer's Certificate
of the Owner Lessor or the Facility Lessee or a Noteholder as to such fact or
matter, and such certificate shall constitute full protection to the Indenture
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon. The Indenture Trustee shall have the right to request
instructions from the Owner Lessor or the Majority in Interest of Noteholders
with respect to taking or refraining from taking any action in connection with
the Lease Indenture or any other Operative Document to which it is a party, and
shall be entitled to act or refrain from taking such action unless and until the
Indenture Trustee shall have received written instructions from the Owner Lessor
or the Majority in Interest of Noteholders, and the Indenture Trustee shall not
incur liability by reason of so acting (except as provided in Section 6.1) or
refraining from acting. 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 may, at
the expense of the Indenture Estate (but subject to the priorities of payment
set forth in Section 3 hereof), consult with independent skilled Persons to be
selected and retained by it (other than Persons regularly in its employ) as to
matters within their particular competence, 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, within such Person's area of competence,
of any such Person, so long as the Indenture Trustee shall have exercised
reasonable care in selecting such Person.
SECTION 7.
SUCCESSOR INDENTURE TRUSTEES
AND SEPARATE TRUSTEES
Section 7.1. Resignation or Removal of the Indenture Trustee;
Appointment of Successor.
(a) Resignation or Removal. Either of the Indenture Trustee or the
Account Bank or any successor thereto may resign at any time with or without
cause by giving at least thirty (30) days' prior written notice to the Owner
Lessor, the Owner Participant, the Facility Lessee and each Noteholder, such
resignation to be effective on the acceptance of appointment by the successor
Indenture Trustee or Account Bank pursuant to the provisions of subsection (b)
below. In addition, a Majority in Interest of Noteholders may at any time
remove the Indenture Trustee or the Account Bank with or without cause by an
instrument in writing delivered to the Owner Lessor, the Owner Participant, the
Indenture Trustee and the Account Bank, and the
64
Owner Lessor shall give prompt written notification thereof to each Noteholder
and the Facility Lessee. Such removal will be effective on the acceptance of
appointment by the successor Indenture Trustee or Account Bank pursuant to the
provisions of subsection (b) below. In the case of the resignation or removal
of the Indenture Trustee or Account Bank, a Majority in Interest of Noteholders
may appoint a successor Indenture Trustee or Account Bank by an instrument
signed by such holders. If a successor Indenture Trustee or Account Bank shall
not have been appointed within thirty (30) days after such resignation or
removal, the Indenture Trustee, Account Bank or any Noteholder may apply to any
court of competent jurisdiction to appoint a successor Indenture Trustee or
Account Bank to act until such time, if any, as a successor shall have been
appointed by a Majority in Interest of Noteholders as above provided. The
successor Indenture Trustee or Account Bank so appointed by such court shall
immediately and without further act be superseded by any successor Indenture
Trustee or Account Bank appointed by a Majority in Interest of Noteholders as
above provided.
(b) Acceptance of Appointment. Any successor Indenture Trustee or
Account Bank shall execute and deliver to the predecessor Indenture Trustee or
Account Bank, the Owner Participant, the Owner Lessor and all Noteholders an
instrument accepting such appointment and thereupon such successor Indenture
Trustee or Account Bank, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor Indenture
Trustee or Account Bank hereunder in the trusts hereunder applicable to it with
like effect as if originally named the Indenture Trustee or Account Bank
herein; but nevertheless, upon the written request of such successor Indenture
Trustee or Account Bank or a Majority in Interest of Noteholders, such
predecessor Indenture Trustee or Account Bank shall execute and deliver an
instrument transferring to such successor Indenture Trustee or Account Bank,
upon the trusts herein expressed applicable to it, all the estates, properties,
rights and powers of such predecessor Indenture Trustee or Account Bank, and
such predecessor Indenture Trustee or Account Bank 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 or Account Bank
hereunder. To the extent required by Applicable Law or upon request of the
successor Indenture Trustee or Account Bank, the Owner Lessor shall execute any
and all documents confirming the vesting of such estates, properties, rights
and powers in the successor Indenture Trustee or Account Bank.
(c) Qualifications. Any successor Indenture Trustee or Account Bank,
however appointed, shall be a trust company or bank with trust powers (i) which
(A) has a combined capital and surplus of at least $150,000,000, or (B) is a
direct or
65
indirect subsidiary of a corporation which has a combined capital and surplus
of at least $150,000,000 provided such corporation guarantees the performance
of the obligations of such trust company or bank as Indenture Trustee or
Account Bank, or (C) is a member of a bank holding company group having a
combined capital and surplus of at least $150,000,000 provided the parent of
such bank holding company group or a member which itself has a combined capital
and surplus of at least $150,000,000 guarantees the performance of the
obligations of such trust company or bank, and (ii) is willing, able and
legally qualified to perform the duties of Indenture Trustee or Account Bank
hereunder upon reasonable or customary terms. No successor Indenture Trustee or
Account Bank, however appointed, shall become such if such appointment would
result in the violation of any Applicable Law or create a conflict or
relationship involving a conflict of interest under the Trust Indenture Act of
1939, as amended.
(d) Appointment of Account Bank. The Indenture Trustee and each
Noteholder hereby irrevocably designate and appoint State Street Trust Bank and
Trust Company of Connecticut, National Association as the Account Bank under
this Indenture (the "Account Bank"). The Account Bank hereby agrees to act as
"securities intermediary" (within the meaning of Section 8-102(a)(14) of the
UCC) with respect to the Indenture Trustee's Account. The Owner Lessor hereby
acknowledges that the Account Bank shall act as securities intermediary with
respect to the Indenture Trustee's Account pursuant to this Indenture. The
Account Bank shall not have duties or responsibilities except those expressly
set forth in Sections 3.11 and 3.12 of this Indenture. The Indenture Trustee,
at the written direction of a Majority in Interest of Noteholders, may remove
and replace the Account Bank pursuant to the terms of Section 7.1(a) and direct
such Account Bank according to the terms of this Indenture.
(e) Merger, etc. Any Person into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any Person to which substantially all the
corporate trust business of the Indenture Trustee may be transferred, shall,
subject to the terms of subsection (c) of this Section 7.1, be the Indenture
Trustee under this Indenture without further act.
Section 7.2. Appointment of Additional and Separate Trustees.
(a) Appointment. Whenever (i) the Indenture Trustee shall deem it
necessary or prudent in order to conform to any law of any applicable
jurisdiction or to make any claim or bring any suit with respect to or in
connection with the Inden-
66
ture Estate, this Indenture, the Facility Lease, the Lessor Notes or any of the
transactions contemplated by the Operative Documents, (ii) the Indenture
Trustee shall be advised by counsel, satisfactory to it, that it is so
necessary or prudent in the interest of the Noteholders or (iii) a Majority in
Interest of Noteholders deems it so necessary or prudent and shall have
requested in writing the Indenture Trustee to do so, then in any such case the
Indenture Trustee shall execute and deliver from time to time all instruments
and agreements necessary or proper to constitute another bank or trust company
or one or more Persons approved by the Indenture Trustee either to act as
additional trustee or trustees of all or any part of the Indenture Estate,
jointly with the Indenture Trustee, or to act as separate trustee or trustees
of all or any part of the Indenture Estate, in any such case with such powers
as may be provided in such instruments or agreements, and to vest in such bank,
trust company or Person as such additional trustee or separate trustee, as the
case may be, any property, title, right or power of the Indenture Trustee
deemed necessary or advisable by the Indenture Trustee, subject to the
remaining provisions of this Section 7.2. The Owner Lessor hereby consents to
all actions taken by the Indenture Trustee under the provisions of this Section
7.2 and agrees, upon the Indenture Trustee's request, to join in and execute,
acknowledge and deliver any or all such instruments or agreements; and the
Owner Lessor hereby makes, constitutes and appoints the Indenture Trustee its
agent and attorney-in-fact for it and in its name, place and stead to execute,
acknowledge and deliver any such instrument or agreement in the event that the
Owner Lessor shall not itself execute and deliver the same within fifteen (15)
days after receipt by it of such request so to do; provided, however, that the
Indenture Trustee shall exercise due care in selecting any additional or
separate trustee if such additional or separate trustee shall not be a Person
possessing trust powers under Applicable Law. If at any time the Indenture
Trustee shall deem it no longer necessary or prudent in order to conform to any
such law or take any such action or shall be advised by such counsel that it is
no longer so necessary or prudent in the interest of the Noteholders or in the
event that the Indenture Trustee shall have been requested to do so in writing
by a Majority in Interest of Noteholders, the Indenture Trustee shall execute
and deliver all instruments and agreements necessary or proper to remove any
additional trustee or separate trustee. In such connection, the Indenture
Trustee may act on behalf of the Owner Lessor to the same extent as is provided
above. Notwithstanding anything contained to the contrary in this Section
7.2(a), to the extent the laws of any jurisdiction preclude the Indenture
Trustee from taking any action hereunder either alone, jointly or through a
separate trustee under the direction and control of the Indenture Trustee, the
Owner Lessor, at the instruction of the Indenture Trustee, shall appoint a
separate trustee for such jurisdiction, which separate trustee shall have full
power and authority to take all action hereunder as to matters relating to such
jurisdiction without the consent of the Indenture Trustee, but not subject to
the same limitations in
67
any exercise of his power and authority as those to which the Indenture
Trustee is subject.
(b) The Indenture Trustee as Agent. Any additional trustee or separate
trustee at any time by an instrument in writing may constitute the Indenture
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by Applicable Law, to do all acts and things and exercise
all discretions which it is authorized or permitted to do or exercise, for and
in its behalf and in its name. In case any such additional trustee or separate
trustee shall become incapable of acting or cease to be such additional trustee
or separate trustee, the property, rights, powers, trusts, duties and
obligations of such additional trustee or separate trustee, as the case may be,
so far as permitted by Applicable Law, shall vest in and be exercised by the
Indenture Trustee, without the appointment of a new successor to such
additional trustee or separate trustee, unless and until a successor is
appointed in the manner hereinbefore provided.
(c) Requests, etc. Any request, approval or consent in writing by the
Indenture Trustee to any additional trustee or separate trustee shall be
sufficient to warrant such additional trustee or separate trustee, as the case
may be, to take the requested, approved or consented to action.
(d) Subject to Indenture, etc. Each additional trustee and separate
trustee appointed pursuant to this Section 7.2 shall be subject to, and shall
have the benefit of Sections 3 through 9 hereof insofar as they apply to the
Indenture Trustee. Notwithstanding any other provision of this Section 7.2, (i)
the powers, duties, obligations and rights of any additional trustee or
separate trustee appointed pursuant to this Section 7.2 shall not in any case
exceed those of the Indenture Trustee hereunder, (ii) all powers, duties,
obligations and rights conferred upon the Indenture Trustee in respect of the
receipt, custody, investment and payment of moneys or the investment of moneys
shall be exercised solely by the Indenture Trustee and (iii) no power hereby
given to, or exercisable as provided herein by, any such additional trustee or
separate trustee shall be exercised hereunder by such additional trustee or
separate trustee except jointly with, or with the consent of, the Indenture
Trustee.
SECTION 8.
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS
Section 8.1. Supplemental Indenture and Other Amendment With Consent;
Conditions and Limitations. At any time and from time to time, subject to
Sections
68
8.2 and 8.3 hereof, but only upon the written direction of a Majority in
Interest of Noteholders and the written consent of the Owner Lessor, (a) the
Indenture Trustee shall execute an amendment or supplement hereto for the
purpose of adding provisions to, or changing or eliminating provisions of, this
Indenture as specified in such request, and (b) the Indenture Trustee, as the
case may be, shall enter into or consent to such written amendment of or
supplement to any Assigned Document as each other party thereto may agree to
and as may be specified in such request, or execute and deliver such written
waiver or modification of or consent to the terms of any such agreement or
document as may be specified in such request; provided, however, that without
the consent of the Noteholders representing one hundred percent (100%) of the
outstanding principal amount of the Lessor Notes, such percentage to be
determined in the same manner as provided in the definition of the term
"Majority in Interest of Noteholders," no such supplement to or amendment of
this Indenture or any Assigned Document, or waiver or modification of or
consent to the terms hereof or thereof, shall (i) modify the definition of the
terms "Majority in Interest of Noteholders" or reduce the percentage of
Noteholders required to take or approve any action hereunder, (ii) change the
amount or the time of payment of any amount owing or payable under any Lessor
Note or change the rate or manner of calculation of interest payable on any
Lessor Note, (iii) alter or modify the provisions of Section 3 hereof with
respect to the manner of payment or the order of priorities in which
distributions thereunder shall be made as between the Noteholders and the Owner
Lessor, (iv) reduce the amount (except to any amount as shall be sufficient to
pay the aggregate principal of, Make-Whole Amount, if any, and interest on all
outstanding Lessor Notes) or extend the time of payment of Periodic Rent or
Termination Value except as expressly provided in Section 3.5 of the Facility
Lease, or change any of the circumstances under which Periodic Rent or
Termination Value is payable, (v) consent to any assignment of the Facility
Lease if in connection therewith the Facility Lessee will be released from its
obligation to pay Periodic Rent and Termination Value, except as expressly
provided in Section 13 of the Participation Agreement, or release the Facility
Lessee of its obligation to pay Periodic Rent or Termination Value or change
the absolute and unconditional character of such obligations as set forth in
Section 9 of the Facility Lease; (vi) consent to any release of the Guarantor
under Section 8.4 of the Calpine Guaranty or (vii) deprive the Indenture
Trustee of the Lien on the Indenture Estate or permit the creation of any Lien
on the Indenture Estate ranking equally or prior to the Lien of the Indenture
Trustee, except for Permitted Liens.
Section 8.2. Supplemental Indentures and other Amendments Without
Consent. Without the consent of any Noteholders but subject to the provisions
of Section 8.3, and only after notice thereof shall have been sent to the
Noteholders and
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with the consent of the Owner Lessor, the Indenture Trustee shall enter into
any indenture or indentures supplemental hereto or execute any amendment,
modification, supplement, waiver or consent with respect to any other Operative
Document (a) to evidence the succession of another Person as a Lessor Manager
or the appointment of a co-manager in accordance with the terms of the LLC
Agreement, or to evidence the succession of a successor as the Indenture
Trustee hereunder, the removal of the Indenture Trustee or the appointment of
any separate or additional trustee or trustees, in each case if done pursuant
to the provisions of Section 7 hereof and to define the rights, powers, duties
and obligations conferred upon any such separate trustee or trustees or
co-trustee or co-trustees, (b) to correct, confirm or amplify the description
of any property at any time subject to the Lien of this Indenture or to convey,
transfer, assign, mortgage or pledge any property to or with the Indenture
Trustee, (c) to provide for any evidence of the creation and issuance of any
Additional Lessor Notes pursuant to, and subject to the conditions of, Section
2.12 and to establish the form and the terms of such Additional Lessor Notes,
(d) to cure any ambiguity in, to correct or supplement any defective or
inconsistent provision of, or to add to or modify any other provisions and
agreements in, this Indenture or any other Operative Document in any manner
that will not in the judgment of the Indenture Trustee materially adversely
affect the interests of the Noteholders, (e) to grant or confer upon the
Indenture Trustee for the benefit of the Noteholders any additional rights,
remedies, powers, authority or security which may be lawfully granted or
conferred and which are not contrary or inconsistent with this Indenture, (f)
to add to the covenants or agreements to be observed by the Facility Lessee or
the Owner Lessor and which are not contrary to this Indenture, to add Indenture
Events of Defaults for the benefit of Noteholders or surrender any right or
power of the Owner Lessor, provided it has consented thereto, (g) to effect the
assumption of all or, to the extent otherwise provided hereunder, part of the
Lessor Notes by the Facility Lessee, provided that the supplemental indenture
will contain all of the covenants applicable to the Facility Lessee contained
in the Facility Lease and the Participation Agreement for the benefit of the
Indenture Trustees or the holders of such Lessor Notes, such that the Facility
Lessee's obligations contained therein, if applicable in the event that the
Facility Lease are terminated, will continue to be in full force and effect,
(h) to comply with requirements of the SEC, any applicable law, rules or
regulations of any exchange or quotation system on which the Certificates are
listed, or any regulatory body, (i) to modify, eliminate or add to the
provisions of any Operative Documents to such extent as shall be necessary to
qualify or continue the qualification of this Lease Indenture or the Pass
Through Trust Agreements (including any supplements thereto) under the Trust
Indenture Act, or similar federal statute enacted after the Closing Date, and
to add to this Indenture such other provisions as may be expressly required or
permitted by the Trust Indenture Act of 1939 (if such qualification is
required), and (j) to effect
70
any indenture or indentures supplemental hereto or any amendment, modification,
supplement, waiver or consent with respect to any other Operative Document,
provided such supplemental indenture, amendment, modification, supplement,
waiver or consent shall not reasonably be expected to materially and adversely
affect the interest of the Noteholders; provided, however, that no such
amendment, modification, supplement, waiver or consent contemplated by this
Section 8.2 shall, without the consent of the holder of each then outstanding
Lessor Note, cause any of the events specified in clauses (i) through (v) of
the first sentence of Section 8.1 hereof to occur; and provided, further, that
no such amendment, modification, supplement, waiver or consent contemplated by
this Section 8.2 shall, without the consent of the holder of a Majority in
Interest of Noteholders, modify the provisions of Sections 5.1, 5.2, 5.6, 5.14,
5.31, 6, or 13.1 of the Participation Agreement or Section 19 of the Lease, or
modify in any material respect the provisions of the Calpine Guaranty (other
than, in each case, any amendment, modification, supplement, waiver or consent
having no adverse affect on the interest of the Noteholders).
Section 8.3. Conditions to Action by the Indenture Trustee. If in the
opinion of the Indenture Trustee any document required to be executed pursuant
to the terms of Section 8.1 or 8.2 or the election referred to in Section 9.13
hereof adversely affects any immunity or indemnity in favor of the Indenture
Trustee under this Indenture or the Participation Agreement, or would
materially increase its administrative duties or responsibilities hereunder or
thereunder or may result in personal liability for it (unless it shall have
been provided an indemnity satisfactory to the Indenture Trustee), the
Indenture Trustee may in its discretion decline to execute such document or the
election. With every such document and election, the Indenture Trustee shall be
furnished with evidence that all necessary consents have been obtained and with
an opinion of counsel that such document complies with the provisions of this
Indenture, does not deprive the Indenture Trustee or the holders of the Lessor
Notes of the benefits of the Lien hereby created on any property subject hereto
or of the assignments contained herein (except as otherwise consented to in
accordance with Section 8.1 hereof) and that all consents required by the terms
hereof in connection with the execution of such document or the making of such
election have been obtained. The Indenture Trustee shall be fully authorized
and protected in relying on such opinion.
SECTION 9.
MISCELLANEOUS
Section 9.1. Surrender, Defeasance and Release.
71
(a) Surrender and Cancellation of Indenture. This Indenture shall be
surrendered and cancelled and the trusts created hereby shall terminate and
this Indenture shall be of no further force or effect upon satisfaction of the
conditions set forth in the proviso to the Granting Clause hereof. Upon any
such surrender, cancellation, and termination, the Indenture Trustee shall pay
all moneys or other properties or proceeds constituting part of the Indenture
Estate (the distribution of which is not otherwise provided for herein) to the
Owner Lessor, and the Indenture Trustee shall, upon request and at the cost and
expense of the Owner Lessor, execute and deliver proper instruments
acknowledging such cancellation and termination and evidencing the release of
the security, rights and interests created hereby. If this Indenture is
terminated pursuant to this Section 9.1(a), the Indenture Trustee shall
promptly notify the Facility Lessee and the Owner Participant of such
termination.
(b) Release.
(i) Whenever a Component is replaced pursuant to the Facility
Lease, such component shall automatically and without further act of
any Person be released from the Lien of this Lease Indenture and the
Indenture Trustee shall, upon the written request of the Owner Lessor
or the Facility Lessee, execute and deliver to, and as directed in
writing by, the Facility Lessee or the Owner Lessor an appropriate
instrument (in due form for recording) releasing the replaced Component
from the Lien of this Indenture.
(ii) Whenever the Facility Lessee is entitled to acquire the
Facility or have the Facility transferred to it pursuant to the express
terms of the Facility Lease, the Indenture Trustee shall release the
Indenture Estate from the Lien of this Indenture and execute and
deliver to, or as directed in writing by, the Facility Lessee or the
Owner Lessor an appropriate instrument (in due form for recording)
releasing the Indenture Estate from the Lien of this Indenture;
provided that all sums secured by this Indenture have been paid to the
Persons entitled to such sums.
Section 9.2. Conveyances Pursuant to the Site Lease. Sales, grants of
leases or easements and conveyances of portions of the Facility Site, rights of
way, easements or leasehold interest made by the Facility Lessee in accordance
with Article VIII of the Facility Site Lease shall automatically, without
further act of any Person, be released from this Lease Indenture.
Section 9.3. Appointment of the Indenture Trustee as Attorney; Further
72
Assurances. The Owner Lessor hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Lessor irrevocably with full power as long as
the Lease Indenture is in effect (in the name of the Owner Lessor or otherwise)
to ask, require, demand, receive, compound and give acquittance for any and all
moneys and claims for moneys due and to become due under or arising out of the
Assigned Documents (except to the extent that such moneys and claims constitute
Excepted Payments), to endorse any checks or other instruments or orders in
connection therewith, to make all such demands and to give all such notices as
are permitted by the terms of the Facility Lease to be made or given by the
Owner Lessor upon the occurrence and continuance of a Lease Event of Default,
to enforce compliance by the Facility Lessee with all terms and provisions of
the Facility Lease (except as otherwise provided in Sections 4.3 and 5.6
hereof), and to file any claims or take any action or institute any proceedings
which the Indenture Trustee may request in the premises.
Section 9.4. Indenture for Benefit of Certain Persons Only. Nothing in
this Indenture, whether express or implied, shall be construed to give to any
Person other than the parties hereto, the Owner Participant, the Facility
Lessee (with respect to Sections 4.12 and 8.1 hereof) and the Noteholders (and
any successor or assign of any thereof) any legal or equitable right, remedy or
claim under or in respect of this Indenture, and this Indenture shall be for
the sole and exclusive benefit of the parties hereto, the Owner Participant,
the Facility Lessee (as provided in Sections 4.12 and 8.1 hereof) and the
Noteholders.
Section 9.5. Notices; Furnishing Documents, etc. Unless otherwise
expressly specified or permitted by the terms hereof, all communications and
notices provided for herein to a party hereto shall be in writing or by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (a) upon personal delivery thereof, including by
overnight mail or courier service, (b) in the case of notice by United States
mail, certified or registered, postage prepaid, return receipt requested, upon
receipt thereof, or (c) in the case of notice by such a telecommunications
device, upon transmission thereof, provided such transmission is promptly
confirmed by either of the methods set forth in clauses (a) and (b) above, in
each case addressed to such party and copy party at its address set forth below
or at such other address as such party or copy party may from time to time
designate by written notice to the other party:
If to the Owner Lessor:
Xxxxx Fargo Bank Northwest, National Association
MAC U1254-031
73
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Services
with a copy to the Owner Participant:
Xxxxx Fargo Bank Northwest, National Association
MAC U1254-000
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Services
and
Newcourt Capital USA Inc.
0000 Xxxxxx xx xxx Xxxxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx, Esq.
If to the Indenture Trustee:
State Street Bank and Trust Company of Connecticut,
National Association
000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
with a copy to:
State Street Bank and Trust Company of California,
National Association
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
74
Los Angeles, CA 90071
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
If to the Facility Lessee:
South Point Energy, LLC
c/o Calpine Center Northbrook Office
Attention: Senior Counsel
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Calpine Corporation
Attention: General Counsel
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Section 9.6. Severability. Any provision of this Indenture which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating or rendering unenforceable the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 9.7. Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Indenture is executed and delivered
by Xxxxx Fargo Bank Northwest, National Association ("Xxxxx Fargo"), not
individually or personally but solely as trustee of the Owner Lessor under the
LLC Agreement, in the exercise of the powers and authority conferred and vested
in it pursuant thereto, (b) each of the representations, undertakings and
agreements herein made on the part of the Owner Lessor is made and intended not
as personal representations, undertakings and agreements by Xxxxx Fargo, but is
made and intended for the purpose for binding only the Owner Lessor, (c)
nothing herein contained shall be construed as creating any liability on Xxxxx
Fargo, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly
75
waived by the parties hereto or by any Person claiming by, through or under
the parties hereto and (d) under no circumstances shall Xxxxx Fargo, be
personally liable for the payment of any indebtedness or expenses of the Owner
Lessor or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Owner Lessor
under this Indenture.
Section 9.8. Written Changes Only. Subject to Sections 8.1 and 8.2
hereof, no term or provision of this Indenture or any Lessor Note may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the parties hereto; and any waiver of the terms hereof or of
any Lessor Note shall be effective only in the specific instance and for the
specific purpose given.
Section 9.9. Counterparts. This Indenture may be executed in separate
counterparts, each of which, when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
Section 9.10. Successors and Permitted Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and permitted assigns and
each Noteholder. Any request, notice, direction, consent, waiver or other
instrument or action by any Noteholder shall bind the successor and assigns
thereof.
Section 9.11. Headings and Table of Contents. The headings of the
sections of this Indenture and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
Section 9.12. Governing Law. Except for those provisions relating to the
creation, perfection, enforcement, interpretation and foreclosure of the deed
of trust lien and security agreement covering the real property described on
Exhibit A hereto (the "Real Property") and fixtures thereon, the appointment
and actions of a receiver and related provisions regarding enforcement of liens
and security agreements relating to the Real Property and fixtures thereon,
which provisions of this Indenture shall be governed by, enforced in accordance
with and interpreted according to Arizona law (excluding its choice of law
provisions), and except to the extent that the laws of the United States of
America (hereinafter "Federal Law") require the application of Federal Law (in
which limited case(s) Federal Law shall apply to those issues or matters as to
which Federal Law is required to apply), this Indenture and the Lessor Notes
shall be in all other respects governed by and construed in accordance with the
laws of the State of New York, including all matters of construction, validity
and
76
performance (without giving effect to the conflicts of laws provisions
thereof, other than New York General Obligation Law Section 5-1401), except to
the extent mandatory choice of law rules require the application of laws of
another jurisdiction. Regardless of any provision in any other agreement, for
purposes of the Uniform Commercial Code (as in effect from time to time in any
jurisdiction including the State of New York), the "Securities Intermediary's
Jurisdiction" of the Account Bank with respect to the Indenture Trustee's
Account is the State of New York.
Section 9.13. Reorganization Proceedings with Respect to the Lessor
Estate. If (a) the Lessor Estate becomes a debtor subject to the reorganization
provisions of Title 11 of the United States Code, or any successor provisions,
(b) pursuant to such reorganization provisions the Owner Participant is
required by reason of the Owner Participant's being held to have recourse
liability that it would not otherwise have had under Section 2.5 hereof to the
debtor or the trustee of the debtor, directly or indirectly, to make payment on
account of any amount payable as principal or interest on the Lessor Notes and
(c) any Noteholder or the Indenture Trustee actually receives any Excess Amount
(as hereinafter defined) which reflects any payment by the Owner Participant on
account of clause (b) above, then such Noteholder or the Indenture Trustee, as
the case may be, shall promptly refund such Excess Amount, without interest, to
the Owner Participant after receipt by such Noteholder or the Indenture
Trustee, as the case may be, of a written request for such refund by the Owner
Participant (which request shall specify the amount of such Excess Amount and
shall set forth in detail the calculation thereof). For purposes of this
Section 9.13, "Excess Amount" means the amount by which such payment exceeds
the amount which would have been received by such holder and the Indenture
Trustee in respect of such principal or interest if the Owner Participant had
not become subject to the recourse liability referred to in clause (b) above.
Nothing contained in this Section 9.13 shall prevent the Indenture Trustee or
any Noteholder from enforcing any personal recourse obligations (and retaining
the proceeds thereof) of the Owner Participant under the Participation
Agreement.
The Noteholders and the Indenture Trustee agree that should the Lessor
Estate become a debtor subject to the reorganization provisions of the
Bankruptcy Code, they shall upon the request of the Owner Participant, and
provided that the making of the election hereinafter referred to is permitted
to be made by them under Applicable Law and will not have any adverse impact on
any Noteholder, the Indenture Trustee or the Indenture Estate other than as
contemplated by the preceding paragraph, make the election referred to in
Section 1111(b)(1)(A)(i) of Title 11 of the Bankruptcy Code or any successor
provision if, in the absence of such election, the Noteholders would have
recourse against the Owner Participant for the payment of the indebtedness
77
represented by the Lessor Notes in circumstance in which such Noteholders would
not have recourse under this Indenture if the Lessor Estate had not become a
debtor under the Bankruptcy Code.
Section 9.14. Withholding Taxes: Information Reporting. The Indenture
Trustee shall exclude and withhold from each distribution of principal,
Make-Whole Amount, if any, and interest and other amounts due hereunder or
under the Lessor Notes any and all withholding taxes applicable thereto as
required by law. The Indenture Trustee agrees (i) to act as such withholding
agent and, in connection therewith, whenever any present or future taxes or
similar charges are required to be withheld with respect to any amounts payable
in respect of the Lessor Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the
Noteholders and to pay to the Noteholders from amounts received by Paying Agent
pursuant hereto such additional amounts so that the net amount actually
received by the Noteholders, after reduction for such withheld amounts, shall
be equal to the full amount of principal, Make-Whole Amount, interest and other
amounts otherwise due and payable hereunder; provided, however, that,
notwithstanding the foregoing, the Paying Agent shall be required to pay such
additional amounts only if and to the extent that (a) the Facility Lessee is
required to indemnify the Noteholders for such amounts under Section 9 of the
Participation Agreement and (b) the Facility Lessee has not paid such amounts
within three (3) days after notice of nonpayment, (ii) that it will file any
necessary withholding tax returns or statements when due, and (iii) that, as
promptly as possible after the payment thereof, it will deliver to each
Noteholder appropriate documentation showing the payment thereof, together with
such additional documentary evidence as such Noteholders may reasonably request
from time to time. The Indenture Trustee agrees to file any other information
as it may be required to file under United States law.
Any Noteholder which is organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date such Noteholder becomes a
Noteholder, (a) so notify the Indenture Trustee, (b) (i) provide the Indenture
Trustee with Internal Revenue Service form W-8 BEN, W-8 ECI or W-9, as
appropriate, or (ii) notify the Indenture Trustee that it is not entitled to an
exemption from United States withholding tax or a reduction in the rate thereof
on payments of interest. Any such Noteholder agrees by its acceptance of a
Lessor Note, on an ongoing basis, to provide like certification for each
taxable year and to notify the Indenture Trustee should subsequent
circumstances arise affecting the information provided the Indenture Trustee in
clauses (a) and (b) above. The Indenture Trustee shall be fully protected in
relying upon, and each Noteholder by its acceptance of a Lessor Note hereunder
78
agrees to indemnify and hold the Indenture Trustee harmless against all claims
or liability of any kind arising in connection with or related to the Indenture
Trustee's reliance upon any such documents, forms or information provided by
such Noteholder to the Indenture Trustee. In addition, if the Indenture Trustee
has not withheld taxes on any payment made to any Noteholder, and the Indenture
Trustee is subsequently required to remit to any taxing authority any such
amount not withheld, such Noteholder shall return such amount to the Indenture
Trustee upon written demand by the Indenture Trustee. The Indenture Trustee
shall be liable only for direct (but not consequential) damages to any
Noteholder due to the Indenture Trustee's violation of the Code and only to the
extent such liability is caused by the Indenture Trustee's violation of the
Code and only to the extent such liability is caused by the Indenture Trustee's
failure to act in accordance with its standard of care under this Lease
Indenture.
Section 9.15. Fixture Financing Statement. This Indenture also is
intended to serve as a fixture filing financing statement and as a financing
statement with respect to goods or items, or other personal property that is or
will be attached to the Real Property, as permitted under the Arizona Uniform
Commercial Code and the Owner Lessor hereby authorizes this Indenture to so
serve and to be filed and/or recorded as such. In addition, a photographic,
electronic or other copy of this Indenture and/or any financing statement
related hereto shall be sufficient for filing and/or recording as a financing
statement. In connection therewith, the following information is provided:
(a) Name and address of Debtor:
South Point OL-4, LLC
c/o Wells Fargo Bank Northwest, National Association
MAC U1254-031
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Services
(b) Name and Address of Secured Party (from which information concerning
the security interest may be obtained):
State Street Bank and Trust Company of Connecticut,
National Association,
as Indenture Trustee
79
000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
(c) The personal property covered by the security interest granted
hereunder includes goods which are or are to become fixtures upon the real
property described in Exhibit A hereto.
(d) Recording: This Indenture is to be recorded and/or filed in the
official real estate or other records of the County of Mohave, State of
Arizona, and in the records of the Bureau of Indian Affairs in Albuquerque, New
Mexico.
80
(e) Type of Filing: This is a commercial filing and NOT a consumer
filing under the UCC as enacted and in effect in the State of Arizona.
(Remainder of Page Intentionally Left Blank)
81
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed on the day and year first above written.
SOUTH POINT OL-4, LLC, as Owner Lessor/Trustor
By: Xxxxx Fargo Bank Northwest, National Association,
not in its individual capacity but solely as the
Lessor Manager
By: ________________________________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Indenture Trustee and Account Bank
By: ________________________________________________________
Name:
Title:
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ___ day of
October 2001, by _________________________, the _______________________of Xxxxx
Fargo Bank Northwest, National Association, not in its individual capacity but
solely as the Lessor Manager of South Point OL-4, LLC, a Delaware limited
liability company, as the Owner Lessor/Trustor (the "Owner Lessor"), to be the
free act and deed on behalf of the national banking association as the Lessor
Manager of the Owner Lessor under the LLC Agreement dated as of __________,
2001.
Notary Public
My Commission Expires
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this the ___ day of
October 2001, by _________________________, the _______________________of State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, to be the free act and deed on behalf of the corporation.
Notary Public
My Commission Expires
EXHIBIT A
to Lease Indenture
DESCRIPTION OF FACILITY SITE
The East half (E1/2) of Section 8, Township 17 North, Range 21 West of the Gila
and Salt River Base and Meridian, Mohave County, Arizona.
Reserving therefrom, all mineral rights on, under or within said land, as
reserved by the Fort Mojave Indian Tribe.
EXHIBIT B
to Lease Indenture
FORM OF SOUTH POINT LESSOR NOTE SERIES [A][B]
SOUTH POINT OL-4, LLC
NONRECOURSE PROMISSORY NOTE (SOUTH POINT) DUE IN
A SERIES OF INSTALLMENTS OF PRINCIPAL
WITH FINAL PAYMENT DATE
OF MAY 30, [2012][2019]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED,
SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT
Issued at: New York, New York
Issue Date: October __, 2001
$[ ]
SOUTH POINT OL-4, LLC, a Delaware limited liability company (herein called
the "Owner Lessor", which term includes any successor person under the
Collateral Trust Indenture hereinafter referred to), hereby promises to pay to
State Street Bank and Trust Company of Connecticut, National Association, in
its capacity as pass through trustee of [the South Point, Broad River and
RockGen Series A Trust] [the South Point, Broad River and RockGen Series B
Trust], (the "Pass Through Trustee") or its registered assigns, the principal
sum of $[_____], which is due and payable in a series of installments of
principal with a final payment date of May 30, [2012][2019], as provided below,
together with interest at the rate of [___]% per annum on the principal
remaining unpaid from time to time from and including the Issue Date until paid
in full. Interest on the outstanding principal amount under this Note shall be
due and payable in arrears semiannually at the rate specified above, commencing
on May 30, 2002, and on each May 30 and November 30 thereafter until the
principal of this Note is paid in full or made available for payment. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.
The principal of this Note shall be due and payable in installments on
each of the dates set forth on Schedule I hereto. The installment of principal
payable on any such date shall be in an aggregate amount equal to the product
of the Principal Portion set forth on Schedule I multiplied by the percentage
set forth on Schedule I under the column
B-1-1
headed "Percentage of Principal Amount Payable" for such date unless the
Principal Portion has been prepaid; provided, that the final installment of
principal shall be equal to the then unpaid principal balance of this Note.
Capitalized terms used in this Note that are not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture of Trust, Mortgage
and Security Agreement dated as of October 18, 2001 (the "Collateral Trust
Indenture"), between the Owner Lessor and State Street Bank and Trust Company
of Connecticut, National Association, as trustee (the "Indenture Trustee").
Interest (computed on the basis of a 360-day year of twelve 30-day months)
on any overdue principal and premium, if any, and (to the extent permitted by
Applicable Law) any overdue interest shall be paid, on demand, from the due
date thereof at the Overdue Rate for the period during which any such
principal, premium or interest shall be overdue.
In the event any date on which a payment is due under this Note is not a
Business Day, then payment thereof shall be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
such payment was due.
Except as otherwise specifically provided in the Collateral Trust
Indenture and in the Participation Agreement, all payments of principal,
premium, if any, and interest on this Note, and all payments of any other
amounts due hereunder or under the Collateral Trust Indenture shall be made
only from the Indenture Estate, and the Indenture Trustee shall have no
obligation for the payment thereof except to the extent that the Indenture
Trustee shall have sufficient income or proceeds from the Indenture Estate to
make such payments in accordance with the terms of Section 3 of the Collateral
Trust Indenture. The holder hereof, by its acceptance of this Note, agrees that
it will look solely to the income and proceeds from the Indenture Estate to the
extent available for distribution to the holder hereof, as herein provided, and
that, none of the Owner Participant, the Owner Lessor or the Indenture Trustee
is or shall be personally liable to the holder hereof for any amounts payable
under this Note or under the Collateral Trust Indenture, or, except as
expressly provided in the Collateral Trust Indenture or, in the case of the
Owner Participant and the Owner Lessor, the Participation Agreement for any
performance to be rendered under the Collateral Trust Indenture or any Assigned
Document or for any liability under the Collateral Trust Indenture or any
Assigned Document.
The principal of and premium, if any, and interest on this Note shall be
paid by the Indenture Trustee, without any presentment or surrender of this
Note, except that, in
B-1-2
the case of the final payment in respect of this Note, this Note shall be
surrendered to the Indenture Trustee, by mailing a check for the amount then
due and payable, in New York Clearing House funds, to the Noteholder, at the
last address of the Noteholder appearing on the Note Register, or by whichever
of the following methods specified by notice from the Noteholder to the
Indenture Trustee: (a) by crediting the amount to be distributed to the
Noteholder to an account maintained by the Noteholder with the Indenture
Trustee, (b) by making such payment to the Noteholder in immediately available
funds at the Indenture Trustee Office, or (c) by transferring such amount in
immediately available funds for the account of the Noteholder to the banking
institution having bank wire transfer facilities as shall be specified by the
Noteholder, such transfer to be subject to telephonic confirmation of payment.
All payments due with respect to this Note shall be made (i) as soon as
practicable prior to the close of business on the date the amounts to be
distributed by the Indenture Trustee are actually received by the Indenture
Trustee if such amounts are received by 12:00 noon, New York City time, on a
Business Day or (ii) on the next succeeding Business Day if received after such
time or if received on any day other than a Business Day. Prior to due
presentment for registration of transfer of this Note, the Owner Lessor and the
Indenture Trustee may deem and treat the Person in whose name this Note is
registered on the Note Register as the absolute owner and holder of this Note
for the purpose of receiving payment of all amounts payable with respect to
this Note and for all other purposes, and neither the Owner Lessor nor the
Indenture Trustee shall be affected by any notice to the contrary. All payments
made on this Note in accordance with the provisions of this paragraph shall be
valid and effective to satisfy and discharge the liability on this Note to the
extent of the sums so paid and neither the Indenture Trustee nor the Owner
Lessor shall have any liability in respect of such payment.
The holder hereof, by its acceptance of this Note, agrees that each
payment received by it hereunder shall be applied in the manner set forth in
Section 2.7 of the Collateral Trust Indenture, which provides that each payment
on the Note shall be applied as follows: first, to the payment of accrued
interest (including interest on overdue principal and the Make Whole Amount, if
any, and, to the extent permitted by Applicable Law, overdue interest) on this
Note to the date of such payment; second, to the payment of the principal
amount of, and the Make Whole Amount, if any, on this Note then due (including
any overdue installments of principal) thereunder; and third, to the extent
permitted by Section 2.10 of the Collateral Trust Indenture, the balance, if
any, remaining thereafter, to the payment of the principal amount of, and the
Make Whole Amount, if any, on this Note.
This Note is the Note referred to in the Collateral Trust Indenture as
the "Lessor Note". The Collateral Trust Indenture permits the issuance of
additional notes ("Additional Lessor Notes"), as provided in Section 2.12 of
the Collateral Trust
B-1-3
Indenture, and the several Notes may be for varying principal amounts and may
have different maturity dates (not later than the final maturity date of the
applicable series of the Initial Lessor Notes), interest rates, redemption
provisions and other terms. The properties of the Owner Lessor included in the
Indenture Estate are pledged or mortgaged to the Indenture Trustee to the
extent provided in the Collateral Trust Indenture as security for the payment
of the principal of and premium, if any, and interest on this Note and all
other Notes issued and outstanding from time to time under the Collateral Trust
Indenture.
Reference is hereby made to the Collateral Trust Indenture for a statement
of the rights of the holder of, and the nature and extent of the security for,
this Note and of the rights of, and the nature and extent of the security for,
the holders of the other Notes and of certain rights of the Owner Lessor and
the Owner Participant, as well as for a statement of the terms and conditions
of the trust created by the Collateral Trust Indenture, to all of which terms
and conditions the holder hereof agrees by its acceptance of this Note.
This Note is subject to redemption, in whole but not in part as provided
in the Collateral Trust Indenture, as follows: (x) in the case of redemptions
under the circumstances set forth in Section 2.10(a) of the Collateral Trust
Indenture, at a price equal to the principal amount of this Note being redeemed
together with accrued interest on such principal amount to the Redemption Date,
and (y) in the case of redemptions under the circumstances set forth in
Sections 2.10(d) of the Collateral Trust Indenture, at a price equal to the
principal amount of this Note then outstanding together with accrued interest
on such principal amount to the Redemption Date, plus the Make-Whole Amount, if
any; provided, however, that no such redemption shall be made until notice
thereof is given by the Indenture Trustee to the holder hereof as provided in
the Collateral Trust Indenture.
In case either (i) a Regulatory Event of Loss under the Facility Lease
shall occur or (ii) the Facility Lease shall have been terminated pursuant to
Section 13.1 or 13.2 thereof where the Facility Lessee purchases the Undivided
Interest from the Owner Lessor, the obligations of the Owner Lessor under this
Note may, subject to the conditions set forth in Section 2.10(b) of the
Collateral Trust Indenture, be assumed in whole (but not in part) by the
Facility Lessee in which case the Owner Lessor shall be released and discharged
from all such obligations. In connection with such an assumption, the holder of
this Note may be required to exchange this Note for a new Note evidencing such
assumption.
In case a Collateral Trust Indenture Event of Default shall occur and be
B-1-4
continuing, the unpaid balance of the principal of this Note together with all
accrued but unpaid interest thereon may, subject to certain rights of the Owner
Lessor and the Owner Participant contained or referred to in the Collateral
Trust Indenture, be declared or may become due and payable in the manner and
with the effect provided in the Collateral Trust Indenture.
There shall be maintained at the Indenture Trustee Office a register for
the purpose of registering transfers and exchanges of Notes in the manner
provided in the Collateral Trust Indenture. The transfer of this Note is
registrable, as provided in the Collateral Trust Indenture, upon surrender of
this Note for registration of transfer duly accompanied by a written instrument
of transfer duly executed by or on behalf of the registered holder hereof,
together with the amount of any applicable transfer taxes.
It is expressly understood and agreed by the holder of this Note that (a)
this Note is executed and delivered by Xxxxx Fargo Bank Northwest, National
Association, not individually or personally but solely as the lessor manager
(the "Lessor Manager"), of the Owner Lessor, in the exercise of the powers and
authority conferred and vested in it pursuant thereto, (b) each of the
undertakings and agreements in this Note made on the part of the Owner Lessor
is made and intended not as personal undertakings and agreements by the Lessor
Manager but is made and intended for the purpose for binding only the Owner
Lessor, (c) nothing contained in this Note shall be construed as creating any
liability on the Lessor Manager individually or personally, to perform any
covenant either expressed or implied contained in this Note, all such
liability, if any, being expressly waived by the holder of this Note or by any
Person claiming by, through or under such holder, and (d) under no
circumstances shall the Lessor Manager, be personally liable for the payment of
any indebtedness or expenses of the Owner Lessor or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Owner Lessor under this Note.
This Note shall be governed by the laws of the State of New York.
B-1-5
IN WITNESS WHEREOF, the Owner Lessor has caused this Note to be duly
executed as of the date hereof.
SOUTH POINT OL-4, LLC
a Delaware limited liability company,
By: Xxxxx Fargo Bank Northwest, National
Association, not in its individual
capacity but solely as the Lessor
Manager
By: ________________________________________
Name:
Title:
This is the Lessor Note referred to in the within-mentioned Collateral
Trust Indenture duly executed as of the date hereof.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as the Indenture Trustee
_________________________________________
Name:
Title:
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s)
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
___________________________
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________________________________________
attorney to transfer said Note on the books of the Issuer with full power of
substitution in the premises.
Date: ________________ ____________________________________________
(Signature of Transferor)
NOTE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
SCHEDULE I
TO NOTE
Schedule Of Principal Amortization
Series A Lessor Notes.
Principal Portion: $43,000,000
Percentage of Principal
-----------------------
Regular Distribution Date Amount Payable
------------------------- --------------
May 30, 2002.................................................... 22.79069767%
November 30, 2002............................................... 15.40697674%
May 30, 2003.................................................... 9.36046512%
November 30, 2003............................................... 9.76744186%
May 30, 2004.................................................... 9.06976744%
November 30, 2004............................................... 0.00000000%
May 30, 2005.................................................... 0.00000000%
November 30, 2005............................................... 0.00000000%
May 30, 2006.................................................... 0.00000000%
November 30, 2006............................................... 0.00000000%
May 30, 2007.................................................... 0.00000000%
November 30, 2007............................................... 0.00000000%
May 30, 2008.................................................... 0.00000000%
November 30, 2008............................................... 0.00000000%
May 30, 2009.................................................... 0.00000000%
November 30, 2009............................................... 0.00000000%
May 30, 2010.................................................... 0.00000000%
November 30, 2010............................................... 0.00000000%
May 30, 2011.................................................... 0.00000000%
November 30, 2011............................................... 33.60465117%
------------
Total........................................................... 100.00000000%
=============
Series B Lessor Notes.
PRINCIPAL PORTION: $12,125,000
Percentage of Initial
---------------------
Regular Distribution Date Principal Amount
------------------------- ----------------
May 30, 2002.................................................... 0.00000000%
November 30, 2002............................................... 0.00000000%
May 30, 2003.................................................... 0.00000000%
November 30, 2003............................................... 0.00000000%
May 30, 2004.................................................... 0.00000000%
November 30, 2004............................................... 0.00000000%
May 30, 2005.................................................... 0.00000000%
November 30, 2005............................................... 0.00000000%
May 30, 2006.................................................... 0.00000000%
November 30, 2006............................................... 0.00000000%
May 30, 2007.................................................... 0.00000000%
November 30, 2007............................................... 0.00000000%
May 30, 2008.................................................... 0.00000000%
November 30, 2008............................................... 0.00000000%
May 30, 2009.................................................... 0.00000000%
November 30, 2009............................................... 0.00000000%
May 30, 2010.................................................... 0.00000000%
November 30, 2010............................................... 0.00000000%
May 30, 2011.................................................... 0.00000000%
November 30, 2011............................................... 0.00000000%
May 30, 2012.................................................... 0.00000000%
November 30, 2012............................................... 0.00000000%
May 30, 2013.................................................... 0.00000000%
November 30, 2013............................................... 0.00000000%
May 30, 2014.................................................... 0.00000000%
November 30, 2014............................................... 0.00000000%
May 30, 2015.................................................... 0.00000000%
November 30, 2015............................................... 0.00000000%
May 30, 2016.................................................... 0.00000000%
November 30, 2016............................................... 0.00000000%
May 30, 2017.................................................... 0.00000000%
November 30, 2017............................................... 0.00000000%
May 30, 2018.................................................... 0.00000000%
November 30, 2018............................................... 0.00000000%
May 30, 2019.................................................... 100.00000000%
-------------
Total........................................................... 100.00000000%
=============
B-1-10
EXHIBIT C
to Lease Indenture
FORM OF CERTIFICATE OF AUTHENTICATION
This is one of the Lessor Notes referred to in the within-mentioned Lease
Indenture.
_______________________________________,
not in its individual capacity but
solely as the Indenture Trustee
By: ____________________________________
Name:
Title:
C-2
EXHIBIT D
to Lease Indenture
DESCRIPTION OF THE FACILITY
That certain approximately 530 megawatt net nameplate capacity gas-fired
combined cycle electric generating facility (known also as the "South Point
Facility") together with all structures or improvements, all alterations
thereto or replacements thereof, and all other fixtures, attachments,
appliances, equipment, machinery and other articles (including, but not limited
to, the property set forth below (the "Included Property")), in each case
located on the land, or on the easements appurtenant to the land, consisting of
320 acres of land leased from the Fort Mojave Indian Tribe near Mojave Valley,
Arizona approximately 15 miles south of Bullhead City, Arizona and 5 miles east
of Needles, California, described more particularly on Exhibit A.
Included Property
1. Two Combustion Turbines & Generators - Siemens Westinghouse Turbines
(Serial Nos. 37A8063, 37A8065), Generators (Serial Nos. 94P3215,
94P0060).
2. Two Heat Recovery Steam Generators - Xxxx-Nem Boiler (Serial Nos.
17382 1A-1D and 17382 2A-2D).
3. One Steam Turbine & Generator- Siemens Westinghouse Steam Turbine
(Serial No. 24A3191 ) / Generator (Serial Nos. 1S94P0086 ).
4. One Condenser - Alstrom Condenser (Order No. 99-5080).
5. Water Treatment Facility - Reverse Osmosis, Brine Concentrator, Mixed
Bed Exchangers, Multi-media Filters and associated tanks.
6. Eleven cell Marley Cooling Tower- including Circulating Water Pumps.
7. Three Generator Step Up Transformers, all electrical switchyard
equipment and other interconnection equipment associated with the
South Point Facility.
D-1
SCHEDULE I
to Lease Indenture
SERIES A LESSOR NOTE
Initial Aggregate Principal Amount: $43,000,000
Final Maturity Date: May 30, 2012
Interest Rate: 8.400%
Amortization Schedule:
Percentage of Principal
-----------------------
Regular Distribution Date Amount Payable
------------------------- --------------
May 30, 2002.................................................... 22.79069767%
November 30, 2002............................................... 15.40697674%
May 30, 2003.................................................... 9.36046512%
November 30, 2003............................................... 9.76744186%
May 30, 2004.................................................... 9.06976744%
November 30, 2004............................................... 0.00000000%
May 30, 2005.................................................... 0.00000000%
November 30, 2005............................................... 0.00000000%
May 30, 2006.................................................... 0.00000000%
November 30, 2006............................................... 0.00000000%
May 30, 2007.................................................... 0.00000000%
November 30, 2007............................................... 0.00000000%
May 30, 2008.................................................... 0.00000000%
November 30, 2008............................................... 0.00000000%
May 30, 2009.................................................... 0.00000000%
November 30, 2009............................................... 0.00000000%
May 30, 2010.................................................... 0.00000000%
November 30, 2010............................................... 0.00000000%
May 30, 2011.................................................... 0.00000000%
November 30, 2011............................................... 33.60465117%
-------------
Total........................................................... 100.00000000%
=============
SCHEDULE 1-1
SERIES B LESSOR NOTE
Initial Aggregate Principal Amount: $12,125,000
Final Maturity Date: May 30, 2019
Interest Rate: 9.825%
Amortization Schedule:
Percentage of Initial
---------------------
Regular Distribution Date Principal Amount
------------------------- ----------------
May 30, 2002.................................................... 0.00000000%
November 30, 2002............................................... 0.00000000%
May 30, 2003.................................................... 0.00000000%
November 30, 2003............................................... 0.00000000%
May 30, 2004.................................................... 0.00000000%
November 30, 2004............................................... 0.00000000%
May 30, 2005.................................................... 0.00000000%
November 30, 2005............................................... 0.00000000%
May 30, 2006.................................................... 0.00000000%
November 30, 2006............................................... 0.00000000%
May 30, 2007.................................................... 0.00000000%
November 30, 2007............................................... 0.00000000%
May 30, 2008.................................................... 0.00000000%
November 30, 2008............................................... 0.00000000%
May 30, 2009.................................................... 0.00000000%
November 30, 2009............................................... 0.00000000%
May 30, 2010.................................................... 0.00000000%
November 30, 2010............................................... 0.00000000%
May 30, 2011.................................................... 0.00000000%
November 30, 2011............................................... 0.00000000%
May 30, 2012.................................................... 0.00000000%
November 30, 2012............................................... 0.00000000%
May 30, 2013.................................................... 0.00000000%
November 30, 2013............................................... 0.00000000%
May 30, 2014.................................................... 0.00000000%
November 30, 2014............................................... 0.00000000%
May 30, 2015.................................................... 0.00000000%
November 30, 2015............................................... 0.00000000%
May 30, 2016.................................................... 0.00000000%
November 30, 2016............................................... 0.00000000%
May 30, 2017.................................................... 0.00000000%
November 30, 2017............................................... 0.00000000%
May 30, 2018.................................................... 0.00000000%
November 30, 2018............................................... 0.00000000%
May 30, 2019.................................................... 100.00000000%
-------------
Total........................................................... 100.00000000%
=============
SCHEDULE 1-2
