Exhibit 4.2
EXECUTION COPY
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XXXXX CITY OL1 LLC
$__________ 8.137% Series A Lessor Notes due 2019
$__________ 8.734% Series B Lessor Notes due 2026
INDENTURE OF TRUST AND SECURITY AGREEMENT
Dated as of December __, 2001
THE BANK OF NEW YORK,
as Lease Indenture Trustee
and
THE BANK OF NEW YORK,
as Security Agent
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS....................................................8
SECTION 1.2 OTHER DEFINITIONS.............................................13
SECTION 1.3 OTHER DEFINITIONS.............................................14
SECTION 1.4 ONE CLASS OF SECURITIES.......................................14
ARTICLE II THE LESSOR NOTES
SECTION 2.1 LIMITATION ON LESSOR NOTES....................................14
SECTION 2.2 INITIAL LESSOR NOTES..........................................14
SECTION 2.3 EXECUTION AND AUTHENTICATION OF LESSOR NOTES..................15
SECTION 2.4 ISSUANCE AND TERMS OF THE INITIAL LESSOR NOTES................15
SECTION 2.5 PAYMENTS FROM INDENTURE ESTATE ONLY; NO PERSONAL LIABILITY OF
THE OWNER PARTICIPANT SECURITY AGENT OR THE LEASE INDENTURE
TRUSTEE.......................................................16
SECTION 2.6 SUBSEQUENT LESSOR NOTES.......................................17
SECTION 2.7 PAYMENT OF EXPENSES ON TRANSFER...............................18
SECTION 2.8 RESTRICTIONS OF TRANSFER RESULTING FROM FEDERAL SECURITIES
LAWS; LEGEND..................................................19
SECTION 2.9 SECURITY FOR AND PARITY OF LESSOR NOTES.......................19
SECTION 2.10 ACCEPTANCE OF THE LEASE INDENTURE TRUSTEE AND APPOINTMENT OF
THE SECURITY AGENT............................................19
SECTION 2.11 PAYING AGENT..................................................20
SECTION 2.12 PAYING AGENT TO HOLD MONEY IN TRUST...........................20
SECTION 2.13 [RESERVED]....................................................21
SECTION 2.14 REPLACEMENT LESSOR NOTES......................................21
SECTION 2.15 OUTSTANDING LESSOR NOTES......................................21
SECTION 2.16 TREASURY LESSOR NOTES.........................................22
SECTION 2.17 [RESERVED]....................................................22
SECTION 2.18 CANCELLATION..................................................22
SECTION 2.19 DEFAULTED INTEREST............................................22
SECTION 2.20 [RESERVED]....................................................23
SECTION 2.21 ASSUMPTION OF LESSOR NOTES....................................23
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ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
FROM INDENTURE ESTATE
SECTION 3.1 DISTRIBUTION PRIOR TO LEASE INDENTURE EVENT OF DEFAULT.......25
SECTION 3.2 PAYMENTS FOLLOWING EVENT OF LOSS OR OTHER EARLY TERMINATION..26
SECTION 3.3 PAYMENTS AFTER LEASE INDENTURE EVENT OF DEFAULT..............27
SECTION 3.4 CERTAIN PAYMENTS.............................................28
SECTION 3.5 OTHER PAYMENTS...............................................29
SECTION 3.6 MANNER OF PAYMENT TO THE OWNER LESSOR........................29
SECTION 3.7 ESTABLISHMENT OF THE NOTE ACCOUNTS; AND LIEN AND SECURITY
INTEREST; ETC................................................30
SECTION 3.8 THE ACCOUNT BANK; LIMITED RIGHTS OF THE OWNER LESSOR.........31
SECTION 3.9 EXERCISE OF POWERS; INSTRUCTIONS OF REQUIRED LEASE INDENTURE
SECURED PARTIES..............................................33
SECTION 3.10 INVESTMENT OF AMOUNTS HELD BY LEASE INDENTURE TRUSTEE........33
ARTICLE IV REDEMPTION AND PREPAYMENT
SECTION 4.1 NOTICES TO LEASE INDENTURE TRUSTEE...........................34
SECTION 4.2 SELECTION OF LESSOR NOTES TO BE REDEEMED.....................34
SECTION 4.3 NOTICE OF REDEMPTION.........................................35
SECTION 4.4 EFFECT OF NOTICE OF REDEMPTION...............................36
SECTION 4.5 DEPOSIT OF REDEMPTION PRICE..................................36
SECTION 4.6 LESSOR NOTES REDEEMED IN PART................................36
SECTION 4.7 OPTIONAL REDEMPTION..........................................37
SECTION 4.8 MANDATORY REDEMPTION.........................................37
ARTICLE V COVENANTS
SECTION 5.1 PAYMENT OF LESSOR NOTES......................................37
SECTION 5.2 STAY, EXTENSION AND USURY LAWS...............................38
SECTION 5.3 PAYMENTS FOR CONSENT.........................................39
SECTION 5.4 DEBT SERVICE RESERVE ACCOUNT.................................39
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ARTICLE VI SUCCESSORS
SECTION 6.1 LIMITATION ON MERGER, CONSOLIDATION AND SALE OF SUBSTANTIALLY
ALL ASSETS...................................................39
ARTICLE VII LEASE INDENTURE EVENTS OF DEFAULT
SECTION 7.1 LEASE INDENTURE EVENTS OF DEFAULT............................40
SECTION 7.2 CERTAIN RIGHTS TO CURE.......................................42
SECTION 7.3 ACCELERATION.................................................44
SECTION 7.4 OTHER REMEDIES...............................................44
SECTION 7.5 TAKING POSSESSION OF INDENTURE ESTATE........................45
SECTION 7.6 WAIVER OF PAST LEASE INDENTURE DEFAULTS......................46
SECTION 7.7 CONTROL BY MAJORITY..........................................47
SECTION 7.8 [RESERVED]...................................................47
SECTION 7.9 RIGHTS OF HOLDERS OF LESSOR NOTES TO RECEIVE PAYMENT.........47
SECTION 7.10 COLLECTION SUIT BY LEASE INDENTURE TRUSTEE...................47
SECTION 7.11 [RESERVED]...................................................47
SECTION 7.12 NO ACTION CONTRARY TO THE FACILITY LESSEE'S RIGHTS UNDER THE
FACILITY LEASE...............................................47
ARTICLE VIII LEASE INDENTURE TRUSTEE AND SECURITY AGENT
SECTION 8.1 DUTIES OF LEASE INDENTURE TRUSTEE AND SECURITY AGENT.........48
SECTION 8.2 RIGHTS OF LEASE INDENTURE TRUSTEE............................49
SECTION 8.3 INDIVIDUAL RIGHTS OF SECURITY AGENT..........................50
SECTION 8.4 LEASE INDENTURE TRUSTEE'S DISCLAIMER.........................51
SECTION 8.5 NOTICE OF LEASE INDENTURE DEFAULTS...........................51
SECTION 8.6 GENERAL AUTHORITY OF THE SECURITY AGENT OVER THE INDENTURE
ESTATE.......................................................51
SECTION 8.7 COMPENSATION.................................................52
SECTION 8.8 REPLACEMENT OF LEASE INDENTURE TRUSTEE.......................52
SECTION 8.9 SUCCESSOR LEASE INDENTURE TRUSTEE BY MERGER, ETC.............54
SECTION 8.10 ELIGIBILITY; DISQUALIFICATION................................54
SECTION 8.11 OTHER CAPACITIES.............................................54
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ARTICLE IX SHARED RIGHTS
SECTION 9.1 CERTAIN RIGHTS OF OWNER LESSOR AND OWNER PARTICIPANT.........55
SECTION 9.2 NO REPRESENTATIONS OR WARRANTIES AS TO THE PROPERTY INTEREST.58
ARTICLE X SUPPLEMENTS AND AMENDMENTS TO THIS LEASE
INDENTURE AND OTHER DOCUMENTS
SECTION 10.1 WITHOUT CONSENT OF NOTEHOLDERS OR REQUIRED NOTEHOLDERS.......58
SECTION 10.2 WITH CONSENT OF REQUIRED NOTEHOLDERS; LIMITATIONS............61
SECTION 10.3 DOCUMENTS FURNISHED TO NOTEHOLDERS...........................62
SECTION 10.4 LEASE INDENTURE TRUSTEE AND SECURITY AGENT PROTECTED.........62
SECTION 10.5 REVOCATION AND EFFECT OF CONSENTS............................63
SECTION 10.6 NOTATION ON OR EXCHANGE OF LESSOR NOTES......................63
SECTION 10.7 LEASE INDENTURE TRUSTEE TO SIGN AMENDMENTS, ETC..............63
ARTICLE XI LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 11.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.....64
SECTION 11.2 LEGAL DEFEASANCE AND DISCHARGE...............................64
SECTION 11.3 COVENANT DEFEASANCE..........................................64
SECTION 11.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE...................65
SECTION 11.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS...............................67
SECTION 11.6 REPAYMENT TO OWNER LESSOR....................................67
SECTION 11.7 REINSTATEMENT................................................68
ARTICLE XII MISCELLANEOUS
SECTION 12.1 TERMINATION OF INDENTURE.....................................68
SECTION 12.2 NOTICES......................................................69
SECTION 12.3 RULES BY LEASE INDENTURE TRUSTEE AND AGENTS..................70
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SECTION 12.4 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.................................................70
SECTION 12.5 GOVERNING LAW................................................71
SECTION 12.6 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS................71
SECTION 12.7 SUCCESSORS...................................................71
SECTION 12.8 SEVERABILITY.................................................71
SECTION 12.9 COUNTERPART ORIGINALS........................................71
SECTION 12.10 TABLE OF CONTENTS, HEADINGS, ETC.............................71
SECTION 12.11 CONCERNING THE OWNER MANAGER.................................72
SECTION 12.12 ACKNOWLEDGEMENT..............................................72
EXHIBITS:
A Form of Lessor Note
B Form of Mortgage
SCHEDULES:
I Schedule of Scheduled Payments of Principal
II Participation Agreements
III List of Note Accounts
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INDENTURE OF TRUST AND SECURITY AGREEMENT
This INDENTURE OF TRUST AND SECURITY AGREEMENT (LI1) (as
amended, supplemented or otherwise modified from time to time in accordance with
the provisions hereof, this "LEASE Indenture"), dated as of December __, 2001,
among Xxxxx City OL1 LLC, a Delaware limited liability company created for the
benefit of the Owner Participant referred to below, as grantor (the "OWNER
LESSOR" or the "MORTGAGOR"), The Bank of New York, as grantee and as successor
in interest to United States Trust Company of New York (the "LEASE INDENTURE
TRUSTEE" or the "MORTGAGEE") and The Bank of New York, as Security Agent (the
"SECURITY AGENT").
WITNESSETH:
WHEREAS, this Lease Indenture is executed pursuant to the
Participation Agreement as of the date hereof set forth on Schedule II hereto
among the Owner Lessor, the Owner Manager, the Owner Participant, EME Homer City
Generation L.P. ("XXXXX CITY"), Xxxxx City Funding LLC ("LENDER"), the Lease
Indenture Trustee, and the Bondholder Trustee (as defined herein);
WHEREAS, by a Facility Deed of even date intended to be
recorded in the office of the Recorder of Deeds of Indiana County, Pennsylvania,
Xxxxx City will convey to the Owner Lessor an Undivided Interest Percentage in
the Facility, which is more particularly described in Exhibit A attached hereto
and made a part hereof and is located on the Facility Site in Indiana County,
Pennsylvania;
WHEREAS, the Owner Lessor and Xxxxx City (the "FACILITY
LESSEE") will, pursuant to the Participation Agreement, enter into the Facility
Lease Agreement (FL1), dated as of December __, 2001 (as amended, supplemented
or otherwise modified from time to time in accordance with the provisions
thereof, the "FACILITY LEASE"), pursuant to which the Owner Lessor will lease to
the Facility Lessee and the Facility Lessee will lease from the Owner Lessor for
a term of 33 3/4 years all of the Owner Lessor's interest in and to the Facility
with the right to nonexclusive possession thereof;
WHEREAS, a Memorandum of the Facility Lease executed by the
Owner Lessor and Xxxxx City is intended to be recorded as aforesaid;
WHEREAS, Xxxxx City will lease to the Owner Lessor a
corresponding undivided interest equal to the Undivided Interest Percentage in
and to the Facility Site described in Exhibit B attached hereto and made a part
hereof with the right to nonexclusive possession thereof and has granted certain
non-exclusive easements (such undivided leasehold interest, together with such
non-exclusive easements, the "GROUND INTEREST") pursuant to a Facility Site
Lease between Xxxxx City and the Owner Lessor (the "FACILITY SITE LEASE") as of
the date hereof;
WHEREAS, a Memorandum of the Facility Site Lease executed by
Xxxxx City and the Owner Lessor is intended to be recorded prior to this Lease
Indenture;
WHEREAS, the Owner Lessor will sublease the Ground Interest
back to Xxxxx City pursuant to a Sublease of even date herewith (the "FACILITY
SITE SUBLEASE"), a memorandum of which is intended to be recorded;
WHEREAS, the Facility is more particularly described in
Exhibit A attached hereto and made a part hereof and is located on the Facility
Site located in Indiana County, in the Commonwealth of Pennsylvania, which,
together with certain easements, are more particularly described in Exhibit B
attached hereto and made a part hereof;
WHEREAS, the Owner Lessor was authorized and directed in the
LLC Agreement (LA1), effective as of December __, 2001 (as amended, supplemented
or otherwise modified from time to time in accordance with the provisions
thereof, the "LESSOR LLC AGREEMENT"), between Xxxxx Fargo Bank Northwest,
National Association, as independent manager (the "TRUST COMPANY"), and General
Electric Capital Corporation (the "OWNER PARTICIPANT"), a copy of which is
recorded contemporaneously herewith, to execute and deliver this Lease
Indenture;
WHEREAS, in connection with the transactions contemplated by
the Lessor LLC Agreement, the Owner Lessor entered into the Participation
Agreement;
WHEREAS, by entering into an Assumption Agreement, dated
December __, 2001, between Xxxxx City and Edison Mission Holdings Co., Xxxxx
City will assume all obligations of Edison Mission Holdings Co. on the Existing
Debt;
WHEREAS, the Owner Lessor, pursuant to the Facility Deed and
Xxxx of Sale, will purchase the Undivided Interest from the Facility Lessee, the
purchase price for which will include assumption of the Existing Debt from Xxxxx
City, and concurrently therewith will lease such Undivided Interest to the
Facility Lessee pursuant to the Facility Lease;
WHEREAS, the holders of the Existing Debt have consented to
the amendments and waivers to the Bondholder Indenture;
WHEREAS, in accordance with this Lease Indenture, the Owner
Lessor will execute and deliver the Initial Lessor Notes, in consideration of
the assumption of certain indebtedness by the initial Noteholders which
constitutes a portion of the Purchase Price, and will grant to the Security
Agent the Mortgage and the other liens and security interests herein provided;
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WHEREAS, in accordance with this Lease Indenture, the Owner
Lessor will execute and deliver an open-end mortgage, leasehold mortgage,
assignment of leases and rents and fixture filing (the "Mortgage") in the form
attached as Exhibit B hereto;
WHEREAS, this Lease Indenture is intended to be a security
agreement under the Uniform Commercial Code of the State of New York;
WHEREAS, the Owner Lessor, the Security Agent and the Lease
Indenture Trustee desire to enter into this Lease Indenture, to, among other
things, provide for (a) the issuance by the Owner Lessor of the Lessor Notes in
two series, and (b) creation of the liens and security interests in favor of the
Security Agent as security for, INTER ALIA, the Owner Lessor's obligations to
and for the benefit of the Debt Service Reserve Letter of Credit Secured Parties
and for the benefit and security of such Noteholders; and
WHEREAS, in order to simplify the administration of the common
collateral, the Lease Indenture Trustee and the Owner Lessor desire to appoint
the Security Agent to serve as a common representative and to hold the Indenture
Estate for the benefit of the Lease Indenture Secured Parties.
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual agreement herein contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
GRANTING CLAUSE:
As collateral to secure the prompt payment of the principal of
and interest on, and all other amounts due with respect to, the Lessor Notes
from time to time outstanding hereunder, and all other amounts owing hereunder
by the Owner Lessor and the performance and observance by the Owner Lessor of
all the agreements, covenants and provisions contained in the Operative
Documents, and the prompt payment of all amounts from time to time due or to
become due to any Lease Indenture Secured Party under the Operative Documents
(collectively, the "LESSOR SECURED OBLIGATIONS"), and for the uses and purposes
and subject to the terms and provisions hereof, and in consideration of the
premises and of the covenants herein contained, and of the acceptance of the
Lessor Notes by the Noteholders thereof, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Owner Lessor does
hereby pledge and grant a first priority security interest in, and by the
execution and delivery of the Mortgage shall grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and warrant, unto and for the security and
benefit of, the Security Agent acting for and on behalf of the Lease Indenture
Secured Parties, a first priority mortgage lien on, all estate, right, title and
interest now held or hereafter acquired by the Owner Lessor in, to and under the
following described property, rights, interests and privileges, whether now or
hereafter acquired, other than Excepted Payments (such property, rights,
interests and
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privileges as are conveyed pursuant to this granting clause, but excluding
Excepted Payments and the rights to enforce and collect the sums as set forth
herein, being hereinafter referred to as the "INDENTURE ESTATE"):
(1) the Undivided Interest, the Owner Lessor's interest in all
goods (as defined in the Uniform Commercial Code as in effect in the
State of New York from time to time) constituting the Facility; all
Components; the Owner Lessor's interest in any Improvements; the Owner
Lessor's interest in any Project Document now or hereinafter acquired
by pledge, assignment or otherwise; the Facility Site Lease and the
Ground Interest thereunder; the Facility Lease and all payments of any
kind by the Facility Lessee thereunder (including Rent); the Facility
Site Sublease and the Sublease Ground Interest thereunder and all
payments of any kind by the Facility Lessee thereunder; Owner Lessor's
interest in all tangible property located on or at or attached to the
Facility Land that an interest in such tangible property arises under
applicable real estate law ("FIXTURES"); the Facility Deed, the Xxxx of
Sale, the Ownership and Operation Agreement, the Lessor LLC Agreement,
and all and any interest in any property now or hereafter granted to
the Owner Lessor pursuant to any provision of the Facility Site Lease,
Facility Lease or the Facility Site Sublease; the Security Depositary
Agreement, the Debt Service Reserve Letter of Credit, the Pledge and
Collateral Agreement and each other Operative Document to which the
Owner Lessor is a party (the Undivided Interest, the Owner Lessor's
interest in any Components, the Owner Lessor's interest in any
fixtures, Improvements and the Ground Interest are collectively
referred to as the "PROPERTY INTEREST" and the documents, specifically
referred to above in this paragraph (1) are collectively referred to as
the "INDENTURE ESTATE DOCUMENTS"), including, without limitation, (x)
all rights of the Owner Lessor or the Facility Lessee (to the extent
assigned by the Facility Lessee to the Owner Lessor) to receive any
payments or other amounts or to exercise any election or option or to
make any decision or determination or to give or receive any notice,
consent, waiver or approval or to make any demand or to take any other
action under or in respect of any such document, to accept surrender or
redelivery of the Property Interest or any part thereof, as well as all
the rights, powers and remedies on the part of the Owner Lessor or the
Facility Lessee (to the extent assigned by the Facility Lessee to the
Owner Lessor), whether acting under any such document or by statute or
at law or in equity or otherwise, arising out of any Lease Default or
Lease Event of Default and (y) any right to restitution from the
Facility Lessee, any sublessee or any other Person in respect of any
determination of invalidity of any such document;
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(2) all rents, royalties, issues, profits, revenues, proceeds,
damages, claims and other income from the property described in this
Granting Clause, including, without limitation, all payments or
proceeds payable to the Owner Lessor as the result of the sale of the
Property Interest or the lease or other disposition of the Property
Interest, and all estate, right, title and interest of every nature
whatsoever of the Owner Lessor in and to such rents, issues, profits,
revenues and other income and every part thereof (the "LEASE
REVENUES");
(3) all condemnation proceeds with respect to the Property
Interest or any part thereof (to the extent of the Owner Lessor's
interest therein), and all proceeds (to the extent of the Owner
Lessor's interest therein) of all insurance maintained pursuant to
Section 11 of the Facility Lease or otherwise;
(4) all other property of every kind and description and
interests therein now held or hereafter acquired by the Owner Lessor
pursuant to the terms of any Operative Document, wherever located;
(5) all damages resulting from breach (including, without
limitation, breach of warranty or misrepresentation) or termination of
any of the Indenture Estate Documents or arising from bankruptcy,
insolvency or other similar proceedings involving any party to the
Indenture Estate Documents;
(6) the Debt Service Reserve Account and all amounts on
deposit therein; and
(7) all proceeds of the foregoing;
BUT EXCLUDING from the Indenture Estate all Excepted Payments,
any and all rights to enforce and collect the same, and SUBJECT TO the rights of
the Owner Lessor and the Owner Participant hereunder.
Concurrently with the delivery hereof, the Owner Lessor is
delivering to the Security Agent on behalf of the Lease Indenture Secured
Parties, from time to time the original executed counterpart of the Facility
Lease to which a chattel paper receipt is attached and the Mortgage.
The Mortgage will be recorded in the Office of the Recorder of
Deeds of Indiana County, Pennsylvania, and is intended (i) to constitute an
open-end mortgage and leasehold mortgage and fixture filing under the laws of
the Commonwealth of Pennsylvania and (ii) to be consistent with the terms and
conditions of this Lease Indenture.
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The Mortgage is intended to constitute an open-end mortgage
and leasehold mortgage under the laws of the Commonwealth of Pennsylvania and
this Lease Indenture is intended to constitute a security agreement as required
under the Uniform Commercial Code of the State of New York. This Lease Indenture
and the Mortgage are given to secure the payment and performance of the Lessor
Secured Obligations.
PROVIDED, HOWEVER, that if the principal, interest and any
other amounts due in respect of all the Lessor Notes, all other amounts due to
the Noteholders at the time and in the manner required hereby and by the Lessor
Notes, the Facility Lease and the Participation Agreement (but not including
Excepted Payments) and any other Lessor Secured Obligations shall have been
paid, then this Lease Indenture and the Mortgage shall be surrendered and
cancelled and upon such surrender and cancellation the rights hereby and thereby
granted and assigned shall terminate and cease and the Security Agent shall take
such actions as are required to be taken by it to evidence such termination and
cancellation pursuant to and as directed under Section 12.1.
Subject to the terms and conditions hereof, the Lease
Indenture Secured Parties do hereby irrevocably constitute and appoint the
Security Agent as their true and lawful attorney (which appointment is coupled
with an interest) with full power (in the name of each Lease Indenture Secured
Party, as applicable) to ask, require, demand and receive any and all moneys and
claims for moneys (in each case, including, without limitation, insurance and
requisition proceeds to the extent of the Owner Lessor's interest therein but
excluding in all cases Excepted Payments) due and to become due under or arising
out of the Indenture Estate Documents and all other property which now or
hereafter constitutes part of the Indenture Estate and, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings (other than in connection with
the enforcement or collection of Excepted Payments) which the Security Agent may
deem to be necessary or advisable. Pursuant to the Facility Lease, the Facility
Lessee is directed to make all payments of Rent required to be paid or deposited
with the Owner Lessor (other than Excepted Payments) and all other amounts which
are required to be paid to or deposited with the Owner Lessor pursuant to the
Facility Lease (other than Excepted Payments) directly to the Security Agent at
such address or addresses as the Security Agent shall specify, for application
as provided in this Lease Indenture. Further, the Owner Lessor agrees that
promptly on receipt thereof, it will transfer to the Security Agent 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 Lease Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Lessor shall remain liable under the
Indenture Estate Documents to perform all of the obligations assumed by it
thereunder, all in accordance with and pursuant to the terms and provisions
thereof, and the Lease Indenture Trustee and the Noteholders shall have no
obligation or liability under any term or provision
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thereof by reason of or arising out of the assignment hereunder, nor shall the
Lease Indenture Trustee or the Noteholders be required or obligated in any
manner, except as herein expressly provided, to perform or fulfill any
obligations of the Owner Lessor under or pursuant to any of the Indenture Estate
Documents to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or present or file any claim or take
any action to collect or enforce the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
The Owner Lessor agrees that at any time and from time to
time, upon the written request of the Lease Indenture Trustee (acting on the
instruction of any Noteholder) or any Noteholder, the Owner Lessor will promptly
and duly execute and deliver or cause to be duly executed and delivered any and
all such further instruments and documents necessary to obtain the full benefits
of the assignment hereunder and of the rights and powers herein granted;
PROVIDED, HOWEVER, that the Owner Lessor shall have no obligation to execute or
deliver or to cause to be executed or delivered any further instruments or
documents that would give the Lease Indenture Trustee, the Security Agents or
the Lease Indenture Secured Parties Reserve Letter of Credit greater rights and
powers than the rights and powers of the Owner Lessor which have been granted
herein or intended to be granted herein.
The Owner Lessor does hereby warrant and represent that it has
not assigned, pledged or granted a lien or security interest in, to or under,
and hereby covenants that, so long as this Lease Indenture shall remain in
effect and the lien hereof and of the Mortgage shall not have been released
pursuant to Section 7.1 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 Security Agent for the
benefit of the Lease Indenture Secured Parties. 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 Lease
Indenture and except as to Excepted Payments, (i) accept any payment from the
Facility Lessee or any sublessee or enter into any agreement amending, modifying
or supplementing any of the Indenture Estate Documents, execute any waiver or
modification of, or consent under, the terms of any of the Indenture Estate
Documents or revoke or terminate any of the Indenture Estate Documents, (ii)
settle or compromise any claim arising under any of the Indenture Estate
Documents, or (iii) submit or consent to the submission of any dispute,
difference or other matter arising under or in respect of any of the Indenture
Estate Documents to arbitration thereunder.
Except as provided herein, the Owner Lessor hereby ratifies
and confirms its obligations under the Indenture Estate Documents and does
hereby agree that it will not take or omit to take any action, the taking or
omission of which might result in an alteration or impairment of any of the
Indenture Estate Documents or of any of the rights created by any such Indenture
Estate Document or the assignment (subject to the previous paragraph) hereunder.
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The Security Agent, 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 Noteholders 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, (ii) the Lease
Indenture Trustee, and for the uses and purposes and subject to the terms and
provisions set forth in this Lease Indenture and (iii) the Debt Service Reserve
Letter of Credit Secured Parties.
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 Security Agent, for the benefit
and security of the Noteholders from time to time of the Lessor Notes from time
to time outstanding and the Debt Service Letter of Credit Secured Parties and to
protect the security of this Lease Indenture, and the Lease Indenture Trustee
and the Security Agent agree to accept the trusts and duties hereinafter set
forth, as follows:
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS
"ACCEPTABLE CREDIT SUPPORT" means an irrevocable letter of
credit from an Acceptable Credit Provider. In the event that (a) such letter of
credit will expire or otherwise terminate, substitute Acceptable Credit Support
must be provided at least 30 days prior to the applicable expiration or
termination date or (b) a downgrade of any Acceptable Credit Provider by Moody's
or S&P to below the minimum criteria specified in the definition thereof,
substitute Acceptable Credit Support must be provided within 30 days of such
event. Otherwise, in either such case above the Security Agent shall draw down
the then outstanding amount of the Acceptable Credit Support and deposit such
monies into the Debt Service Reserve Account.
"AGENT" means any Paying Agent, authenticating agent or
securities custodian.
"ASSUMPTION EVENT" means the election by the Facility Lessee
to assume the Lessor Notes pursuant to Section 10.2(b) or Section 13.4 of the
Facility Lease.
"BONDHOLDER INDENTURE" means the Indenture dated May 27, 1999
between Edison Mission Holdings Co. and The Bank of New York, as Trustee, as
amended and restated.
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"BOARD RESOLUTION" means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary of such
Person or the general partner, in the case of a limited partnership, of such
Person (or, if such Person is a partnership, one of its general partners) to
have been duly adopted by the Board of Directors of such Person or the general
partner, in the case of a limited partnership, of such Person (or, if such
Person is a partnership, one of its general partners) and to be in full force
and effect on the date of such certification, and delivered to the Lease
Indenture Trustee.
"BUSINESS DAY" means a day other than a Saturday, Sunday or
other day on which commercial banking institutions are authorized or required by
law, regulation or executive order to be closed in New York, New York or the
city and state in which the office of the Lease Indenture Trustee is located.
"CAPITAL LEASE OBLIGATION" means, as to any Person, all
monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of the Lease Indenture, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"CLOSING DATE" means the date of issuance and delivery of the
Initial Lessor Notes.
"COLLATERAL" means the collective reference to all assets,
whether now owned or hereafter acquired, upon which a lien is created or granted
from time to time pursuant to any Security Document.
"CORPORATE TRUST OFFICE OF THE LEASE INDENTURE TRUSTEE" shall
be at the address of the Lease Indenture Trustee specified in Section 13.2
hereof or such other address as to which the Lease Indenture Trustee may give
notice to the Owner Lessor.
"CUSTODIAN" means the Lease Indenture Trustee, as custodian
with respect to the Lessor Notes in global form, or any successor entity
thereto.
"DEBT SERVICE RESERVE ACCOUNT" has the meaning set forth in
Section 5.4 hereof.
"DEBT SERVICE RESERVE LETTER OF CREDIT SECURED PARTIES" means
the Reimbursement Agreement Agent, the DSR Noteholder and the Issuer of the Debt
Service Reserve Letter of Credit.
"DEPOSITARY" means, with respect to the Lessor Notes issuable
or issued in whole or in part in global form, the Person specified in Section
2.11 hereof as the Depositary with respect to the Lessor Notes, and any and all
successors thereto appointed
9
as depositary hereunder and having become such pursuant to the applicable
provision of this Lease Indenture.
"DSR NOTEHOLDER"shall have the meaning set forth in the
Reimbursement Agreement.
DSR NOTES" shall have the meaning set forth in the
Reimbursement Agreement.
"DUFF & XXXXXX" means Duff & Xxxxxx Credit Rating Co. and its
successors and assigns.
"EUROCLEAR" means Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"FINANCING DOCUMENTS" has the meaning set forth in the
Security Deposit Agreement.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"INDEPENDENT ENGINEER" means Stone and Xxxxxxx Management
Consultants, Inc. or another nationally recognized independent engineering and
consulting firm which, as Independent Engineer, will independently review the
technical aspects of the project, analyze the contractual structure and create
financial projections for the benefit of the Noteholders.
"INDEPENDENT MANAGER" means Xxxxx Fargo Bank Northwest,
National Association, a Delaware corporation or its successors and assigns.
"ISSUER OF THE DEBT SERVICE RESERVE LETTER OF CREDIT" has the
meaning set forth in the Reimbursement Agreement.
"LEASE INDENTURE DEFAULT" means an event or condition that,
with the giving of notice or the lapse of time, or both, would become a Lease
Indenture Event of Default.
"LEASE INDENTURE SECURED PARTY" means each Noteholder, the
Security Agent, the Lease Indenture Trustee and the Reimbursement Agreement
Agent, the DSR Noteholder and the Issuer of the Debt Service Reserve Letter of
Credit.
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"LESSOR NOTES" means the Series A Lessor Notes and the Series
B Lessor Notes.
"MAKE-WHOLE PREMIUM" means, with respect to any Lessor Note to
be redeemed on any Redemption Date, an amount calculated by the Owner Lessor as
of such date equal to the excess, if any, of (i) the net present value of the
then remaining scheduled installments of principal and payments of interest (but
excluding that portion of any scheduled installment of principal or payment of
interest that is actually due and paid on the Redemption Date) in respect of
such Lessor Note calculated using a discount factor equal to the sum of the
Treasury Yield plus 50 basis points, over (ii) the unpaid principal amount of
such Lessor Note. Such Yield Maintenance Premium shall be determined in
accordance with the following provisions:
(a) the average life of the remaining scheduled installments of
principal in respect of such Lessor Note (the "Remaining Average Life") shall be
calculated as of such Redemption Date; and
(b) the "Treasury Yield" shall be calculated for the United States
Treasury security having an average life equal to the Remaining Average Life and
trading in the secondary market at the price closest to par (the "Primary
Issue"); PROVIDED, HOWEVER, that, if no United States Treasury security has an
average life equal to the Remaining Average Life, the yields (the "Other
Yields") for maturities of the two United States Treasury securities having
average lives most closely corresponding to such Remaining Average Life and
trading in the secondary market at the price closest to par shall be calculated,
and the yield to maturity for the Primary Issue shall be the yield interpolated
or extrapolated from such Other Yields on a straight-line basis, rounding in
each of such relevant periods to the nearest month.
"MANAGER'S CERTIFICATE" means a certificate signed by the
Independent Manager of the Owner Lessor.
"MOODY'S" means Xxxxx'x Investors Service, Inc., a division of
Xxxxx'x Corporation, and its successors and assigns.
"NEW LESSOR NOTES" has the meaning set forth in Section 2.6(a)
to this Lease Indenture.
"NOTEHOLDER" means a Person in whose name a Lessor Note is
registered.
"OFFERING" means the offering of the Initial Lessor Notes by
the Owner Lessor.
"OPINION OF COUNSEL" means a written opinion of counsel for
any Person either expressly referred to in the Lease Indenture or otherwise
reasonably satisfactory to
11
the Lease Indenture Trustee which may include, without limitation, counsel for
the Owner Lessor, whether or not such counsel is an employee of the Owner
Lessor.
"POWER MARKET CONSULTANT" means PHB Xxxxxx Bailly, Inc. or
another nationally recognized power market consulting firm which, as Power
Market Consultant, will perform a market study of certain markets relating to
the Facility and develop independent electricity price forecasts for the benefit
of the Noteholders.
"RECOVERY EVENT" means any settlement of or payment of
$5,000,000 or more in respect of (i) any property or casualty insurance claim
relating to the Facility or (ii) any seizure, condemnation, confiscation or
taking of, or requisition of title or use of, the Facility or any part thereof
by any Governmental Authority.
"REDEMPTION DATE" means a date set forth for redemption of
Lessor Notes pursuant to this Lease Indenture.
"REDEMPTION PRICE" means the price to be paid by the Owner
Lessor for the Lessor Notes that are redeemed pursuant to this Lease Indenture.
"REIMBURSEMENT AGREEMENT" means the Debt Service Reserve
Letter of Credit and Reimbursement Agreement, dated as of December __, 2001, by
and among the Owner Lessor, Westdeutsche Landesbank Girozentrale, New York
Branch and Credit Suisse First Boston, New York Branch.
"REIMBURSEMENT AGREEMENT AGENT" means the Agent as defined in
the Reimbursement Agreement.
"RENT DEFAULT REMEDY DATE" means the earlier to occur of the
date on which (i) the Existing Debt is retired or (ii) there is an acceleration
under Section 7.3 hereof so long as such acceleration is not rescinded.
"REQUIRED LEASE INDENTURE SECURED PARTIES" means, at any time,
holders of debt that at such time hold greater than 50% of the sum of (i) the
Lessor Notes outstanding at such time (disregarding for such computation any
Lessor Notes held directly or beneficially by the Facility Lessee, the Owner
Lessor, the Owner Participant, or any of their respective Affiliates, unless
such Person owns all of the Lessor Notes in accordance with the provisions of
this Lease Indenture) and (ii) in the case of the Debt Service Reserve Letter of
Credit, the commitments with respect thereto at such time.
"RESPONSIBLE OFFICER," when used with respect to the Lease
Indenture Trustee, means any officer within the Corporate Trust Office of the
Lease Indenture Trustee (or any successor group of the Lease Indenture Trustee)
or any other officer of the Lease Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular
12
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RULE 144" means Rule 144 promulgated under the Securities
Act.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 903" means Rule 903 promulgated under the Securities
Act.
"RULE 904" means Rule 904 promulgated under the Securities
Act.
"S&P" means Standard & Poor's Rating Services.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR RENT" has the meaning set forth in the Security
Deposit Agreement.
"SERIES A LESSOR NOTES" has the meaning set forth in Section
2.2.
"SERIES B LESSOR NOTES" " has the meaning set forth in Section
2.2.
SECTION 1.2 OTHER DEFINITIONS
Defined in
Term Section
"AUTHENTICATION ORDER"............................................2.2
"COVENANT DEFEASANCE".............................................2.3
"DTC".............................................................2.3
"EVENT OF LEASE INDENTURE DEFAULT"................................6.1
"INCUR"...........................................................4.9
"INITIAL LESSOR NOTES"............................................2.2
"LEASE INDENTURE EVENT OF DEFAULT"................................7.1
"LEGAL DEFEASANCE"................................................8.2
"LESSOR NOTES PAYMENT ACCOUNT"....................................3.7
"LESSOR SECURED OBLIGATIONS"..........................Granting Clause
"NOTE ACCOUNTS"...................................................3.7
"NOTE ACCOUNTS COLLATERAL.........................................3.7
"NOTICE OF ACTION"................................................3.9
"PAYING AGENT"....................................................2.3
"PERMITTED INDEBTEDNESS"..........................................4.9
"PERMITTED LIENS"................................................4.13
"SECTION 9.1 RIGHTS"..............................................9.1
"SECURITY AGENT'S ACCOUNT"........................................3.7
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SECTION 1.3 OTHER DEFINITIONS
Unless otherwise defined in SECTION 1.1 hereof (including
Annex A hereto), each capitalized term used in this Lease Indenture and not
otherwise defined herein shall have the respective meaning set forth in Appendix
A to the Participation Agreement (PA1) dated as of December __, 2001 (as
amended, supplemented or otherwise modified from time to time in accordance with
the provisions thereof, the "PARTICIPATION AGREEMENT") among the Facility
Lessee, the Owner Manager, the Owner Lessor, the Owner Participant, the Lease
Indenture Trustee, the Lender and the Bondholder Lease Indenture Trustee, unless
the context hereof shall otherwise require. The general provisions of Appendix A
to the Participation Agreement shall apply to terms used in this Lease Indenture
and specifically defined herein.
SECTION 1.4 ONE CLASS OF SECURITIES
The Series A Lessor Notes and Series B Lessor Notes (and any
Subsequent Lessor Notes issued pursuant to Section 2.6 hereof) shall vote and
consent together on all matters as one class and none of the Series A Lessor
Notes or Series B Lessor Notes shall have the right to vote or consent as a
separate class on any matter.
ARTICLE II
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 Lease 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 Lease
Indenture shall be limited to the aggregate principal amount of the Initial
Lessor Notes issued on the Closing Date to the Lender plus the aggregate
principal amount of Additional Lessor Notes issued pursuant to Section 2.6
hereof.
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 (the "Series A Lessor
Notes") and the Series B Lessor Notes (the "Series B Lessor Notes"), each in
substantially the form set forth in Exhibit A to this Lease 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 Lease Indenture (the Series A
14
Lessor Notes and the Series B Lessor Notes, collectively, the "INITIAL LESSOR
NOTES" 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 Lessor Note,
is an authorized signatory of the Owner Lessor although at the nominal date of
such Lessor Note such Person may not have been an authorized signatory of the
Owner Lessor. No Lessor Note shall be secured by or be entitled to any benefit
under this Lease Indenture or be valid or obligatory for any purpose unless
there appears thereon a certificate of authentication substantially in the form
set forth in Exhibit D to this Lease Indenture (or in the appropriate form
provided for in any supplement hereto executed pursuant to Section 2.6 hereof),
executed by the Lease Indenture Trustee by the manual signature of one of its
authorized officers, and such certificate upon any Lessor Note shall be
conclusive evidence that such Lessor Note has been duly authenticated and
delivered hereunder. The Lease Indenture Trustee shall authenticate and deliver
the Initial Lessor Notes for original issue in the respective aggregate
principal amounts specified in Schedule I to this Lease Indenture, upon a
written order of the Owner Lessor signed on its behalf by the Owner Manager. The
Lease Indenture Trustee shall authenticate and deliver Subsequent Lessor Notes,
upon a written order of the Owner Lessor executed on its behalf by the Owner
Manager and satisfaction of the conditions specified in Section 2.6 hereof. Such
order shall specify the principal amount of the Subsequent Lessor Notes to be
authenticated and the date on which the original issue of Subsequent Lessor
Notes is to be authenticated.
SECTION 2.4 ISSUANCE AND TERMS OF THE INITIAL LESSOR NOTES
(a) There shall be issued to the Lender the Initial Lessor Notes, dated
the Closing Date. The aggregate amount of the Initial Lessor Notes shall be in
the principal amount equal to the aggregate principal amount of the Lessor Notes
purchased by the Lender from the Owner Lessor pursuant to Section 2.1(b) of the
Participation Agreement.
(b) Interest, including post-petition interest in any proceeding under
any Bankruptcy Code (computed on the basis of a 360-day year of twelve 30-day
months) on any overdue principal and, to the extent permitted by Requirements of
Law, on overdue interest or Make-Whole Premium shall be paid on demand at a rate
that is 1% per annum in excess of the rate then in effect.
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SECTION 2.5 PAYMENTS FROM INDENTURE ESTATE ONLY; NO PERSONAL LIABILITY OF
THE OWNER PARTICIPANT SECURITY AGENT OR THE LEASE INDENTURE
TRUSTEE
Except as may otherwise specifically be provided in this Lease
Indenture or in the Participation Agreement, all payments to be made in respect
of the Lessor Notes or under this Lease 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 Lease Indenture. The Lease
Indenture Trustee, the Security Agent, each Noteholder and the Debt Service
Reserve Letter of Credit Secured Parties, by its acceptance thereof, agrees that
it will look solely to the income and proceeds from the Indenture Estate to the
extent available for distribution to the Lease Indenture Trustee, the Security
Agent, or such Noteholder or the Debt Service Reserve Letter of Credit Secured
Parties, as the case may be, as herein provided and that, except as expressly
provided in this Lease Indenture or the Participation Agreement, (x) none of the
Owner Participant, the Trust Company, the Security Agent, or the Lease Indenture
Trustee, or any Affiliate of any thereof, shall be personally liable to such
Noteholder or the Debt Service Reserve Letter of Credit Secured Parties for any
amounts payable hereunder, under such Lessor Note or for any performance to be
rendered under any Indenture Estate Document or for any liability under any
Indenture Estate Document, and (y) such amounts shall be non-recourse to the
assets of each of the Owner Participant, the Security Agent, the Trust Company
or the Lease Indenture Trustee or the Debt Service Reserve Letter of Credit
Secured Parties, or any Affiliate of any thereof. Without prejudice to the
foregoing, the Owner Lessor will duly and punctually pay or cause to be paid the
principal of, premium (including, without limitation, Make-Whole Premium), if
any, and interest on all Lessor Notes according to their terms and the terms of
this Lease Indenture. Nothing contained in this Section 2.5 limiting the
liability of the Owner Lessor shall derogate from the right of the Lease
Indenture Trustee the Security Agent, the Noteholders and the Debt Service
Reserve Letter of Credit Secured Parties to proceed against the Indenture Estate
to secure and enforce all payments and obligations due hereunder and under the
Indenture Estate Documents and the Lessor Notes.
In furtherance of the foregoing, to the fullest extent
permitted by law, each Noteholder (and each assignee of such Person) and each
Debt Service Reserve Letter of Credit Secured Party, by their acceptance
thereof, agrees, as a condition to its being secured under this Lease Indenture,
that neither they nor the Lease Indenture Trustee will exercise any statutory
right to negate the agreements set forth in this Section 2.5.
Nothing herein contained shall be interpreted as affecting the
representations, warranties or agreements of the Owner Lessor expressly made set
forth in the Participation Agreement or the Lessor LLC Agreement.
16
SECTION 2.6 SUBSEQUENT LESSOR NOTES
(a) The Owner Lessor may, subject to the conditions hereafter provided
in this Section 2.6, issue additional Lessor Notes ("SUBSEQUENT LESSOR NOTES")
under and secured by this Lease Indenture, at any time or from time to time for
the purpose of (i) providing funds for a Supplemental Financing pursuant to
Section 12.1 of the Participation Agreement (Subsequent Lessor Notes issued for
such purpose, the "ADDITIONAL LESSOR NOTES") or (ii) refinancing the Lessor
Notes or other Subsequent Lessor Notes pursuant to Section 12.2 of the
Participation Agreement (Subsequent Lessor Notes issued for such purpose, the
"NEW LESSOR NOTES").
(b) Before any Subsequent Lessor Notes shall be issued under the
provisions of this Section 2.6, the Owner Lessor shall have delivered to the
Lease Indenture Trustee, not less than 5 (15 days in the case of New Lessor
Notes) days nor more than 60 days (or in the case of a Supplemental Financing
under Section 12.1 of the Participation Agreement, 90 days) prior to the
proposed date of issuance of such Subsequent Lessor Notes, a request and
authorization to issue such Subsequent Lessor Notes, which request and
authorization shall (i) contain the proposed date of issuance of such Lessor
Notes and the terms thereof and (ii) include a certification by the Facility
Lessee that the terms of such Lessor Notes are in compliance with this Section
2.6 and Section 12.1 or 12.2 of the Participation Agreement, as the case may be.
Such Subsequent Lessor Notes shall have a designation so as to distinguish such
Subsequent Lessor Notes from the Lessor Notes theretofore issued, be dated their
respective dates of issuance, bear interest at such rates (which may be either
fixed or floating) as shall be agreed between the Facility Lessee and the Owner
Lessor, and shall be stated to be payable by their terms not later than the
latest date permitted therefore under Section 12.1 or 12.2 of the Participation
Agreement, as the case may be.
(c) Except as to any differences in the maturity dates of the
Subsequent Lessor Notes or the rate or rates of interest thereon, such
Subsequent Lessor Notes shall be on a parity with, and shall be entitled to the
same benefits and security of this Lease Indenture, and shall be subject to the
same terms hereof, as the other Lessor Notes issued pursuant to the terms
hereof.
(d) The terms, provisions and designations of such Subsequent Lessor
Notes shall be set forth in a supplement to this Lease Indenture executed by the
Owner Lessor, the Lease Indenture Trustee and the Security Agent. Such
Subsequent Lessor Notes shall be executed, delivered and registered as provided
in this Lease Indenture, but before such Subsequent Lessor Notes shall be
delivered and registered there shall be delivered to the Lease Indenture Trustee
and the Security Agent, in addition to other documents and certificates required
by this Section 2.6, the following, all of which shall be dated as of the date
of the supplement to this Lease Indenture:
17
(i) a copy of such supplement (which shall include the form of
such series of Subsequent Lessor Notes);
(ii) unless the Subsequent Lessor Notes will upon issuance be
the only Lessor Notes outstanding, evidence of the filing of record of
such supplement, together with UCC lien searches, supplemental title
reports, opinions, title insurance endorsements and such other evidence
that may be reasonably required by the Lease Indenture Trustee or the
Security Agent, as applicable, demonstrating that this Lease Indenture
and such supplement provide a first-priority perfected lien and
security interest, subject to Permitted Liens, in the Indenture Estate
for the full amount of all Lessor Notes outstanding, including all
Subsequent Lessor Notes described in such supplement and the Debt
Service Reserve Letter of Credit Secured Parties;
(iii) an officer's certificate of an Authorized Officer of the
Facility Lessee stating that (A) no Lease Default or Lease Event of
Default has occurred and is continuing, (B) the conditions in respect
of the issuance of such Subsequent Lessor Notes contained in this
Section 2.6 have been satisfied, (C) the Basic Lease Rent and the
Termination Value are calculated to be sufficient to pay all the
outstanding Lessor Notes, after taking into account the issuance of
such Subsequent Lessor Notes and any related prepayment of Lessor Notes
theretofore outstanding and (D) all conditions to the Supplemental
Financing or refinancing contained in Section 12.1 or 12.2 of the
Participation Agreement or in any other provision of the Operative
Documents have been satisfied;
(iv) a Manager's Certificate of the Owner Lessor stating that
no Lease Indenture Default has occurred and is continuing; and
(v) an opinion of counsel to the Owner Lessor that the
Subsequent Lessor Notes and the supplement to this Lease Indenture have
been duly authorized, executed and delivered by the Owner Lessor and
constitute the legal, valid and binding obligations of the Owner Lessor
enforceable in accordance with their terms.
SECTION 2.7 PAYMENT OF EXPENSES ON TRANSFER
Upon the issuance of a new Lessor Note or Lessor Notes
pursuant to Section 2.14 or 2.6 hereof, the Owner Lessor or the Lease Indenture
Trustee may require from the party requesting the issuance of such new Lessor
Note or Lessor Notes payment of a sum to reimburse the Owner Lessor and the
Lease Indenture Trustee for, or to provide funds for, the payment on an
After-Tax Basis to the Owner Lessor, Lease Indenture Trustee, Security Agent,
Owner Participant and any OP Member of any tax or other governmental charge,
legal fees and expenses in connection therewith or any
18
charges and expenses connected with such tax or governmental charge paid or
payable by the Owner Lessor or the Lease Indenture Trustee.
SECTION 2.8 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 Lease 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 Lease Indenture Trustee and the Owner Lessor an opinion of counsel,
which opinion and which counsel shall be reasonably satisfactory to the Lease
Indenture Trustee, the Owner Lessor and the Facility Lessee, to the effect that
such transfer will not violate the registration provisions of the Securities Act
or require qualification of this Lease Indenture under the Trust Indenture Act
of 1939, as amended, and all Lessor Notes issued hereunder shall be endorsed
with a legend which shall read substantially as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE OR OTHERWISE DISPOSED
OF EXCEPT WHILE SUCH REGISTRATION IS IN EFFECT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT.
SECTION 2.9 SECURITY FOR AND PARITY OF LESSOR NOTES
All Lessor Notes issued and outstanding hereunder shall rank
on a parity with each other and with each Debt Service Reserve Letter of Credit
Secured Party and shall as to each other be secured equally and ratably by this
Lease Indenture, without preference, priority or distinction of any thereof over
any other by reason of difference in time of issuance or otherwise.
SECTION 2.10 ACCEPTANCE OF THE LEASE INDENTURE TRUSTEE AND APPOINTMENT OF
THE SECURITY AGENT
(a) Each Noteholder, by its acceptance of a Lessor Note, shall be
deemed to have consented to the appointment of the Lease Indenture Trustee.
(b) Each of the Lease Indenture Secured Parties or their
representatives hereby designates and appoints The Bank of New York as the
security agent for such Lease Indenture Secured Parties under the Lease
Indenture and the Mortgage, and authorizes The Bank of New York in such capacity
to take such action on its behalf under the provisions of the Lease Indenture
and to exercise such powers and perform such
19
duties as are expressly delegated to it by the terms of this Lease Indenture,
together with such other powers as are incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Lease Indenture, the Security Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Lease Indenture or otherwise
exist against the Security Agent.
SECTION 2.11 PAYING AGENT
(a) The Owner Lessor shall maintain in the Borough of Manhattan, the
City of New York, an office or agency where Lessor Notes must be presented for
registration of transfer and payment by a paying agent ("PAYING AGENT"). The
Paying Agent shall keep a register of the Lessor Notes both as to principal and
stated interest thereon and of their transfer. The Owner Lessor shall cause the
Paying Agent to ensure that the transfer of any Lessor Notes will be effected
only by the surrender of the old instrument and either (i) the reissuance by the
Paying Agent of the old instrument to the new holder or (ii) the issuance by the
Paying Agent of a new instrument to the new holder. The Owner Lessor shall also
cause the Paying Agent to ensure that the right to the principal of, and stated
interest on, any Lessor Notes will be transferred only through the book entry
system maintained by the Paying Agent. The Owner Lessor may appoint one or more
additional paying agents. The term Paying Agent includes any additional paying
agent. The Owner Lessor may change any Paying Agent without notice to any
Noteholder. The Owner Lessor shall notify the Security Agent and the Lease
Indenture Trustee in writing of the name and address of any Paying Agent not a
party to this Lease Indenture. If the Owner Lessor fails to appoint or maintain
another entity as Paying Agent, the Lease Indenture Trustee shall act as such.
(b) The Owner Lessor initially appoints the Lease Indenture Trustee to
act as the Paying Agent and to act as Custodian with respect to the Lessor
Notes.
(c) The Security Agent shall deposit with the Lease Indenture Trustee
for as long as the Lessor Note Indenture is outstanding, (or to the Paying Agent
if applicable) a sum sufficient to pay such principal and interest, and premium,
if any, when so becoming due. The Owner Lessor shall require each Paying Agent
(other than the Lease Indenture Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Noteholders or the Lease Indenture
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Lessor Notes and shall notify the Lease Indenture Trustee of any
default by the Security Agent in making any such payment.
SECTION 2.12 PAYING AGENT TO HOLD MONEY IN TRUST
The Owner Lessor shall require each Paying Agent other than
the Lease Indenture Trustee to agree in writing that the Paying Agent will hold
in trust for the benefit of Noteholders or the Debt Service Reserve Letter of
Credit Secured Parties, as
20
applicable, and all money held by the Paying Agent for the payment of principal
on, premium, if any, or interest on the Lessor Notes, and will notify the Lease
Indenture Trustee in writing of any default by the Security Agent in making any
such payment. While any such default continues, the Lease Indenture Trustee may
require a Paying Agent to pay all money held by it to the Lease Indenture
Trustee. The Owner Lessor at any time may require a Paying Agent to pay all
money held by it to the Lease Indenture Trustee. Upon payment over to the Lease
Indenture Trustee, the Paying Agent shall have no further liability for the
money.
SECTION 2.13 [RESERVED]
SECTION 2.14 REPLACEMENT LESSOR NOTES
If any mutilated Lessor Note is surrendered to the Lease
Indenture Trustee or the Owner Lessor and the Lease Indenture Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Lessor
Note, the Owner Lessor shall issue and the Lease Indenture Trustee, upon receipt
of an Authentication Order, shall authenticate a replacement Lessor Note 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 amounts. If required by the
Lease Indenture Trustee or the Owner Lessor, an indemnity Lessor Note must be
supplied by the Noteholder that is sufficient in the judgment of the Lease
Indenture Trustee and the Owner Lessor to protect the Owner Lessor, the Lease
Indenture Trustee, any Agent and any authenticating agent from any loss that any
of them may suffer if a Lessor Note is replaced. The Owner Lessor and the Lease
Indenture Trustee may charge for their expenses in replacing a Lessor Note.
Every replacement Lessor Note is an additional obligation of
the Owner Lessor and shall be entitled to all of the benefits of this Lease
Indenture equally and proportionately with all other Lessor Notes duly issued
hereunder.
SECTION 2.15 OUTSTANDING LESSOR NOTES
The Lessor Notes outstanding at any time are all the Lessor
Notes authenticated by the Lease Indenture Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding. Except as set forth in Section 2.16 hereof, a Lessor Note
does not cease to be outstanding because the Owner Lessor or an Affiliate of the
Owner Lessor holds the Lessor Note.
If a Lessor Note is replaced pursuant to Section 2.14 hereof,
it ceases to be outstanding unless the Lease Indenture Trustee receives proof
satisfactory to it that the replaced Lessor Note is held by a bona fide
purchaser.
If the principal amount of any Lessor Note is considered paid
under Section 5.1 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
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If the Paying Agent holds, on a redemption date or maturity
date, money sufficient to pay Lessor Notes payable on that date, then on and
after that date such Lessor Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest.
SECTION 2.16 TREASURY LESSOR NOTES
In determining whether the Noteholders of the required
principal amount of Lessor Notes have concurred in any direction, waiver or
consent, Lessor Notes owned by the Owner Lessor, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Owner Lessor shall be considered as though not outstanding,
except that for the purposes of determining whether the Lease Indenture Trustee
shall be protected in relying on any such direction, waiver or consent, only
Lessor Notes that the Lease Indenture Trustee knows are so owned shall be so
disregarded.
SECTION 2.17 [RESERVED]
SECTION 2.18 CANCELLATION
The Owner Lessor at any time may deliver Lessor Notes to the
Lease Indenture Trustee for cancellation. The Paying Agent shall forward to the
Lease Indenture Trustee any Lessor Notes surrendered to it for registration of
transfer, exchange or payment. The Lease Indenture Trustee and no one else shall
cancel all Lessor Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy canceled Lessor Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Lessor Notes shall be delivered (at the
expense of the Owner Lessor) to the Owner Lessor. The Owner Lessor may not issue
New Lessor Notes to replace Lessor Notes that it has paid or that have been
delivered to the Lease Indenture Trustee for cancellation.
SECTION 2.19 DEFAULTED INTEREST
If the Owner Lessor defaults in a payment of interest on the
Lessor Notes, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the
Noteholders on a subsequent special record date, in each case at the rate
provided in the Lessor Notes and in Section 5.1 hereof. The Owner Lessor shall
notify the Security Agent and the Lease Indenture Trustee in writing of the
amount of defaulted interest proposed to be paid on each Lessor Note and the
date of the proposed payment. The Owner Lessor shall fix or cause to be fixed
each such special record date and payment date, PROVIDED that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Owner Lessor (or, upon the written request of the Owner Lessor, the Lease
Indenture Trustee in the name and at the expense of the Owner
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Lessor) shall mail or cause to be mailed to Noteholders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.
SECTION 2.20 [RESERVED]
SECTION 2.21 ASSUMPTION OF LESSOR NOTES
(a) Upon the occurrence of an Assumption Event, the Facility Lessee may
notify the Security Agent and the Lease Indenture Trustee of its intention to
assume all of the Lessor Notes in whole (but not in part) pursuant to and in
accordance with this Section 2.21. In the event of the occurrence of an
Assumption Event and provided each of the conditions set forth below have been
satisfied, all of the obligations and liabilities of the Owner Lessor under this
Lease Indenture and each Lessor Note shall be assumed by the Facility Lessee and
the Owner Lessor shall be released and discharged without further act or
formality whatsoever from all obligations and liabilities under this Lease
Indenture and each Lessor Note:
(i) no Lease Event of Default shall have occurred and be
continuing after giving effect to such assumption;
(ii) the Lease Indenture Trustee shall have received a
supplement to this Lease Indenture which shall, among other things, (A)
confirm the release of the Owner Lessor thereby effected and (B)
contain provisions appropriately amending this Lease Indenture: (1) to
reflect the fact that the obligations of the Owner Lessor under this
Lease Indenture have been assumed directly by the Facility Lessee, (2)
to incorporate herein such provisions from the Facility Lease, the
Facility Site Lease and the Participation Agreement as shall be
appropriate, including covenants substantially identical to those set
forth in the Facility Lease and (3) as otherwise necessary to reflect
the foregoing provisions and preserve, protect and maintain the Lien on
the Indenture Estate (such supplement, the "ASSUMPTION AGREEMENT");
(iii) the Lease Indenture Trustee shall have received an
opinion of counsel to the Facility Lessee (with customary
qualifications and limitations and otherwise reasonably satisfactory to
the Lease Indenture Trustee), addressed to the Lease Indenture Trustee
and the Noteholders of the Lessor Notes, to the effect that (A) the
Assumption Agreement and each other instrument, document or agreement
executed and delivered by the Facility Lessee in connection with the
assumption contemplated by the Assumption Agreement (collectively, the
"ASSUMPTION DOCUMENTS") have been duly authorized, executed and
delivered by the Facility Lessee, (B) each Assumption Document and the
assumption contemplated thereby do not contravene (1) the Organic
Documents of the Facility Lessee, (2) any contractual obligation of the
Facility Lessee or (3) Requirements of Law, (C) no Governmental
Approval is necessary or required in
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connection with any Assumption with any Assumption Document or the
assumption contemplated thereby (or, if any such Governmental Approval
is necessary or required that the same has been duly obtained and is
final and in full force and effect and any period for the filing of
notice of rehearing or application for judicial review of the issuance
of such Governmental Approval has expired without any such notice or
application having been made), (D) each Assumption Document is a legal,
valid and binding obligation of the Facility Lessee, enforceable in
accordance with its terms (except as limited by bankruptcy, insolvency
or similar laws of general application affecting the enforcement of
creditors' rights generally and equitable principles), (E) unless the
Facility Lessee has elected to provide to the Lease Indenture Trustee
an indemnity against the risk that such assumption of the Lessor Notes
will cause a Tax Event to occur as to any direct or indirect holder of
a Lessor Note (including any holder of the Bonds), such Assumption
Agreement and the assumption of the Notes thereunder shall not cause a
Tax Event to occur as to any direct or indirect holder of any Lessor
Note (including any Fundco Bondholders) and (F) the lien of this Lease
Indenture will continue to be a first priority perfected lien on the
Indenture Estate;
(iv) the Lease Indenture Trustee shall have received copies of
all Governmental Approvals (if any) referred to in the opinion of
counsel referred to in clause (iii) above;
(v) the Lease Indenture Trustee shall have received UCC lien
searches, supplemental title reports, opinions and such other evidence
as may reasonably be required by the Lease Indenture Trustee
demonstrating that no impairment exists or will exist to the first
priority perfected lien and security interest in the Undivided
Interest; and
(vi) the Lease Indenture Trustee shall have received ratings
letters from each of Moody's and S&P to the effect that the then
existing rating of the Bonds will not be downgraded as a result of such
assumption.
(b) Notice of any assumption of the Lessor Notes shall be given by the
Lease Indenture Trustee to the Noteholders as promptly as practicable after the
Lease Indenture Trustee has received notice thereof in accordance with the first
sentence of section 2.21(a) hereof.
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ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM INDENTURE ESTATE
SECTION 3.1 DISTRIBUTION PRIOR TO LEASE INDENTURE EVENT OF DEFAULT
Except as otherwise provided in Section 3.2 or 3.3 of this
Lease Indenture, each installment of Basic Lease Rent and any payment of
Supplemental Lease Rent constituting interest on overdue installments of Basic
Lease Rent or constituting reimbursement for any drawing under the Debt Service
Reserve Letter of Credit received by the Security Agent, or otherwise payable to
the Owner Lessor pursuant to Sections 10, 13 or 14 of the Facility Lease shall
be deposited into the Security Agent's Account and distributed in the following
order of priority:
FIRST, ratably to (i) so much of such amounts as
shall be required to pay in full the aggregate principal,
accrued interest and other fees and expenses (as well as any
interest on overdue principal and, to the extent permitted by
Requirements of Law, on overdue interest) then due and payable
under the Lessor Notes issued under this Lease Indenture shall
be deposited into the Lessor Notes Payment Account and
distributed by the Lease Indenture Trustee or by each Paying
Agent and 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 such Lessor Note bears to the aggregate
amount of the payments then due and payable under all such
Lessor Notes and (ii) so much of such amounts as shall be
required to reimburse the Issuer of the Debt Service Reserve
Letter of Credit for any amount drawn thereunder or to pay in
full the aggregate principal, accrued interest and other fees
and expenses (as well as any interest on overdue principal
and, to the extent permitted by Requirements of Law, on
overdue interest) then due and payable under the DSR Notes;
SECOND, so much of such amounts as shall be required
to meet the required balance in the Debt Service Reserve
Account pursuant to Section 5.4 shall be distributed to the
Debt Service Reserve Account; and
THIRD, the balance, if any, of such amounts remaining
in the Lessor Notes Payment Account shall be distributed to
the Owner Lessor for distribution by it in accordance with the
terms of the Lessor LLC Agreement; PROVIDED, HOWEVER, that if
a Lease
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Indenture Event of Default shall have occurred and be
continuing, then such balance shall not be distributed as
provided in this clause "THIRD" but shall be held by the Lease
Indenture Trustee or the Security Agent, as applicable, as
part of the Indenture Estate until the earliest to occur of
(i) receipt by the Security Agent of a Notice of Action
stating that all Lease Indenture Events of Default shall have
been cured or waived, in which event such balance shall be
distributed as provided in this clause "THIRD," or (ii)
receipt by the Security Agent of a Notice of Action stating
that Section 3.3 hereof shall be applicable, in which event
such balance shall be distributed in accordance with the
provisions of said Section 3.3.
SECTION 3.2 PAYMENTS FOLLOWING EVENT OF LOSS OR OTHER EARLY TERMINATION
(a) Except as otherwise provided in Section 3.3 hereof, any payment
received by the Security Agent and deposited into the Security Agent's Account
on account of a redemption of the Lessor Notes shall then be deposited into the
Lessor Notes Payment Account and distributed by the Lease Indenture Trustee or
by each Paying Agent with respect to such redemption arising pursuant to Article
4 hereof in the following order of priority: FIRST, as provided in clause
"SECOND" of Section 3.3 hereof; (but including all Make-Whole Premium (if any)
due in respect thereof required to be paid in accordance with Section 4.7
hereof); SECOND, to reimburse the applicable Noteholders (to the extent not
previously reimbursed) for any reasonable out-of-pocket costs or expenses
incurred in connection with such prepayment (including payments provided for in
clause "THIRD" of Section 3.3 hereof); and THIRD, as provided in clause "FOURTH"
of Section 3.3 hereof.
(b) Except as otherwise provided in Section 3.2(a) or 3.3 hereof, any
amounts received directly or indirectly from any Governmental Authority or
insurer or other party not as a result of an Event of Loss or pursuant to any
provision of Section 10.3, Section 10.5 or Section 11 of the Facility Lease
shall be applied as provided in the applicable provisions of the Facility Lease
and, if and to the extent that any portion of such amounts are required to be
held for the account of the Facility Lessee and are not at the time required to
be paid to the Facility Lessee pursuant to the applicable provisions of the
Facility Lease, shall be promptly paid to (if not initially paid directly to the
Security Agent) and, thereafter, held by, the Security Agent as security for the
obligations of the Facility Lessee under the Facility Lease, and at such time as
the Security Agent shall have received written notice from the Facility Lessee
(i) stating that the conditions specified in the Facility Lease for payment of
such amounts to the Facility Lessee shall have been satisfied and (ii) setting
out the portion of such amounts so held by the Security Agent to be paid to the
Facility Lessee, the Security Agent shall pay to the Facility Lessee the amount
specified in such notice.
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SECTION 3.3 PAYMENTS AFTER LEASE INDENTURE EVENT OF DEFAULT
If, during the continuance of a Lease Indenture Event of
Default, (a) the Security Agent has elected to pursue remedies in respect
thereof or (b) the entire principal amount of the Lessor Notes shall have become
due and payable as provided herein, all payments (other than Excepted Payments)
received by the Security Agent or the Lease Indenture Trustee or by each Paying
Agent in respect of all amounts (other than Excepted Payments) held or realized
by the Security Agent or the Lease Indenture Trustee upon, and all other
payments or amounts (other than Excepted Payments) held by the Security Agent or
the Lease Indenture Trustee or by each Paying Agent as part of the Indenture
Estate shall be promptly distributed in the following order of priority:
FIRST, to the Lease Indenture Trustee and the
Security Agent, so much of such payments or amounts as shall
be required to reimburse the Lease Indenture Trustee and the
Security Agent for any amounts payable to them under Section
8.7 hereof and Section 10.1 of the Participation Agreement and
not previously paid;
SECOND, ratably paid to (i) so much of such payments
or amounts remaining as shall be required to pay in full the
aggregate unpaid principal amount of all Lessor Notes and
accrued but unpaid interest and premium, if any, thereon to
the date of distribution (as well as any interest on overdue
principal and, to the extent permitted by Requirements of Law,
overdue interest as provided in Section 5.1(b) hereof), shall
be distributed to the Noteholders, (ii) all amounts as shall
be required to reimburse to the Issuer of the Debt Service
Reserve Letter of Credit for any drawings thereunder that are
due and payable or to pay in full the aggregate principal,
accrued interest and other fees and expenses (as well as any
interest on overdue principal and, to the extent permitted by
Requirements of Law, on overdue interest) then due and payable
under the DSR Notes, and if the aggregate amount shall be
insufficient to pay all such amounts of (i) and (ii) above in
full, such amounts shall be distributed ratably, without
priority of any Lease Indenture Secured Party over any other
Lease Indenture Secured Party, in the proportion that the
aggregate amount due to each such Lease Indenture Secured
Party under this clause "SECOND" bears to the aggregate amount
due to all such Noteholders under this clause "SECOND"; and if
the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then such
distribution shall be made, ratably, without priority of one
Lease Indenture Secured Party over any other Lease Indenture
Secured Party, in the proportion that the aggregate amount due
to each such Lease Indenture Secured Party, plus the
27
accrued but unpaid interest or fees thereon to the date of
distribution, bears to the aggregate unpaid principal amount
due to each such Lease Indenture Secured Party, plus the
accrued but unpaid interest or fees thereon to the date of
distribution;
THIRD, to the Noteholders, so much of such payments
or amounts as shall be required to reimburse each such
Noteholder, in each case to the extent the Facility Lessee has
an obligation to indemnify under the Participation Agreement,
for any tax, expense, charge or other loss (including, without
limitation, all amounts to be expended at the expense of, or
charged upon, the tolls, rents, revenues, issues, products and
profits of the Indenture Estate pursuant to Section 7.5(b)
hereof) incurred by such Noteholder (to the extent
reimbursable and not previously reimbursed) under the
Operative Documents, including, without limitation, the
expenses of any sale, taking or other proceeding, reasonable
attorneys' fees and expenses, court costs, and any other
expenditures incurred or expenditures or advances made by such
Noteholder in the protection, exercise or enforcement of any
right, power or remedy or any damages sustained by such
Noteholder, liquidated or otherwise, upon such Lease Indenture
Event of Default shall be applied by such Noteholder in
reimbursement of such expenses; and
FOURTH, the balance, if any, of such payments or
amounts remaining thereafter shall be paid to the Owner Lessor
for distribution in accordance with the terms of the Lessor
LLC Agreement.
SECTION 3.4 CERTAIN PAYMENTS
(a) Except as otherwise provided in this Lease Indenture, any payments
received by the Lease Indenture Trustee or the Security Agent for which
provision as to the application thereof is made in any other Operative Document
shall be applied forthwith to the purpose for which such payment was made in
accordance with the terms of such Operative Document.
(b) The Owner Lessor hereby agrees that if, at any time during the term
of this Lease Indenture, it receives from the Facility Lessee or any Affiliate
of the Facility Lessee any amount or payment (other than Excepted Payments)
described in Section 3.4(c) hereof, it shall hold such amount of payment in
trust for the benefit of the Security Agent and promptly pay such amount of
payment to the Security Agent. The Owner Lessor further aggress that the
obligation to remit such amount or payment shall be secured by this Lease
Indenture.
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(c) Any payment of Supplemental Lease Rent received by the Owner
Participant or the Security Agent pursuant to the fourth sentence of Section 7.2
hereof shall, so long as no Lease Indenture Event of Default shall have occurred
and be continuing, and except to the extent applied as provided in Section 3.3
hereof, be retained by, or promptly distributed to, the Owner Participant.
Notwithstanding anything to the contrary in this Section 3 or any of the
Operative Documents and without regard to whether a Lease Indenture Event of
Default shall have occurred and be continuing, all Excepted Payments received by
the Security Agent shall be paid by the Security Agent forthwith to the Person
or Persons entitled thereto.
SECTION 3.5 OTHER PAYMENTS
Any payments in respect of the Indenture Estate received by
the Security Agent no provision for the application of which is made in the
Facility Lease or in another Operative Document or elsewhere in this Indenture
shall (i) to the extent received or realized at any time prior to the payment in
full of all obligations to the Noteholders or to the Debt Service Reserve Letter
of Credit Secured Parties, as applicable, secured by the lien of this Lease
Indenture, be deposited into the Lease Indenture Trustee's Account, and
thereafter applied to the payment of principal, interest, Make-Whole Premium or
other amounts as and when such principal, interest, Make-Whole Premium or other
amounts come due pursuant to priority "FIRST" specified in Section 3.1 hereof
or, if applicable at such time, pursuant to Section 3.2 or 3.3 hereof and (ii)
to the extent received or realized at any time after payment in full of all
obligations to the Noteholders and to the Debt Service Reserve Letter of Credit
Secured Parties, as applicable, secured by the lien of this Lease Indenture, in
the following order of priority: FIRST, to reimburse the Lease Indenture Trustee
and the Security Agent (to the extent not previously reimbursed) for any
reasonable out-of-pocket costs or expenses to which it is entitled to
reimbursement pursuant to an Operative Document; and SECOND, in the manner
provided in clause "FOURTH" of Section 3.3 hereof.
SECTION 3.6 MANNER OF PAYMENT TO THE OWNER LESSOR
Any amounts distributed hereunder by the Security Agent to the
Owner Lessor shall be paid by the Security Agent to the Owner Lessor by wire
transfer of funds of the type received by the Security Agent at such offices and
to such account or accounts of such entity or entities as shall be designated in
advance by written notice from the Owner Lessor to the Security Agent from time
to time. The Security Agent shall, whether or not the lien of this Lease
Indenture shall have been discharged in accordance herewith, act as paying agent
for the Owner Lessor, in connection with the Security Agent's duties to make
distributions to or for the benefit of the Owner Lessor pursuant to this Section
3 and to accept all revenues, payments, securities, investments and other
amounts received by the Security Agent and to be distributed to the Owner Lessor
pursuant thereto or held in trust for the benefit of the Owner Lessor pursuant
to the terms of this Lease Indenture. The Owner Lessor hereby notifies and
instructs the Security
29
Agent that unless and until the Security Agent receives written notice to the
contrary from the Owner Lessor, all amounts to be distributed to the Owner
Lessor pursuant to clause "SECOND" of Section 3.1 hereof shall be distributed by
wire transfer of funds of the type received by the Security Agent to the Owner
Participant. In the event that the Security Agent is unable to distribute any
amounts to the Owner Lessor or the Owner Participant on the same day such
amounts are received by the Security Agent, the Security Agent agrees that such
amounts shall be held in trust for the benefit of the Owner Lessor or the Owner
Participant, as the case may be, and shall be invested by the Security Agent for
and at the expense and risk of the Owner Lessor or the Owner Participant, as the
case may be, in Permitted Investments identified in written instructions to the
Security Agent from the Owner Lessor or the Owner Participant, as the case may
be, if such investments are reasonably available.
SECTION 3.7 ESTABLISHMENT OF THE NOTE ACCOUNTS;
AND LIEN AND SECURITY INTEREST; ETC.
(a) The Security Agent hereby confirms that it has established
securities accounts entitled the "SECURITY AGENT'S ACCOUNT" (the "SECURITY
AGENT'S ACCOUNT") and "LESSOR NOTES PAYMENT ACCOUNT" (the "LESSOR NOTES PAYMENT
ACCOUNT", collectively with the Security Agent's Accounts, the "NOTE ACCOUNTS")
which Note Accounts shall be maintained by the Account Bank until the date this
Lease Indenture is terminated pursuant to Section 12.1 hereof. The account
number of the Note Accounts established hereunder is specified in Schedule III
hereto. The Note Accounts shall not be evidenced by passbooks or similar
writings.
(b) All amounts from time to time held in the Note Accounts shall be
maintained (i) in the name of the Owner Lessor subject to the lien and security
interest of the Security Agent for the benefit of the Lease Indenture Secured
Parties as set forth herein and (ii) in the custody of the Security Agent for
and on behalf of the Security Agent for the benefit of the Secured Parties for
the purposes and on the terms set forth in this Lease Indenture. All such
amounts shall constitute a part of the Note Accounts 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's Secured Obligations owed to the Lease Indenture Secured Parties,
the Owner Lessor hereby pledges, assigns, hypothecates and transfers to the
Security Agent for the benefit of the Lease Indenture Secured Parties, and
hereby grants to the Security Agent for the benefit of the Lease Indenture
Secured Parties, a lien on and security interest in and to (i) the Note Accounts
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 Note Accounts, including all income or gain earned thereon and any proceeds
thereof (the "NOTE ACCOUNTS COLLATERAL").
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SECTION 3.8 THE ACCOUNT BANK; LIMITED RIGHTS OF THE OWNER LESSOR
(a) THE ACCOUNT BANK.
(i) ESTABLISHMENT OF SECURITIES ACCOUNT. The Security Agent
hereby agrees and confirms that (A) that it has established the Note
Accounts as set forth in Section 3.7, (B) Note Accounts are and each
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 each Note Account, (D) all property
delivered to the Security Agent pursuant to this Lease Indenture or any
other Operative Document will be held by the Security Agent and
promptly credited to each Note Account by an appropriate entry in its
records in accordance with this Lease 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 each
Note Account shall be registered in the name of, payable to or to the
order of, or indorsed to, the Security Agent or in blank, or credited
to another securities account maintained in the name of the Security
Agent, and in no case will any financial asset credited to any of the
Note Accounts be registered in the name of, payable to or to the order
of, or indorsed to, the Owner Lessor except to the extent the foregoing
have been subsequently indorsed by the Owner Lessor to the Account Bank
or in blank and (F) the Security Agent shall not change the name or
account number of the Security Agent's Account without the prior
written consent of the Security Agent.
(ii) FINANCIAL ASSETS ELECTION. The Security Agent agrees that
each item of property (including any security, instrument or
obligation, share, participation, interest or other property
whatsoever) credited to the Security Agent's Account shall be treated
as a "FINANCIAL ASSET" within the meaning of Section 8-102(a)(9) of the
UCC.
(iii) ENTITLEMENT ORDERS. Notwithstanding anything in this
Lease Indenture to the contrary, if at any time the Security Agent
shall receive any "ENTITLEMENT ORDER" (within the meaning of Section
8-102(a)(8) of the UCC) or any other order directing the transfer or
redemption of any financial asset relating to the Security Agent's
Account, the Security Agent 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 Security Agent shall
have "CONTROL" (within the meaning of Section 8-106(d) of the UCC) of
the Owner Lessor's "SECURITY ENTITLEMENTS" (within the meaning of
Section 8-102(a)(17) of the UCC) with respect to the financial assets
credited to the Security Agent's Account and the Owner Lessor hereby
disclaims any entitlement to claim
31
"CONTROL" of such "SECURITY entitlements". Unless a Lease Indenture
Event of Default shall have occurred and is continuing, the Lease
Indenture Trustee shall not deliver any entitlement order directing the
transfer or redemption of any financial asset relating to the Security
Agent's Account.
(iv) SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event
that the Security Agent has or subsequently obtains by agreement,
operation of law or otherwise a lien or security interest in the
Security Agent's Account or any security entitlement credited thereto,
the Security Agent agrees that such lien or security interest shall be
subordinate to the lien and security interest of the Security Agent for
the benefit of the Lease Indenture Secured Parties. The financial
assets standing to the credit of the Lease Indemnitee's Lease Indenture
Trustee's Account will not be subject to deduction, set-off, banker's
lien, or any other right in favor of any Person other than the Security
Agent for the benefit of the Lease Indenture Secured Parties (except
for the face amount of any checks which have been credited to the Note
Accounts but are subsequently returned unpaid because of uncollected or
insufficient funds).
(v) NO OTHER AGREEMENTS. The Security Bank and the Owner
Lessor have not entered into any agreement with respect to the Note
Accounts or any financial assets credited to the Note Accounts other
than this Lease Indenture. The Security Agent has not entered into any
agreement with the Owner Lessor or any other Person purporting to limit
or condition the obligation of the Security Agent to comply with
entitlement orders originated by the Security Agent in accordance with
Section 3.8(a)(iii) hereof. In the event of any conflict between this
Section 3.8 or any other agreement now existing or hereafter entered
into, the terms of this Section 3.8 shall prevail.
(vi) NOTICE OF ADVERSE CLAIMS. Except for the claims and
interest of the Security Agent for the benefit of the Lease Indenture
Secured Parties and the Owner Lessor in the Note Accounts, the Security
Agent does not know of any claim to, or interest in, the Note Accounts
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 Note Accounts or in any financial asset credited thereto, the
Security Agent will promptly notify the Security Agent and the Owner
Lessor in writing thereof.
(vii) RIGHTS AND POWERS OF THE SECURITY AGENT. The rights and
powers granted by the Lease Indenture Secured Parties to the Security
Agent have been granted in order to perfect its lien and security
interests in the Security Agent'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.
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(b) LIMITED RIGHTS OF THE OWNER LESSOR. The Owner Lessor shall not have
any rights against or to monies held in the Note Accounts, as third party
beneficiary or otherwise, or any right to direct the Security Agent or the
Security Agent to apply or transfer monies in the Note Accounts, except the
right to receive or make requisitions of monies held by the Security Agent and
to direct investments of monies as provided in Section 3.10 hereof, as provided
in this Lease Indenture. Except as provided in this Lease Indenture, in no event
shall any amounts or Cash Equivalent Investments deposited in or credited to the
Note Accounts 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 Security Agent
or in blank.
SECTION 3.9 EXERCISE OF POWERS; INSTRUCTIONS OF REQUIRED LEASE INDENTURE
SECURED PARTIES.
(a) All of the powers, remedies and rights of the Security Agent set
forth in or contemplated by this Agreement may be exercised by the Security
Agent as though set forth in full herein, and all of the powers, remedies and
rights of the Security Agent and the Lease Indenture Secured Parties as set
forth herein.
(b) Following the delivery of a direction of acceleration under Section
7.4 hereof to the Security Agent, during any Event of Default, the Required
Lease Indenture Secured Parties may deliver a "NOTICE OF ACTION" to the Security
Agent directing the Security Agent to exercise one or more of the rights and
remedies available to the Security Agent under this Lease Indenture and under
the Security Deposit Agreement. The Security Agent shall deliver to each Lease
Indenture Secured Party a copy of such Notice of Action promptly after receipt
thereof. The Security Agent shall exercise the rights and remedies and take the
other actions described in such Notice of Action at the time or times specified
in such Notice of Action.
(c) All Proceeds of the Indenture Estate received by the Security Agent
from the exercise of its rights and remedies under this Lease Indenture or under
the Mortgage shall be applied as set forth in Article 3 hereof.
SECTION 3.10 INVESTMENT OF AMOUNTS HELD BY LEASE INDENTURE TRUSTEE.
Any amounts held by the Security Agent pursuant to the proviso
to clause "SECOND" of Section 3.1 hereof, pursuant to Section 3.2 or Section 3.3
hereof, or pursuant to Section 10 or 11 of the Facility Lease shall be invested
by the Security Agent from time to time in Permitted Investments identified in
written instructions to the Security Agent from the Owner Lessor, at the expense
of the Owner Lessor, if such investments are reasonably available. Unless
otherwise expressly provided in this Lease Indenture, any income realized as a
result of any such investment, net of the Security Agent's
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reasonable fees and expenses in making such investment, shall be held and
applied by the Security Agent in the same manner as the principal amount of such
investment is to be applied, and any losses, net of earnings and such reasonable
fees and expenses, shall be charged against the principal amount invested. The
Security Agent shall not be liable for any loss resulting from any investment
required to be made by it under this Lease Indenture other than by reason of its
willful misconduct or gross negligence as determined by a court of competent
jurisdiction in receiving, handling or disbursing funds, and any such investment
may be sold (without regard to its maturity) by the Security Agent without
instructions whenever it reasonably believes such sale is necessary to make a
distribution required by this Lease Indenture.
ARTICLE IV
REDEMPTION AND PREPAYMENT
SECTION 4.1 NOTICES TO LEASE INDENTURE TRUSTEE
If the Owner Lessor elects to redeem Lessor Notes pursuant to
the redemption provisions of Section 4.7 or 4.8 hereof, it shall furnish to the
Lease Indenture Trustee, the Security Agent, and for so long as the Bonds are
outstanding, the Bondholder Trustee at least 30 days but not more than 60 days
before a redemption date, an Officer's Certificate setting forth (i) the clause
of this Lease Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Lessor Notes to be redeemed and
(iv) the redemption price.
SECTION 4.2 SELECTION OF LESSOR NOTES TO BE REDEEMED
If less than all of the Lessor Notes are to be redeemed at any
time, the Lease Indenture Trustee shall select the Lessor Notes to be redeemed
among the Noteholders of the Lessor Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Lessor Notes
are listed or, if the Lessor Notes are not so listed, on a PRO RATA basis,
between the Series A Lessor Notes and the Series B Lessor Notes. In the event of
partial redemption, the particular Lessor Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Lease Indenture Trustee from the
outstanding Lessor Notes not previously called for redemption.
The Lease Indenture Trustee shall promptly notify the Owner
Lessor and the Security Agent of the Lessor Notes selected for redemption and,
in the case of any Lessor Note selected for partial redemption, the principal
amount thereof to be redeemed. Lessor Notes and portions of Lessor Notes
selected shall be in amounts of $100,000 or whole multiples of $1,000 in excess
thereof; except that if all of the Lessor Notes of a Noteholder are to be
redeemed, the entire outstanding amount of Lessor Notes held by such Noteholder,
even if not in the amount of $100,000 or a multiple of $1,000 in excess thereof,
shall be redeemed. Except as provided in the preceding sentence, provisions of
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this Lease Indenture that apply to Lessor Notes called for redemption also apply
to portions of Lessor Notes called for redemption.
SECTION 4.3 NOTICE OF REDEMPTION
At least 30 days but not more than 60 days before a redemption
date, the Owner Lessor shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Noteholder whose Lessor Notes are to be redeemed at
its registered address and, for as long as the Bonds are outstanding, the
Bondholder Trustee and each holder of the Bonds corresponding to the tenor and
the principal amount of the Lessor Notes being redeemed.
The notice shall identify the Lessor Notes to be redeemed and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Lessor Note is being redeemed in part, the portion of the
principal amount of such Lessor Note to be redeemed and that, after the
redemption date upon surrender of such Lessor Note, a new Lessor Note or Lessor
Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Lessor Note;
(d) the name and address of the Paying Agent;
(e) that Lessor Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Owner Lessor defaults in making such redemption
payment, interest on Lessor Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Lessor Notes and/or Section of this Lease
Indenture pursuant to which the Lessor Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Lessor Notes.
At the Owner Lessor's request, the Lease Indenture Trustee
shall give the notice of redemption in the Owner Lessor's name and at its
expense; PROVIDED, HOWEVER, that the Owner Lessor shall have delivered to the
Lease Indenture Trustee, at least 45 days prior to the redemption date (or such
shorter time period acceptable to the Lease Indenture Trustee), an Officer's
Certificate requesting that the Lease Indenture Trustee
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give such notice and setting forth the information to be stated in such notice
as provided in the preceding paragraph.
SECTION 4.4 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section
4.3 hereof, Lessor Notes (and the Bonds corresponding to the tenor and principal
amount of such Lessor Notes) called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 4.5 DEPOSIT OF REDEMPTION PRICE
One Business Day prior to the redemption date, the Security
Agent shall deposit with the Lease Indenture Trustee or with the Paying Agent
into the Lessor Notes Payment Account money sufficient to pay the redemption
price of and accrued interest on all Lessor Notes to be redeemed on that date.
The Lease Indenture Trustee or the Paying Agent shall promptly return to the
Owner Lessor any money deposited with the Lease Indenture Trustee or the Paying
Agent by the Owner Lessor in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Lessor Notes to be redeemed.
If the Owner Lessor complies with the provisions of the
preceding paragraph, on and after the redemption date, interest shall cease to
accrue on the Lessor Notes or the portions of Lessor Notes called for
redemption. If a Lessor Note is redeemed on or after an interest record date but
on or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Lessor Note was
registered at the close of business on such record date. If any Lessor Note
called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Owner Lessor to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Lessor Notes and
in Section 5.1 hereof.
SECTION 4.6 LESSOR NOTES REDEEMED IN PART
Upon surrender of a Lessor Note that is redeemed in part, the
Owner Lessor shall issue and, upon receipt of an Authentication Order, the Lease
Indenture Trustee shall authenticate for the Noteholder at the expense of the
Owner Lessor a new Lessor Note equal in principal amount to the unredeemed
portion of the Lessor Note surrendered.
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SECTION 4.7 OPTIONAL REDEMPTION
The Lessor Notes shall be subject to optional redemption at
any time at a Redemption Price equal to the outstanding principal amount of the
Lessor Notes to be redeemed plus all accrued and unpaid interest thereon to the
Redemption Date, plus the Make-Whole Premium, if any.
SECTION 4.8 MANDATORY REDEMPTION
The Lessor Notes will be subject to mandatory redemption upon
the occurrence of a Recovery Event with respect to the Facility, other than with
respect to amounts received by the Owner Lessor in connection with a Recovery
Event for which the Facility Lessee elects to restore or replace the asset or
assets in respect of which such Recovery Event occurred and a Reinvestment
Notice is provided by the Facility Lessee to the Owner Participant, the
Collateral Agent and the Lease Indenture Trustee within 45 days of such Recovery
Event (provided that, with respect to any Recovery Event of $50 million or more,
the Independent Engineer shall have certified as to the reasonableness, in light
of Prudent Industry Practice, of the Facility Lessee's repair and replacement
plans as set forth in the Facility Lessee's Reinvestment Notice relating to such
Recovery Event). Any mandatory redemption of the Lessor Notes will be without
premium or penalty at a Redemption Price equal to the unpaid principal amount
thereof plus accrued and unpaid interest thereon to the Redemption Date.
ARTICLE V
COVENANTS
SECTION 5.1 PAYMENT OF LESSOR NOTES
The Owner Lessor hereby covenants and agrees as follows:
(a) The Owner Lessor will duly and punctually pay the principal of and
interest on and other amounts (including any Make-Whole Premium) due under the
Lessor Notes and this Lease Indenture in accordance with the terms hereof and
thereof and all amounts payable by it to the Lease Indenture Trustee, the
Noteholders and the Debt Service Reserve Letter of Credit Secured Parties, as
applicable, under any other Operative Document. Principal, premium, if any, and
interest shall be considered paid on the date due if the Security Agent holds as
of 10:00 A.M. Eastern time on the due date, money deposited by, or at the
direction of the Owner Lessor, in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due;
(b) The Owner Lessor shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Code) on overdue principal at
the rate equal to 1% per annum in excess of the then applicable interest rate on
the Lessor Notes to the extent
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lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Code) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
(c) In the event that the Independent Manager of the Owner Lessor shall
have actual knowledge of a Lease Indenture Event of Default or a Lease Indenture
Default, the Owner Lessor will give prompt written notice of such Lease
Indenture Event of Default or Lease Indenture Default to the Facility Lessee,
the Owner Participant, the Lease Indenture Trustee (and the Lease Indenture
Trustee shall thereupon promptly deliver a copy of such notice to each
Noteholder and the Security Agent); and
(i) in the event that an Authorized Officer of the Owner
Lessor shall have actual knowledge of an Event of Loss, then, to the
extent that the Facility Lessee is not required, pursuant to the
Facility Lease, to give notice of such event to the Lease Indenture
Trustee and the Security Agent, the Owner Lessor will give prompt
written notice of such Event of Loss to the Lease Indenture Trustee
(and the Lease Indenture Trustee shall thereupon promptly deliver a
copy of such notice to each Noteholder) and the Security Agent; and
(ii) the Owner Lessor will furnish to the Lease Indenture
Trustee and the Security Agent true and correct duplicates or copies of
all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Owner Lessor under
the Facility Lease, to the extent that the same shall not have been (or
are not required to be) furnished to the Lease Indenture Trustee, the
Noteholders, or the Security Agent pursuant to the Facility Lease or
the Participation Agreement.
(d) Except as contemplated by the Operative Documents, the Owner Lessor
will not incur any Indebtedness or engage in any business activity except with
the prior written consent of the Lease Indenture Trustee and acting on the
instructions of the Required Holders.
SECTION 5.2 STAY, EXTENSION AND USURY LAWS
The Owner Lessor covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Lease Indenture; and the Owner
Lessor (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Security Agent or the Lease Indenture Trustee, but shall suffer
and permit the execution of every such power as though no such law had been
enacted.
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SECTION 5.3 PAYMENTS FOR CONSENT
The Owner Lessor shall not directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Noteholder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Lease Indenture or the
Lessor Notes unless such consideration is offered to be paid or is paid to all
Noteholders of the Lessor Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 5.4 DEBT SERVICE RESERVE ACCOUNT
The Owner Lessor shall establish and, so long as any Lessor
Notes and Bonds remain outstanding, maintain with the Security Agent the Debt
Service Reserve Account (the "DEBT SERVICE RESERVE ACCOUNT"). On the Closing
Date and on any date on which a payment is made pursuant to Section 6.9 of the
Participation Agreement, the Debt Service Reserve Amount on such date of
determination will be 100% of the projected debt service on the Lessor Notes for
the succeeding six-month period, and may be satisfied by one or a combination of
the following: (i) cash or (ii) a letter of credit issued by a bank or trust
company that constitutes Acceptable Credit Support. The Security Agent is hereby
authorized to withdraw funds from the Debt Service Reserve Account or draw on
such letter of credit to make any payments, to the extent the amounts on deposit
in the Note Accounts are insufficient, due to the Noteholders in the manner
provided in Article III hereof. Withdrawal of funds from the Debt Service
Reserve Account or a draw on such letter of credit issued pursuant to this
Section 5.4 following a Lease Event of Default resulting from failure to pay any
Basic Lease Rent or Supplemental Lease Rent when due, shall be deemed to be an
exercise by the Owner Lessor of its rights under Section 7.2 hereof (other than
clause (i) of the last proviso of the last sentence of Section 7.2). Any deposit
made by the Owner Lessor into the Debt Service Reserve Account and any
reinstatement of the Debt Service Reserve Letter of Credit other than in
connection with the payment by the Facility Lessee of the related overdue Rent
shall be deemed to be an exercise by the Owner Lessor of its rights under
Section 7.2 hereof for purposes of clause (i) of the last proviso of the last
sentence of Section 7.2.
ARTICLE VI
SUCCESSORS
SECTION 6.1 LIMITATION ON MERGER, CONSOLIDATION AND SALE OF SUBSTANTIALLY
ALL ASSETS
The Owner Lessor shall not, directly or indirectly,
consolidate or merge with or into any other person (whether or not the Owner
Lessor is the surviving corporation), or sell, assign, convey, lease, transfer
or otherwise dispose of, all or
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substantially all of its properties or assets in one or a series of
transactions, to any Person or Persons.
ARTICLE VII
LEASE INDENTURE EVENTS OF DEFAULT
SECTION 7.1 LEASE INDENTURE EVENTS OF DEFAULT
"LEASE INDENTURE EVENT OF DEFAULT" means any of the following
events (whatever the reason for such Lease Indenture Event of Default and
whether such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority):
(a) any Lease Event of Default (other than with respect to (x) a Rent
Default Event, (y) Excepted Payments unless the Facility Lease has been declared
in default by the Owner Lessor or (z) the failure of the Facility Lessee to
maintain insurance in the amounts and on the terms set forth in the Operative
Documents so long as the insurance actually maintained by the Facility Lessee is
in accordance with Prudent Industry Practice, so long as such Lease Event of
Default is waived by the Owner Lessor and the Owner Participant) shall have
occurred and be continuing; or
(b) default of the Owner Lessor in the payment when due of any (i)
payment of principal of, premium (including, without limitation, Make-Whole
Premium), if any, or interest on, or any scheduled fees within 5 Business Days
after the same shall become due or (ii) other amounts due and payable by the
Owner Lessor under or with respect to, any Lessor Note and such failure shall
continue for thirty days after receipt by the Owner Lessor of written demand
therefore from the Security Agent; or
(c) any material representation or warranty made by the Owner
Participant or the Owner Lessor in this Lease Indenture or in any other
Operative Document to which it is a party shall prove to have been inaccurate
when made or deemed made in any material respect or by any OP Guarantor in its
OP Guaranty (provided the OP Guaranty shall not have been terminated or
released), as the case may be, and such misrepresentation or breach of warranty
remains material and shall not have been corrected within a period of 30 days
following written notice thereof being given to the Owner Lessor and the Owner
Participant or such OP Guarantor, as the case may be, by any Noteholder (through
the Lease Indenture Trustee); PROVIDED that, if such misrepresentation or breach
of warranty is capable of correction but cannot with diligence be corrected
within such 30-day period, such failure will not constitute a Lease Indenture
Event of Default so long as the party whose representation or warranty was
inaccurate promptly institutes corrective action within such 30-day period and
diligently pursues such corrective action (but in no event shall the total
period permitted to correct such misrepresentation or breach of warranty extend
beyond 120 days from the date such notice was provided); or
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(d) any failure (i) by the Owner Lessor to observe, perform or comply
with the provisions of any material covenant or obligation of the Owner Lessor
contained in this Lease Indenture or in any Operative Document to which it is a
party (other than as provided in clause (a) above) in any material respect or
(ii) by the Owner Participant to observe or perform any material covenant or
obligation of the Owner Participant contained in any Operative Document (other
than the Tax Indemnity Agreement) to which it is a party or (iii) by any OP
Guarantor to observe or any material covenant or obligation of such OP Guarantor
contained in any OP Guaranty (provided the OP Guaranty shall not have been
terminated or released); and such covenant remains material and such failure
shall not have been cured within a period of 30 days following written notice
thereof being given to the Owner Lessor and the Owner Participant, as the case
may be, by any Noteholder (through the Lease Indenture Trustee); PROVIDED that,
if such failure is capable of cure but cannot with diligence be cured within
such 30-day period, such failure will not constitute a Lease Indenture Event of
Default so long as the party failing to observe or perform such covenant
promptly institutes corrective action within such 30-day period and diligently
pursues such corrective action (but in no event shall the total period permitted
to cure such failure extend beyond 180 days from the date such notice was
provided); or
(e) the Owner Participant, any OP Guarantor (provided the OP Guaranty
shall not have been terminated or released) or the Owner Lessor shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to controvert in a
timely and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the Owner Lessor, such OP
Guarantor (provided the OP Guaranty shall not have been terminated or released)
the Owner Participant or any substantial part of the property of any of the
foregoing, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due, or (vii) take corporate action
for the purpose of effecting any of the foregoing; or
(f) an involuntary proceeding is commenced or an involuntary petition
is filed in a court of competent jurisdiction seeking (i) relief in respect of
the Owner Participant, any OP Guarantor (provided the OP Guaranty shall not have
been terminated or released) or the Owner Lessor under Bankruptcy Code or any
other federal, state or foreign bankruptcy, insolvency or similar law now or
hereafter in effect, (ii) the appointment of a receiver, Lease Indenture
Trustee, custodian, sequestrator or similar official for the Owner Participant,
such OP Guarantor (provided the OP Guaranty shall not have been terminated or
released) or the Owner Lessor or any substantial part of the property of the
foregoing or (iii) the winding-up or liquidation of the Owner Participant, such
OP
41
Guarantor (provided the OP Guaranty shall not have been terminated or released)
or the Owner Lessor and such proceeding or petition continues undismissed for 60
days or an order or decree approving or ordering any of the foregoing continues
unstayed and in effect for 60 days; or
(g) If Owner Lessor shall give any notice pursuant to 42 Pa.C.S.
ss.8143(c) or otherwise to terminate the operation of the Mortgage as security
for future advances or future obligations made or incurred after the date the
Lease Indenture Secured Parties receive such notice, or Owner Lessor shall take
any other similar action for the purpose of limiting or attempting to limit the
operation of the Mortgage as such security.
SECTION 7.2 CERTAIN RIGHTS TO CURE
In the event of any Lease Indenture Event of Default triggered by a
Lease Event of Default that arises in connection with the payment of any
installment of Basic Lease Rent or Supplemental Lease Rent (other than with
respect to Excepted Payments) due under the Facility Lease, the Owner Lessor or
the Owner Participant may, but shall not be obligated to, within ten Business
Days (but with respect to a default in the payment of Basic Lease Rent in no
event more than 15 days after the related Rent Payment Date), after receipt by
the Owner Lessor and Owner Participant of written notice of the occurrence of
such Lease Default or Lease Event of Default, without the consent or concurrence
of the Security Agent, the Lease Indenture Trustee or any Noteholder, pay, as
provided in Section 2.11 hereof, for application in accordance with Section 3.1
hereof, the principal of, interest on and other amounts payable under or in
respect of, the Lessor Notes as shall then be due and payable on the Lessor
Notes (without giving effect to any acceleration pursuant to Section 7.3
hereof). If any other Lease Default or other Lease Event of Default that gives
rise to a Lease Indenture Event of Default occurs and the Owner Lessor shall
have been furnished (by or for the account of the Owner Participant) with all
funds necessary for remedying such Lease Default or Lease Event of Default, the
Owner Participant may, within ten Business Days after the earlier of (a) receipt
by the Owner Participant of written notice of or (b) the Owner Participant
acquiring actual knowledge of the occurrence of such Lease Event of Default,
without the consent or concurrence of the Security Agent, the Lease Indenture
Trustee or any Noteholder, instruct the Owner Lessor to exercise the Owner
Lessor's rights under Section 20 of the Facility Lease to perform such
obligation on behalf of the Facility Lessee. Solely for the purpose of
determining whether there exists a Lease Indenture Event of Default, (a) any
payment by the Owner Participant or the Owner Lessor pursuant to, and in
compliance with, the first sentence of this Section 7.2 shall be deemed to
remedy (for purposes of this Lease Indenture only) any Lease Default or Lease
Event of Default in the payment of installments of Basic Lease Rent theretofore
due and payable and to remedy any default by the Owner Lessor in the payment of
any amount due and payable under the Lessor Notes or hereunder, and (b) any
performance by the Owner Lessor of any obligation of the Facility Lessee under
the Facility Lease pursuant to, and in compliance with, the second sentence of
this Section 7.2 shall be deemed to remedy (for purposes of this Lease
42
Indenture) any Lease Default or Lease Event of Default to the same extent that
like performance by the Facility Lessee itself would have remedied such Lease
Event of Default (but any such payment or performance shall not relieve the
Facility Lessee of its duty to pay all Rent and perform all of its obligations
pursuant to the Facility Lease). If, on the basis specified in the preceding
sentence, such Lease Default or Lease Event of Default shall have been remedied,
then any determination that the Facility Lease, and any declaration pursuant to
this Lease Indenture that the Lessor Notes are due and payable or that a Lease
Indenture Default or Lease Indenture Event of Default exists hereunder, based
upon such Lease Default or Lease Event of Default, shall be deemed to be
rescinded, and the Owner Participant shall (to the extent of any such payments
made by or for the account of the Owner Lessor) be subrogated to the rights of
the Noteholders hereunder to receive such payment of Rent from the Facility
Lessee (and the payment of interest on account of such Rent from the Facility
Lessee being overdue), and shall be entitled, so long as no other Lease
Indenture Event of Default shall have occurred or would result therefrom, to
receive and retain such payment from the Facility Lessee; provided, however,
that the Owner Participant shall not, so long as this Lease Indenture shall not
have terminated, otherwise attempt to recover any such amount paid by it or for
its account on behalf of the Facility Lessee pursuant to this Section 7.2 except
by demanding of the Facility Lessee payment of such amount or by commencing an
action at law and obtaining and enforcing a judgment against the Facility Lessee
for the payment of such amount or taking appropriate action in a pending action
at law against the Facility Lessee and the Owner Participant will not obtain any
lien on any part of the Indenture Estate on account of such payment nor will any
claim of the Owner Participant against the Facility Lessee or any other party
for the repayment thereof impair the prior right and security interest of the
Lease Indenture Secured Parties in and to the Indenture Estate, as the case may
be; provided, further, however, that
(i) this Section 7.2 shall not apply with respect to any cure
of any default in the payment of Basic Lease Rent if such cure shall
have previously been effected with respect to (A) four (4) consecutive
payments of Basic Lease Rent immediately preceding the date of such
default, or (B) more than eight (8) payments of Basic Lease Rent;
(ii) neither the Owner Lessor nor the Owner Participant shall
(without a Notice of Action) have the right to cure any Lease Event of
Default except as specified in this Section 7.2; and
(iii) until the expiration of the period during which the
Owner Lessor shall be entitled to exercise rights under the first and
second sentence of this Section 7.2 with respect to any failure by the
Facility Lessee referred to therein, neither the Lease Indenture
Trustee and the Security Agent nor any Lease Indenture Secured Party
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 7 or Section 17 of the Facility Lease or
otherwise.
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SECTION 7.3 ACCELERATION
If any Lease Indenture Event of Default (other than a Lease
Indenture Event of Default specified in clause (e) or (f) of Section 7.1 hereof
with respect to the Owner Lessor) occurs and is continuing, the Security Agent
may, and upon written direction of the Noteholders of at least 33-1/3% (in the
case of any Lease Indenture Event of Default specified in clause (b) of Section
7.1 hereof) or 50% (in the case of any other Lease Indenture Event of Default)
in principal amount of the then outstanding Lessor Notes shall, declare, by
written notice to the Owner Lessor, all the Lessor Notes to be due and payable
immediately. Notwithstanding the foregoing, if a Lease Indenture Event of
Default specified in clause, (e) or (f) of Section 7.1 hereof occurs with
respect to the Owner Lessor, all outstanding Lessor Notes shall be due and
payable without further action or notice. Noteholders may not enforce this Lease
Indenture or the Lessor Notes except as provided in this Lease Indenture. The
Lease Indenture Trustee may withhold from Noteholders a notice of any continuing
Lease Indenture Default or Lease Indenture Event of Default (except a Lease
Indenture Default or Lease Indenture Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their best
interest. The Noteholders of 66 2/3% in aggregate principal amount of the then
outstanding Lessor Notes by notice to the Security Agent may on behalf of all
Noteholders rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Lease Indenture
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.
The Noteholders of a majority (or 66 2/3% in case of a Lease
Indenture Event of Default triggered by a Lease Event of Default specified in
clause (d)(i) of Section 16 of the Facility Lease, for non-compliance with
SECTION 6.1 of the Participation Agreement) in aggregate principal amount of the
Lessor Notes then outstanding by notice to the Lease Indenture Trustee may on
behalf of the Noteholders of all of the Lessor Notes waive any existing Lease
Indenture Lease Indenture Default or Lease Indenture Event of Default and its
consequences under this Lease Indenture except (i) a continuing Lease Indenture
Default or Lease Indenture Event of Default in the payment of principal of,
premium, if any, or interest on, the Lessor Notes (including in connection with
an offer to purchase) and (ii) a Lease Indenture Event of Default specified in
clause (e) or (f) of Section 7.1 hereof.
SECTION 7.4 OTHER REMEDIES
(a) If a Lease Indenture Event of Default shall have occurred and so
long as the same shall be continuing unremedied the Security Agent may, if not
precluded by law or otherwise, exercise any or all of the rights and powers and
pursue any and all remedies available to collect the payment of principal,
premium, if any, or interest on the Lessor Notes including the remedies pursuant
to this Section 7.4 and shall have and may exercise all of the rights and
remedies of a secured party under any and all applicable
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laws, rules or regulations. It is understood and agreed that if a Lease
Indenture Event of Default has occurred and is continuing by virtue of one or
more Lease Events of Default the Security Agent shall not exercise foreclosure
remedies under this Lease Indenture without exercising material remedies seeking
to dispossess the Lessee under the Lease, unless exercising such remedies under
the Facility Lease shall be prohibited at the time by law, governmental
authority or court order, in which case the Security Agent shall not exercise
foreclosure remedies under the Lease Indenture until the expiration of a period
of one year from the commencement of such prohibition. For the avoidance of
doubt, it is expressly understood and agreed that the above-described inability
of the Security Agent to exercise any right or remedy under the Facility Lease
shall not prevent the Security Agent from exercising any of its other rights,
powers and remedies under this Lease Indenture.
(b) Both the Owner Lessor, the Lease Indenture Trustee and the Security
Agent irrevocably agree for the benefit of the Facility Lessee that neither of
them will exercise any remedies on account of a Lease Event of Default resulting
from a Rent Default Event other than (x) the Owner Lessor may at any time a Rent
Default Event has occurred and is continuing, exercise the remedy set forth in
Section 17.1(g) of the Facility Lease and (y) upon the Rent Default Remedy Date,
the Owner Lessor may declare the Facility Lease in default and the Owner Lessor,
or if the lien of this Lease Indenture has not terminated, the Security Agent
may exercise all remedies. The Owner Lessor and the Security Agent irrevocably
agree that the Facility Lessee is a third party beneficiary of this section
7.4(b).
SECTION 7.5 TAKING POSSESSION OF INDENTURE ESTATE
(a) Subject to the rights of the Owner Lessor and the Owner Participant
under Sections 7.2 and 2.21 hereof, and unless a Lease Indenture Event of
Default shall have occurred and be continuing and the Lessor Notes shall have
been accelerated (and any such acceleration has not been rescinded) pursuant to
Section 7.3 hereof, upon a Notice of Action , the Owner Lessor shall promptly
execute and deliver or cause to be delivered to the Security Agent such
instruments and other documents as the Required Lease Indenture Secured Parties
may deem necessary or advisable to enable the Security Agent at such time or
times and place or places as the Security Agent (acting upon a Notice of Action)
may specify, to obtain possession of all or any part of the Indenture Estate to
which the Lease Indenture Secured Parties shall at the time be entitled
hereunder. If the Owner Lessor shall for any reason fail to execute and deliver
or cause to be delivered such instruments and documents after such request by
the Security Agent , the Security Agent (acting upon a Notice of Action) may (i)
obtain a judgment conferring on the Security Agent the right to immediate
possession and requiring the Owner Lessor to execute and deliver or cause to be
delivered such instruments and documents to the Security Agent and the Owner
Lessor hereby specifically consents to the entry of such judgment to the fullest
extent it may lawfully do so, and (ii) to the extent permitted by law, pursue
all or part of such Indenture Estate, as applicable, wherever it may be found,
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subject to Article XI of the Participation Agreement and Section 4.2 of the
Facility Lease, if applicable. All expenses (including those of the Security
Agent) of obtaining such judgment or of pursuing, searching for and taking such
property shall, until paid, be secured by the lien of this Lease Indenture.
(b) Upon every such taking of possession in connection with a Lease
Event of Default, the Security Agent (acting upon a Notice of Action) may, from
time to time at the expense of the Indenture Estate, make all such expenditures
for maintenance, insurance, repairs, replacements, alterations, additions and
improvements to and of the Indenture Estate as the Required Lease Indenture
Secured Parties may deem proper. In each such case, the Security Agent (acting
upon a Notice of Action) or its designee shall have the right to maintain, use,
operate, store, lease, control or manage the Indenture Estate and to carry on
the business and to exercise all rights and powers of the Owner Lessor relating
to the Indenture Estate, as the Required Lease Indenture Secured Parties shall
deem best, including the right to enter into any and all such agreements with
respect to the maintenance, insurance, use, operation, storage, leasing,
control, management or disposition of the Indenture Estate or any part thereof
as the Required Lease Indenture Secured Parties may determine; and the Security
Agent shall be entitled to collect and receive directly all tolls, rents
(including Rent), revenues, issues, income, products and profits constituting
part of the Indenture Estate and every part thereof, except Excepted Payments,
without prejudice, however, to the right of the Security Agent under any
provision of this Lease Indenture to collect and receive all cash held by, or
required to be deposited with, the Security Agent hereunder. Such tolls, rents
(including Rent), revenues, issues, income, products and profits shall be
applied to pay the expenses of use, operation, storage, subleasing, control,
management or disposition of the Indenture Estate and of conducting the business
thereof, and of all maintenance, repairs, replacements, alterations, additions
and improvements, and to make all payments which the Security Agent may be
required or may elect (acting upon a Notice of Action) to make, if any, for
taxes, assessments, insurance or other proper charges upon the Indenture Estate
or any part thereof (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Lessor), and all other payments which the Security Agent may be
required or authorized to make under any provision of this Lease Indenture, as
well as reasonable compensation for the services of the Lease Indenture Trustee
and the Security Agent, and of all Persons properly engaged and employed by the
Lease Indenture Trustee and the Security Agent.
SECTION 7.6 WAIVER OF PAST LEASE INDENTURE DEFAULTS
Upon any waiver of any existing Lease Indenture Default or
Lease Indenture Event of Default pursuant to the second paragraph of Section
7.3, such Lease Indenture Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Lease Indenture; but no such waiver shall extend to any subsequent or other
Lease Indenture Default or impair any right consequent thereon.
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SECTION 7.7 CONTROL BY MAJORITY
The Required Lease Indenture Secured Parties may direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Security Agent or exercising any trust or power conferred on
it. However, the Security Agent may refuse to follow any direction that
conflicts with law or this Lease Indenture or that the Security Agent determines
may be unduly prejudicial to the rights of other Noteholders or the Debt Service
Reserve Letter of Credit Secured Parties or that may involve the Security Agent
in personal liability. The Security Agent may take any other action consistent
with this Lease Indenture relating to any such direction.
SECTION 7.8 [RESERVED]
SECTION 7.9 RIGHTS OF HOLDERS OF LESSOR NOTES TO RECEIVE PAYMENT
Notwithstanding any other provision of this Lease Indenture
but subject to Section 2.5, the right of any Noteholder, which is absolute and
unconditional, to receive payment of principal, premium, if any, and interest on
the Lessor Note, on or after the respective due dates expressed in the Lessor
Note (including in connection with an offer to purchase), or to bring suit for
the enforcement of any such payment on or after such respective dates, or the
obligation of the Owner Lessor, which is also absolute and unconditional, to pay
the principal of, premium, if any, and interest on the Lessor Note to such
Noteholder at the time and place set forth in the Lessor Note, shall not be
impaired or affected without the consent of such Noteholder.
SECTION 7.10 COLLECTION SUIT BY LEASE INDENTURE TRUSTEE
If a Lease Indenture Event of Default specified in Section
6.1(a) occurs and is continuing, the Security Agent is authorized to recover
judgment in its own name and as Lease Indenture Trustee of an express trust
against the Owner Lessor for the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Lessor Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, fees, expenses, disbursements and advances of the
Security Agent, its agents and counsel.
SECTION 7.11 [RESERVED]
SECTION 7.12 NO ACTION CONTRARY TO THE FACILITY LESSEE'S RIGHTS UNDER THE
FACILITY LEASE
Notwithstanding any other provision of any Operative Document,
so long as the Facility Lease shall not have been declared (or deemed to have
been declared) in
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default, the Security Agent shall not take or cause to be taken any action
contrary to the right of the Facility Lessee under the Facility Lease, including
its rights, as between the Facility Lessee and the Owner Lessor, to quiet use
and possession of the Undivided Interest under the Facility Lease.
ARTICLE VIII
LEASE INDENTURE TRUSTEE AND SECURITY AGENT
SECTION 8.1 DUTIES OF LEASE INDENTURE TRUSTEE AND SECURITY AGENT
(a) If a Lease Indenture Event of Default has occurred and is
continuing, the Security Agent and the Lease Indenture Trustee shall exercise
such of the rights and powers vested in it by this Lease Indenture, and use the
same degree of care and skill in its exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Lease Indenture Event of
Default:
(i) the duties of each of the Lease Indenture Trustee and the
Security Agent shall be determined solely by the express provisions of
this Lease Indenture and the Lease Indenture Trustee and the Security
Agent need perform only those duties that are specifically set forth in
this Lease Indenture and no others, and no implied covenants or
obligations shall be read into this Lease Indenture against the Lease
Indenture Trustee or the Security Agent; and
(ii) in the absence of bad faith on its part, the Lease
Indenture Trustee or the Security Agent may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Lease
Indenture Trustee or the Security Agent and conforming to the
requirements of this Lease Indenture. However, the Lease Indenture
Trustee and the Security Agent shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Lease Indenture.
(c) The Lease Indenture Trustee nor the Security Agent may not be
relieved from liabilities for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Lease Indenture Trustee nor the Security Agent shall
not be liable for any error of judgment made in good faith by a
Responsible Officer,
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unless it is proved that the Lease Indenture Trustee or the Security
Agent was negligent in ascertaining the pertinent facts; and
(iii) the Lease Indenture Trustee and the Security Agent shall
not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to
Section 7.7 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Lease Indenture that in any way relates to the Lease Indenture Trustee or
the Security Agent is subject to paragraphs (a), (b), (c), (e) and (f) of this
Section.
(e) No provision of this Lease Indenture shall require the Lease
Indenture Trustee nor the Security Agent to expend or risk its own funds or
incur any liability. The Lease Indenture Trustee and the Security Agent shall be
under no obligation to exercise any of its rights and powers under this Lease
Indenture at the request or direction of any Noteholders, unless such Noteholder
shall have offered and, if requested, provided to the Lease Indenture Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Lease Indenture Trustee shall not be liable for interest on any
money received by it except as the Lease Indenture Trustee or the Security Agent
may agree in writing with the Owner Lessor. Money held in trust by the Lease
Indenture Trustee or the Security Agent need not be segregated from other funds
except to the extent required by law.
SECTION 8.2 RIGHTS OF LEASE INDENTURE TRUSTEE
(a) The Lease Indenture Trustee or the Security Agent may conclusively
rely upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Lease Indenture Trustee and the Security
Agent need not investigate any fact or matter stated in the document, but the
Lease Indenture Trustee nor the Security Agent, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and if the Lease Indenture Trustee or the Security Agent shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Owner Lessor personally or by agent or
attorney.
(b) Before the Lease Indenture Trustee or the Security Agent acts or
refrains from acting, it may require a Manager's Certificate or an Opinion of
Counsel or both. The Lease Indenture Trustee or the Security Agent shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Lease Indenture Trustee or
the Security Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and
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complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Lease Indenture Trustee or the Security Agent may act through
its attorneys and agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Lease Indenture Trustee or the Security Agent shall not be
liable for any action it takes or omits to take in good faith that it believes
to be authorized or within the rights or powers conferred upon it by this Lease
Indenture.
(e) Unless otherwise specifically provided in this Lease Indenture, any
demand, request, direction or notice from the Owner Lessor shall be sufficient
if signed by the Independent Manager of the Owner Lessor.
(f) The Lease Indenture Trustee or the Security Agent shall be under no
obligation to exercise any of the rights or powers vested in it by this Lease
Indenture at the request or direction of any of the Lease Indenture Secured
Parties unless such Lease Indenture Secured Parties shall have offered and, if
requested, provided to the Lease Indenture Trustee or the Security Agent
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) No permissive right of the Lease Indenture Trustee or the Security
Agent to act hereunder shall be construed as a duty.
(h) Whenever in the administration of this Lease Indenture the Lease
Indenture Trustee or the Security Agent shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Lease Indenture Trustee or the Security Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers Certificate, an Opinion of Counsel, or both.
SECTION 8.3 INDIVIDUAL RIGHTS OF SECURITY AGENT
The Security Agent in its individual or any other capacity may
become the owner or pledgee of Lessor Notes and may otherwise deal with the
Owner Lessor or any Affiliate of the Owner Lessor with the same rights it would
have if it were not the Security Agent. However, in the event that the Security
Agent acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Lease Indenture
Trustee or resign. Any Agent may do the same with like rights and duties. The
Security Agent is also subject to Sections 8.10 and 8.11 hereof.
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SECTION 8.4 LEASE INDENTURE TRUSTEE'S DISCLAIMER
The Lease Indenture Trustee or the Security Agent shall not be
responsible for and makes no representation as to the validity or adequacy of
this Lease Indenture or the Lessor Notes; they shall not be accountable for the
Owner Lessor's use of the proceeds from the Lessor Notes or any money paid to
the Owner Lessor or upon the Owner Lessor's direction under any provision of
this Lease Indenture; they shall not be responsible for the use or application
of any money received by any Paying Agent other than the Lease Indenture
Trustee, and they shall not be responsible for any statement or recital herein
or any statement in the Lessor Notes or any other document in connection with
the sale of the Lessor Notes or pursuant to this Lease Indenture other than its
certificate of authentication.
SECTION 8.5 NOTICE OF LEASE INDENTURE DEFAULTS
If a Lease Indenture Default or a Lease Indenture Event of
Default occurs and is continuing and if the Lease Indenture Trustee receives
written notice thereof, the Lease Indenture Trustee shall (at the expense of the
Owner Lessor) mail to Noteholders a notice of the Lease Indenture Default or
Lease Indenture Event of Default within 90 days after it occurs. Except in the
case of a Lease Indenture Default or Lease Indenture Event of Default in payment
of principal of, premium, if any, or interest on any Lessor Note, the Lease
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Noteholders of the Lessor Notes.
SECTION 8.6 GENERAL AUTHORITY OF THE SECURITY AGENT OVER THE INDENTURE
ESTATE
Each Lease Indenture Secured Party hereby irrevocably
constitutes and appoints, effective after the occurrence and during the
continuance of a Lease Indenture Event of Default, the Security Agent and any
officer or agent thereof, with full power of substitution as among such officers
and agents, as its true and lawful attorney-in-fact with full power and
authority in the name of such Lease Indenture Secured Party or in its own name,
from time to time in the Security Agent's reasonable discretion to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to carry out the terms of the Lease
Indenture (but subject to the terms hereof and thereof) and to accomplish the
purposes hereof and thereof; and, without limiting the generality of the
foregoing, each Lease Indenture Secured Party hereby gives the Security Agent,
during any Lease Indenture Event of Default or Lease Indenture Default, the
power and right on behalf of such Lease Indenture Secured Party, without notice
to or further assent by such Lease Indenture Secured Party, to: (i) ask for,
demand, xxx for, collect, receive and give acquittance for any and all moneys
due or to become due upon, or in connection with, the Indenture Estate; (ii)
receive, take, endorse, assign and deliver any and all checks, notes, drafts,
acceptances, documents and other
51
negotiable and non-negotiable instruments taken or received by the Security
Agent as, or in connection with, the Indenture Estate, (iii) commence,
prosecute, defend, settle, compromise or adjust any claim, suit, action or
proceeding with respect to, or in connection with, the Indenture Estate; (iv)
sell, transfer, assign or otherwise deal in or with the Indenture Estate or any
part thereof as fully and effectively as if the Security Agent were the absolute
owner thereof; (v) exercise all remedies provided for by the Lease Indenture;
and (vi) do, at its option and at the expense and for the account of such Lease
Indenture Secured Party, at any time or from time to time, all acts and things
which the Security Agent reasonably deems necessary to perfect the liens and
security interests of the Security Agent in the Indenture Estate, to protect or
preserve the Indenture Estate and to realize upon the Indenture Estate in each
case is accordance with the terms hereof. Each Lease Indenture Secured Party
hereby ratifies all that said attorneys-in-fact shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
SECTION 8.7 COMPENSATION
The Owner Lessor agrees to pay to the Lease Indenture Trustee
and the Security Agent from time to time compensation as agreed upon by the
Lease Indenture Trustee and the Security Agent and the Owner Lessor, and, in the
absence of any such agreement, reasonable compensation for its acceptance of
this Lease Indenture and services hereunder. The Lease Indenture Trustee's and
the Security Agent's compensation shall not be limited by any law on
compensation of a Lease Indenture Trustee of an express trust.
To secure the Owner Lessor's payment obligations in this
Section, the Lease Indenture Trustee and the Security Agent shall have a lien
prior to the Lessor Notes on all money or property held or collected by the
Lease Indenture Trustee or the Security Agent, except that held in trust to pay
principal and interest on particular Lessor Notes.
When the Lease Indenture Trustee or the Security Agent incurs
expenses or renders services after a Lease Indenture Event of Default specified
in Section 7.1(e) or (b) hereof occurs, the expenses and the compensation for
the services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Code.
SECTION 8.8 REPLACEMENT OF LEASE INDENTURE TRUSTEE
A resignation or removal of the Lease Indenture Trustee or the
Security Agent and appointment of a successor Lease Indenture Trustee or
Security Agent shall become effective only upon the successor Lease Indenture
Trustee's acceptance of appointment as provided in this Section.
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The Lease Indenture Trustee or the Security Agent may resign
in writing at any time and be discharged from the trust hereby created by so
notifying the Owner Lessor. The Noteholders of a majority in principal amount of
the then outstanding Lessor Notes may remove the Lease Indenture Trustee or the
Security Agent by so notifying the Lease Indenture Trustee or the Security Agent
and the Owner Lessor in writing. The Owner Lessor may by a Board Resolution
remove the Lease Indenture Trustee or the Security Agent if:
(a) the Lease Indenture Trustee or the Security Agent fails to comply
with Section 8.10 hereof;
(b) the Lease Indenture Trustee or the Security Agent is adjudged a
bankrupt or an insolvent or an order for relief is entered with respect to the
Lease Indenture Trustee or the Security Agent under any Bankruptcy Code;
(c) a custodian or public officer takes charge of the Lease Indenture
Trustee or Security Agent or either of its property; or
(d) the Lease Indenture Trustee or the Security Agent becomes incapable
of acting as Lease Indenture Trustee hereunder.
If the Lease Indenture Trustee or the Security Agent resigns
or is removed or if a vacancy exists in the office of Lease Indenture Trustee or
the Security Agent for any reason, the Owner Lessor shall promptly appoint a
successor Lease Indenture Trustee or Security Agent. Within one year after the
successor Lease Indenture Trustee or Security Agent takes office, the Required
Lease Indenture Secured Parties may appoint a successor Lease Indenture Trustee
or Security Agent to replace the successor Lease Indenture Trustee or Security
Agent appointed by the Owner Lessor.
If a successor Lease Indenture Trustee or Security Agent does
not take office within 60 days after a vacancy exists in the office of the Lease
Indenture Trustee or the Security, as applicable, the non-retiring Lease
Indenture Trustee or Security Agent, as applicable, the Owner Lessor, the
Noteholders of at least 10% in principal amount of the then outstanding Lessor
Notes or any of the Debt Service Reserve Letter of Credit Secured Parties may
petition any court of competent jurisdiction for the appointment of a successor
Lease Indenture Trustee or Security Agent, as applicable.
If the Lease Indenture Trustee or Security Agent, as
applicable, after receiving a written request by any Noteholder who has been a
BONA FIDE Noteholder for at least six months, fails to comply with Section 8.10,
such Noteholder or any of the Debt Service Reserve Letter of Credit Secured
Parties may petition any court of competent jurisdiction for the removal of the
Lease Indenture Trustee or Security Agent, as applicable and the appointment of
a successor Lease Indenture Trustee or Security Agent, as applicable.
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A successor Lease Indenture Trustee or Security Agent, as
applicable shall deliver a written acceptance of its appointment to the retiring
Lease Indenture Trustee or Security Agent, as applicable and to the Owner
Lessor. Thereupon, the resignation or removal of the retiring Lease Indenture
Trustee shall become effective, and the successor Lease Indenture Trustee or
Security Agent, as applicable shall have all the rights, powers and duties of
the Lease Indenture Trustee or Security Agent, as applicable under this Lease
Indenture. The successor Lease Indenture Trustee or Security Agent, as
applicable shall mail a notice of its succession to the Noteholders. The
retiring Lease Indenture Trustee or Security Agent, as applicable shall promptly
transfer all property held by it as Lease Indenture Trustee or Security Agent,
as applicable to the successor Lease Indenture Trustee or Security Agent, as
applicable, PROVIDED all sums owing to the Lease Indenture Trustee or Security
Agent, as applicable hereunder have been paid and subject to the lien provided
for in Section 8.7 hereof. Notwithstanding replacement of the Lease Indenture
Trustee or Security Agent pursuant to this Section 8.8, the Owner Lessor's
obligations under Section 8.7 hereof shall continue for the benefit of the
retiring Lease Indenture Trustee.
SECTION 8.9 SUCCESSOR LEASE INDENTURE TRUSTEE BY MERGER, ETC
If the Lease Indenture Trustee or Security Agent or any Agent
of theirs consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Lease
Indenture Trustee, Security Agent or Agent, as the case may be.
SECTION 8.10 ELIGIBILITY; DISQUALIFICATION
(a) There shall at all times be a Lease Indenture Trustee and a
Security Agent hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that together
with its direct parent, if any, or in the case of a corporation included in a
bank holding company system, its related bank holding company, has a combined
capital and surplus of at least $100 million as set forth in its most recent
published annual report of condition.
SECTION 8.11 OTHER CAPACITIES
All references in this Lease Indenture to the Lease Indenture
Trustee shall be deemed to refer to the Lease Indenture Trustee in its capacity
as Lease Indenture Trustee and in its capacities as any Agent, to the extent
acting in such capacities, and every provision of this Lease Indenture relating
to the conduct or affecting the liability or offering protection, immunity or
indemnity to the Lease Indenture Trustee shall be
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deemed to apply with the same force and effect to the Lease Indenture Trustee
acting in its capacities as any Agent.
ARTICLE IX
SHARED RIGHTS
SECTION 9.1 CERTAIN RIGHTS OF OWNER LESSOR AND OWNER PARTICIPANT
(a) Notwithstanding any other provisions of this Lease Indenture other
than Section 9.1 hereof, including the Granting Clause, the following rights
(the "SECTION 9.1 RIGHTS") shall be exercisable by the Owner Lessor or the
Security Agent (acting upon a Notice of Action):
(i) at all times the Owner Lessor shall have the right,
together with or independently of the Security Agent, (A) to receive
from the Facility Lessee all notices, certificates, reports, filings,
opinions of counsel and other documents and all information which the
Facility Lessee is permitted or required to give or furnish to the
Owner Lessor pursuant to any Operative Document, (B) to exercise
inspection rights granted to the Owner Lessor pursuant to Section 12 of
the Facility Lease, (C) to exercise, to the extent necessary to enable
it to exercise its rights under Section 7.2 hereof, the rights of the
Owner Lessor under Section 20 of the Facility Lease, (D) to request
from the Facility Lessee such further documents or assurances, or
request that the Facility Lessee take such further actions in respect
of such party's interests, as shall be required to be delivered or
taken by the Facility Lessee pursuant to Section 5.6 or 17.14 of the
Participation Agreement and (E) to declare and give notice of a Lease
Default or a Lease Event of Default pursuant to Section 17 of the
Facility Lease; PROVIDED, HOWEVER, that the rights -------- -------
excepted and reserved by this Section 9.1(a)(i) shall not be deemed to
include the exercise of any remedies provided for in Section 17.1 of
the Facility Lease (other than Section 17.1(g)), except that the Owner
Lessor and the Owner Participant may proceed by appropriate court
action or actions, either at law or in equity, to enforce performance
by the Facility Lessee of the applicable covenants and terms of
Excepted Payments but not proceed to terminate the Facility Lease;
(ii) so long as the Lessor Notes have not been accelerated
pursuant to Section 7.3 hereof and the Security Agent shall not have
commenced the exercise of remedies to dispossess the Facility Lessee of
the Undivided Interest under this Lease Indenture, the Owner Lessor
shall have the right, but not to the exclusion of the Security Agent
and to the extent permitted by the Operative Documents and Requirements
of Law, to (A) 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, (B) to provide such insurance as may be permitted by
Section 11 of the Facility Lease
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and (C) to perform for the Facility Lessee as provided in Section 20 of
the Facility Lease; and
(iii) so long as the Lessor Notes have not been accelerated
pursuant to Section 7.3 hereof (or, if accelerated, such acceleration
has theretofore been rescinded) and the Security Agent shall not have
commenced the exercise of remedies to dispossess the Facility Lessee of
the Undivided Interest under this Lease Indenture, neither the Owner
Lessor nor the Security Agent shall have any right, without the prior
consent of the other (A) to amend, supplement, modify or waive any
return condition in Section 5 of the Facility Lease or to amend,
supplement, modify, waive or replace the Reimbursement Agreement or
the Ownership and Operation Agreement, or (B) to exercise any rights
with respect to the Facility Lessee's use and operation, modification
or maintenance of the Property Interest which the Facility Lease
specifically confers on the Owner Lessor or to exercise any rights
with respect to the use and operation, modification or maintenance
of Owner Lessor under the Ownership and Operation Agreement, or (C) to
exercise the Owner Lessor*s right under Section 22.4(b) of the
Facility Lease to withhold or grant its consent to an assignment by
the Facility Lessee of its rights under the Facility Lease; and
(b) Notwithstanding the foregoing provisions of this Section 9.1 but
subject to Section 7.4(b) hereof, the Security Agent (acting upon a Notice of
Action) shall at all times have the right to declare the Facility Lease in
default and to exercise the remedies set forth in Section 17.1 of the Facility
Lease and in Section 7.4 and 7.5 hereof. Notwithstanding anything herein or in
any other Operative Document to the contrary, so long as the Facility Lessee or
any Affiliate of the Facility Lessee is a Noteholder or Owner Lessor, neither
the Facility Lessee nor any such Affiliate, in its capacity as Noteholder or
Owner Lessor, shall have any rights to approve, consent to, vote on or ratify
any action, inaction or determination taken or made or to be taken or made
hereunder; provided, however, that this sentence shall not apply to the Facility
Lessee or any such Affiliate with respect to those matters set forth in Section
10.2 hereof requiring the consent of all Noteholders.
(c) Notwithstanding any other provision of this Lease Indenture:
(i) The Owner Lessor shall at all times, to the exclusion of
the Lease Indenture Trustee and the Security Agent, retain all rights
(A) subject to the Lease Subordination Agreement (so long as it has not
been terminated) in accordance with its terms, 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; (B) except in connection with
the exercise of remedies pursuant to the Facility Lease, to exercise
the Owner Lessor*s rights relating to the Appraisal Procedure and to
confer and agree with the Facility Lessee on Fair
56
Market Rental Value, or any Renewal Lease Term; (C) retain all rights
with respect to insurance that Section 11 of the Facility Lease
specifically confers upon the Owner Lessor and to waive any failure by
the Facility Lessee to maintain the insurance required by Section 11 of
the Facility Lease before or after the fact so long as the insurance
maintained by the Facility Lessee still constitutes Prudent Industry
Practice; (D) to consent or withhold consent to (1) any change of
control as provided in Section 6.1 of the Participation Agreement or
Section 16.1(m) of the Facility Lease or (2) to sell, lease, convey or
otherwise transfer its interest provided in Article 14 of the
Participation Agreement, PROVIDED THAT such consent shall not be given
if: (i) the Bonds are not rated at least BBB- by S&P, Baa3 by Moody's,
and BBB by Duff & Xxxxxx, and a reaffirmation of such ratings if
obtained and (ii) the reduction of EME's interest in the facility
Lessee has not been approved by more than 66 2/3 of the Noteholders;
(E) to exercise remedies from time to time set forth in Section 17.1(g)
of the Facility Lease; (F) to adjust Basic Lease Rent (or any component
thereof), Allocated Rent, Lessor Section 467 Loan Balance, Lessee
Section 467 Loan Balance, Lessor Section 467 Interest, Proportional
Rent, Lessee Section 467 Interest and Termination Value as provided in
Section 3.4 of the Facility Lease, Section 13 of the Participation
Agreement or the Tax Indemnity Agreement; provided, however, that after
giving effect to any such adjustment (x) the amount of Basic Lease Rent
(exclusive of Component A thereof) 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 (exclusive of any Component
A thereof) 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 other than any portion thereof that
is Component A of Basic Lease Rent or an Excepted Payment) 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; and (G) to modify the provisions of Section 6.10
of the Participation Agreement, provided that such terms as modified
are no more favorable than the provisions of Section 6.9 of the
Participation Agreement;
(ii) So long as the Lessor Notes have not been accelerated
pursuant to Section 7.3 hereof (or, if accelerated, such acceleration
has theretofore been rescinded) or the Security Agent shall not have
exercised any of its rights pursuant to Section 7 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 Security Agent to exercise the rights of the
Owner Lessor under the provisions of Section 10 (other than Section
10.3 and Section 10.5 thereof), 13, 14 and 15 of the Facility Lease;
PROVIDED, HOWEVER, that if a Lease Indenture Event of Default shall
have occurred and be continuing, subject to Section 7.2, the Owner
Lessor shall cease to retain such rights upon
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notice from the Security Agent (acting upon a Notice of Action) stating
that such rights shall no longer be retained by the Owner Lessor.
SECTION 9.2 NO REPRESENTATIONS OR WARRANTIES AS TO THE PROPERTY INTEREST.
NONE OF THE OWNER LESSOR, THE OWNER MANAGER, THE TRUST COMPANY
OR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE, AND EACH HEREBY
EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
THE TITLE, VALUE, WORKMANSHIP, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE PROPERTY INTEREST OR ANY PART THEREOF, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE
ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, INCLUDING ANY
ENVIRONMENTAL LIABILITY, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE PROPERTY INTEREST OR ANY PART THEREOF WHATSOEVER, except that the Owner
Lessor warrants that on the Closing Date it shall have received such rights and
interests that were conveyed to it with respect to the Property Interest
pursuant to the Facility Deed, the Xxxx of Sale and the Facility Site Lease
subject to the rights of the parties to this Lease Indenture and to Permitted
Liens and Permitted Encumbrances, and the Trust Company warrants that on the
Closing Date the Property Interest shall be free and clear of Owner Lessor Liens
attributable to the Trust Company. None of the Owner Manager or the Trust
Company makes or shall be deemed to have made any representation or warranty as
to the validity, legality or enforceability of this Indenture, the Lessor LLC
Agreement or the Lessor Notes or as to the correctness of any statement
contained in any such document, except for the representations and warranties of
the Owner Lessor, the Owner Manager or the Trust Company in its individual
capacity made under this Lease Indenture or in the Participation Agreement.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS LEASE INDENTURE AND
OTHER DOCUMENTS
SECTION 10.1 WITHOUT CONSENT OF NOTEHOLDERS OR REQUIRED NOTEHOLDERS.
Subject to the provisions of the Participation Agreement, at
any time and from time to time, the Owner Lessor (but only on the written
request of the Owner Participant) and the Lease Indenture Trustee may enter into
any indenture or indentures supplemental hereto or execute any amendment,
modification, supplement, waiver or
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consent with respect to any other Operative Document, without the consent of the
Noteholders or the Required Lease Indenture Secured Parties for one or more of
the following purposes:
(i) to correct, confirm or amplify the description of any
property at any time subject to the lien on the Indenture Estate or to
convey, transfer, assign, mortgage or pledge any property or assets to
the Security Agent as security for the Lessor Notes;
(ii) to evidence the succession of another corporation as
Owner Manager or the appointment of a co-manager in accordance with the
terms of the Lessor LLC Agreement;
(iii) to add to the covenants of the Owner Lessor for the
benefit of the Lease Indenture Secured Parties such further covenants,
restrictions, conditions or provisions as the Owner Lessor and the
Security Agent shall consider to be for the protection of the
Noteholders of any series, and to make the occurrence, or the
occurrence and continuance, of a default in complying with any such
additional covenant, restriction, condition or provision a Lease
Indenture Event of Default permitting the enforcement of all or any of
the several remedies provided in this Lease Indenture as herein set
forth; in respect of any such additional covenant, restriction,
condition or provision, such supplement may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such a Lease Indenture Event of Default or
may limit the remedies available to the Security Agent upon such a
Lease Indenture Event of Default or may limit the right of the Required
Lease Indenture Secured Parties to waive such a Lease Indenture Event
of Default;
(iv) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplement which may be defective
or inconsistent with any other provision contained herein or in any
supplement, or to add or modify such other provisions or agreements
herein or in any other Operative Documents, in each case as the Owner
Lessor may deem necessary or desirable, with respect to matters or
questions arising under this Lease Indenture; provided that no such
action shall, in the reasonable judgment of the Security Agent,
materially adversely affect the interests of the Lease Indenture
Secured Parties of any series;
(v) to provide for any evidence of the creation and issuance
of any Subsequent Lessor Notes of any series pursuant to, and subject
to the conditions of, Section 2.6 and to establish the form and terms
of such Subsequent Lessor Notes;
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(vi) to effect an assumption of the Lessor Notes, as permitted
by Section 2.21; PROVIDED that the supplemental indenture entered into
to effect such assumption shall contain all of the covenants applicable
to the Facility Lessee contained in the Facility Lease and the
Participation Agreement for the benefit of the Lease Indenture Trustee,
the Security Agent or the Lease Indenture Secured Parties, such that
the Facility Lessee's obligations contained therein, to the extent they
are applicable, will continue to be in full force and effect in the
event the Facility Lease is terminated;
(vii) to evidence and provide for the removal of the Lease
Indenture Trustee or Security Agent or the acceptance of appointment
hereunder by a successor Lease Indenture Trustee or Security Agent with
respect to the Lessor Notes as provided in Section 8.8;
(viii) to grant or confer upon the Lease Indenture Trustee or
the Security Agent for the benefit of the Lease Indenture Secured
Parties any additional rights, remedies, powers, authority or security
which may be lawfully granted or conferred upon the Lease Indenture
Trustee or the Security Agent and which are not contrary to or
inconsistent with this Lease Indenture;
(ix) subject to Section 10.2 with respect to the provisions of
the Indenture Estate Documents referred to therein, to effect any other
amendment, modification, supplement, waiver or consent with respect to
any Indenture Estate Document; provided that no such action shall, in
the judgment of the Security Agent, materially and adversely affect the
interests of the Lease Indenture Secured Parties; PROVIDED, HOWEVER,
that no such amendment, -------- ------- modification, supplement,
waiver or consent contemplated by this Section 10.1 shall, without the
consent of the Required Lease Indenture Secured Parties, modify the
provisions of Sections 5.4, 5.10, 6.1, 6.2, 6.3, 6.7 or 6.10 of the
Participation Agreement or Sections 19.1, 22.4(b), 22.4(c) or 22.4(d)
of the Facility Lease (other than any amendment, modification,
supplement, waiver or consent having no adverse effect on the interests
of the Lease Indenture Secured Parties).
(x) The Security Agent and the Lease Indenture Trustee is
hereby authorized to join with the Owner Lessor in the execution of any
such supplement, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property or
assets thereunder, but the Security Agent and the Lease Indenture
Trustee shall not be obligated to enter into any such supplement which
affects the Lease Indenture Trustee's or the Security Agent's own
rights, duties or immunities under this Lease Indenture or otherwise.
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SECTION 10.2 WITH CONSENT OF REQUIRED NOTEHOLDERS; LIMITATIONS.
Subject to the provisions of the Participation Agreement, at
any time and from time to time, (i) the Owner Lessor (but only on the written
request of the Owner Participant) and the Security Agent and the Lease Indenture
Trustee (but only if so directed upon a Notice of Action to the extent that the
same is not expressly permitted by Section 10.1), may execute a supplement or
amendment hereto for the purpose of adding provisions to, or changing or
eliminating provisions of, this Lease Indenture as specified in such request,
(ii) the Owner Lessor (but only on the written request of the Owner Participant)
and, except with respect to Excepted Payments, the Security Agent and the Lease
Indenture Trustee (but only if so directed upon a Notice of Action to the extent
that the same is not expressly permitted by Section 10.1), may enter into such
written amendment of or supplement to any Indenture Estate Document as may be
specified in such request and (iii) the Owner Lessor shall not revoke or
otherwise terminate the Lessor LLC Agreement or, if such amendment or supplement
would impair the rights of the Security Agent and the Lease Indenture Trustee or
any Lease Indenture Secured Parties, amend or supplement the Lessor LLC
Agreement; provided, however, that, without the consent of each Lease Indenture
Secured Party affected, except with respect to Excepted Payments, no such
amendment of or supplement to any Indenture Estate Document, and no waiver or
modification of the terms of any thereof, shall, except to the extent pertaining
to the Excepted Payments,
(i) modify the definition of the term "Required Lease
Indenture Secured Party" or reduce the percentage of Lease Indenture
Secured Parties 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 with respect to any Lessor Note, or
make any Lessor Note payable in money other than that stated on the
Lessor Notes,
(iii) alter or modify the provisions of Section 3 hereof with
respect to the manner of payment or the order of priorities in which
distribution thereunder shall be made as between the Noteholders, the
Debt Service Reserve Letter of Credit Secured Parties and the Owner
Lessor or the Owner Participant, or waive a Lease Indenture Event of
Default in the payment of principal of, premium, if any, or interest on
the Lessor Notes (except a rescission of acceleration of the Lessor
Notes by the Noteholders of at least 66 2/3% in aggregate principal
amount of then outstanding Lessor Notes and a waiver of the payment
default that resulted from such acceleration),
(iv) reduce the amount (except as to any amount as shall be
sufficient to pay the aggregate principal of, make-whole premium, if
any, and interest on, all
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outstanding Lessor Notes) or extend the time of payment of Basic Lease
Rent or Termination Value except as expressly provided in the Facility
Lease, or, except in connection with Section 10.1(vi), change any of
the circumstances under which Basic Lease Rent or Termination Value is
payable,
(v) except in connection with Section 10.1(vi) or as expressly
provided in Section 22.4 of the Facility Lease, allow for the
assignment of the Facility Lease if, in connection therewith, the
Facility Lessee will be released from its obligation to pay Basic Lease
Rent and Termination Value,
(vi) except in connection with Section 10.1(vi), release the
Facility Lessee from its obligation to pay Basic Lease Rent or
Termination Value or change the absolute and unconditional character of
such obligations as set forth in Section 9 of the Facility Lease,
(vii) deprive the Security Agent of the lien on a material
portion of the Indenture Estate or permit the creation of any lien on a
material portion of the Indenture Estate ranking equally or prior to
the lien of the Security Agent, except for permitted liens.
(viii) make any change in the provisions of this Lease
Indenture relating to waivers of past Lease Indenture Defaults or the
rights of Noteholders to receive payments of principal of, premium, if
any, or interest on the Lessor Notes;
(ix) waive a redemption payment with respect to any Lessor
Note; or
(x) make any change in the foregoing amendment and waiver
provisions.
SECTION 10.3 DOCUMENTS FURNISHED TO NOTEHOLDERS.
Promptly after the execution by the Owner Lessor, the Security
Agent or the Lease Indenture Trustee of any document entered into pursuant to
Sections 10.1 and 10.2, the Lease Indenture Trustee shall furnish a copy thereof
to the Noteholders but the failure of the Lease Indenture Trustee to deliver
such conformed copy, or the failure of the Noteholders to receive such conformed
copies, shall not impair or affect the validity of such document.
SECTION 10.4 LEASE INDENTURE TRUSTEE AND SECURITY AGENT PROTECTED.
Notwithstanding anything to the contrary contained herein, if,
in the opinion of the Lease Indenture Trustee or the Security Agent, any
document required to be executed by it pursuant to Sections 10.1 and 10.2
adversely affects any right, duty, immunity or indemnity of or in favor of the
Lease Indenture Trustee or the Security
62
Agent under any Indenture Estate Document or under any other Operative Document,
the Lease Indenture Trustee or the Security Agent may in its discretion decline
to execute such document unless the Person or Persons requesting any related
action shall provide an indemnity that is reasonably satisfactory to the Lease
Indenture Trustee or the Security Agent.
SECTION 10.5 REVOCATION AND EFFECT OF CONSENTS
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Lease Indenture Secured Party is a continuing consent by the
Lease Indenture Secured Party, even if notation of the consent is not made on
any Lessor Note. However, any such Lease Indenture Secured Party may revoke the
consent if the Security Agent receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Lease Indenture Secured Party.
SECTION 10.6 NOTATION ON OR EXCHANGE OF LESSOR NOTES
The Lease Indenture Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Lessor Note thereafter
authenticated. The Owner Lessor in exchange for all Lessor Notes may issue and
the Lease Indenture Trustee shall, upon receipt of an Authentication Order,
authenticate new Lessor Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Lessor
Note shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 10.7 LEASE INDENTURE TRUSTEE TO SIGN AMENDMENTS, ETC
The Lease Indenture Trustee and the Security Agent shall sign
any amended or supplemental Lease Indenture authorized pursuant to this Article
Ten if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Lease Indenture Trustee or the Security Agent.
The Owner Lessor may not sign an amendment or supplemental Lease Indenture
unless signed pursuant to Section 6.1 of the Lessor LLC Agreement. In executing
any amended or supplemental indenture, the Lease Indenture Trustee and the
Security Agent shall be entitled to receive and (subject to Section 8.1 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 12.4 hereof, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Lease Indenture.
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ARTICLE XI
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 11.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
The Owner Lessor may, at its option and at any time, elect to
have either Section 11.2 or 11.3 hereof be applied to all outstanding Lessor
Notes upon compliance with the conditions set forth below in this Article 11.
SECTION 11.2 LEGAL DEFEASANCE AND DISCHARGE
Upon the Owner Lessor's exercise under Section 11.1 hereof of
the option applicable to this Section 11.2, the Owner Lessor shall, subject to
the satisfaction of the conditions set forth in Section 11.4 hereof, be deemed
to have been discharged from its obligations with respect to all outstanding
Lessor Notes on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that
the Owner Lessor shall be deemed to have paid and discharged the entire
Indebtedness represented by the Debt Service Reserve Letter of Credit and by the
outstanding Lessor Notes, which shall thereafter be deemed to be "OUTSTANDING"
only for the purposes of Section 11.5 hereof and the other Sections of this
Lease Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Lessor Notes and this Lease Indenture (and the
Lease Indenture Trustee or the Security Agent, as applicable, on demand of and
at the expense of the Owner Lessor, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of
Noteholders of outstanding Lessor Notes to receive solely from the trust fund
described in Section 11.4 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest on such
Lessor Notes when such payments are due, (b) the Owner Lessor's obligations with
respect to such Lessor Notes under Article 2 hereof, (c) the rights, powers,
trusts, duties and immunities of the Security Agent, the Lease Indenture Trustee
and any Agent hereunder and the Owner Lessor's obligations in connection
therewith, including, without limitation, Article 8 and Section 11.5 and 11.7
hereunder, and (d) this Article 11. Subject to compliance with this Article 11,
the Owner Lessor may exercise its option under this Section 11.2 notwithstanding
the prior exercise of its option under Section 11.3 hereof.
SECTION 11.3 COVENANT DEFEASANCE
Upon the Owner Lessor's exercise under Section 11.1 hereof of
the option applicable to this Section 11.3, the Owner Lessor shall, subject to
the satisfaction of the conditions set forth in Section 11.4 hereof, be released
from its obligations under the material covenants contained herein with respect
to the outstanding Lessor Notes on and after the date the conditions set forth
in Section 11.4 are satisfied (hereinafter, "COVENANT
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DEFEASANCE"), and the Lessor Notes shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Noteholders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "OUTSTANDING" for all other purposes
hereunder (it being understood that such Lessor Notes shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Lessor Notes or any outstanding
amounts due under the Debt Service Reserve Letter of Credit, the Owner Lessor
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Lease
Indenture Default or a Lease Indenture Event of Default under Section 7.1
hereof, but, except as specified above, the remainder of this Lease Indenture
and such Lessor Notes shall be unaffected thereby. In addition, upon the Owner
Lessor's exercise under Section 11.1 hereof of the option applicable to this
Section 11.3 hereof, subject to the satisfaction of the conditions set forth in
Section 11.4 hereof, Section 7.1(a) hereof shall not constitute a Lease
Indenture Event of Default.
SECTION 11.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
The following shall be the conditions to the application of
either Section 11.2 or 11.3 hereof to the outstanding Lessor Notes or any
outstanding amounts due under the Debt Service Reserve Letter of Credit, as
applicable:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Owner Lessor must irrevocably deposit with the Security Agent
in the Security Agent's Account, in trust, for the benefit of the Noteholders
(or the Debt Service Reserve Letter of Credit Secured Parties as applicable),
cash in United States dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the outstanding Lessor Notes on
the stated maturity or on the applicable redemption date, as the case may be,
and the Owner Lessor must specify whether the Lessor Notes are being defeased to
maturity or to a particular redemption date and any amount outstanding under the
Debt Service Reserve Letter of Credit;
(b) in the case of an election under Section 11.2 hereof, the Owner
Lessor shall have delivered to the Lease Indenture Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Lease Indenture Trustee
confirming that (A) the Owner Lessor has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Lease Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon
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such Opinion of Counsel shall confirm that, the Noteholders of the outstanding
Lessor Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 11.3 hereof, the Owner
Lessor shall have delivered to the Lease Indenture Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Lease Indenture Trustee
confirming that, subject to customary assumptions and exclusions, the
Noteholders of the outstanding Lessor Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Lease Indenture Default or Lease Indenture Event of Default
shall have occurred and be continuing on the date of such deposit (other than a
Lease Indenture Default or a Lease Indenture Event Default resulting from the
borrowing of funds to be applied to such deposit) or insofar as Sections 7.1(e)
or 7.1(f) hereof are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a Lease Indenture Default under, any
material agreement or instrument (other than this Lease Indenture or any other
Financing Document) to which the Owner Lessor is a party or by which the Owner
Lessor is bound;
(f) the Owner Lessor shall have delivered to the Security Agent an
Opinion of Counsel to the effect that (subject to customary qualifications and
assumptions) after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(g) the Owner Lessor shall have delivered to the Security Agent an
Officer's Certificate stating that the deposit was not made by the Owner Lessor
with the intent of preferring the Noteholders or the Debt Service Reserve Letter
of Credit Secured Parties over any other creditors of the Owner Lessor or with
the intent of defeating, hindering, delaying or defrauding creditors of the
Owner Lessor or others; and
(h) the Owner Lessor shall have delivered to the Lease Indenture
Trustee and the Security Agent an Officer's Certificate and an Opinion of
Counsel, each stating that, subject to customary assumptions and exclusions, all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
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SECTION 11.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to Section 11.6 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Security Agent (or other qualifying trustee or agent) pursuant to Section 11.4
hereof in respect of the outstanding Lessor Notes or outstanding amounts due
under the Debt Service Reserve Letter of Credit shall be held in trust and
applied by the Security Agent, in accordance with the provisions of such Lessor
Notes and this Lease Indenture, to the payment, either directly or through any
Paying Agent, to the Noteholders of such Lessor Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law or any of the Debt Service Reserve Letter of Credit Secured Parties.
The Owner Lessor agrees to pay and indemnify the Lease
Indenture Trustee and the Security Agent against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 11.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Noteholders of the outstanding Lessor Notes.
Anything in this Article 11 to the contrary notwithstanding,
the Lease Indenture Trustee or the Security Agent shall deliver or pay to the
Owner Lessor from time to time upon the request of the Owner Lessor any money or
non-callable Government Securities held by it as provided in Section 11.4 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Lease
Indenture Trustee (which may be the opinion delivered under Section 11.4(a)
hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 11.6 REPAYMENT TO OWNER LESSOR
Any money deposited with the Security Agent or any Paying
Agent, or then held by the Owner Lessor in trust for the payment of the
principal of, premium, if any, or interest on any Lessor Note and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Owner Lessor on its request or
(if then held by the Owner Lessor) shall be discharged from such trust; and the
Noteholder of such Lessor Note shall thereafter, as a secured creditor, look
only to the Owner Lessor for payment thereof, and all liability of the Security
Agent or such Paying Agent with respect to such trust money, and all liability
of the Owner Lessor as trustee thereof, shall thereupon cease; PROVIDED,
HOWEVER, that the Security Agent or such Paying Agent, before being required to
make any such repayment, may at the expense of the Owner Lessor cause to be
published once, in The New York
67
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Owner
Lessor.
SECTION 11.7 REINSTATEMENT
If the Security Agent or Paying Agent is unable to apply any
United States dollars or non-callable Government Securities in accordance with
Section 11.2 or 11.3 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Owner Lessor's obligations
under this Lease Indenture and the Lessor Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 11.2 or 11.3 hereof until
such time as the Security Agent or Paying Agent is permitted by such court or
governmental authority to apply all such money in accordance with Section 11.2
or 11.3 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Owner Lessor
makes any payment of principal of, premium, if any, or interest on any Lessor
Note following the reinstatement of its obligations, the Owner Lessor shall be
subrogated to the rights of the Noteholders of such Lessor Notes to receive such
payment from the money held by the Security Agent or Paying Agent.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 TERMINATION OF INDENTURE
Upon payment in full of the principal of and interest on, and
all other amounts payable to the Noteholders hereunder, under all Lessor Notes
and under the Operative Documents and to each of the Debt Service Letter of
Credit Secured Parties, the Security Agent shall execute and deliver to the
Owner Lessor an appropriate instrument releasing the Indenture Estate from the
lien of this Lease Indenture and releasing the Indenture Estate Documents from
the assignment and pledge thereof hereunder, and the Security Agent shall
execute and deliver such instrument as aforesaid and, at the Owner Lessor's
expense, will execute and deliver such other instruments or documents as may be
reasonably requested by the Owner Lessor to give effect to such release;
PROVIDED, HOWEVER, that this Lease Indenture shall earlier terminate and shall
be of no further force or effect upon any sale or other final disposition by the
Security Agent of all property constituting part of the Indenture Estate and the
final distribution by the Security Agent of all moneys or other property or
proceeds constituting part of the Indenture Estate in accordance with the terms
hereof. Further, upon the purchase or redemption of the Lessor Notes pursuant to
Section 4.7 or 4.8 hereof, and receipt by the Lease Indenture Trustee and then
the Security Agent of a certificate from each Noteholder to the effect that all
sums payable to the Noteholders hereunder and under the
68
Operative Documents, the Security Agent shall execute and deliver to the Owner
Lessor an appropriate instrument releasing the Indenture Estate from the lien of
this Lease Indenture and releasing the Indenture Estate Documents from the
assignment and pledge hereunder, and the Security Agent shall execute and
deliver such instruments as aforesaid. Except as otherwise provided in this
Section 12.1, this Lease Indenture and the lien created by this Lease Indenture
shall continue in full force and effect in accordance with the terms hereof.
Promptly upon receipt by a Noteholder of payment in full of the principal of and
interest on the Lessor Notes held by it, and all other amounts payable to it
hereunder, under the Lessor Notes and under the Operative Documents and under
the Debt Service Reserve Letter of Credit such Noteholder shall deliver the
appropriate certificate contemplated by the foregoing sentences of this Section
12.1 to be delivered by it.
SECTION 12.2 NOTICES
Any notice or communication by the Owner Lessor, the Lease
Indenture Trustee and the Security Agent to the others is duly given if in
writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address.
If to the Owner Lessor:
Xxxxx City OL1 LLC
c/o Wells Fargo Bank Minnesota, N.A.
Corporate Trustee Services
MAC; N2691-090
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
With a copy to:
Xxxxx Fargo Bank Northwest, N.A.
Corporate Trust Services
MAC; X0000-000
Xxxx Xxxx Xxxx, XX 00000
If to the Lease Indenture Trustee or the Security Agent:
00
Xxx Xxxx xx Xxx Xxxx
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Division
Facsimile: 212-852-1625
The Owner Lessor, the Lease Indenture Trustee or the Security
Agent, by notice to the others may designate additional or different addresses
for subsequent notices or communications.
All notices and communications (other than those sent to
Noteholders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Lease Indenture Secured Party
shall be mailed by first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day delivery to its
address shown on the register kept by the Paying Agent.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it, except for notices or communications to the Security Agent or the
Lease Indenture Trustee, which shall be effective only upon actual receipt
thereof.
If the Owner Lessor mails a notice or communication to
Noteholders, it shall mail a copy to the Lease Indenture Trustee, the Security
Agent and each Agent at the same time.
SECTION 12.3 RULES BY LEASE INDENTURE TRUSTEE AND AGENTS
The Lease Indenture Trustee may make reasonable rules for
action by or at a meeting of Noteholders. The Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 12.4 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS
No director, officer, employee, incorporator, shareholder or
Affiliate of the Owner Lessor, as such, shall have any liability for any
obligations of the Owner Lessor under the Lessor Notes, this Lease Indenture or
for any claim based on, in respect
70
of, or by reason of, such obligations or their creation. Each Noteholder of
Lessor Notes by accepting a Lessor Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Lessor
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
SECTION 12.5 GOVERNING LAW
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS LEASE INDENTURE AND THE LESSOR NOTES EXCEPT TO THE EXTENT
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA ARE MANDATORILY APPLICABLE UNDER
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
SECTION 12.6 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Lease Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Owner Lessor or its Subsidiaries or of
any other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Lease Indenture.
SECTION 12.7 SUCCESSORS
All agreements of the Owner Lessor in this Lease Indenture and
the Lessor Notes shall bind its successors. All agreements of the Lease
Indenture Trustee and the Security Agent in this Lease Indenture shall bind its
successors.
SECTION 12.8 SEVERABILITY
In case any provision in this Lease Indenture or in the Lessor
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 12.9 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Lease
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
SECTION 12.10 TABLE OF CONTENTS, HEADINGS, ETC
The Table of Contents and Headings of the Articles and
Sections of this Lease Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Lease Indenture and shall in no
way modify or restrict any of the terms or provisions hereof.
71
SECTION 12.11 CONCERNING THE OWNER MANAGER.
The Owner Manager is executing this Lease Indenture on behalf
of the Owner Lessor solely in its capacity as Owner Manager under the Lessor LLC
Agreement and not in its individual capacity (except as expressly stated herein)
and in no case shall the Trust Company (or any successor entity acting as Owner
Manager under the Lessor LLC Agreement) be personally liable for or on account
of any of the statements, representations, warranties, covenants or obligations
stated to be those of the Owner Lessor or the Owner Manager hereunder, all such
liability, if any, being expressly waived by the parties hereto and any Person
claiming by, through, or under such party; PROVIDED, HOWEVER, that the Trust
Company (or any such successor Owner Manager) shall be personally liable
hereunder for its own gross negligence or willful misconduct or for its breach
of its covenants, representations and warranties contained herein, to the extent
covenanted or made in its individual capacity.
SECTION 12.12 ACKNOWLEDGEMENT.
In order to secure the Fundco Bonds of the Lender, the Lender
will assign and grant a first priority security interest in favor of the
Bondholder Trustee in and to all of the Lender's right, title and interest to
and under the Lessor Notes. The Owner Lessor hereby consents to such assignment
and to the creation of such lien and security interest and acknowledges receipt
of copies of the Fundco Indenture. In addition, the Lender has granted to the
Bondholder Trustee a power of attorney to, among other things, take any action
with respect to and exercise any rights or remedies of the Lender under the
Lessor Notes and this Lease Indenture and has assigned to the Bondholder Trustee
its rights to receive any and all payments on and in respect of the Lessor Notes
and this Lease Indenture for as long as the estate created by the Fundco
Indenture remains in existence. The Owner Lessor hereby acknowledges and
consents to such power of attorney and assignment and further agrees that all
amounts due to the Lender under the Lessor Notes and this Lease Indenture will
be paid directly to the Bondholder Trustee. Unless and until the lien of the
Fundco Indenture shall have been discharged, the Bondholder Trustee shall have
the right to exercise the rights of the Lender under this Lease Indenture and to
directly receive for application in accordance with the Fundco Indenture all
amounts payable or otherwise distributable with respect to the Lessor Notes or
this Lease Indenture.
72
SIGNATURES
Dated as of December __, 2001
THE BANK OF NEW YORK, as Lease Indenture
Trustee
By:
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Security Agent
By:
--------------------------------------
Name:
Title:
XXXXX CITY OLI LLC, as Owner Lessor
By:
-------------------------------------
Xxxxx Fargo Bank Northwest, National
Association, not in its individual
capacity, but solely as Owner Manager
under the Lessor LLC Agreement
By:
--------------------------------------
Name:
Title:
73
EXHIBIT A to Lease Indenture
FORM OF INITIAL LESSOR NOTES
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE SUCH A REGISTRATION IS IN EFFECT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT
Xxxxx City OL1 LLC
as Owner Lessor
SERIES [A] [B] LESSOR NOTE DUE [ ]
$[___________] December, 20_
Xxxxx City OL1 LLC (herein called the "OWNER LESSOR", which
term includes any successor person under the Indenture hereinafter referred to),
a Delaware limited liability company and wholly-owned subsidiary of [General
Electric Capital Corporation], a Delaware corporation (the "OWNER PARTICIPANT")
acting pursuant to that certain LLC Agreement (LA1) effective as of September
__, 2001 (as the same may from time to time be amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof and,
where applicable, the terms of the other Operative Documents, the "LESSOR LLC
AGREEMENT") between the Owner Participant and Xxxxx Fargo Bank Northwest,
National Association (the "TRUST COMPANY"), hereby promises to pay to
[________________________][, as Lease Indenture Trustee/Paying Agent,] or its
registered assigns, the principal sum of [_____________] Dollars, which is due
and payable in a series of installments of principal on the Rent Payment Dates
and in the amounts set forth in Annex A hereto; PROVIDED, HOWEVER, that the
final principal payment hereon shall in any and all events equal the then
outstanding principal balance hereof. Interest shall be due and payable in
arrears on each Rent Payment Date and on the date the Lessor Note is paid in
full at the rate of [ ]% per annum on the unpaid principal amount hereof from
time to time outstanding from and including the date hereof until such principal
amount is paid in full. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. This Lessor Note shall bear interest, to the
extent permitted by Requirements of Law, at a rate that is 1% per annum in
excess of the rate then in effect on any part of the principal amount hereof and
on any interest, Make-Whole Premium or other amounts due hereunder, not paid
when due (whether at stated maturity, by acceleration or otherwise), for the
period the same is past due, payable on demand of the holder hereof.
74
Capitalized terms used in this Lessor Note which are not
otherwise defined herein shall have the meanings ascribed thereto in the
Indenture of Trust and Security Agreement, dated as of December __, 2001 (as the
same may from time to time be amended, amended and restated, supplemented or
otherwise modified in accordance with the terms thereof and, where applicable,
the terms of the other Operative Documents, the " LEASE INDENTURE"), between the
Owner Lessor and The Bank of New York, not in its individual capacity but solely
as trustee (the "LEASE INDENTURE Trustee").
All payments of principal and interest and all other amounts
to be made by the Owner Lessor hereunder or under the Lease Indenture shall be
made only from the income and proceeds from the Indenture Estate and the Owner
Lessor and Lease Indenture Trustee shall have no obligation for the payment
thereof except to the extent that the Lease Indenture Trustee shall have
sufficient income or proceeds from the Indenture Estate to enable such payments
to be made in accordance with the terms of the Lease Indenture. Each holder
hereof, by its acceptance of this Lessor Note, agrees that (a) it will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to the holder hereof as above provided, (b) none of
the Lease Indenture Trustee, Owner Participant, any OP Guarantor, the Owner
Manager or the Trust Company, or any Affiliate of any thereof, is, or shall be,
personally liable to the holder hereof for any amounts payable under this Lessor
Note or under the Lease Indenture or for any liability under the Lease
Indenture, except as expressly provided in the Lease Indenture and (c) any such
amounts shall be non-recourse to the assets of each of the Lease Indenture
Trustee, the Owner Participant, any OP Guarantor, the Owner Manager or the Trust
Company, or any Affiliate of any thereof.
Principal, Make-Whole Premium (if any) and interest and other
amounts due hereunder or under the Lease Indenture shall be payable in Dollars
by wire transfer of immediately available funds on the due date thereof to the
Security Agent's Account (by wire transfer of immediately available funds if not
otherwise specified) or to such other account as the holder hereof shall have
designated to the Owner Lessor in writing. Payment to the Lease Indenture
Trustee must be received by 10:00 a.m., New York City time. If any sum payable
hereunder or under the Lease Indenture falls due on a day which is not a
Business Day, then such sum shall be payable on the next succeeding Business Day
and, if paid on such Business Day, the payment thereof shall be without penalty
or interest (unless calculation of such amount is based on actual days elapsed)
or other adjustment.
The holder hereof, by its acceptance of this Lessor Note,
agrees that each payment of principal and interest or other amounts received by
it hereunder shall be applied, first, to the payment of interest on this Lessor
Note (as well as any interest on overdue principal, and, to the extent permitted
by law, interest and other amounts hereunder) due and payable to the date of
such payment as hereinabove provided, second, to the payment of the principal
of, and Make-Whole Premium, if any, then due hereunder, and third, to the extent
permitted under the Lease Indenture, the balance, if any,
75
remaining thereafter, to the payment of the principal amount of, and Make-Whole
Premium, if any, hereunder.
This Lessor Note is one of the Lessor Notes, and one of the
Initial Lessor Notes, referred to in the Lease Indenture which have been or are
to be issued by the Owner Lessor pursuant to the terms of the Lease Indenture.
The Indenture Estate is held by the Lease Indenture Trustee as security for the
Lessor Notes. Reference is hereby made to the Lease Indenture for a statement of
the rights and obligations of the holder of, and the nature and extent of the
security for, this Lessor Note and of the rights and obligations of the
Noteholders of, and the nature and extent of the security for, the other Lessor
Notes, as well as for a statement of the terms and conditions of the trusts
created thereby. By its acceptance of this Lessor Note, each holder hereof
agrees to all of the terms and conditions in the Lease Indenture and in the
Participation Agreement referred to therein expressed to be binding on the Lease
Indenture Trustee or a holder of a Lessor Note.
There shall be maintained a register for the purpose of
registering this Lessor Note and registering transfers and exchanges of Lessor
Notes in the manner provided in Section 2.11 of the Lease Indenture. As provided
in the Lease Indenture and subject to certain limitations therein set forth, the
Lessor Notes are exchangeable for Lessor Notes of the same series, of any
authorized denominations and of like aggregate original principal amount, as
requested by the holder hereof surrendering the same.
Except as otherwise provided in Section 2.11 of the Lease
Indenture, prior to the due presentment for registration of transfer of this
Lessor Note, the Owner Lessor and the Lease Indenture Trustee shall deem and
treat the Person in whose name this Lessor Note is registered on the register as
the absolute owner and holder hereof for the purpose of receiving payment of all
amounts payable with respect to this Lessor Note and for all other purposes
whether or not this Lessor Note is overdue, and neither the Owner Lessor nor any
holder hereof shall be affected by any notice to the contrary. All payments made
on this Lessor Note in accordance with the provisions of this paragraph shall be
valid and effective to satisfy and discharge the liability on this Lessor Note
to the extent of the sums so paid and neither the Lease Indenture Trustee nor
the Owner Lessor shall have any liability in respect of such payment.
This Lessor Note is subject to redemption solely as required
or permitted by Sections 4.7 and 4.8 of the Lease Indenture, to purchase by the
Facility Lessee or the Owner Participant as provided in Sections 10.2(a),
13.3(a) and 14.3 of the Facility Lease and to assumption by the Facility Lessee
in accordance with Section 2.21 of the Lease Indenture. If at any time a Lease
Indenture Event of Default shall have occurred and be continuing, this Lessor
Note may, subject to certain rights of the Owner Lessor and Owner Participant
contained or referred to in the Lease Indenture, be declared, and under certain
circumstances shall automatically be deemed to be declared, due and payable, all
upon the conditions, in the manner and with the effect provided in the Lease
Indenture.
76
By its acceptance hereof, the holder of this Lessor Note
agrees that the Owner Manager is executing this Lessor Note on behalf of the
Owner Lessor solely in its capacity as Owner Manager under the Lessor LLC
Agreement and not in its individual capacity and in no case shall the Trust
Company (or any entity acting as Owner Manager under the Lessor LLC Agreement)
be personally liable in respect of the obligations stated to be those of the
Owner Lessor or the Owner Participant hereunder.
In circumstances set forth in Section 2.21 of the Lease
Indenture, the obligations of the Owner Lessor under this Lessor Note may,
subject to the conditions set forth in Section 2.21 of the Lease Indenture, be
assumed in whole by the Facility Lessee in accordance with Section 2.21 of the
Lease Indenture, 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 Lessor Note may be required to exchange this Lessor Note for a new Lessor
Note evidencing such assumption.
THIS LESSOR NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE, WITH THE LAWS OF THE STATE OF NEW YORK.
77
IN WITNESS WHEREOF, the Owner Lessor has caused this Lessor
Note to be executed in its name by the Owner Manager by an officer of the Owner
Manager thereunto duly authorized, as of the date hereof.
Xxxxx City OL1 LLC, as Owner Lessor
By: Xxxxx Fargo Bank Northwest, National
Association, not in its individual capacity,
but solely as Owner Manager under the
LLC Agreement
By:
------------------------------------------
Name:
Title:
78
SCHEDULE OF SCHEDULED PAYMENTS OF PRINCIPAL
[Attach the following table for Series A Lessor Notes]
--------------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PRINCIPAL AMOUNT
PRINCIPAL PAYMENT DATES PAYABLE ON EACH PRINCIPAL PAYMENT DATE
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2004 1.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2005 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2006 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2007 2.500%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2008 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2009 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2010 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2011 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2012 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2013 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2014 3.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2015 4.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2016 4.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2017 5.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2018 5.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2019 3.500%
--------------------------------------------------------------------------------------------------------------------------
[Attach the following table for Series B Lessor Notes]
--------------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PRINCIPAL AMOUNT
PRINCIPAL PAYMENT DATES PAYABLE ON EACH PRINCIPAL PAYMENT DATE
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2004 0.055%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2005 0.480%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2006 0.590%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2007 0.375%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2008 0.375%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2009 0.415%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2010 1.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2011 1.750%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2012 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2013 1.250%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2014 1.500%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2015 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2016 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2017 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2018 2.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2019 2.500%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2020 3.500%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2021 3.500%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2022 3.500%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2023 4.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2024 4.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2025 5.000%
--------------------------------------------------------------------------------------------------------------------------
April 1 and October 1, 2026 6.210%
--------------------------------------------------------------------------------------------------------------------------
A-2-1
ASSIGNMENT FORM
To assign this Lessor Note, fill in the form below: (I) or (we) assign and
transfer this Lessor Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Lessor Note on the books of the Owner Lessor. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:
---------
Your signature:
---------------------
(Sign exactly as your name appears
on the face of this Lessor Note)
Tax Identification No.:
-------------
SIGNATURE GUARANTEE:
------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Paying Agent, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Paying
Agent in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
A-2-2
EXHIBIT B
----------------------------------------------------------------
THIS MORTGAGE CONSTITUTES A FIXTURE FILING
UNDER THE
PENNSYLVANIA UNIFORM COMMERCIAL CODE
-----------------------------------------------------------------
THIS IS AN OPEN-END MORTGAGE SECURING FUTURE ADVANCES
UP TO A MAXIMUM PRINCIPAL AMOUNT OF $330,000,000
PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS
AS DESCRIBED IN 42 PA.C.S. SS.8143
-----------------------------------------------------------------
OPEN-END MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
dated as of December ___, 2001
from
XXXXX CITY OL1 LLC,
as the Owner Lessor
to
THE BANK OF NEW YORK,
as Security Agent and Mortgagee
--------------------------------------------------------
When recorded return to:
The Bank of New York
x/x Xxx Xxxxxx Xxxxxx Xxxxx Xxxxxxx xx Xxx Xxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
THIS IS AN OPEN-END MORTGAGE SECURING FUTURE ADVANCES
UP TO A MAXIMUM PRINCIPAL AMOUNT OF $330,000,000
PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS
AS DESCRIBED IN 42 Pa.C.S.ss.8143
OPEN-END MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
THIS OPEN-END MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
(this "Mortgage"), dated as of December ___, 2001, is made by and between XXXXX
CITY OL1 LLC, a Delaware limited liability company ("OWNER Lessor"), as
mortgagor, and THE BANK OF NEW YORK as Security Agent for the Lease Indenture
Secured Parties as defined below (the "SECURITY AGENT").
WHEREAS, the Owner Lessor is the ground tenant of an undivided
percentage interest (the "GROUND Interest") in the land more particularly
described on Schedule I hereto (the "SITE") pursuant to the Facility Site Lease
described on Schedule II hereto (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "FACILITY SITE
LEASE"), a memorandum of which Facility Site Lease is recorded in __________
Book _____, page _____ in the Office of the Recorder of Deeds for Indiana
County,
Pennsylvania;
WHEREAS, the Owner Lessor has subleased the Ground Interest to EME
Homer City Generation L.P. ("XXXXX CITY") pursuant to the Facility Site Sublease
described on Schedule III hereto (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "FACILITY SITE
SUBLEASE"), a memorandum of which Facility Site Sublease is recorded in
__________ Book _____, page _____ in the Office of the Recorder of Deeds for
Indiana County, Pennsylvania;
WHEREAS, the Owner Lessor is the fee owner of an undivided 30% interest
in the generating facilities located on the Site (the "FACILITY") more
particularly described in Schedule IV hereto (the "UNDIVIDED Interest").
WHEREAS, the Owner Lessor has leased the Undivided Interest in the
Facility to Xxxxx City pursuant to a Facility Lease described on Schedule V
hereto (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "FACILITY LEASE"), a memorandum of which Facility Lease
is recorded in ____ Book_____, page _____ in the Office of the Recorder of Deeds
for Indiana County, Pennsylvania;
WHEREAS, Owner Lessor, the Security Agent and The Bank of New York (the
"LEASE INDENTURE TRUSTEE") have entered into an
Indenture of Trust and Security
Agreement, dated as of December ___, 2001 (as amended, restated, supplemented or
otherwise modified from time to
time, the "LEASE INDENTURE"), to provide among other things for the issuance by
the Owner Lessor of certain Lessor Notes as defined therein, and for the grant
of this Mortgage;
WHEREAS, pursuant to the Lease Indenture, the Security Agent serves as
a common representative and to hold the Indenture Estate for the benefit of the
Lease Indenture Secured Parties;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, in order to secure (i)
the prompt payment of the principal of and interest on, and all other amounts
due with respect to, the Lessor Notes from time to time outstanding, and all
other amounts owing by Owner Lessor hereunder or under the Lease Indenture, and
the performance and observance by Owner Lessor of all the agreements, covenants
and provisions contained in the Operative Documents, and the prompt payment of
all amounts from time to time due or to become due to any Lease Indenture
Secured Party under the Operative Documents (collectively the "LESSOR SECURED
OBLIGATIONS"), Owner Lessor hereby grants, bargains, sells, conveys, aliens,
enfeoffs, confirms, releases, assigns, transfers, pledges and mortgages unto the
Security Agent acting for and on behalf of the Lease Indenture Secured Parties,
a first priority security interest in and mortgage lien on all estate, right,
title and interest now held or hereafter acquired by the Owner Lessor in, to and
under the following described property, rights, interests and privileges,
whether now or hereafter acquired, other than Excepted Payments (such property,
rights, interests and privileges as are conveyed pursuant to this granting
clause, but excluding Excepted Payments and the rights to enforce and collect
the sums as set forth herein, being hereinafter referred to as the "INDENTURE
ESTATE"):
(1) the Undivided Interest; the Owner Lessor's
interest in all goods (as defined in the Uniform Commercial
Code as in effect in the State of New York from time to time)
constituting the Facility; all appliances, parts, instruments,
appurtenances, accessories, furnishings, equipment or other
property of whatever nature that may from time to time be
incorporated in the Facility ("Components"), except to the
extent constituting a modification, alteration, addition or
improvement to the Facility ("Improvements"); the Owner
Lessor's interest in any Improvements; the Facility Site Lease
and the Ground Interest thereunder; the Facility Lease and all
payments of any kind by the Facility Lessee thereunder
(including Rent); the Facility Site Sublease and the Sublease
Ground Interest thereunder and all payments of any kind by the
Facility Lessee thereunder; Owner Lessor's interest in all
tangible property located on or at or attached to the Facility
Land that an interest in such tangible property arises under
applicable real estate law ("FIXTURES"); the Facility Deed,
the Xxxx of Sale, the Ownership and Operation Agreement, the
Lessor LLC Agreement, and all and any interest in any property
now or hereafter granted to the Owner Lessor pursuant to any
provision of the Facility Site Lease, Facility Lease or the
Facility Site Sublease; the Security Depositary Agreement, the
Debt Service Reserve Letter of Credit, the Pledge and
Collateral Agreement and each other Operative Document to
which the Owner
Lessor is a party (the Undivided Interest, the Owner Lessor's
interest in any Components, the Owner Lessor's interest in any
fixtures, Improvements and the Ground Interest are
collectively referred to as the "PROPERTY INTEREST" and the
documents, specifically referred to above in this paragraph
(1) are collectively referred to as the "INDENTURE ESTATE
DOCUMENTS"), including, without limitation, (x) all rights of
the Owner Lessor or the Facility Lessee (to the extent
assigned by the Facility Lessee to the Owner Lessor) to
receive any payments or other amounts or to exercise any
election or option or to make any decision or determination or
to give or receive any notice, consent, waiver or approval or
to make any demand or to take any other action under or in
respect of any such document, to accept surrender or
redelivery of the Property Interest or any part thereof, as
well as all the rights, powers and remedies on the part of the
Owner Lessor or the Facility Lessee (to the extent assigned by
the Facility Lessee to the Owner Lessor), whether acting under
any such document or by statute or at law or in equity or
otherwise, arising out of any Lease Default or Lease Event of
Default and (y) any right to restitution from the Facility
Lessee, any sublessee or any other Person in respect of any
determination of invalidity of any such document;
(2) all rents, royalties, issues, profits, revenues,
proceeds, damages, claims and other income from the property
described in this Granting Clause, including, without
limitation, all payments or proceeds payable to the Owner
Lessor as the result of the sale of the Property Interest or
the lease or other disposition of the Property Interest, and
all estate, right, title and interest of every nature
whatsoever of the Owner Lessor in and to such rents, issues,
profits, revenues and other income and every part thereof (the
"LEASE REVENUES");
(3) all condemnation proceeds with respect to the
Property Interest or any part thereof (to the extent of the
Owner Lessor's interest therein), and all proceeds (to the
extent of the Owner Lessor's interest therein) of all
insurance maintained pursuant to Section 11 of the Facility
Lease or otherwise;
(4) all other property of every kind and description
and interests therein now held or hereafter acquired by the
Owner Lessor pursuant to the terms of any Operative Document,
wherever located;
(5) all damages resulting from breach (including,
without limitation, breach of warranty or misrepresentation)
or termination of any of the Indenture Estate Documents or
arising from bankruptcy, insolvency or other similar
proceedings involving any party to the Indenture Estate
Documents;
(6) the Debt Service Reserve Account and all amounts
on deposit therein; and
(7) all proceeds of the foregoing;
BUT EXCLUDING from the Indenture Estate all Excepted Payments,
any and all rights to enforce and collect the same, and SUBJECT TO the rights of
the Owner Lessor and the Owner Participant under the Lease Indenture.
TO HAVE AND TO HOLD the Indenture Estate unto the Security
Agent, forever, provided that if Owner Lessor shall pay and otherwise observe
and perform all of the Lessor Secured Obligations, then this Mortgage and the
estate and interests hereby granted, shall cease and be void.
AND Owner Lessor covenants and agrees with Security Agent as
follows:
1. PAYMENT AND PERFORMANCE. THIS IS AN OPEN-END MORTGAGE
SECURING FUTURE ADVANCES UP TO A MAXIMUM PRINCIPAL AMOUNT OF $330,000,000 PLUS
ACCRUED INTEREST AND OTHER INDEBTEDNESS AS DESCRIBED IN 42 Pa.C.S. ss.8143.
Subject to the terms and conditions of the Lease Indenture, Owner Lessor shall
pay when due and shall observe and perform all of the Lessor Secured
Obligations.
2. DEFAULT. Owner Lessor shall not be deemed in default
hereunder unless and until a Lease Indenture Event of Default shall have
occurred.
3. REMEDIES. Upon the occurrence and continuance of a Lease
Indenture Event of Default, Mortgagee may forthwith exercise, separately,
concurrently, successively or otherwise, but only in compliance with the Lease
Indenture, any and all rights and remedies available to Mortgagee pursuant to
this Mortgage or the Lease Indenture or available by law, equity or otherwise.
4. MORTGAGEE'S RIGHT TO PERFORM OBLIGATIONS. Upon the
occurrence and continuance of any Lease Indenture Event of Default, and in
addition to all other rights and remedies available to it, to the extent
provided in the Lease Indenture the Security Agent shall have the right, but not
the obligation, to perform the Obligation of Owner Lessor then in default, and
to make all advances of funds in connection therewith as the Security Agent
deems appropriate, including, without limitation, for the payment of taxes,
assessments, and other charges and costs for the protection of the Indenture
Estate or the lien of this Mortgage and expenses incurred by reason of the
default of this Mortgage, all of which expenditures shall be secured by the lien
of this Mortgage and payable on demand of Security Agent.
5. INVALIDITY. If any term, provision, or condition of the
Lease Indenture, Facility Lease, the Facility Sublease, the Facility Site Lease
and/or this Mortgage or the application thereof to any person or circumstance
shall be invalid, illegal or unenforceable in any respect, the remainder thereof
shall be construed without such provision and the application of such term or
provision to persons or circumstances other than those as to which it is held
invalid, illegal or unenforceable, as the case may be, shall not be affected
thereby, and each term and provision thereof shall be valid and enforced to the
fullest extent permitted by law.
9. GOVERNING LAW. This Mortgage shall be governed by the laws
of the Commonwealth of Pennsylvania.
10. LEASE INDENTURE. This Mortgage is executed pursuant to the
Lease Indenture, and is subject to the rights and obligations of the Owner
Lessor, the Owner Participant and the Security Agent as set forth therein
(except to the extent inapplicable by their nature to a mortgage). Capitalized
terms used and not defined herein shall have the meaning given such terms in the
Lease Indenture.
11. FUTURE ADVANCES, 42 PA. C.S. SECTION 8143. This Mortgage
shall secure any additional loans as well as any and all present or future
advances and readvances under or in connection with the Lessor Secured
Obligations, made pursuant to or in connection with the Lease Indenture to or
for the benefit of Owner Lessor or the Indenture Estate, all of which shall be
entitled to the benefits of an Open-End Mortgage under 42 Pa.C.S.A. ss.8143 and
shall have the same lien priority as if the future loans, advances or readvances
were made as of the date hereof including, without limitation: (i) principal,
interest, late charges, fees and other amounts due under the Lease Indenture,
the Lessor Notes, or this Mortgage; (ii) all advances made or costs incurred by
Mortgagee for the payment of real estate taxes, and other charges and costs
incurred by Security Agent for the enforcement and protection of the Indenture
Estate or the lien of this Mortgage; and (ii) all legal fees, costs and other
expenses incurred by the Security Agent by reason of any Lease Indenture Event
of Default.
12. 42 PA. C.S. SECTION 8144. In addition to any other
indebtedness secured hereby, this Mortgage secures unpaid balances of advances
made with respect to the Indenture Estate, for the payment of taxes,
assessments, and other charges or costs incurred for the protection of the
Indenture Estate or the lien of this Mortgage, and expenses incurred by the
Security Agent by reason of default by Owner Lessor under this Mortgage. This
Mortgage shall be a lien on the Indenture Estate from the time the Mortgage is
left for record, or the time of delivery to the Security Agent of a Purchase
Money Mortgage which is recorded within ten days after its date, for the full
amount of the unpaid balances of such advances that are made under this
Mortgage, plus interest thereon, regardless of the time when such advances are
or may be made.
IN WITNESS WHEREOF, Owner Lessor has executed this Mortgage as
of the date first above written.
XXXXX CITY OL1 LLC
By: XXXXX FARGO BANK
NORTHWEST, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Owner Manager
under the Lessor LLC Agreement
By:
--------------------------------------
Name:
Title:
I certify that the precise address
of the within named mortgagee is:
The Bank of New York
c/o The United Sates Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
------------------------------
For the mortgagee
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
To wit, I, hereby certify, that on this ___ day of December,
in the year 2001, before the subscriber, a Notary Public, personally appeared
_____________, the ___________________ of Xxxxx Fargo Bank Northwest, National
Association and that he/she, as _______________ of such corporation,
acknowledged the foregoing deed to be the act of said corporation as Owner
Manager under the LIMITED LIABILITY COMPANY AGREEMENT dated as of December __,
2001.
In testimony whereof, I have affixed my official seal, this
____ day of December, A.D. 2001.
--------------------
Notary Public
My commission expires: ________________
[ADD OWNER LESSOR ACKNOWLEDGEMENT]
[ADD SCHEDULE I - LEGAL DESCRIPTION OF SITE]
[ADD SCHEDULE II - DESCRIPTION OF FACILITY SITE LEASE
[ADD SCHEDULE III - DESCRIPTION OF FACILITY SITE SUBLEASE]
[ADD SCHEDULE IV - DESCRIPTION OF THE FACILITY]
[ADD SCHEDULE V - DESCRIPTION OF FACILITY LEASE]
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL BOND
The following exchanges of a part of this Regulation S
Temporary Global Bond for an interest in another Global Bond for an interest in
this Regulation S Temporary Global Bond, have been made:
Principal Amount
Amount of Amount of increase of this Global Bond
decrease in in Principal following such
Principal Amount Amount of this decrease (or
Date of Exchange of this Global Bond Global Bond increase
---------------- ------------------- ----------- --------
C-1
