EXHIBIT 4.2
TRUST INDENTURE, ASSIGNMENT OF CHARTER AND HEAD LEASE
AND SECURITY AGREEMENT
among
QM TANKER 1177 TRUST,
a Delaware Business Trust,
created under the
Trust Agreement dated
as of November 19, 1997, with
the Owner Participant thereto
and
STATE STREET BANK AND TRUST COMPANY
Indenture Trustee
Dated as of December 5, 1997
Leveraged Lease of one LR 1 Crude Oil Tank Vessel
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.................................. 6
ARTICLE II
THE SECURED NOTES
SECTION 2.01. Secured Notes................................ 6
SECTION 2.02. Payment from Indenture Estate Only........... 7
SECTION 2.03. Method of Payment............................ 8
SECTION 2.04. Note Register................................ 9
SECTION 2.05. Registered Owners............................ 9
SECTION 2.06. Transfer, Exchange and Replacement of Notes.. 9
SECTION 2.07. New Notes, Payment of Expenses............... 10
SECTION 2.08. Additional Notes............................. 11
SECTION 2.09. Termination of Interest in Indenture Estate.. 15
SECTION 2.10. Equally and Ratably Secured.................. 15
ARTICLE III
REDEMPTION AND REFUNDING
SECTION 3.01. Generally.................................... 15
SECTION 3.02. Mandatory Casualty Redemption................ 16
SECTION 3.03. Mandatory Early Termination Redemption....... 16
SECTION 3.04. Assumption of Obligations of Owner Trust..... 17
SECTION 3.05. Optional Redemption.......................... 19
SECTION 3.06. Owner Trust's and Owner Participant's Option
to Redeem or Purchase Secured Notes......... 19
SECTION 3.07. Deposited Redemption Moneys.................. 21
SECTION 3.08. Acquisition of Secured Notes................. 21
SECTION 3.09. Condition to Redemption and Refunding........ 21
SECTION 3.10. Notice of Certain Redemptions................ 21
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ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE;
ACTIONS UPON VESSEL DELIVERY
SECTION 4.01. Distribution of Hire........................... 22
SECTION 4.02. Certain Distributions.......................... 23
SECTION 4.03. Distribution After Indenture Event of Default.. 24
SECTION 4.04. Application of Payments on Secured Notes....... 26
SECTION 4.05. Applications of Payments According to
Applicable Operative Document Provisions..... 26
SECTION 4.06. Amounts Received for Which No Provision Is Made.27
SECTION 4.07. Payment Procedures..............................27
SECTION 4.08. Application of Payments Under Parent Guaranty...28
ARTICLE V
COVENANTS OF OWNER TRUST AND THE OWNER TRUSTEES;
CERTAIN AGREEMENTS; INDENTURE EVENTS OF DEFAULT;
REMEDIES OF INDENTURE TRUSTEE
SECTION 5.01. Covenants of Owner Trust and the Managing Trustee; Certain
Agreements................................... 28
SECTION 5.02. Indenture Events of Default..................... 31
SECTION 5.03. Certain Rights.................................. 32
SECTION 5.04. Remedies........................................ 34
SECTION 5.05. Suit; Possession; Title; Sale of
Indenture Estate.............................................. 36
SECTION 5.06. Remedies Cumulative............................. 40
SECTION 5.07. Discontinuance of Proceedings................... 40
SECTION 5.08. Waiver of Past Defaults......................... 40
SECTION 5.09. No Action Contrary to Certain Third
Party Rights.................................................. 40
SECTION 5.10. Rights of Holders of Secured Notes.............. 41
SECTION 5.11. Limitation on Suits by Holders.................. 41
ARTICLE VI
DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.01. Certain Actions................................. 42
SECTION 6.02. Action Upon Instructions........................ 42
SECTION 6.03. Release of Lien of Indenture.................... 43
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SECTION 6.04. Indemnification................................. 44
SECTION 6.05. No Implied Duties............................... 45
SECTION 6.06. Duties to Remove Certain Liens.................. 45
SECTION 6.07. No Action Except Under Operative Documents or
Instructions.................................. 45
SECTION 6.08. Certain Rights of the Owner Trust and the Owner
Participant................................... 45
SECTION 6.09. Filing of Financing and Continuation Statements..46
SECTION 6.10. Publishing of Notices............................46
SECTION 6.11. Taxes; Withholding; Information Reporting........46
ARTICLE VII
THE INDENTURE TRUSTEE AND THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties................. 47
SECTION 7.02. Absence of Duties Except as Specified........... 47
SECTION 7.03. No Representations or Warranties................ 47
SECTION 7.04. No Segregation of Moneys; No Interest;
Investments.................................... 48
SECTION 7.05. Reliance; Agents; Advice of Counsel............. 49
SECTION 7.06. No Compensation from Holders or Indenture Estate.49
SECTION 7.07. Right of the Indenture Trustee to Perform
Covenants, Etc.................................50
SECTION 7.08. Moneys for Payments in Respect of Notes to be
in Trust......................................50
SECTION 7.09. Disposition of Moneys Held for Payments of Notes.50
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee............... 51
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor..................................... 51
SECTION 8.03. Co-Trustees and Separate Trustees............... 53
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Indenture Supplements Without Consent of
Holders....................................... 55
SECTION 9.02. Supplements and Amendments to Operative
Documents With Consent Holders of Notes....... 56
SECTION 9.03. Execution of Indenture Supplement, Amendments,
Etc........................................... 61
SECTION 9.04. Effect of Indenture Supplement................. 61
SECTION 9.05. Reference in Secured Notes to Indenture
Supplements................................... 61
iv
SECTION 9.06. Notices of Indenture Supplements and Amendments,
Etc............................................. 61
SECTION 9.07. Charterer Rights.................................. 62
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Indenture.......................... 62
SECTION 10.02. No Legal Title to Indenture Estate in Holders..... 63
SECTION 10.03. Power of Attorney................................. 64
SECTION 10.04. Regarding the Owner Trust and the Owner Trustees.. 64
SECTION 10.05. Notices........................................... 65
SECTION 10.06. Severability of Provisions........................ 65
SECTION 10.07. No Oral Modification or Continuing Waivers........ 66
SECTION 10.08. Successors and Assigns............................ 66
SECTION 10.09. Headings; Table of Contents....................... 66
SECTION 10.10. Normal Commercial Relations....................... 66
SECTION 10.11. Governing Law..................................... 66
SECTION 10.12. Execution......................................... 67
SECTION 10.13. Security Agreement................................ 67
SECTION 10.14. Benefits of Indenture............................. 67
Appendix A Definitions
Schedule 1 Description of Vessel
Exhibit A Form of Secured Note
Exhibit B Maturity Dates, Esq.
Exhibit C Form of Substitution Agreement
Exhibit D Form of Indenture Supplement
Exhibit E Form of Ship Mortgage
TRUST INDENTURE, ASSIGNMENT OF CHARTER AND HEAD LEASE
AND SECURITY AGREEMENT
This TRUST INDENTURE, ASSIGNMENT OF CHARTER AND HEAD LEASE AND SECURITY
AGREEMENT dated as of December 5, 1997 (this "Indenture"), between QM TANKER
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1177 TRUST, a trust created pursuant to the Delaware Business Trust Act (the
"Owner Trust") under the Trust Agreement (as hereinafter defined), under which
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DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (CAYMAN) LIMITED, a Cayman Islands banking corporation
is the Managing Trustee, (together with its permitted successors and assigns,
the "Managing Trustee"), acting not individually, except as otherwise provided
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herein (when acting in such individual capacity, the "Cayman Trust Company"),
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but solely as trustee for the Owner Trust (the Managing Trustee in such capacity
being, an "Owner Trustee", and STATE STREET BANK AND TRUST COMPANY, a
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Massachusetts trust company (together with its permitted successors and assigns,
the "Indenture Trustee").
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WITNESSETH:
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WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant, the Cayman Trust Company and Wilmington
Trust Company (the "Resident Trust Company") have heretofore entered into the
Declaration of Agreement of Trust dated as of November 19, 1997 (the "Trust
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Agreement"), whereby, among other things, the Cayman Trust Company and the
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Resident Trust Company in their respective capacities as Managing Trustee and
Resident Trustee thereunder have declared a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Lien of this
Indenture, and the Owner Trust is authorized and directed to execute and deliver
this Indenture;
WHEREAS, the Owner Trust desires by this Indenture to provide, among other
things, (i) for the issuance by the Owner Trust to the Pass Through Trustee of
the Series 1997-C-1 Secured Notes, a form of which is set forth in Exhibit A
hereto, upon payment by the Pass Through Trustee of the aggregate principal
amount of such Secured Notes, (ii) for the grant, assignment, mortgage and
pledge by the Owner Trust to the Indenture Trustee, as part of the Indenture
Estate hereunder, among other things, all of the right, title and interest of
the Owner Trust in, to and under, as the case may be, the Vessel Interest (by
virtue of the grant hereunder), the Head Lease, the Charter, the Parent
Guaranty, any proceeds from the U.K. Lessor's Mortgage (upon delivery thereof as
described below), the U.K. Lessor's Security Assignment (upon delivery thereof
as described below) and the
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Bank Guarantee and all payments and other amounts received hereunder or
thereunder (other than Excepted Payments), in accordance with the terms hereof
and thereof, as security for, among other things, the Owner Trust's obligations
to the Indenture Trustee, the Loan Participant and the other Holders and for the
benefit and security of the Loan Participant and such Holders;
WHEREAS, all things have been done to make the Secured Notes, when executed
by the Owner Trust and authenticated, issued and delivered hereunder, the legal,
valid, binding and enforceable obligations of the Owner Trust to the extent
provided herein in accordance with their terms; and
WHEREAS, all things necessary to make this Indenture the legal, valid,
binding and enforceable obligation of the Owner Trust, for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed and
have happened, and the Indenture Trustee has duly accepted the trust created
hereby and as evidenced thereof has joined in the execution hereof;
NOW, THEREFORE, THIS TRUST INDENTURE, ASSIGNMENT OF CHARTER AND HEAD LEASE
AND SECURITY AGREEMENT WITNESSETH that, to secure (i) the prompt payment of the
principal of, Make-Whole Amount, if any, and interest on all Secured Notes from
time to time Outstanding hereunder and of all other amounts payable to the
Holders (whether as Holders or Loan Participant) hereunder, under the Secured
Notes and under the other Operative Documents, (ii) the performance and
observance by the Owner Trust of all of the provisions, covenants and agreements
contained in the Participation Agreement, the Secured Notes and in the other
Operative Documents for the benefit of the Indenture Trustee or the Holders
herein, and (iii) the performance and observance by the Owner Participant of its
covenants and agreements contained in the Operative Documents (the obligations
described in the above clauses (i), (ii) and (iii), collectively, the "Indenture
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Indebtedness"), and for the uses and purposes and subject to the terms and
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provisions hereof, and in consideration of the premises and of the covenants
herein contained and of the acceptance of the Secured Notes by the Holders
thereof:
GRANTING CLAUSE
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The Owner Trust, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to secure the payment and
performance of the Indenture Indebtedness, hereby presently irrevocably
mortgages, hypothecates and pledges unto the Indenture Trustee and creates to
and for the benefit of the Indenture Trustee, a security interest in and
mortgage lien on, and assigns by way of security, all of the right, title and
interest of the Owner Trust in, to and under the following property, rights,
interests, and privileges, now owned or in the future acquired by the Owner
Trust or in which the Owner Trust now has or may in the future acquire any
estate, right, title or interest (which
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collectively, together with all of the Indenture Trustee's right, title and
interest in and to the Vessel Interest, by virtue of the grant hereunder,
including all property hereafter subjected to the Lien of this Indenture by any
Indenture Supplement or any mortgage supplemental hereto or thereto, but
excluding Excepted Payments, shall constitute the "Indenture Estate"), to wit:
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(a) all right, title and interest of the Owner Trust in the Vessel (as
described in Schedule 1 hereto) under and pursuant to the Head Lease,
including, without limitation, any Modification or Alteration to the Vessel
which, pursuant to the terms of the Head Lease and the Charter, become part
of the Vessel Interest of the Owner Trust;
(b) all rights to receive all amounts that are received by the Owner
Trust from the Builder under the Supervisory Agreement or from Shinhan Bank
under the bank letter of guarantee referred to in the Construction
Contract, and which the Owner Trust is entitled to retain unconditionally
for its own benefit in accordance with the terms of the Head Lease (and not
as agent for the U.K. Lessor), including, without limitation, all moneys
due and to become due to the Owner Trust under such Head Lease, subject to
the rights of the U.K. Lessor under such Head Lease.
(c) the Charter, including, without limitation, (i) all amounts of
hire, rent, income insurance proceeds and requisition, indemnity or other
payments of any kind (other than Excepted Payments) for or with respect to
any asset leased or subleased thereunder, (ii) all rights of the Owner
Trust to exercise any election or option, or to give any notice, consent,
waiver or approval under or in respect of the Charter, or to accept any
surrender or enter into any modification thereof, as the case may be, and
(iii) all rights, powers and remedies of the Owner Trust pursuant to the
Charter, whether arising thereunder or by statute, at law, in equity or
otherwise, including, without limitation, the right to possession of any
asset demised thereunder;
(d) the Head Lease, the Lessee Support Agreement, the Bank Guarantee,
the U.K. Lessor's Security Assignment (upon delivery thereof by the U.K.
Lessor) and any proceeds from the U.K. Lessor's Mortgage (upon delivery
thereof by the U.K. Lessor), including, without limitation, (i) all amounts
payable to the Owner Trust under any of them, (ii) all right of the Owner
Trust to exercise any election or option, or to give any notice, consent,
waiver or approval under or in respect of any such agreement, or to accept
any surrender or enter into any modification thereof, as the case may be,
and (iii) all rights, powers and remedies of the Owner Trust pursuant to
any such agreement, whether arising thereunder or by statute, at law, in
equity or otherwise;
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(f) the Parent Guaranty, including without limitation, (i) all amounts
payable thereunder, (ii) all rights of the Owner Trust to exercise any
election or option, or to give any notice, consent, waiver or approval
under or in respect of the Parent Guaranty, or to accept any surrender or
enter into any modification thereof, as the case may be, and (iii) all
rights, powers and remedies of the Owner Trust pursuant to the Parent
Guaranty, whether arising thereunder or by statute, at law, in equity or
otherwise;
(g) all moneys and securities now or hereafter paid or deposited or
required to be paid or deposited to or with the Indenture Trustee pursuant
to any term of any Operative Document, and held or required to be held by
the Indenture Trustee hereunder;
(h) to the extent assignable, any and all permits, certificates,
approvals and authorizations, however characterized, issued or in any way
furnished in connection with the Vessel, whether necessary or not for the
operation and use of the Vessel;
(i) all the tolls, rents, issues, profits, products, revenues and
other income of the property subjected or required to be subjected to the
Lien of this Indenture, including all payments or proceeds payable to the
Owner Trust upon or after termination of the Charter as the result of the
sale, lease or other disposition of the Vessel or the Vessel Interest, and
all estate, right, title and interest of every nature whatsoever of the
Owner Trust in and to the same and every part thereof; and
(j) all rights or property which may be received upon the exercise of
any remedy or option contained in any of the above-described instruments
and all proceeds in whatever form of all or any part of any of the
foregoing;
EXCLUDING, HOWEVER, from the foregoing grant, and thereby from the
Lien of this Indenture and from the Indenture Estate, any and all Excepted
Payments and provided that, notwithstanding the foregoing provisions or anything
herein to the contrary, so long as no Charter Event of Default has occurred and
is continuing, the leasehold interest granted to the Charterer under the Charter
shall not be subject to the Lien of this Indenture or be part of the Indenture
Estate, and nothing in this Indenture shall affect the rights of the Charterer
under the Charter; and
SUBJECT to the rights of the Owner Trust and the Owner Participant
hereunder, including, without limitation, Section 6.08;
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee,
its successors and assigns, for the benefit and security of the Holders, without
any priority of any one Secured Note over any other (except as provided herein
or under any Operative
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Document), and for the uses and purposes and subject to the terms and conditions
set forth in this Indenture. This Indenture is a mortgage given to secure the
payment of the Indenture Indebtedness and is also intended to operate as, among
other things, a security agreement and an assignment of Bareboat Hire, leases
and rents.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trust shall remain liable under the
Operative Documents to which it is a party or a third party beneficiary to
perform all of the obligations of the Owner Trust thereunder or by which it is
bound, all in accordance with and pursuant to the terms and provisions of each
thereof and the Holders and, except as expressly provided herein, the Indenture
Trustee shall have no obligation or liability under any Operative Document by
reason of or arising out of this Indenture (except as to the Indenture Trustee,
if the Indenture Trustee shall have become the "Owner" under the Charter). None
of the Indenture Trustee or any Holder shall be required or obligated in any
manner to perform or fulfill any obligation of the Owner Trust under or pursuant
to any Operative Document or, except as herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim, or to take any action to
collect or enforce the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time.
Pursuant to clause 5.2(B) of the Head Lease, the U.K. Lessor has
covenanted with the Owner Trust that it shall (at the expense of the Owner
Trust) (i) upon delivery of the Vessel to the U.K. Lessor and upon documentation
of the Vessel under the laws of ▇▇▇▇▇▇▇▇ Islands (or such other jurisdiction as
is permitted by the Operative Documents and the U.K. Documents) in the name of
the U.K. Lessor as holder of title to the Vessel, execute and deliver to the
Owner Trust the U.K. Lessor's Mortgage; and (ii) upon delivery of the Vessel to
the U.K. Lessor aforesaid, execute and deliver to the Owner Trust the U.K.
Lessor's Security Assignment, in each case securing certain of the U.K. Lessor's
obligations to the Owner Trust under the Head Lease. Pursuant to this
Indenture, the Owner Trust hereby grants, pledges, assigns and mortgages all of
its rights and interest under the U.K. Lessor's Security Assignment and to any
proceeds from the U.K. Lessor's Mortgage to the Indenture Trustee, as part of
the Indenture Estate hereunder.
Accordingly, the Owner Trust and the Indenture Trustee hereby agree
for themselves and for the benefit and security of the Holders as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise defined herein, for the
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purposes hereof, capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in Appendix A. References in this Indenture
to Sections, subsections, paragraphs, Schedules, Appendices and Exhibits are to
Sections, subsections and paragraphs in, and Schedules, Appendices and Exhibits
to, this Indenture unless otherwise indicated.
ARTICLE II
THE SECURED NOTES
SECTION 2.01. Secured Notes. (a) Generally. Except for Secured
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Notes issued pursuant to Section 2.06 or 2.08 hereof, Secured Notes may be
issued only on the Closing Date. On the Closing Date, the Secured Notes to be
issued on such date pursuant to Section 2.2 of the Participation Agreement shall
be duly executed by the Managing Trustee on behalf of the Owner Trust, duly
authenticated and delivered by the Indenture Trustee and registered in the name
of the Loan Participant to which such Secured Note is being issued. Each
Secured Note shall have attached thereto the Amortization Schedule for such
Secured Note. Receipt by the Indenture Trustee of Secured Notes duly executed
by the Managing Trustee on behalf of the Owner Trust shall constitute
instructions to the Indenture Trustee to authenticate, register and deliver such
Secured Notes on the Closing Date.
(b) Series 1997-C-1 Secured Notes. The Series
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1997-C-1 Secured Notes shall:
(i) be limited in aggregate principal amount (including the full
accretion of discount) to the amount specified in Exhibit B hereto (the
principal amount of such Secured Notes shall be the Accreted Value of such
Secured Note during the period prior to the Full Accrual Date, and
thereafter, the face amount thereof as such amount may be reduced from time
to time by the payment of principal installments thereunder);
(ii) be issuable only as registered Secured Notes in denominations of
at least $1,000, or if the remaining principal amount thereof shall be less
than $1,000, such remaining principal amount;
(iii) be dated the Closing Date;
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(iv) bear interest on the unpaid principal amount thereof from the
date of such Series 1997-C-1 Secured Notes to and including the Full
Accrual Date thereof in the form of accretion of discount, and after the
Full Accrual Date with respect to such Secured Notes, at the rate specified
in Exhibit B hereto (computed on the basis of a 360-day year consisting of
twelve 30-day months);
(v) provide for payments of interest and otherwise be due and payable
as to principal and interest as specified herein and therein;
(vi) be prepayable only as provided in Article III; and
(vii) be substantially of the tenor and in the form set forth in
Exhibit A.
(c) Execution and Authentication. Each Secured Note shall be signed
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on behalf of the Owner Trust by a Responsible Officer of the Managing Trustee,
manually or in facsimile. No Secured Note shall be secured by or entitled to
any benefit under this Indenture, or be valid for any purpose, unless there
appears thereon a certificate of authentication executed by or on behalf of the
Indenture Trustee by the manual signature of a Responsible Officer of the
Indenture Trustee, and such certificate on any Secured Note shall be conclusive
evidence that such Secured Note has been duly authenticated and delivered
hereunder.
(d) No Registration of Transfer or Exchange Upon Redemption. The
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Indenture Trustee shall not be required (i) to register the transfer of or to
exchange any Secured Note during a period beginning at the opening of business
15 Business Days before the day of the mailing of a notice of redemption (or
purchase in lieu of redemption) of Secured Notes pursuant to Article III and
ending at the close of business on the day of such mailing or (ii) to register
the transfer of or to exchange any Secured Note called for redemption (or
purchase in lieu of redemption) pursuant to Article III.
SECTION 2.02. Payment from Indenture Estate Only. All payments of
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principal, Make-Whole Amount, if any, and interest to be made by the Owner Trust
and, except as otherwise provided in the Operative Documents, all payments of
any other amounts payable by or on behalf of the Owner Trust under the Secured
Notes and this Indenture, shall be made only from the income and proceeds from
the Indenture Estate, and only to the extent that the Indenture Trustee shall
have received sufficient income or proceeds from the Indenture Estate to make
such payments in accordance with the terms hereof. Each Holder, by its
acceptance of a Secured Note, agrees that it will look solely to the income and
proceeds from the Indenture Estate to the extent available for payment as herein
provided and that (a) none of the Managing Trustee or the Indenture Trustee
(whether in their respective individual or trust capacities) or the Owner Trust
shall be personally liable to such Holder for any amounts payable under the
Secured Notes, nor, except as specifically provided herein
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or in the other Operative Documents, for any amounts payable or any liability
under this Indenture and (b) the Owner Participant shall not be liable to the
Indenture Trustee or to any Holder under any circumstances for any reason
whatsoever, except to the extent expressly provided herein or in any other
Operative Document.
SECTION 2.03. Method of Payment. (a) The principal of, and Make-
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Whole Amount, if any, and interest, on each Secured Note shall be payable in
immediately available funds, the receipt of which has been confirmed by a
Responsible Officer of the Indenture Trustee (which shall be done promptly upon
receipt thereof) on or before 12:00 p.m., New York time, at the place of
receipt, on the due date therefor, to the Indenture Trustee at the corporate
trust office of the Indenture Trustee. Amounts so received by the Indenture
Trustee shall be paid by the Indenture Trustee to each Holder on the due date
therefor without any presentment or surrender of any Secured Note held by such
Holder by whichever of the following methods shall be specified by prior written
notice from such Holder to the Indenture Trustee: (i) by transferring prior to
2:00 p.m., New York City time, on such date such payment to such Holder in
immediately available funds by crediting the amount to be distributed to any
Holder to any account maintained by such Holder with the Indenture Trustee or
(ii) by initiating a wire transfer prior to the time set forth in clause (i) of
this Section 2.03(a) of such amount in immediately available funds to a banking
institution designated in such notice with bank wire transfer facilities for the
account of such Holder, in all cases without any presentment or surrender of any
Secured Note, except that, on the date of the final maturity thereof (whether at
maturity, upon prepayment, acceleration or otherwise), the Holder of each
Secured Note shall surrender such Secured Note promptly after payment; provided
that failure to so present such Secured Note shall not diminish the effect of
full and final payment by the Owner Trust. If any Holder does not specify one
of the foregoing methods, payment will be made by check mailed to the registered
address of the Holder. In the event the Indenture Trustee shall fail to make
any payment as provided in the preceding sentences after its receipt of funds at
the place and on or before the time specified in this Section 2.03(a), the
Indenture Trustee in its individual capacity agrees to compensate each Holder
for loss of use of funds at the Federal Funds overnight rate.
(b) Whenever any payment to be made hereunder or pursuant to the terms
of any Secured Note shall be stated to be due on a day which is not a Business
Day, such payment shall be due and payable on the next succeeding Business Day
with the same force and effect as if made on such scheduled date and (provided
such payment is timely made on such succeeding Business Day) no interest shall
accrue on the amount of such payment from and after such scheduled date.
(c) If payment of any installment of principal or interest payable in
accordance with the terms hereof and of the Secured Notes is not paid in full
when due, whether as scheduled or upon acceleration and whether before or after
the maturity date of the Secured Notes, such overdue amount of principal or
interest shall bear (to the extent not
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prohibited by applicable law) interest, payable on demand, for each day from and
including the date payment thereof was due to the actual date of payment, at the
Overdue Rate.
(d) Subject to Section 6.11, the Holder of any Secured Note shall be
entitled to the principal of, and the Make-Whole Amount, if any, and interest on
such Secured Note free from all rights of set-off or counterclaims of the Owner
Trust, the Indenture Trustee or any prior Holder of such Secured Note. Nothing
set forth in this Section 2.03(d) shall impair the right of the Owner Trust to
receive a return from the Indenture Trustee of any amount unintentionally
overpaid by the Owner Trust in respect of a Secured Note.
SECTION 2.04. Note Register. The Indenture Trustee shall cause to be
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kept at the Indenture Trustee's corporate trust office a register (the "Note
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Register") for the registration or transfer of the Secured Notes. The Note
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Register shall be maintained by the Indenture Trustee, and the names and
addresses of the registered Holders of the Secured Notes, the transfers of the
Secured Notes and the names and addresses of the transferees of the Secured
Notes shall be entered in the Note Register under such reasonable regulations as
the Indenture Trustee may prescribe. Each Loan Participant shall be provided
reasonable opportunities to inspect the Note Register from time to time.
SECTION 2.05. Registered Owners. The Owner Trust and the Indenture
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Trustee may deem and treat any registered Holder as the absolute owner of any
Secured Note held by such Holder, as indicated in the Note Register, for the
purpose of receiving payment of all amounts payable with respect to such Secured
Note and for all other purposes, and neither the Owner Trust nor the Indenture
Trustee shall be affected by any notice to the contrary. All such payments so
made shall be valid and effectual to satisfy and discharge the liability of the
Owner Trust upon such Secured Note to the extent of the sum or sums so paid.
SECTION 2.06. Transfer, Exchange and Replacement of Notes. (a)
-------------------------------------------
Secured Notes may be transferred only on the Note Register. Any Secured Note
may be transferred on the Note Register if such Secured Note is surrendered for
cancellation at the corporate trust office of the Indenture Trustee and is
accompanied by an instrument of transfer in form and substance reasonably
satisfactory to the Indenture Trustee, which Secured Note or Secured Notes shall
be cancelled by the Indenture Trustee. A new Secured Note or Secured Notes of
the same series, duly executed by the Owner Trust and registered in the name of
the transferee or transferees in a principal amount or amounts equal to the
principal amount of such transferred Secured Note, shall be duly authenticated
and delivered by the Indenture Trustee to the transferee or transferees named by
the Holder of such transferred Secured Note in exchange for such transferred
Secured Note. Promptly after registration of the transfer of any Secured Note,
the Indenture Trustee shall give notice thereof to the Charterer
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and the Owner Trust specifying the name and address for notices of the
transferee or transferees.
(b) Any Secured Note may be exchanged for a new Secured Note if such
Secured Note to be so exchanged is surrendered for cancellation at the corporate
trust office of the Indenture Trustee and is accompanied by the request of the
Holder thereof specifying the denomination of the new Secured Note (which shall
be in denominations of at least $1,000 or, if less, the then unpaid principal
amount thereof) to be issued in exchange therefor. Upon instructions from the
Indenture Trustee, the Owner Trust shall deliver to the Indenture Trustee a new
Secured Note of the same series, duly executed by the Owner Trust and registered
in the name of such Holder in the denominations so requested and in an aggregate
principal amount equal to the aggregate original principal amount of such
Secured Note to be so exchanged, and such new Secured Note shall be duly
authenticated by the Indenture Trustee and delivered by the Indenture Trustee to
such Holder in exchange for such Secured Note to be so exchanged, which Secured
Note shall be cancelled by the Indenture Trustee.
(c) If any Secured Note shall become mutilated or be destroyed, lost
or stolen, upon request of the Holder thereof, a new Secured Note of the same
series, duly executed by the Owner Trust and registered in the name of such
Holder in the same original principal amount as the Secured Note so mutilated,
destroyed, lost or stolen, shall be duly authenticated and delivered by the
Indenture Trustee to such Holder in exchange for such Secured Note, if
mutilated, or in substitution for such Secured Note, if destroyed, lost or
stolen. In the case of a mutilated Secured Note, such Secured Note shall be
surrendered for cancellation at the corporate trust office of the Indenture
Trustee and shall be cancelled by the Indenture Trustee. In the case of a
destroyed, lost or stolen Secured Note, the Holder thereof shall furnish to the
Owner Trust and the Indenture Trustee (i) evidence to their reasonable
satisfaction of the destruction, loss or theft of such Secured Note and
ownership thereof, and (ii) such security or indemnity as may be reasonably
required by them to save them harmless; provided that if the affected Holder is
a Pass Through Trustee, the written agreement of such Holder to indemnify the
Managing Trustee, the Resident Trustee, the Indenture Trustee and the Owner
Trust (in their respective individual and trust capacities) with respect to such
destroyed, lost or stolen Secured Note, together with written notice of
ownership and destruction, loss or theft thereof, shall satisfy the conditions
of this sentence.
(d) The Indenture Trustee shall cancel all Secured Notes surrendered
for replacement, redemption, registration of transfer, exchange, payment or
cancellation and shall destroy canceled Secured Notes.
SECTION 2.07. New Notes, Payment of Expenses. (a) Each new Secured
------------------------------
Note issued pursuant to Section 2.06 (a "New Note") upon transfer of, in
--------
exchange for or in substitution for a Secured Note (an "Old Note") shall be
--------
dated as of the date of such Old
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Note. The Indenture Trustee shall ▇▇▇▇ on each New Note (i) the date to which
principal and interest have been paid on the applicable Old Note and (ii) all
payments and prepayments of principal made on such Old Note which are allocable
to such New Note. Interest shall be deemed to have been paid on such New Note
to the date to which interest was paid on the applicable Old Note, and all
payments and prepayments of principal required to have been marked on such New
Note, as provided in clause (ii) of the preceding sentence, shall be deemed to
have been made thereon. All New Notes issued pursuant to Section 2.06 in
exchange for or in substitution for or in lieu of Old Notes shall be valid
obligations of the Owner Trust evidencing the same debt as such Old Notes and
shall be entitled to the benefits and security of this Indenture to the same
extent as such Old Notes. Issuance of any New Note shall not for any purposes
be deemed a further advance of funds to the Owner Trust and the perfection and
priority of the security interest in the Indenture Estate applicable to such New
Note shall for all purposes be the same as that applicable to the Secured Note
replaced by such New Note.
(b) Upon the issuance of a New Note or New Notes pursuant to Section
2.06, the Owner Trust and/or the Indenture Trustee may require from the party
requesting such New Note or New Notes payment of a sum to reimburse the Owner
Trust and/or the Indenture Trustee for, or to provide funds for, the payment of
any tax or other governmental charge or any other charge or expense paid or
payable with respect to such transfer by the Owner Trust or the Indenture
Trustee, without any right of reimbursement under any Operative Document with
respect to such payments.
SECTION 2.08. Additional Notes. (a) So long as no Charter Event of
----------------
Default or Indenture Event of Default shall have occurred and be continuing,
Additional Notes of one or more series may be issued under and secured by this
Indenture at any time or from time to time, subject to the conditions
hereinafter provided in this Section 2.08, for the purpose of providing funds to
finance (i) the cost of any Modifications to the Vessel undertaken pursuant to
Article 13 of the Charter or (ii) the cost of any Alteration to the Vessel
undertaken pursuant to Section 15 of the Construction Contract. Any Additional
Notes issued hereunder may be issued to any Person, including, without
limitation affiliates of the Guarantor, other than the Pass Through Trustee.
(b) Prior to the issuance of any Additional Notes of any series
pursuant to this Section 2.08, the Owner Trust shall have received from the
Owner Participant and delivered to the Indenture Trustee, not less than thirty
(30) days prior to the proposed date of issuance of such Additional Notes, a
request and authorization to issue Additional Notes (a "Request"), which Request
-------
shall include the amount and series of such Additional Notes, the proposed date
of issuance of such Additional Notes and other details with respect thereto
which are not inconsistent with this Section 2.08. Such Additional Notes shall
have a designation so as to distinguish such Additional Notes from the Initial
Secured Notes and Additional Notes of any other series, but otherwise shall be
substantially similar in form to
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the Initial Secured Notes, with such omissions therefrom, variations therein and
additions thereto as shall be appropriate. Such Additional Notes shall be
denominated and payable in United States Dollars and shall rank pari passu with,
or subordinate to, all other Secured Notes issued pursuant to the terms hereof;
provided that, if any Additional Notes are issued that rank subordinate to any
Secured Notes, any additional issuances of Additional Notes, as provided
hereunder, may rank senior to such subordinated Additional Notes but not senior
to the Secured Notes originally issued hereunder.
(c) The terms, conditions and designations of such Additional Notes
(which shall be consistent with the Request and with the terms of this Indenture
and of the Participation Agreement) shall be set forth in a supplement to this
Indenture in form and substance reasonably satisfactory to the Indenture
Trustee, which shall be executed by the Owner Trust and the Indenture Trustee.
Such indenture supplement shall set forth:
(i) the aggregate principal amount of such Additional Notes (which
amount with respect to Additional Notes issued pursuant to clause (a)(i) or
a(ii) of this Section 2.08 shall not exceed 100% of the cost of such
Modifications or Alterations, as the case may be) and the premium, if any,
and interest thereon;
(ii) after giving effect to the issuance of the Additional Notes
pursuant to clause (a)(ii) of this Section 2.08, the aggregate unpaid
principal amount of all Secured Notes Outstanding (including any other
Additional Notes issued under this Section 2.08), which amount shall not
exceed 80% of the initial cost of the Vessel;
(iii) after giving effect to the issuance of the Additional Notes
pursuant to clauses (a)(i) or (a)(ii) of this Section 2.08, the aggregate
unpaid principal amount of all Secured Notes Outstanding (including any
other Additional Notes issued under this Section 2.08), which amount shall
not exceed 85% of the total Fair Market Sales Value of the Vessel (as
determined pursuant to the mutual agreement of the Owner Trust and the
Charterer and otherwise by the Appraisal Procedure) after giving effect to
such Modifications or Alterations. In the event that the issuance of
Additional Notes shall occur prior to the Delivery Date, the Fair Market
Sales Value of the Vessel shall be determined by reference to the amounts
paid or payable to the Builder under the Construction Contract and the
amounts paid or payable to the Supervisor under the Supervisory Agreement;
(iv) the text of such Additional Notes (which, except for the terms of
payment thereof, shall be of substantially the same effect as the text of
the initial Secured Notes set forth in this Indenture, with such changes as
are consistent with and permitted by this Indenture and which in all events
shall provide that such Additional Notes are never more than pari passu in
priority of payment, in right of security and in all other respects with
the Initial Secured Notes);
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(v) the date of maturity of such Additional Notes (which shall be no later
than the end of the Charter Period);
(vi) the date from which, and the date or dates on which, interest is
payable (which shall be Interest Payment Dates);
(vii) the terms for the repayment of the principal amount of such
Additional Notes (each regularly scheduled payment of principal shall be on
an Interest Payment Date);
(viii) the terms, if any, as to prepayment or redemption of such
Additional Notes at the option of the Owner Trust, and as to the premium,
if any, payable on any redemption or prepayment of such Additional Notes;
and
(ix) any other terms and agreements in respect thereof provided or
permitted by this Indenture or necessary to specify the terms and
conditions on which such Additional Notes shall be issued.
(d) Such Additional Notes shall be executed by the Owner Trust as
provided in Section 2.01 and deposited with the Indenture Trustee for
authentication and delivery, but before such Additional Notes shall be
authenticated and delivered by the Indenture Trustee, there shall be delivered
to or deposited with the Indenture Trustee the following:
(i) the Request;
(ii) such supplement to this Indenture, duly executed by the Owner
Trust;
(iii) a supplement to the Charter, duly authorized, executed and
delivered by the Charterer and the Owner Trust, providing for adjustments
to the Assigned Hire required to ensure that payments of Assigned Hire will
be adequate to provide for the payment, when due, of all scheduled payments
of principal of, Make-Whole Amount, if any, and interest on the Secured
Notes, including any other Additional Notes, after giving effect to the
issuance of such Additional Notes, together with such instruments of
conveyance, assignment and transfer, if any, necessary to subject such
supplement to the Charter to the Lien and security interest of this
Indenture and to perfect such Lien and security interest subject to no
Liens other than Permitted Liens, and evidence as to the due recording or
filing of each thereof or of financing or similar statements with respect
thereto;
(iv) such instruments of conveyance, assignment and transfer
(including, without limitation, contractors' waivers) duly executed and
delivered by the respective
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parties thereto, and such evidence of the due filing thereof or of
financing statements with respect thereto, as may be required to convey to
the Owner Trust such interest in all property included in such
Modification or Alteration, if any, and to subject such property, subject
to the Head Lease, to the Lien of this Indenture, subject to no Liens
except Permitted Liens;
(v) in the event that the issuance of Additional Notes shall occur on
or after the delivery of the U.K. Lessor's Mortgage and if title to such
Modifications or Alterations shall be transferred to the U.K. Lessor, an
amendment to the U.K. Lessor's Mortgage so that the lien thereof will cover
and include the Modifications or Alterations or an opinion of counsel that
such amendment is not required;
(vi) if the Head Lease is in effect, if necessary, an amendment to the
Head Lease so that the amount set forth on Schedule 7 thereof on each date
will be greater than the scheduled principal amount of the Secured Notes
(including such Additional Notes) Outstanding on such date;
(vii) originals or certified copies of all corporate actions
necessary for the due and valid issuance of such Additional Notes, the due
and valid authorization, execution, delivery and performance by the Owner
Trust of the supplement to this Indenture relating thereto, and the due and
valid authorization, execution, delivery and performance by the Charterer
and the Owner Trust of the supplement to the Charter and the creation of
the Lien and security interest thereon referred to above, all of which
corporate actions shall have been duly obtained and shall be in full force
and effect, together with evidence as to the due occurrence of all such
authorization, execution, delivery and performance;
(viii) documentation, duly executed and delivered, in each case to
the extent practicable, by the respective parties thereto whereby the
proposed holders of the Additional Notes agree to be bound by the terms of
the Operative Documents (including, without limitation, representations and
covenants corresponding to those contained in Section 12.3 of the
Participation Agreement);
(ix) an Officer's Certificate of the Charterer certifying (a) as to
the cost of such Modification or Alteration and (b) that all conditions
precedent to the issuance of the Additional Notes contained in this Section
2.08 have been satisfied unless such conditions have been waived in writing
by the Indenture Trustee and the Owner Trust;
(x) such opinions of counsel as are customary in transactions of this
type, including, without limitation, opinions as to the due authorization,
execution, delivery and enforceability of such supplement to this Indenture
and such Additional Notes and the creation and perfection of the security
interest in such Modification or Alteration
15
(subject to usual or customary exceptions, qualifications and assumptions),
and such other certificates and other documents as may be reasonably
requested by the Indenture Trustee to evidence the validity and binding
effect of such supplement to this Indenture and such Additional Notes and
compliance with this Section 2.08; and
(xi) Rating Agency Confirmation with respect to the issuance of such
Additional Notes.
(e) When the documents referred to in Section 2.08(d) shall have been
delivered to or deposited with the Indenture Trustee and when such Additional
Notes described in the Request and the supplement to this Indenture have been
executed by the Owner Trust as required by this Indenture, the Indenture Trustee
shall authenticate and deliver such Additional Notes in the manner described in
such Request, but only upon payment to the Owner Trust of the sum or sums
specified in such Request, whereupon the Owner Trust shall pay such sum or sums
to the Charterer.
SECTION 2.09. Termination of Interest in Indenture Estate. A Holder
-------------------------------------------
shall have no further interest in, or other right with respect to, the Indenture
Estate upon the payment of all principal of, Make-Whole Amount, if any, and
interest on, any Secured Notes held by such Holder and all other sums payable to
such Holder hereunder with respect to any such Secured Notes under the other
Operative Documents and under such Secured Notes.
SECTION 2.10. Equally and Ratably Secured. Except as otherwise
---------------------------
expressly provided in this Indenture or any supplement to this Indenture, all
Secured Notes, including any Additional Notes, at any time Outstanding under
this Indenture shall be equally and ratably secured by this Indenture without
preference, priority or distinction on account of the series, date, time of
issue or maturity of such Secured Notes. All Additional Notes at any time
Outstanding under this Indenture shall be equally and ratably secured by this
Indenture without preference, priority or distinction on account of the series,
date, time of issue or maturity of such Additional Notes.
ARTICLE III
REDEMPTION AND REFUNDING
SECTION 3.01. Generally. The Secured Notes may not be redeemed or
---------
prepaid except to the extent and in the manner expressly permitted or required
by this Indenture. Except as otherwise expressly provided in this Indenture,
any amount prepaid in partial redemption of the Secured Notes Outstanding shall
be distributed by the Indenture Trustee to all Holders ratably, without priority
of any Holder over any other Holder, in the
16
proportion that the principal amount of Secured Notes held by such Holder bears
to the principal amount of all Secured Notes then Outstanding.
SECTION 3.02. Mandatory Casualty Redemption. In the event that (i)
-----------------------------
an Event of Loss shall occur with respect to the Vessel, (ii) the Construction
Contract shall be terminated prior to delivery of the Vessel under circumstances
which would obligate the Builder to pay a refund under the Construction Contract
or (iii) the Vessel shall not have been delivered to the U.K. Lessor by the
Builder and accepted by the Charterer by the Final Delivery Date, then the Owner
Trust shall redeem, on the date on which Termination Value is paid pursuant to
the Charter (the date of any redemption under this Section 3.02 being herein
called a "Casualty Redemption Date"), the entire unpaid principal amount of the
------------------------
Secured Notes Outstanding on such Casualty Redemption Date at a redemption price
equal to 100% of the unpaid principal amount of the Secured Notes, together with
any accrued and unpaid interest thereon to, but not including, such Casualty
Redemption Date and without the payment of any Make-Whole Amount or other
premium.
SECTION 3.03. Mandatory Early Termination Redemption. (a) In the
--------------------------------------
event that (i) the Construction Contract shall be terminated prior to delivery
of the Vessel under circumstances which would not obligate the Builder to pay a
refund under the Construction Contract or (ii) the Head Lease is terminated
under circumstances where the (x) Charter is terminated or (y) the Vessel is
sold pursuant to the Head Lease and the purchaser of the Vessel is not a Person
substituted as obligor of the Secured Notes issued thereunder pursuant to
Section 3.04, the Owner Trust shall redeem in whole on the date on which
Termination Value is paid pursuant to the Charter (the date of any redemption
under this Section 3.03(a) being herein called a "Special Termination Redemption
------------------------------
Date") the entire unpaid principal amount of the Secured Notes Outstanding on
----
such Special Termination Redemption Date, at a redemption price equal to 100% of
the unpaid principal amount of the Secured Notes, together with any accrued and
unpaid interest thereon to, but not including, such Special Termination
Redemption Date plus, in the event the Special Termination Redemption Date
occurs prior to the Premium Termination Date, a premium equal to the Make-Whole
Amount, if any, and otherwise without premium.
(b) In the event that the Charter with respect to the Vessel is
terminated pursuant to Article 18 of the Charter, the Owner Trust shall redeem
in whole on the applicable Termination Date (the date if any redemption under
this Section 3.03(b) being herein called a "Termination Redemption Date") the
---------------------------
entire unpaid principal amount of the Secured Notes Outstanding on such
Termination Redemption Date, at a redemption price equal to 100% of such unpaid
principal amount of the Secured Notes, together with any accrued and unpaid
interest thereon to, but not including, such Termination Redemption Date plus,
in the event the Termination Redemption Date occurs prior to the Premium
Termination Date, a premium equal to the Make-Whole Amount, if any, and
otherwise without premium.
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SECTION 3.04. Assumption of Obligations of Owner Trust. (a) If, in
----------------------------------------
connection with a termination of the Head Lease, the Vessel is sold to another
owner trust (the "Substitute Obligor"), the Substitute Obligor may assume all of
------------------
the rights and obligations of the Owner Trust under this Indenture and the other
Operative Documents to which the Owner Trust is a party (the date of any such
assumption being referred to hereinafter as the "Substitution Date") and the
-----------------
Secured Notes shall not be redeemed pursuant to Section 3.03 if on or prior to
the Substitution Date:
(i) the Indenture Trustee shall have received a certificate executed
by the Charterer, dated the Substitution Date, stating that the Charterer
has paid to the Owner Trust all amounts, if any, required to be paid to the
Owner Trust pursuant to the Trust Agreement and the other Operative
Documents in connection with such assumption and that the Substitute
Obligor has received title to the Vessel and such substitute owner trust
shall provide to the Indenture Trustee an executed copy of the trust
agreement pursuant to which such substitute owner trust was organized;
(ii) each substitute owner trustee shall have delivered to the
Indenture Trustee the notice required to be delivered pursuant to Section
8.01 hereof, together with evidence satisfactory to the Indenture Trustee
of such substitute owner trustee's compliance with Section 10.1 of the
Trust Agreement;
(iii) the Substitute Obligor shall have executed and delivered to the
Indenture Trustee a supplement to this Indenture and the other Operative
Documents, substantially in the form of Exhibit C (the "Substitution Date
-----------------
Agreement"), duly executed by the Substitute Obligor, whereby such
---------
Substitute Obligor shall agree that it is purchasing the Vessel subject to
the mortgage and security interest of this Indenture (and the Ship Mortgage
referred to in clause (iv) below) in favor of the Indenture Trustee and is
assuming the obligations and liabilities of the Owner Trust under the
Indenture, the Secured Notes and each other Operative Document to which the
Owner Trust is a party, as provided in Section 2 of the form of
Substitution Date Agreement attached hereto as Exhibit C;
(iv) the Substitute Obligor shall have executed and delivered to the
Indenture Trustee a first priority ship mortgage, substantially in the form
of Exhibit E hereto (the "Ship Mortgage") in favor of Indenture Trustee
-------------
which shall be subject to the security interest of this Indenture and
become part of the Indenture Estate;
(v) the Indenture Trustee shall have received, on or prior to the
Substitution Date, evidence of all filings, recordings and other actions
referred to in the opinion of counsel referred to below;
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(vi) the Charterer shall have confirmed in writing to the Indenture
Trustee that the Charter remains in full force and effect and the Guarantor
shall have confirmed in writing to the Indenture Trustee that the Parent
Guaranty remains in full force and effect;
(vii) the Substitute Obligor shall have caused to be delivered to the
Indenture Trustee an opinion of counsel to the effect that such assumption
will not have an adverse United States income tax effect on the holders of
the Pass Through Certificates and such holders will be taxed under United
States tax law in the same manner as if such assumption had not occurred;
(viii) the Substitute Obligor shall have caused to be delivered to
the Indenture Trustee opinions of counsel as are customary for transactions
of this type, subject to usual or customary qualifications, exceptions and
assumptions, and shall include opinions, subject to such qualifications,
exceptions and assumptions, to the effect that, after giving effect to the
Substitution Date Agreement:
(A) on the Substitution Date, this Indenture, as supplemented by
the Substitution Date Agreement, and the Secured Notes issued
thereunder constitute the legal, valid and binding obligations of the
Substitute Obligor, enforceable against such Substitute Obligor in
accordance with their terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, and except as limited by applicable laws
which may affect the remedies provided for in this Indenture as so
supplemented, which laws, however, do not in the opinion of such
counsel make the remedies provided for in this Indenture inadequate
for the practical realization of the rights and benefits provided for
in this Indenture as so supplemented;
(B) on the Substitution Date, each of the Charter and Parent
Guarantee, constitutes the legal, valid and binding obligations of the
Charterer, the Substitute Obligor and the Guarantor, as the case may
be, enforceable in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally
and by general principles of equity; and
(C) the Lien of this Indenture, including the Ship Mortgage, on
the Vessel has been accomplished and creates a security interest in
the Indenture Estate and all filings and recordings and other action
necessary or appropriate to perfect the interests of the Indenture
Trustee have been accomplished;
19
(ix) the Indenture Trustee shall have received Rating Agency
Confirmation with respect to such assumption; and
(x) after giving effect to the substitution no Indenture Event of
Default shall have occurred and be continuing
(b) Upon satisfaction of the conditions and the delivery of such
documents set forth in Section 3.04(a), the Indenture Trustee shall execute and
deliver the Substitution Date Agreement, and automatically and without the
requirement of further action by any Person, effective as of the Substitution
Date, each of the Owner Trustees and the Owner Trust shall be released from all
of its obligations under this Indenture in respect of the Secured Notes (other
than any obligations or liabilities of either Owner Trustee in its individual
capacity incurred on or prior to the Substitution Date or arising out of or
based upon events occurring on or prior to the Substitution Date, which
obligations and liabilities shall remain the sole responsibility of such Owner
Trustee) and such Substitute Obligor and each successor owner trustee shall
immediately and without further act, be substituted for and assume all of the
respective obligations of the Owner Trust and the Owner Trustees, as the case
may be, under this Indenture and the Secured Notes.
SECTION 3.05. Optional Redemption. The Owner Trust may at any time
-------------------
with the prior written consent of the Charterer redeem in whole all Outstanding
Secured Notes at a redemption price equal to 100% of the unpaid principal amount
of the Secured Notes to be redeemed pursuant to this Section 3.05, together with
any accrued and unpaid interest thereon to, but not including, the date of
redemption, plus, in the event the Secured Notes are redeemed prior to the
Premium Termination Date, a premium equal to the Make-Whole Amount, if any, and
otherwise without the Make-Whole Amount or any other premium.
SECTION 3.06. Owner Trust's and Owner Participant's Option to Redeem
------------------------------------------------------
or Purchase Secured Notes. In the event that (a) at any time one or more
-------------------------
Charter Events of Default shall have occurred and be continuing and such Charter
Event of Default shall have continued for a period of less than 180 days, during
which time the Secured Notes shall not have been accelerated pursuant to Section
5.04 or (b)(i) at any time one or more Charter Events of Default shall have
occurred and be continuing and such Charter Event of Default shall have
continued for a period of 180 days or more during which time the Secured Notes
shall not have been accelerated pursuant to Section 5.04, (ii) the Indenture
Trustee shall have given the Owner Trust or the Owner Participant notice of the
intent to accelerate the Secured Notes pursuant to Section 5.04 or (iii) the
Secured Notes shall have been accelerated pursuant to Section 5.04, the Owner
Trust or the Owner Participant may, at its option, give at least 25 days' prior
irrevocable notice to the Indenture Trustee and the Loan Participant that it
will redeem (or purchase in lieu of redemption) all Secured Notes then
Outstanding, which redemption or purchase shall be at a redemption or purchase
price equal to 100% of
20
the unpaid principal amount of such Secured Notes, together with any accrued and
unpaid interest thereon to, but not including, the date of redemption, plus in
the case of any redemption or purchase pursuant to clause (a) above prior to the
Premium Termination Date, a premium equal to the Make-Whole Amount, if any, with
respect to such Secured Notes, and on or prior to the Business Day preceding
such Redemption Date, the Owner Trust or the Owner Participant will deposit with
the Indenture Trustee an amount sufficient to redeem or purchase at the
applicable Redemption Price all Secured Notes then Outstanding (including, in
the case of a redemption or purchase pursuant to clause (a) above prior to the
Premium Termination Date, a good faith estimate of the premium computed as
provided for herein) plus an amount equal to all other sums then due and payable
to each Loan Participant hereunder, and to pay the Indenture Trustee all amounts
then due it hereunder, which funds shall be held by the Indenture Trustee as
provided in Section 7.04. Upon the giving of such notice and the receipt by the
Indenture Trustee of such deposit, the Indenture Trustee shall deem all
instructions received from the Owner Trustee or the Owner Participant as having
been given by the Loan Participant of 100% of the Outstanding principal amount
of Secured Notes for all purposes of this Indenture. If such notice is given,
the Owner Trust further agrees that it will deposit, or cause to be deposited
with the Indenture Trustee, on or prior to the Business Day preceding the
applicable Redemption Date, whether or not an Indenture Event of Default is then
continuing, funds sufficient, when added to the funds already held by the
Indenture Trustee for such purpose, to redeem or purchase at the applicable
Redemption Price (including the premium actually payable in respect thereof
computed as provided for herein), on such Redemption Date all Secured Notes then
Outstanding and to pay all other sums then due and payable to each Loan
Participant hereunder and to pay the Indenture Trustee all amounts then due it
hereunder. In the event the Owner Trust shall have given any such notice to
purchase or redeem, unless the Owner Trustee shall have consented thereto, the
Indenture Trustee shall not during the period from such notice to the Redemption
Date specified therein institute any new remedy or proceeding in respect of any
new remedy under this Indenture, and the Indenture Trustee shall, to the extent
the same may be accomplished without prejudicing the rights of the Indenture
Trustee hereunder, take such actions and forbear from taking actions, in each
case sufficient to maintain the status quo with respect to any pending remedies
or proceedings in respect thereof being then pursued hereunder; provided,
however, that in no event shall the Indenture Trustee sell or assign any portion
of the Indenture Estate during the period from such notice to the Redemption
Date specified therein. In the event the Owner Trust shall have given any such
notice to purchase or redeem, and the Owner Trust has deposited with the
Indenture Trustee the amounts required to be deposited pursuant to this Section
3.06, then on the Redemption Date, the Loan Participant will be deemed to sell,
assign, transfer and convey to the Owner Trust or its designee (without recourse
or warranty of any kind other than of title to the Secured Notes so conveyed)
all of the right, title and interest of the Loan Participant in and to the
Secured Notes held by the Loan Participant. On and after such Redemption Date,
the Indenture Trustee shall no longer treat the former Loan Participant as the
"Loan Participant", except for purposes of the Loan Participant's right to
receive their respective portions of the
21
amounts paid to the Indenture Trustee as aforesaid and all other amounts due to
such Loan Participants under the Operative Documents with respect to acts,
events, circumstances or conditions occurring or existing prior to such
Redemption Date, and on such date the Indenture Trustee shall register the
transfer of ownership of the Secured Notes into the name of the Owner Trust or
its designee. If the Owner Trust elects to purchase the Secured Notes under
this Section 3.06, nothing herein, including the use of the terms "Redemption
Date" and "Redemption Price", shall be deemed to result in a redemption of the
Secured Notes.
SECTION 3.07. Deposited Redemption Moneys. Moneys held by the
---------------------------
Indenture Trustee for redemption of any Secured Note issued hereunder as
provided in this Article III shall be held by the Indenture Trustee as a
separate fund in trust for the account of the respective Holders of the Secured
Notes to be redeemed, shall be invested in accordance with the provisions of
Section 7.04 and shall be delivered to them respectively in accordance with
Section 2.03 on the Redemption Date. Any amounts so held by the Indenture
Trustee shall be deemed paid for purposes of Section 2.09, and promptly after
payment of all amounts of principal of, Make-Whole Amount, if any, and interest
on, and all other amounts due and payable under any such Secured Notes, the
Holders thereof shall deliver such Secured Notes to the Indenture Trustee for
cancellation.
SECTION 3.08. Acquisition of Secured Notes. The Owner Trust
----------------------------
covenants that it will not, directly or indirectly, acquire or make any offer to
acquire any Secured Note except pursuant to the provisions of this Indenture.
SECTION 3.09. Condition to Redemption and Refunding. It shall be a
-------------------------------------
condition to any redemption of Secured Notes effected under this Article III
that all amounts of principal of, Make-Whole Amount, if any, and interest on,
and all other amounts then due and payable under the Secured Notes which are to
be the subject of such redemption as well as all other amounts due and payable
to the Holders of such Secured Notes as are to be the subject of such redemption
shall upon completion of such redemption have been paid as specified therein,
herein or in any other Operative Document.
SECTION 3.10. Notice of Certain Redemptions. In connection with a
-----------------------------
redemption of any of the Secured Notes pursuant to Section 3.02, Section 3.03 or
Section 3.05, the Owner Trust shall give irrevocable notice (except as provided
herein) of such redemption at least 25 days and not more than 60 days prior to
the Redemption Date to each Loan Participant of such Secured Notes to be
redeemed, at such Loan Participant's address appearing in the Note Register;
provided, however, that if such notice of redemption shall be given in
connection with the early termination of the Charter and the proposed sale of
the Vessel Interest pursuant to Article 18 of the Charter, and if the Owner
Trust does not sell the Vessel Interest on or prior to the Redemption Date, then
such notice of redemption may be revoked by the Owner Trust.
22
Any such notice of redemption shall state:
(i) the Redemption Date;
(ii) the applicable basis for determining the redemption price
pursuant to Section 3.02, 3.03 or Section 3.05 (the "Redemption Price");
----------------
(iii) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Secured Note, and that, if any such Secured
Notes are then Outstanding, interest on such Secured Notes shall cease to
accrue on and after such Redemption Date;
(iv) whether the notice of redemption may be revoked and under what
circumstances; and
(v) the place or places where such Secured Notes are to be surrendered
for payment of the Redemption Price.
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE;
ACTIONS UPON VESSEL DELIVERY
SECTION 4.01. Distribution of Hire. (a) Generally. Pursuant to
-------------------- ---------
Article 3(c) of the Charter and subject to Section 5.01(g), prior to an
Indenture Event of Default the Charterer shall pay directly to the Indenture
Trustee and, upon receipt of such amount, the Owner Trust shall pay over to the
Indenture Trustee, that portion of Hire constituting Base Hire, Termination
Value, if any, amounts measured by Termination Value and that portion of
Supplemental Hire payable in respect of premium, if any, and interest on overdue
payments due to the Indenture Trustee or any amounts payable to the Indenture
Trustee pursuant to Section 5.03 (collectively, "Assigned Hire"). Except as
-------------
otherwise provided in Sections 4.01(c) and 4.03, each installment of Assigned
Hire shall be promptly distributed by the Indenture Trustee in accordance with
Section 4.04 on the date such payment is due (or as soon thereafter as such
payment shall be received by the Indenture Trustee) to pay in full the aggregate
amount of the payment or repayment of principal, interest and other amounts then
due under all Secured Notes and such amounts shall be distributed to the Holders
of such Secured Notes ratably, without priority of one Holder over any other
Holder (except for Additional Notes, if any, which are subordinate to the
Initial Secured Notes and other Secured Notes), in the proportion that the
amount of such payment or payments then due
23
under each such Secured Note bears to the aggregate amount of the payments then
due under all such Secured Notes.
(b) Application of Certain Amounts Held by the Indenture Trustee upon
-----------------------------------------------------------------
Certain Defaults. If as a result of any default by the Charterer or the Owner
----------------
Participant in the performance of its obligations under any Operative Document,
the Indenture Trustee shall not have received for distribution on any Base Hire
Payment Date (or the Indenture Trustee shall be prevented from distributing on
such date) the full amount then distributable pursuant to Section 4.01(a), the
Indenture Trustee shall, if Section 4.03 is not applicable but subject in any
case to any restrictions contained in Section 4.05, distribute other amounts of
the character referred to in Section 4.05 then held by it or thereafter received
by it to the Holders to the extent necessary to make all distributions then due
pursuant to Section 4.01(a).
(c) Retention of Amounts by the Indenture Trustee. If an Indenture
---------------------------------------------
Event of Default shall have occurred and be continuing, all payments under the
Charter (other than Excepted Payments) or any other Operative Documents (other
than Excepted Payments) will upon notice to the Charterer become immediately
payable by the Charterer to the Indenture Trustee, and the Indenture Trustee
shall withhold any amounts that would have been otherwise payable directly to
the Owner Trust until the earlier to occur of (i) the first Business Day
following the date that is 180 days after the Indenture Trustee received such
amount and (ii) the date that such Indenture Event of Default is no longer
continuing, in which cases described in clauses (i) and (ii) such amounts shall
be distributed to the Owner Trust, unless, prior thereto, the Secured Notes
shall have been declared or otherwise shall have become immediately due and
payable pursuant to Section 5.04 or the Indenture Trustee shall have given
notice to the Owner Trust of its intention to accelerate the Secured Notes
pursuant to the first proviso of Section 5.04 or the Indenture Trustee (as
assignee of the Owner Trust) shall have given notice of its intent to declare
the Charter to be in default in accordance with Article 22 thereof, in which
case such amounts shall be distributed by the Indenture Trustee forthwith in
accordance with the terms of Section 4.03.
SECTION 4.02. Certain Distributions. (a) In the event the Secured
---------------------
Notes are to be redeemed pursuant to Section 3.02, 3.03 or 3.05 hereof, any
payment received by the Indenture Trustee from the Owner Trust or the Charterer
pursuant to Section 3.02, 3.03 or 3.05 hereof shall be distributed forthwith in
the following order of priority:
first, in the manner provided in clause "first" of Section 4.03;
second, in the manner provided in clause "third" of Section 4.03;
third, in the manner provided in clause "second" of Section 4.03;
24
fourth, in the manner provided in clause "fourth" of Section 4.03; and
fifth, in the manner provided in clause "fifth" of Section 4.03.
(b) The portion of each payment referred to in this Section 4.02
distributed to a Holder on account of principal or interest on any Secured Note
held by such Holder shall be applied by such Holder in payment of such Secured
Note in accordance with the terms of Section 4.04.
(c) Application of Certain Payments in Case of Event of Loss. Except
--------------------------------------------------------
as otherwise provided in the second sentence of this Section 4.02(c), any
amounts received directly or through the Charterer from any Governmental
Authority or other Person pursuant to Article 14 of the Charter with respect to
the Vessel as the result of an Event of Loss, to the extent that such amounts
are not at the time required or permitted to be paid to, or retained by, the
Charterer pursuant to said Article 14, and any amounts of insurance proceeds for
damage to the Vessel received directly or through the Charterer from any insurer
pursuant to Article 16 of the Charter with respect thereto as the result of an
Event of Loss, to the extent such amounts are not at the time required to be
paid to, or retained, by the Charterer pursuant to Article 16, shall, except as
otherwise provided in the next sentence, be applied in reduction of the
Charterer's obligations to pay Termination Value as provided in the Charter and
the remainder, if any, shall, except as provided in the next sentence, be
distributed to the Owner Trust to be held or distributed in accordance with the
terms of the Charter. Notwithstanding this Section 4.02(c) or Section 4.03
hereof, any amounts held by the Indenture Trustee, including, without
limitation, pursuant to Section 14 of the Charter, which are payable to the
Charterer pursuant to the terms of the Charter or held by the Indenture Trustee
in accordance with Article 29(h) of the Charter shall be (i) so paid to the
Charterer or (ii) held by the Indenture Trustee as security for the obligations
of the Charterer, in each case in accordance with the applicable provisions of
the Charter.
SECTION 4.03. Distribution After Indenture Event of Default. If (a)
---------------------------------------------
an Indenture Event of Default shall have occurred and be continuing and (b) the
Indenture Trustee (as assignee of the Owner Trust) shall have given notice to
declare the Charter to be in default pursuant to Article 22 thereof and the
Indenture Trustee shall have given notice to the Owner Trust pursuant to the
first proviso of Section 5.04 of its intent to declare the Secured Notes due and
payable or any of the Secured Notes shall have been declared or otherwise shall
have become immediately due and payable pursuant to Section 5.04, then, to the
extent that each such notice or declaration shall not have been rescinded or the
Secured Notes shall remain immediately due and payable, (i) all amounts then
held by the Indenture Trustee pursuant to Section 4.05 or 4.06 (and not excluded
from the operation of this Section 4.03) or then otherwise held by the Indenture
Trustee hereunder or under any Operative Document (other than amounts held for
its own account), and (ii) all payments and amounts
25
thereafter realized by the Indenture Trustee through the exercise of remedies
hereunder or under any of the agreements assigned or pledged to the Indenture
Trustee under this Indenture or otherwise as trustee under this Indenture (for
purposes of this Section 4.03, all such amounts and payments held or realized
being herein called "proceeds"), other than amounts expressly paid to it for its
--------
own account and other than Excepted Payments, shall be distributed forthwith by
the Indenture Trustee in the following order of priority:
first, so much of such proceeds as shall be required to reimburse the
Indenture Trustee for any unpaid fees for its services under this Indenture
and any unreimbursed tax, expense (including reasonable legal fees) or
other loss incurred by it (in each case to the extent reimbursable under
the Operative Documents) shall be distributed to the Indenture Trustee for
application to itself;
second, so much of the remaining proceeds as shall be required to
reimburse the then existing or prior Holders for amounts paid or advanced
by the Holders pursuant to Section 6.04 (to the extent not previously
reimbursed) shall be distributed to the then existing and prior Holders as
their respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any recipient over any other recipient (except
as otherwise expressly provided herein), in the proportion the aggregate
amount due each such Person under this clause "second" bears to the
aggregate amount and interest due all such Persons under this clause
"second";
third, so much of the proceeds remaining as shall be required to pay
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and all accrued but unpaid interest thereon to the date of
distribution, shall be distributed to the Holder of such Secured Note, and
if the proceeds remaining are insufficient to pay all such amounts in full,
they shall be distributed to all Holders ratably, without priority of any
Holder over any other Holder (except as otherwise expressly provided
herein), in the proportion that the aggregate amount due each such Holder
under this clause "third" bears to the aggregate amount due all such
Holders under this clause "third";
fourth, so much of the proceeds remaining as shall be required to pay
to each Holder all other amounts payable pursuant to the indemnification
provisions of Section 13 of the Participation Agreement or pursuant to any
other provision of any Operative Document and secured hereunder to such
Holder or to its predecessors and remaining unpaid shall be distributed to
such Holder for distribution to itself and such predecessors, as their
respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any Holder over any other Holder (except as
otherwise expressly provided herein), in the proportion that the aggregate
amount due each such Holder
26
under this clause "fourth" bears to the aggregate amount due all such
Holders under this clause "fourth"; and
fifth, the balance, if any, of the proceeds remaining shall be
distributed to the Owner Trust for distribution pursuant to the Trust
Agreement.
For the avoidance of doubt, no Make Whole Amount or any other premium
shall be due and payable on the Secured Notes as a consequence of the
acceleration of the Secured Notes as a result of an Indenture of Default.
All amounts distributed to any Holder pursuant to clause "third" of
this Section 4.03 shall be applied by such Holder in payment of the Secured
Notes held by it in accordance with the terms of Section 4.04.
SECTION 4.04. Application of Payments on Secured Notes. Each payment
----------------------------------------
on a Secured Note shall be applied, first, to the payment of accrued interest on
such Secured Note to the date of such payment, second, to the payment of any
principal on such Secured Note then due thereunder, and third, to the payment of
the installments of principal remaining unpaid on such Secured Note in the
inverse order of the installment due date thereof.
SECTION 4.05. Applications of Payments According to Applicable
------------------------------------------------
Operative Document Provisions. (a) Any payments or amounts (other than
-----------------------------
Excepted Payments) received by the Indenture Trustee, provision for the
application of which is made in any Operative Document, shall be applied
promptly as provided in such Operative Document (including in the case of
payments or amounts that would be payable to the Charterer as provided in
Article 14 and 29(h) of the Charter), unless (i) in the case of payments or
amounts that would be payable to the Charterer upon satisfaction of any
applicable conditions, a Charter Event of Default shall have occurred and be
continuing at the time the Indenture Trustee receives such payment and the
Indenture Trustee has Actual Knowledge of such Charter Event of Default, in
which case the Indenture Trustee shall hold such payments and amounts as cash
collateral security for the obligations of the Charterer under the Operative
Documents and shall invest such payments and amounts in accordance with the
terms of Section 7.04, and, subject to earlier distribution thereof by the
Indenture Trustee under Section 4.03, if the Charter shall have been declared in
default in accordance with Article 22 thereof, or under Section 4.01(b) (subject
to Section 4.05(b), such payments and amounts, and the proceeds of any
investment thereof, shall be paid by the Indenture Trustee to the Charterer at
such time as any applicable conditions shall have been satisfied and no Charter
Event of Default shall be continuing, and (ii) in the case of any other such
payments and amounts, an Indenture Event of Default shall have occurred and be
continuing at the time the Indenture Trustee receives such payment and the
Indenture Trustee has Actual Knowledge of such Indenture Event of Default, in
which case the Indenture Trustee shall
27
hold such payment as part of the Indenture Estate, as cash collateral security
hereunder for the performance of the Indenture Indebtedness and on the earlier
of the next Business Day on which no Indenture Event of Default shall have
occurred and be continuing or the first Business Day occurring more than 180
days after the receipt of such payment, and, subject to any prior application of
such payment pursuant to Section 4.01(b) or 4.03, the Indenture Trustee shall
apply such payment, and the proceeds of any investment thereof, to the purpose
for which it was made.
(b) Notwithstanding any other provision of this Indenture to the
contrary, and whether or not any such provision refers to this Section 4.05, any
Excepted Payment or other amount expressly provided by the terms of this
Indenture to be paid directly to the Owner Trust or to the Owner Participant
received by the Indenture Trustee shall be paid or distributed immediately by
the Indenture Trustee to the Owner Trust or the Owner Participant, as the case
may be.
(c) The Indenture Trustee will distribute promptly upon receipt any
indemnity or other payment received by it from the Owner Trust or the Charterer
in respect of the Indenture Trustee in its individual capacity or any Holder
pursuant to either Section 13.1 or 13.2 of the Participation Agreement directly
to the Person entitled thereto.
SECTION 4.06. Amounts Received for Which No Provision Is Made. (a)
-----------------------------------------------
Any payment received or amounts realized by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Indenture or
any other Operative Document shall be held by the Indenture Trustee as part of
the Indenture Estate in a cash collateral account maintained under Section 7.04,
and (b) all payments received and amounts realized by the Indenture Trustee
under the Charter, including without limitation, Article 14(b) of the Charter,
or otherwise with respect to the Vessel, to the extent received or realized at
any time after payment in full of the principal of and interest on all Secured
Notes issued hereunder, as well as any other amounts remaining as part of or as
proceeds of the Indenture Estate after payment in full of the principal, of
Make-Whole Amount, if any, and interest on all such Secured Notes, shall be
distributed forthwith by the Indenture Trustee in the order of priority set
forth in Section 4.03, omitting clause "third" thereof. The Indenture Trustee
shall give prompt notice to the Owner Trust and each Holder of the receipt of
any moneys by the Indenture Trustee subject to the provisions of this Section
4.06.
SECTION 4.07. Payment Procedures. All amounts which are
------------------
distributable from time to time by the Indenture Trustee to the Owner Trust, the
Owner Participant or any Holder shall be paid by the Indenture Trustee in
immediately available funds promptly after such amounts become immediately
available to it, and the Indenture Trustee shall not be obligated to see to the
application of any such payment made by it. All payments made by the Indenture
Trustee to the Owner Trust or to the Owner Participant shall be made in the
manner and to the address set forth in Schedule 1 to the Participation Agreement
or to such
28
other address as may be specified from time to time by notice to the Indenture
Trustee from the Owner Trust or the Owner Participant.
SECTION 4.08. Application of Payments Under Parent Guaranty. All
---------------------------------------------
payments received by the Indenture Trustee pursuant to the Parent Guaranty shall
be distributed forthwith by the Indenture Trustee in the same order of priority,
and in the same manner, as it would have distributed the payment in respect of
which such payment under the Parent Guaranty was received.
ARTICLE V
COVENANTS OF OWNER TRUST AND THE OWNER TRUSTEES;
CERTAIN AGREEMENTS; INDENTURE EVENTS OF DEFAULT;
REMEDIES OF INDENTURE TRUSTEE
SECTION 5.01. Covenants of Owner Trust and the Managing Trustee;
--------------------------------------------------
Certain Agreements. (a) Subject to Section 2.02, the Owner Trust will duly and
------------------
punctually perform and observe all covenants and conditions to be performed and
observed by it pursuant to the terms of any Operative Document. Except as
permitted by this Indenture or the terms of any Operative Document, the Owner
Trust will take no action and will cooperate with the Indenture Trustee so as to
permit no action to be taken by others which will release, or which may be
construed as releasing, the Owner Trust or the Charterer from any of its, as the
case may be, obligations or liabilities under any Operative Document, or which
may result in the termination, amendment or modification, or impair the
validity, of any such Operative Document.
(b) If the Owner Trust has Actual Knowledge of any Indenture Event of
Default, Indenture Default, any failure on the part of the Charterer to make any
payment of Assigned Hire when due or Event of Loss, the Owner Trust will give
prompt written notice thereof to the Indenture Trustee, the Charterer and the
Owner Participant if such notice shall not already have been given to such
party. The notice shall set forth in reasonable detail the circumstances of
such default or loss known to the Owner Trust.
(c) At any time and from time to time, upon the reasonable request of
the Indenture Trustee, the Owner Trust shall promptly and duly execute and
deliver any and all such further instruments and documents as the Indenture
Trustee may deem necessary or desirable (and as shall be consistent with the
intent, purposes and provisions hereof) to perfect the Lien of this Indenture,
and upon delivery of the Vessel, the U.K. Lessor's Security Assignment and the
proceeds of the U.K. Lessor's Mortgage, to perfect or maintain the Lien of this
Indenture or to obtain for the Indenture Trustee the full benefit of the
specific rights and powers herein granted, conveyed or assigned, or which the
Owner Trust
29
may be or may hereafter be bound to convey or assign to the Indenture Trustee or
to facilitate the performance of the terms of this Indenture, or the filing,
registering or recording of this Indenture, including, without limitation, the
execution and delivery of any financing statement (and any continuation
statement with respect to any such financing statement) or any other similar
document specified in such instructions as may be necessary or desirable to
perfect or maintain the Lien of this Indenture.
(d) (i) The Owner Trust does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants that, except as provided in or
permitted by the other Operative Documents, it will not assign or pledge, so
long as this Indenture shall remain in effect and the Lien of this Indenture
shall not have been released pursuant to Section 6.03 hereof, any of the Owner
Trust's right, title or interest hereby assigned to anyone other than the
Indenture Trustee, and that the Owner Trust will not (other than in respect of
Excepted Payments), except as provided in or permitted by this Indenture or any
other Operative Document, (A) accept any payment from the Charterer, (B)
terminate or consent to the cancellation or surrender of the Charter or accept
any prepayment of Assigned Hire, or any portion thereof, under the Charter, (C)
enter into any agreement amending or supplementing any Operative Document, (D)
execute or grant any waiver or modification of, or consent under, the terms of
any Operative Document, (E) settle or compromise any claim arising under any
Operative Document, or (F) submit or consent to the submission of any dispute,
difference or other matter arising under or in respect of any Operative Document
to arbitration thereunder.
(ii) The Owner Trust does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants that, except as provided in or
permitted by any Specified U.K. Document or this Indenture, it will not assign
or pledge, so long as this Indenture shall remain in effect and the Lien of this
Indenture shall not have been released pursuant to Section 6.03 hereof, any of
the Owner Trust's right, title or interest under such Specified U.K. Documents
hereby assigned to anyone other than the Indenture Trustee, and that the Owner
Trust will not, except as provided in or permitted by this Indenture or such
Specified U.K. Document or unless any of the following actions is not materially
less favorable to the Indenture Trustee, as trustee for the Holders of the
Secured Notes, (A) enter into any agreement amending or supplementing any
Specified U.K. Document, (B) execute or grant any waiver or modification of, or
consent under, the terms of any Specified U.K. Document, (C) settle or
compromise any claim arising under any Specified U.K. Document, or (D) submit or
consent to the submission of any dispute, difference or other matter arising
under or in respect of any Specified U.K. Document to arbitration thereunder.
For purpose of this Indenture "Specified U.K. Documents" means the Head Lease,
the U.K. Lessor's Security Assignment, the Bank Guarantee, the U.K. Lessor's
Mortgage and the Lessee Support Agreement.
30
(e) The Owner Trust does hereby ratify and confirm the Charter, and
does hereby agree the Owner Trust will not, except as provided in or permitted
by this Indenture or the terms of any other Operative Document, take or omit to
take any action, the taking or omission of which might result in an alteration
or impairment of the Charter or any other Operative Document, or of any of the
rights created by the Charter or any Operative Document, or the assignment
hereunder or thereunder, as the case may be.
(f) The Managing Trustee, in its individual capacity and at its own
cost and expense, will promptly take such action as may be necessary to
discharge any Owner Trustee's Lien attributable to it on any of the Owner
Trust's estate, right, title or interest in the Trust Estate so pledged or
assigned or intended to be conveyed, pledged or assigned under this Indenture.
(g) Until the release of the security interest in the Indenture Estate
pursuant to Section 6.03, all payments of Assigned Hire shall be made directly
to the Indenture Trustee or in accordance with the Indenture Trustee's
instructions, and the Owner Trust shall give all notices as shall be required to
be given under each Operative Document to direct that such payments be made to
the Indenture Trustee and promptly upon receipt of any such amount, transfer
such amount to the Indenture Trustee for distribution pursuant to this
Indenture; provided, however, that, if an Indenture Event of Default shall have
occurred and is continuing, upon written notice from the Indenture Trustee to
the Charterer, all payments due or to become due under the Charter and the other
Operative Documents to the Owner Trust (other than Excepted Payments) shall be
made directly to the Indenture Trustee or in accordance with the Indenture
Trustee's instructions, and the Owner Trust shall (i) give all notices as shall
be required to be given under each Operative Document to direct that such
payments be made to the Indenture Trustee and (ii) promptly upon receipt of any
and all moneys from time to time received by it constituting part of the
Indenture Estate, transfer such amount to the Indenture Trustee for distribution
pursuant to this Indenture.
(h) An executed counterpart of each amendment or supplement to the
Trust Agreement shall be delivered within 20 Business Days after the execution
thereof to the Indenture Trustee; provided that any amendment or supplement
under which a successor trustee is appointed shall be mailed to the Indenture
Trustee within 10 days after the execution thereof. The Lien of this Indenture
shall not be affected by any amendment or supplement to the Trust Agreement or
by any other action taken under or in respect of the Trust Agreement. Without
the prior written consent of the Indenture Trustee, the Trust Agreement may not
in any event be terminated or revoked by the Owner Participant prior to the
termination of this Indenture. In the case of any appointment of a successor to
any Owner Trustee pursuant to the Trust Agreement or any merger, conversion,
consolidation or transfer of all or substantially all of the corporate trust
business of either Owner Trustee pursuant to the Trust Agreement, the applicable
successor Owner Trustee shall give prompt notice thereof to the Indenture
Trustee.
31
SECTION 5.02. Indenture Events of Default. An "Indenture Event of
--------------------------- ------------------
Default" means any of the following events (whatever the reason for such
-------
Indenture Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any
Governmental Rule):
(a) any Charter Event of Default (other than a Charter Event of
Default arising from the failure of the Charterer to make any payment of
Excess Hire or to make an Excepted Payment unless the Owner Trust shall
elect to make such failure a Charter Event of Default) shall have occurred
and be continuing; or
(b) any payment of principal of, Make-Whole Amount, if any, or
interest on any Secured Note shall not have been made when due and such
default shall continue unremedied for ten Business Days after the same
shall have become due and payable; or
(c) any failure by any of the Owner Trust, the Owner Participant or
the Managing Trustee, in their individual or trust capacities, as the case
may be, to perform or observe in any material respect any covenant or
agreement to be performed or observed by it under this Indenture or any
other Operative Document, (i) which failure shall continue for a period of
30 days after receipt by the Owner Trust, the Owner Participant or the
Managing Trustee of a notice from the Indenture Trustee or the Pass Through
Trustee specifying such failure and requiring it be remedied or (ii) which
failure, if such failure is remediable and the Owner Trust, the Owner
Participant or the Managing Trustee is diligently attempting to remedy such
failure, shall continue for a period of 180 days after such receipt of
written notice thereof; or
(d) any representation or warranty made by the Owner Trust, the Owner
Participant or the Managing Trustee pursuant to Sections 7 or 9, as the
case may be, of the Participation Agreement shall prove to have been
inaccurate in any material respect when made, unless such inaccurate
representation or warranty shall not be material to the recipient at the
time when the notice referred to below shall have been received by the
Owner Trust, the Owner Participant or the Managing Trustee, as the case may
be, or any material adverse impact thereof shall have been cured within 30
days after receipt by the Owner Trust, the Owner Participant or the
Managing Trustee, as the case may be, of a written notice thereof from the
Indenture Trustee; provided that if such material adverse impact is
remediable and the Owner Participant, Owner Trust or the Managing Trustee,
as the case may be, is diligently attempting to remedy such impact, the
Owner Participant, Owner Trust or Managing Trustee shall have 90 days after
such receipt of written notice thereof to remedy such material adverse
impact; or
32
(e) either of the Owner Trust or the Owner Participant shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of its or any substantial part of its property, or shall consent
to any such relief or to the appointment or taking possession by any such
official or agency in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall take any corporate action to authorize any of the
foregoing, or an involuntary case or other proceeding shall be commenced
against either of the Owner Trust or the Owner Participant seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official or agency of its or any substantial
part of its part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 90 days,
or if, under the provisions of any law providing for reorganization or
winding-up of corporations which may apply to the Owner Trust or the Owner
Participant, any court of competent jurisdiction shall assume jurisdiction,
custody or control of the Indenture Estate, the Owner Trust or the Owner
Participant or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished,
unstayed or unterminated for a period of 90 days.
SECTION 5.03. Certain Rights. (a) If the Charterer shall fail to
--------------
make any payment of Base Hire under the Charter when the same shall become due,
and if such failure of the Charterer to make such payment of Base Hire shall not
constitute the fourth consecutive such failure or the seventh or subsequent
cumulative such failure, then as long as no Indenture Event of Default (other
than arising from a Charter Event of Default not involving any failure to make
any payments to which the Indenture Trustee or any Loan Participant is entitled
hereunder when due) shall have occurred and be continuing, the Owner Trust or
the Owner Participant may (but need not), without consent or concurrence of the
Indenture Trustee or any Holder, pay, in the manner provided in Section 2.03 for
application in accordance with Section 4.01, to the Indenture Trustee, at any
time prior to the day which is the eleventh day subsequent to the expiration of
the grace period provided for in Article 21(1) of the Charter with respect to
the payment of Base Hire (and the Indenture Trustee and the Holders of the
Secured Notes shall not (without the prior written consent of the Owner Trust)
declare the Charter in default pursuant to Article 22 thereof or exercise any of
the rights, powers or remedies pursuant to Article 22 of the Charter or Section
5.04 hereof prior to the occurrence of such later date), an amount equal to the
full amount of such payment of Base Hire, together with any interest due thereon
on account of the delayed payment thereof to the date of such payment in
accordance with Section 2.03(c) hereof, and such payment by the Owner Trust or
the Owner Participant shall be deemed to cure, as of the date of such payment,
any Indenture Event of Default which arose from such failure of the Charterer
33
(including any Charter Event of Default arising from the Charterer's failure to
pay interest in respect of such overdue Base Hire for the period commencing on
the date of such payment), but such cure shall not relieve the Charterer of any
of its obligations. If the Charterer shall fail to perform or observe any
covenant, condition or agreement to be performed or observed by it under the
Charter or any other Charter Event of Default shall exist (other than the
failure to pay Base Hire), and if (but only if) the performance or observance of
such covenant, condition or agreement or the cure of such Charter Event of
Default can be effected by the payment of money alone (it being understood that
actions such as the obtaining of insurance can be so effected), then as long as
no other Indenture Event of Default (other than those arising from a Charter
Event of Default) shall have occurred and be continuing, the Owner Trust or the
Owner Participant may (but need not), without consent or concurrence of the
Indenture Trustee or any Holder, pay to the Indenture Trustee (or to such other
person as may be entitled to receive the same), at any time prior to the day
which is the later of (x) the eleventh day subsequent to notice of such failure
or such Charter Event of Default by the Indenture Trustee to the Owner Trust or
the Owner Participant and (y) the eleventh day subsequent to the expiration of
the grace period, if any, provided with respect to such failure or such Charter
Event of Default on the part of the Charterer in Article 21 of the Charter (and
the Indenture Trustee shall not (without the prior written consent of the Owner
Trust) declare the Charter in default pursuant to Article 22 thereof or exercise
any of the rights, powers or remedies pursuant to such Article 22 or Section
5.04 hereof prior to the occurrence of such later date), all sums necessary to
effect the performance or observance of such covenant or agreement of the
Charterer or to cure such Charter Event of Default, together with any interest
due thereon on account of the delayed payment thereof to the date of such
payment, and such payment by the Owner Trust or the Owner Participant shall be
deemed to cure as of the date of such payment any Indenture Event of Default
which arose from such failure of the Charterer or such Charter Event of Default
(including any Charter Event of Default arising from the Charterer's failure to
pay interest in respect of such overdue payment for the period commencing on the
date of such payment), but such cure shall not relieve the Charterer of any of
its obligations.
(b) To the extent of any payment made by the Owner Participant or the
Owner Trust pursuant to Section 5.03(a), the Owner Participant or the Owner
Trust, as the case may be, shall be subrogated to the rights of the Holders
hereunder to receive from the Indenture Trustee the payment of Assigned Hire or
other amount for which such payment was made by the Owner Participant or the
Owner Trust, as the case may be, and the Owner Participant or the Owner Trust,
as the case may be, shall be entitled to receive such payment from the Indenture
Trustee upon receipt thereof by the Indenture Trustee; provided, however, that
no such amount shall be paid to the Owner Participant or the Owner Trust, as the
case may be, unless all principal of and interest on the Secured Notes then due
and payable and any other amounts then due and payable under the Secured Notes
and this Indenture shall have been paid in full and no Indenture Default shall
have occurred and be continuing; provided that neither the Owner Participant nor
the Owner Trustee shall attempt to recover
34
any such amount paid by it on behalf of the Charterer pursuant to Section
5.03(a) except by demanding of the Charterer payment of such amount or by
commencing an action against the Charterer to require the payment of such
amount.
(c) Neither the Owner Trust nor the Owner Participant, upon exercising
cure rights under Section 5.03(a) or rights under Section 6.08(a)(iii) or under
Article 22(a) of the Charter, shall obtain any Lien on any part of the Indenture
Estate or Trust Estate on account of such payment for the costs and expenses
incurred in connection therewith, nor shall any claims of the Owner Trust or the
Owner Participant against the Charterer for the repayment thereof impair the
prior right and security interest of the Indenture Trustee in and to the
Indenture Estate or otherwise related to the Indenture Estate.
(d) If there shall occur an Indenture Event of Default pursuant to
Section 5.02(a) arising as a result of a failure by the Charterer to make any
payment of Assigned Hire when due, the Indenture Trustee shall so notify the
Owner Trust in writing promptly upon such occurrence.
SECTION 5.04. Remedies. (a) If an Indenture Event of Default shall
--------
have occurred and be continuing and so long as the same shall be unremedied,
then and in every such case the Indenture Trustee, subject to Sections 5.03,
5.04(d), 5.05, 5.09 and 6.08 and the rights of the U.K. Lessor, may exercise any
or all of the rights and powers and pursue any and all of the remedies herein
provided or available under applicable law; provided, however, the Indenture
Trustee must give the Owner Trust at least ten Business Days' (or five Business
Days in the case of acceleration of the Secured Notes other than an automatic
acceleration of the Secured Notes as provided in Section 5.04(c)) prior written
notice of its intention to exercise remedies pursuant to this Section 5.04 (it
being understood that such notice may be given concurrently with any notice of
default given hereunder or under the Charter and prior to the expiration of any
applicable grace periods). Subject to the provisions in this Indenture, upon
the occurrence and during the continuance of an Indenture Event of Default, the
Indenture Trustee may exercise, subject to Sections 5.03(a), 5.05, 5.09 and
6.08, all rights and remedies of the Owner Trust to the exclusion of the Owner
Trust under the Charter (other than those rights and remedies to the extent
relating to Excepted Payments), including, without limitation, the right to take
possession of all or any part of the Indenture Estate and exclude the Owner
Trust and all Persons claiming under the Owner Trust (excluding the Charterer if
a Charter Event of Default has not occurred and is not continuing) wholly or
partly therefrom. In addition to and without limiting the foregoing, the
Indenture Trustee, upon at least 25 days' prior written notice to the Owner
Participant and the Owner Trust, may, subject to the rights of the U.K. Lessor,
invoke and exercise the power of sale and sell any or all of the Indenture
Estate in the manner required by law at public auction, or in any other manner
which shall be in accordance with applicable law, or, in lieu of sale pursuant
to the power of sale, the Indenture Estate may be foreclosed, and the Indenture
Trustee has and may exercise all rights and remedies of a secured party under
the
35
Uniform Commercial Code as in effect in any applicable jurisdiction; provided
that (i) notwithstanding any provision herein to the contrary, the Indenture
Trustee shall not sell, assign, transfer or deliver any of the Indenture Estate
or take possession of the Indenture Estate unless the Secured Notes shall have
been accelerated pursuant to Section 5.04(b) or 5.04(c) and (ii) if an Indenture
Event of Default has occurred and is continuing solely by virtue of one or more
Charter Events of Default (at a time when no other Indenture Events of Default
shall have occurred and be continuing), the Indenture Trustee shall not exercise
foreclosure remedies under this Indenture without declaring the Charter to be in
default and exercising one or more material remedies seeking to terminate the
Charter, unless exercising such remedies under the Charter shall be prohibited
by law, governmental authority or court order, in which case the Indenture
Trustee shall not exercise foreclosure remedies under the Indenture until the
later of (i) the expiration of a period of sixty (60) days from the commencement
of such prohibition and (ii) the expiration of an additional period commencing
on the day immediately following the expiration of such 60-day period and ending
on the earlier of (x) the 180th day after the relevant stay or prohibition is
imposed, (y) the occurrence of any additional Indenture Event of Default during
such additional period and (z) rejection of the Charter; provided that such
extended period will not apply unless, on the 60th day following the date upon
which such stay or prohibition becomes effective, all Indenture Events of
Default theretofore existing have been cured (except to the extent arising from
the bankruptcy or similar proceeding giving rise to the applicable stay or
similar prohibition) and to the extent the Owner Trust, as Owner under the
Charter, exercises its right to cure any Charter Defaults or Charter Events of
Default during such 180-day period, the exercise of such rights will not limit
the cure rights otherwise available to the Owner Trust under Section 5.03(a).
The Indenture Trustee shall notify the Owner Trust, the Owner Participant and
the Charterer as soon as is reasonably practicable after its commencement of the
exercise of any remedy pursuant to this Section 5.04.
(b) If an Indenture Event of Default (other than an Indenture Event of
Default specified in Section 5.02(e) or an Indenture Event of Default of the
type specified in Section 5.02(a) which arises as a result of any Charter Event
of Default as is specified in Article 21(7) of the Charter) shall have occurred
and be continuing, then, subject to Sections 5.03, 6.02 and 6.08, the Indenture
Trustee may at any time, by five days' written notice to the Owner Trust,
declare all (but not less than all) of the Secured Notes Outstanding to be due
and payable. Upon such declaration, the unpaid principal of all Secured Notes
then Outstanding, together with accrued but unpaid interest thereon, and any
other amounts due thereunder, shall immediately become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.
(c) If an Indenture Event of Default of the type specified in Section
5.02(e), or an Indenture Event of Default of the type specified in Section
5.02(a) which arises as a result of any Charter Event of Default specified in
Article 21(7) of the Charter shall have occurred and be continuing, the
principal of all Secured Notes then Outstanding,
36
together with accrued but unpaid interest thereon and any other amounts due
thereunder, shall become and be due and payable automatically, without
declaration, notice, demand, or any other action on the part of the Indenture
Trustee or any Holder, all of which are hereby waived. Each of Section 5.04(b)
and this Section 5.04(c), however, is subject to the condition that, if at any
time after the principal of the Secured Notes shall have become due and payable
upon a declared or automatic acceleration thereof as provided herein, and before
any judgment or decree for the payment of the money so due, or any portion
thereof, shall be entered, all overdue payments of interest upon the Secured
Notes, the Make-Whole Amount, if any, and all other amounts payable under the
Secured Notes (except the principal of the Secured Notes which by such
acceleration shall have become payable) shall have been duly paid, and every
other Indenture Event of Default with respect to any covenant or provision of
this Indenture shall have been cured, then in every such case a Majority in
Interest of Holders of Notes, by written instrument filed with the Indenture
Trustee, may (but shall not be obligated to) rescind and annul such declared or
automatic acceleration and its consequences; but no such rescission or annulment
shall extend to or affect any subsequent Event of Default or impair any right
consequent thereon.
(d) Notwithstanding any provision in any document or instruction that
purports to require the Indenture Trustee to acquire title to any or all of the
Indenture Estate upon foreclosure, or pursuant to instructions, the Indenture
Trustee shall not be obligated to acquire any such title unless: (i) the
Indenture Trustee is provided with such security or indemnity as it shall deem
satisfactory to it, (ii) such acquisition of title complies with all applicable
Operative Documents, laws, rules and regulations, which shall be evidenced by an
opinion of counsel to such effect in form and substance satisfactory to the
Indenture Trustee and (iii) the Indenture Trustee shall have obtained such
executed certificates, instruments or other documents, in accordance with its
reasonable inquiries or requests.
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate. (a)
-------------------------------------------------
The Owner Trust agrees that, if an Indenture Event of Default shall have
occurred and be continuing and the Indenture Trustee shall be entitled to
exercise remedies hereunder as provided in Section 5.04, the Indenture Trustee
may, subject to the rights of the U.K. Lessor, take possession of all or any
part of the Indenture Estate and may exclude the Owner Trust, and all Persons
claiming under the Owner Trust (excluding the Charterer if a Charter Event of
Default shall not have occurred and be continuing) wholly or partly therefrom;
provided, however, that at least ten Business Days' prior notice of such taking
of possession shall be given to the Owner Trust. If an Indenture Event of
Default shall have occurred and be continuing and the Indenture Trustee shall be
entitled to exercise remedies hereunder as provided in Section 5.04, at the
request of the Indenture Trustee, the Owner Trust shall promptly execute and
deliver to the Indenture Trustee such instruments of title and other documents
as the Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or any agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or
37
any part of the Indenture Estate to which the Indenture Trustee shall at the
time be entitled hereunder. If the Owner Trust shall for any reason fail to
execute and deliver such instruments and documents after such request by the
Indenture Trustee, the Indenture Trustee may (i) obtain a judgment conferring on
the Indenture Trustee the right to immediate possession of any property
comprising a portion of the Indenture Estate and requiring the Owner Trust to
execute and deliver such instruments and documents to the Indenture Trustee, or
(ii) pursue all or part of such property wherever it may be found, and the
Indenture Trustee may enter any of the premises where such property or any
portion thereof may be or is supposed to be and search for such property. All
expenses of obtaining such judgment or of pursuing, searching for and taking
such property shall, until paid, be secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may
make, from time to time and at the expense of the Indenture Estate, such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of the Indenture Estate as it may deem proper.
In each such case, the Indenture Trustee shall have the right to maintain, use,
operate, store, lease, control or manage the Indenture Estate and to exercise
all rights and power of the Owner Trust relating to the Indenture Estate as the
Indenture Trustee shall deem to be in the best interest of the Holders. The
Indenture Trustee shall be entitled to collect and receive directly all tolls,
rents (including Hire), revenue, issues, income, products and profits of the
Indenture Estate and every part thereof, other than Excepted Payments. Such
tolls, rents (including Hire), revenues, issues, income, products and profits
shall be applied (i) to pay the expenses of the use, operation, storage,
leasing, control, management or disposition of the Indenture Estate, (ii) to pay
the expense of all maintenance, repairs, replacements, alterations, additions
and improvements, (iii) to make all payments which the Indenture Trustee may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Indenture Estate or any portion thereof, including
without limitation the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of the Owner
Trust, and (iv) to pay amounts owing in respect of the Secured Notes in
accordance with the provisions thereof and hereof and to make all other payments
which the Indenture Trustee may be required or authorized to make under any
provision of this Indenture, as well as just and reasonable compensation for the
services of the Indenture Trustee and of all Persons properly engaged and
employed by the Indenture Trustee.
(c) The Indenture Trustee, the Owner Trust, the Owner Participant or
any Holder may be a purchaser of the Indenture Estate or any portion thereof or
any interest therein at any sale thereof, whether pursuant to foreclosure or
power of sale or otherwise. The Indenture Trustee may apply against the
purchase price therefor the amount then due to it hereunder or under any of the
Secured Notes secured hereby and any Holder may apply against the purchase price
therefor the amount then due to it hereunder or under the Secured Notes held by
such Holder, to the extent of such portion of the purchase price as it would
38
have received had it been entitled to share in any distribution thereof. The
Indenture Trustee or any Holder or any nominee of any such Holder shall acquire,
upon any such purchase, good title to the property so purchased, free of the
Lien of this Indenture and, to the extent permitted by applicable law, free of
all rights of redemption in the Owner Trust in respect of the property so
purchased.
(d) Any sale or other conveyance of any of the Indenture Estate by the
Indenture Trustee made pursuant to the terms of this Indenture or the Charter
shall bind the Holders, Owner Trust and the Owner Participant and shall be
effective to transfer or convey all right, title and interest of the Indenture
Trustee, the Owner Trust, the Holders and the Owner Participant in and to such
Indenture Estate or portion thereof, as the case may be. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance, or as to the application of
any sale or other proceeds with respect thereto by the Indenture Trustee. In
the event of any such sale, the Owner Trust shall execute any and all such bills
of sale and other documents, and perform and do all other acts and things
requested by the Indenture Trustee in order to permit continuation of such sale
and to effectuate the transfer or conveyance referred to in the first sentence
of this Section 5.05(d). The Owner Trust shall ratify and confirm any such sale
or sales by executing and delivering to the Indenture Trustee or to such
purchaser or purchasers all instruments as may reasonably be requested for such
purpose. Any such sale or sales made hereunder shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of the Owner Trust in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against the Owner Trust and
against any and all persons claiming or who may claim the same, or any part
thereof from, through or under the Owner Trust. Upon any sale or other
disposition of the Indenture Estate by the Indenture Trustee, the Indenture
Trustee will promptly account in writing, in reasonable detail, to the Owner
Trust for the amount of such sale, the costs and expenses incurred in connection
therewith and any surplus proceeds.
(e) The Indenture Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any successor
or nominee thereof), at any time after an Indenture Event of Default either
before or after declaring due and payable the principal of all Secured Notes
then Outstanding, together with accrued but unpaid interest thereon and any
other amounts due thereunder, for all or any portion of the Indenture Estate,
whether such receivership be incidental to a proposed sale of the Indenture
Estate or the taking of possession thereof or otherwise, and the Owner Trust
hereby consents to the appointment of such a receiver, and agrees that it will
not oppose any such appointment. Any receiver appointed for all or any portion
of the Indenture Estate shall be entitled in addition to any powers available
under applicable law, to exercise all the rights and powers of the Indenture
Trustee with respect to the Indenture Estate.
39
(f) To the extent now or at any time hereafter enforceable under
applicable law, the Owner Trust covenants that it will not at any time insist
upon or plead, or in any manner whatsoever claim or take any benefit or
advantage of any stay, extension, moratorium, any exemption from execution or
sale or other similar law or from any law now or hereafter in force providing
for the valuation or appraisement of the Indenture Estate or any part thereof,
prior to any sale or sales thereof to be made pursuant to any provision herein
contained, or prior to any applicable decree, judgment or order of any court of
competent jurisdiction; nor, after such sale or sales, claim or exercise any
right under any statute now or hereafter made or enacted by any state or any
right to have a portion of the Indenture Estate or the security for the Secured
Notes marshalled or otherwise redeem the property so sold or any part thereof,
and hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Owner Trust acquiring any interest in
or title to the Indenture Estate or any part thereof subsequent to the date of
this Indenture, all benefit and advantage of any such law or laws, and covenants
that it will not invoke or use any such law or laws, but will suffer and permit
the execution of every such power as though no such law or laws had been made or
enacted. Nothing in this Section 5.05(f) shall be deemed to be a waiver by the
Owner Trust of its rights under Section 5.03 hereof.
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Secured Notes or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Indenture shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
(g) The Indenture Trustee may adjourn from time to time any sale to be
made under or by virtue of this Indenture for such sale or for such adjourned
sale or sales, and, except as otherwise provided by any applicable provision of
law, the Indenture Trustee, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.
(h) Any recovery of any judgment by the Indenture Trustee under the
Secured Notes and any levy of any execution under any such judgment upon the
Indenture Estate shall not affect in any manner or to any extent the security
title and security interest conveyed hereby upon the Indenture Estate or any
part thereof, or any conveyances, powers, rights and remedies of the Indenture
Trustee hereunder, but such conveyances, powers, rights and remedies shall
continue unimpaired as before.
(i) Notwithstanding anything contained herein, so long as any Pass
Through Trustee is a registered Holder, the Indenture Trustee is not authorized
or
40
empowered to acquire title to all or any portion of the Indenture Estate or take
any action with respect to all or any portion of the Indenture Estate so
acquired by it if such acquisition or action would cause the related Pass
Through Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 5.06. Remedies Cumulative. Each and every right, power and
-------------------
remedy provided the Indenture Trustee specifically or otherwise in this
Indenture shall be cumulative and shall be in addition to every right, power and
remedy herein specifically provided or now or hereafter existing at law, in
equity or otherwise. Each and every such right, power and remedy may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Indenture Trustee, and the exercise or the beginning of the
exercise of any such right, power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other right,
power or remedy. No delay or omission by the Indenture Trustee in the exercise
of any right or power or in the pursuit of any remedy shall impair any such
right, power or remedy, or be construed to be a waiver of any Indenture Event of
Default or to be an acquiescence therein.
SECTION 5.07. Discontinuance of Proceedings. In case the Indenture
-----------------------------
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Indenture Trustee, then and in every such
case the Owner Trust, the Indenture Trustee and the Charterer shall, subject to
any determination in such proceeding, be restored to their former positions and
rights hereunder with respect to the Indenture Estate, and all right, powers and
remedies of the Indenture Trustee shall continue as if no such proceeding had
been instituted.
SECTION 5.08. Waiver of Past Defaults. Upon written instruction of a
-----------------------
Majority in Interest of Holders of Notes, the Indenture Trustee shall waive any
Indenture Event of Default specified in such instruction and its consequences
and, upon any such waiver, such Indenture Event of Default shall cease to exist
for every purpose of this Indenture; provided, however, that no such waiver
shall extend to any subsequent or other Indenture Event of Default or impair any
right or consequence thereof; and provided further, however, that in the absence
of the written instruction of the Holders of all Secured Notes then Outstanding,
the Indenture Trustee shall not waive any Indenture Event of Default arising
from a default (i) in the payment of the principal of or interest on, or other
amounts due under, any Secured Note then Outstanding, or (ii) in respect of a
covenant or provision hereof which, pursuant to the terms of Article IX, cannot
be modified or amended without the consent of each Holder of a Secured Note then
Outstanding.
SECTION 5.09. No Action Contrary to Certain Third Party Rights.
------------------------------------------------
Notwithstanding any other provision of this Indenture (including, without
limitation, Section
41
5.04 and 5.05 hereof) or any Operative Document, unless a Charter Event of
Default shall have occurred and be continuing and the Charter shall have been
declared to be in default pursuant to Article 22 thereof, the Indenture Trustee
shall not take or cause to be taken any action contrary to the Charterer's
rights under the Charter, including without limitation the rights of the
Charterer under Article 7 thereof.
SECTION 5.10. Rights of Holders of Secured Notes. Notwithstanding
----------------------------------
any provision herein (including Section 5.11) to the contrary, the Holder of a
Secured Note shall have the absolute and unconditional right to receive payment
from the Indenture Estate of the principal of and interest on such Secured Note
on the dates and as specified in such Secured Note, and to institute suit
against the Owner Trust for the enforcement of any such payment, subject to
Section 2.02, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.11. Limitation on Suits by Holders. A Holder may pursue a
------------------------------
remedy under this Indenture or under a Secured Note only if:
(i) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default under this Indenture;
(ii) the Holders of at least 25 percent (25%) of the Outstanding
principal amount of the Secured Notes instruct the Indenture Trustee to
pursue the remedy;
(iii) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or
expense to be, or which may be, incurred by the Indenture Trustee in
pursuing the remedy;
(iv) the Indenture Trustee does not comply with the request within 60
days after receipt of the instructions and the offer of indemnity; and
(v) during such 60-day period, a Majority in Interest of Holders do
not give the Indenture Trustee an instruction inconsistent with the
request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
42
ARTICLE VI
DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.01. Certain Actions. If the Indenture Trustee shall have
---------------
Actual Knowledge of any Indenture Event of Default or any Indenture Default or
any failure on the part of the Charterer to make any payment of Assigned Hire
when due or any Event of Loss or other material fact relating to the Indenture
Estate, the Indenture Trustee shall (a) give prompt telephonic notice (promptly
confirmed in writing) to the Owner Trust, the Owner Participant and the
Charterer and (b) within 90 days after obtaining such Actual Knowledge, mail to
each Holder notice of any such Indenture Event of Default unless, in each case,
such Indenture Event of Default has been remedied before the giving of such
notice and the Indenture Trustee has Actual Knowledge of such remedy; provided,
however, that the failure by the Indenture Trustee to provide such notice shall
not invalidate any actions subsequently taken by the Indenture Trustee in
connection with such Indenture Event of Default. Except in the case of a
default in the payment of the principal or interest on any Secured Note, the
Indenture Trustee shall be protected in withholding the notice required under
clause (b) above if and so long as Responsible Officers of the Indenture Trustee
in good faith determine that withholding such notice is in the interest of the
Holders.
SECTION 6.02. Action Upon Instructions. (a) The Indenture Trustee
------------------------
shall, upon the written instruction at any time and from time to time of a
Majority in Interest of Holders of Notes, give such notice, consent or direction
or exercise such right, remedy or power hereunder or under the Charter or any
other agreement constituting part of the Indenture Estate as shall be specified
in such instruction; provided, however, that nothing set forth in this Section
6.02(a) shall entitle the Holders to cause the Indenture Trustee to give any
notice or exercise any right, power or remedy that is not elsewhere authorized
by, or is otherwise restricted or prohibited by, this Indenture or any other
Operative Document. If the Indenture Trustee shall not have received
instructions as above provided within 20 days after mailing of the notice
pursuant to Section 6.01 to the Holders, the Indenture Trustee may take such
action, or refrain from taking such action, but shall be under no duty to take
or refrain from taking any action, with respect to such Indenture Event of
Default, Event of Loss or material fact as it shall determine to be advisable
and in the best interest of the Holders. If the Indenture Trustee receives any
instructions after the expiration of the aforementioned 20-day period, the
Indenture Trustee shall use its best efforts to conform any action being taken
to comply with those instructions.
(b) The Indenture Trustee shall not consent to the assignment by the
Charterer of all or any material portion of its right, title and interest in, to
and under the Charter, except (i) with respect to an assignment permitted under
Section 20(c) of the Charter or (ii) upon the written instruction at any time
and from time to time of a Majority in Interest of Holders of Notes. Nothing
set forth herein shall be construed to permit such
43
assignment without the consent of the Owner Trust or to adversely affect any
right of the Owner Trust.
SECTION 6.03. Release of Lien of Indenture. (a) Release of
---------------------------- ----------
Indenture Estate. Upon satisfaction of the conditions for termination of this
----------------
Indenture set forth in Section 10.01, the Lien of this Indenture on the
Indenture Estate shall terminate and the Indenture Trustee, upon the written
request of the Owner Trust, shall execute and deliver to, or as directed by, the
Owner Trust, all appropriate instruments (in due form for recording or filing)
releasing the Indenture Estate from the Lien of this Indenture, and the
Indenture Trustee shall pay all moneys or other properties or proceeds held by
it under this Indenture to the Owner Trust and shall give notice to the
Charterer of such payment. The reasonable cost and expense associated with any
action taken by the Indenture Trustee pursuant to the provisions of this Section
6.03(a) shall be borne by the Owner Trust.
(b) Release of the Vessel Interest upon Transfer. Upon any transfer
--------------------------------------------
by the Owner Trust of the Vessel Interest pursuant to Article 18 or 23 of the
Charter or any retention by the Owner Trust of the Vessel Interest pursuant to
Article 18 of the Charter and receipt by the Indenture Trustee of all amounts of
Hire therefor that constituted a part of the Indenture Estate due and payable by
the Charterer and the concurrent redemption of Secured Notes as set forth in
Sections 3.02, 3.03 and 4.02 and the payment of any other amounts then due and
owing hereunder, the Lien of the Indenture Estate shall terminate and the
Indenture Trustee, upon the written request of the Owner Trust or Charterer,
shall execute and deliver to, or as directed by, the Owner Trust or Charterer,
all appropriate instruments (in due form for recording or filing), releasing the
Vessel Interest and all other property relating thereto and then constituting a
portion of the Indenture Estate, as the case may be, from the Lien of this
Indenture. The reasonable cost and expense associated with any action taken by
the Indenture Trustee pursuant to the provisions of this Section 6.03(b) shall
be borne by the Owner Trust.
(c) Release of Lien upon Full Payment of Secured Notes. Upon payment
--------------------------------------------------
in full of the principal of and interest on and all other amounts due and
payable under the Secured Notes, and all other amounts due and payable to any
Holder or the Indenture Trustee hereunder or under any other Operative Document,
the lien of the Indenture Estate shall terminate and the Indenture Trustee, upon
the written request of the Owner Trust, shall execute and deliver to, or as
directed by, the Owner Trust, all appropriate instruments (in due form for
recording or filing) releasing the Vessel Interest and all other property
relating thereto and then constituting a portion of the Indenture Estate from
the Lien of this Indenture. The cost and expense associated with any action
taken by the Indenture Trustee pursuant to the provisions of this Section
6.03(c) shall be borne by the Owner Trust
(d) Disposition, Substitution and Release of Vessel Included in the
---------------------------------------------------------------
Indenture Estate During Continuation of Charter. So long as the Charter is in
-----------------------------------------------
effect, any
44
Alterations, Modifications and improvements in and additions to the Vessel
shall, subject to the Head Lease, become subject to the Lien of this Indenture
and be leased to the Charterer under the Charter; provided that, to the extent
--------
permitted by and as provided in the Head Lease and the Charter, the Charterer
shall have the right, at any time and from time to time, without any release
from or consent by the Owner Trustee or the Indenture Trustee or any other
Person, to remove and/or replace any item of property constituting part of the
Vessel and to make alterations, improvements and Modifications in, and
additions to, the Vessel to the extent set forth in the Head Lease and the
Charter. Each of the Indenture Trustee and the Owner Trustee agrees that, to
the extent permitted by and as provided in the Head Lease and the Charter, title
to any such removed or replaced item of property, shall vest in the Charterer.
The Indenture Trustee shall from time to time execute an appropriate written
instrument or instruments to confirm the release of the security interest of the
Indenture Trustee in any such replaced item of property, as provided in this
Section 6.03(d) in each case upon receipt by the Indenture Trustee of a request
of the Charterer stating that said action was duly taken by the Charterer in
conformity with this Section 6.03(d) and that the execution of such written
instrument or instruments is appropriate to evidence such release of a security
interest under this Section 6.03(d). The reasonable cost and expense (including
reasonable legal fees and expenses) associated with any action taken by the
Indenture Trustee pursuant to the provisions of this Section 6.03(d) shall be
borne by the Charterer.
SECTION 6.04. Indemnification. The Indenture Trustee shall not be
---------------
required to take any action or refrain from taking any action instructed to be
taken or refrained from being taken pursuant to Section 6.02 or under Article V
unless the Indenture Trustee shall have been indemnified to the Indenture
Trustee's reasonable satisfaction against any liability (including, without
limitation, environmental liability), cost or expense (including, without
limitation, the reasonable fees and expenses of counsel) which may be incurred
in connection therewith, other than any such liability, cost or expense which
results from the willful misconduct or gross negligence of the Indenture Trustee
and for the failure of the Indenture Trustee to exercise ordinary care in
distributing funds in accordance with the terms of the Operative Documents.
Except with respect to actions required by the first sentence of Section 6.01
hereof, the Indenture Trustee shall be under no obligation to take any action
under this Indenture and nothing contained in this Indenture shall require the
Indenture Trustee to expend or risk the Indenture Trustee's own funds or
otherwise incur any financial liability or any other liability (including,
without limitation, environmental liability) in the performance of any of the
Indenture Trustee's duties hereunder or in the exercise of any of the Indenture
Trustee's rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. The Indenture Trustee shall not be
required to take any action under Section 6.02 or Article V, nor shall any other
provision of this Indenture be deemed to impose a duty on the Indenture Trustee
to take any action, if such Indenture Trustee shall have reasonably determined
or been advised by its counsel that such action is contrary to the terms hereof
or of any other Operative Document, or is contrary to applicable law.
45
SECTION 6.05. No Implied Duties. No implied duties or obligations of
-----------------
the Indenture Trustee shall be read into this Indenture.
SECTION 6.06. Duties to Remove Certain Liens. The Indenture Trustee,
------------------------------
in its individual capacity, shall comply with Section 12.4(a) of the
Participation Agreement.
SECTION 6.07. No Action Except Under Operative Documents or
---------------------------------------------
Instructions. The Owner Trust and the Indenture Trustee agree that they will
------------
not use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Vessel Interest or any other part of the Indenture Estate, except
(a) in accordance with the terms of the Charter or the other Operative Documents
or the U.K. Documents or (b) in accordance with the powers granted to, or the
authority conferred upon, the Owner Trust and the Indenture Trustee pursuant to
the express terms of this Indenture and the Trust Agreement.
SECTION 6.08. Certain Rights of the Owner Trust and the Owner
-----------------------------------------------
Participant. Notwithstanding any provision in this Indenture to the contrary:
-----------
(a) each of the Owner Trust and the Owner Participant shall have the
right, to the exclusion of the Indenture Trustee, whether or not an
Indenture Event of Default is continuing and whether or not the Indenture
Trustee has foreclosed on the Lien of the Indenture, (i) to receive
Excepted Payments, (ii) to demand, collect, ▇▇▇ for or waive any notice of
default with respect to Excepted Payments and (iii) to enforce the payment
of Excepted Payments due and payable to it by appropriate judicial
proceedings and to exercise other remedies as provided under any Operative
Document to the extent and with respect to any portion of the Indenture
Estate which shall have been released pursuant to the terms of this
Indenture; provided that the rights referred to in this Section
6.08(a)(iii) shall not be deemed to include the exercise of any remedies
provided for in Article 22 of the Charter other than the right to proceed
by appropriate court action or actions, either at law or in equity, to
enforce performance by the Charterer of the applicable covenants or to
recover damages for breach thereof;
(b) at all times prior to the foreclosure of the Lien of the
Indenture, whether or not an Indenture Event of Default is continuing, each
of the Owner Trust and the Owner Participant shall have the right, but not
to the exclusion of the Indenture Trustee, (i) to receive from the
Charterer all notices, financial statements, certificates, opinions of
counsel and other documents and information which the Charterer is
permitted or required to give or furnish to the Owner Trust or the Owner
Participant pursuant to the terms of any Operative Document, (ii) to retain
all rights with respect to liability insurance which Article 16 of the
Charter specifically confers upon the Owner Trust or the Owner Participant,
or other insurance under Article 16 of the Charter purchased for the
benefit of the Owner Trust or the Owner Participant
46
(subject, however to the provisions of the definition of "Excepted
Payments") and (iii) to exercise inspection rights pursuant to Article 11.6
of the Participation Agreement and Article 11(b) of the Charter;
(c) so long as no Indenture Event of Default shall have occurred and
be continuing, the Owner Trust shall have the right, to the exclusion of
the Indenture Trustee, to adjust Bareboat Hire other than Assigned Hire;
and
(d) so long as no Indenture Event of Default shall have occurred and
be continuing (subject to Section 9.02) and subject to Section 5.02(d), the
Owner Trust shall retain (to the exclusion of the Indenture Trustee) (i)
all rights of the "Owner" under the Charter, other than the Indenture
Trustee's right to receive Assigned Hire and other as set forth in (a), (b)
or (c) of this Section 6.08, (ii) all rights of the "Lessee" under the Head
Lease, (iii) all rights under the Specified U.K. Documents.
SECTION 6.09. Filing of Financing and Continuation Statements. The
-----------------------------------------------
Indenture Trustee shall, at the expense of the Owner Trust, execute and file any
continuation or similar statement or document delivered to it by the Owner Trust
or the Charterer in a form reasonably satisfactory to the Indenture Trustee and
proper for filing.
SECTION 6.10. Publishing of Notices. The Indenture Trustee will
---------------------
furnish to the Owner Trust and the Owner Participant, promptly upon receipt
thereof, a duplicate or copy of each report, notice, request, demand,
instruction, certificate, financial statement or other instrument furnished to
the Indenture Trustee hereunder or under any other Operative Document.
SECTION 6.11. Taxes; Withholding; Information Reporting. The
-----------------------------------------
Indenture Trustee shall exclude and withhold from each distribution of principal
and interest and other amounts due hereunder or under the Secured Notes any and
all withholding taxes applicable thereto as required by law. The Indenture
Trustee agrees (a) to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable in respect of the Secured
Notes or otherwise due hereunder, to withhold such taxes or charges and timely
pay the same to the appropriate authority in the name of and on behalf of the
Loan Participants, (b) that it will file any necessary withholding tax returns
or statements when due and (c) that, as promptly as possible after the payment
of such withheld amounts, it will deliver to each Loan Participant appropriate
documentation showing the payment of such withheld amounts, together with such
additional documentary evidence as such Loan Participants may reasonably request
from time to time. The Indenture Trustee agrees to file any other information
reports as it may be required to file under United States law. No withholding
or action with respect thereto shall constitute or give rise to any Indenture
Event of Default or any other claims against the Owner Participant or the Owner
Trust. Any tax withheld by the
47
Indenture Trustee pursuant to this Section 6.11 shall be deemed for all purposes
of this Indenture and the Secured Notes to have been paid to the Holder with
respect to which such tax was withheld.
ARTICLE VII
THE INDENTURE TRUSTEE AND THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties. The Indenture Trustee
-------------------------------
accepts the duties hereby created and applicable to it and agrees to perform the
same upon the terms and conditions set forth in this Indenture and the
Participation Agreement. The Indenture Trustee further agrees to receive and
disburse all moneys constituting part of the Indenture Estate in accordance with
the terms hereof. The Indenture Trustee shall not be answerable or accountable
in its individual capacity under any circumstances, except (a) for its willful
misconduct or gross negligence, (b) for its failure to exercise reasonable care
in safeguarding the security held by it pursuant to the terms hereof, (c) in the
case of the inaccuracy of any representations or warranties made by the
Indenture Trustee in its individual capacity and contained in the Participation
Agreement or any other Operative Document or referred to by reference in Section
7.03 hereof, (d) as provided in Sections 2.03 and 6.06, (e) for any Tax based on
or measured by any fees, commissions or compensation received by it for acting
as trustee hereunder or (f) except as otherwise expressly provided herein for
its failure to use reasonable care in disbursing funds in accordance with the
terms hereof.
SECTION 7.02. Absence of Duties Except as Specified. Except in
-------------------------------------
accordance with written instructions pursuant to Section 6.01 or 6.02, and
except as provided in, and without limiting the generality of, Sections 6.04,
6.05, 6.06 and 6.07, the Indenture Trustee shall have no duty (a) to record or
file the Charter, this Indenture, the Ship Mortgage required by Section 3.04, if
applicable, or any other document, or to maintain any such recording or filing,
or to rerecord or refile any such document, (b) to effect or maintain any such
insurance, whether or not the Charterer shall be in default with respect
thereto, (c) to discharge any Lien of any kind against any part of the Trust
Estate or the Indenture Estate, or (d) to inspect the Vessel at any time, or to
ascertain or inquire as to the performance or observance of any of the
Charterer's covenants pursuant to the terms of the Charter.
SECTION 7.03. No Representations or Warranties. NONE OF THE MANAGING
--------------------------------
TRUSTEE (IN ITS INDIVIDUAL OR TRUST CAPACITY), THE OWNER TRUST OR THE INDENTURE
TRUSTEE (IN ITS INDIVIDUAL OR TRUST CAPACITY) MAKES (a) ANY REPRESENTATION OR
WARRANTY, WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AS TO THE VALUE, COMPLIANCE
48
WITH SPECIFICATIONS, DURABILITY, OPERATION, CONSTRUCTION, PERFORMANCE, DESIGN OR
CONDITION OF THE VESSEL OR ANY PART THEREOF, THE MERCHANTABILITY THEREOF OR THE
FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE VESSEL OR ANY COMPONENT
OF THE VESSEL, THE QUALITY OF THE MATERIALS OR WORKMANSHIP THEREOF OR CONFORMITY
THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE VESSEL, OR ANY COMPONENT OF
THE VESSEL, or (b) any representation or warranty as to the validity, legality
or enforceability of this Indenture, any of the other Operative Documents or the
Secured Notes, or as to the correctness of any statement contained in any
thereof, except as set forth in Sections 9 and 10 of the Participation Agreement
and Section 7.4 of the Trust Agreement.
SECTION 7.04. No Segregation of Moneys; No Interest; Investments.
--------------------------------------------------
Any moneys paid to or retained by the Indenture Trustee pursuant to any
provision hereof and not then required to be distributed to the Holders, the
Charterer or the Owner Trust shall be deposited in a separate, interest bearing
cash collateral account; provided that any payments received or applied
hereunder by the Indenture Trustee shall be accounted for by the Indenture
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof. Any amounts held by the Indenture
Trustee pursuant to the express terms of this Indenture or any other Operative
Document shall be invested and reinvested by the Indenture Trustee from time to
time in Permitted Investments at the direction of (i) the Charterer if such
amounts would be payable to the Charterer upon satisfaction of any applicable
conditions; or (ii) the Owner Participant in the case of the remaining portion
of such amounts; provided, however, that in the event there shall be continuing
any Indenture Event of Default, such directions may be given exclusively by a
Majority in Interest of Holders of Notes provided further, that in the event the
Indenture Trustee shall not have received such written direction from such
appropriate party, such amounts shall be invested in investments of the type
described in clause (iv) of the definition of Permitted Investments. The
Indenture Trustee shall have no liability for any loss resulting from any
investment required to be made hereunder other than by reason of its own willful
misconduct or negligence in failing to comply with such instructions. Any net
income or gain realized as a result of any such investment or reinvestment shall
be held as part of the Indenture Estate and shall be applied by the Indenture
Trustee at the same time, on the same conditions and in the same manner as the
amounts in respect of which such income or gain was realized are required to be
distributed in accordance with the provisions hereof. Any Permitted Investment
may be sold or otherwise reduced to cash (without regard to maturity) by the
Indenture Trustee whenever necessary to make any application as required by the
terms of this Indenture or of any applicable Operative Document.
49
SECTION 7.05. Reliance; Agents; Advice of Counsel. Neither the Owner
-----------------------------------
Trust nor the Indenture Trustee (in their respective individual or trust
capacities for the purposes of this Section 7.05) shall incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and believed by it to be signed by the
proper party or parties. Either of the Owner Trust or the Indenture Trustee may
accept a copy of a resolution of the Board of Directors or other governing body
of any party to the Participation Agreement or other Operative Document,
certified by the Secretary or any Assistant Secretary thereof as duly adopted
and in full force and effect, as conclusive evidence that such resolution has
been duly adopted and that the same is in full force and effect. As to any fact
or matter relating to the Charterer the manner of ascertainment of which is not
specifically described herein, the Owner Trust and the Indenture Trustee may for
all purposes hereof rely on an Officer's Certificate of the relevant party as to
such fact or matter, and such Officer's Certificate shall constitute full
protection to the Owner Trust or the Indenture Trustee (in their individual or
trust capacities), as the case may be, for any action taken or omitted to be
taken by it in good faith in reliance thereon. The Indenture Trustee shall
assume, and shall be fully protected in assuming, that the Owner Trust is
authorized by the Trust Agreement to enter into this Indenture and to take all
action to be taken by the Owner Trust pursuant to the provisions hereof, and
shall not inquire into the authorization of the Owner Trust with respect
thereto. The Owner Trust shall assume, and shall be fully protected in
assuming, that the Indenture Trustee is authorized to enter into this Indenture
and to take all action to be taken by the Indenture Trustee pursuant to the
provisions hereof, and shall not inquire into the authorization of the Indenture
Trustee with respect thereto. In the administration of the trusts hereunder,
the Indenture Trustee may execute any of the trusts or powers hereof and perform
its powers and duties hereunder directly or through agents or attorneys and at
the expense of the Indenture Estate may consult with counsel, accountants and
other skilled Persons to be selected and retained by it, and the Indenture
Trustee shall not be liable for anything done, suffered or omitted in good faith
by it in accordance with the written advice or written opinion of any such
counsel, accountant or other skilled Person acting within such Person's area of
competence (so long as the Indenture Trustee shall have exercised due care in
selecting such Person), provided that, so long as no Charter Event of Default
shall have occurred and be continuing, no such Persons (other than counsel to
the Indenture Trustee or its accountants) shall be retained by the Indenture
Trustee without the consent of the Charterer, such consent not to be
unreasonably withheld.
SECTION 7.06. No Compensation from Holders or Indenture Estate.
------------------------------------------------
Notwithstanding any other provision hereof, the Indenture Trustee shall have no
right against the Holders, the Managing Trustee or the Resident Trustee, in
their respective individual capacities, the Owner Trust, the Owner Participant
or, except as otherwise provided in Section 4.03, the Indenture Estate for any
fee as compensation for its services hereunder.
50
SECTION 7.07. Right of the Indenture Trustee to Perform Covenants,
----------------------------------------------------
Etc. If the Owner Trust or the Charterer shall fail to make any payment or
---
perform any act required to be made or performed by it hereunder or under any
Operative Document to which it is a party or if the Owner Trust or the Charterer
shall fail to release any Lien affecting the Indenture Estate which it is
required to release by the terms of this Indenture or any other Operative
Document to which it is a party, the Indenture Trustee, after notice to and
demand upon the Owner Trust or the Charterer and affording the Owner Trust and
the Charterer a reasonable opportunity to cure, and without waiving or releasing
any obligation or Charter Event of Default, may (but shall be under no
obligation to) at any time thereafter make such payment or perform such act for
the account of and at the expense of the Indenture Estate, and may enter upon
any property for such purpose and take all such action with respect thereto as,
in the Indenture Trustee's opinion, may be necessary or appropriate therefor.
No such entry shall be deemed an eviction. All sums so paid by the Indenture
Trustee and all costs and expenses (including, without limitation, legal fees
and expenses) so incurred, shall constitute additional indebtedness secured by
this Indenture and shall be paid from the Indenture Estate to the Indenture
Trustee on demand. The Indenture Trustee shall not be liable for any damages
resulting from any such payment or action unless such damages shall be a
consequence of willful misconduct or gross negligence on the part of the
Indenture Trustee.
SECTION 7.08. Moneys for Payments in Respect of Notes to be Held in
-----------------------------------------------------
Trust. In case the Holder of any Secured Note shall fail to present the same
-----
for payment on any date on which the principal thereof becomes payable, the
Indenture Trustee may set aside in trust the moneys then due thereon uninvested
and shall pay such moneys to any Holder of such Secured Note upon due
presentation for surrender thereof in accordance with the provisions of this
Indenture, subject to the provisions of Section 7.09.
SECTION 7.09. Disposition of Moneys Held for Payments of Notes. (a)
------------------------------------------------
Any money set aside under Section 7.08 and not paid to Holders under Section
7.08 shall be held by the Indenture Trustee in trust until the latest of (i) the
date three years after the date of such setting aside, (ii) the date all other
Holders (other than other Holders for which the Indenture Trustee is holding
such moneys pursuant to Section 7.08) of the Secured Notes shall have received
full payment of all principal of and interest and other sums payable to them on
such Secured Notes or the Indenture Trustee shall hold (and shall have notified
such Persons that it holds) in trust an amount sufficient to make full payment
thereof when due, and (iii) the date the Owner Trust shall have fully performed
and observed all its covenants and obligations contained in this Indenture with
respect to the Secured Notes; and thereafter shall be paid to the Owner Trust by
the Indenture Trustee, who then shall be released from all further liability
with respect to such moneys, and thereafter the Holders of the Secured Notes in
respect of which such moneys were so paid to the Owner Trust shall have no
rights in respect thereof except to obtain payment of such moneys from the Owner
Trust.
51
(b) All moneys and U.S. Government Obligations deposited with the
Indenture Trustee pursuant to Section 10.01 shall be held in trust and applied
by it, in accordance with the provisions of the Secured Notes and this
Indenture, to the payment to the Holders of all sums due and to become due
thereon for principal and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Indenture Trustee shall promptly pay or return to the Owner
Trustee upon the written request of the Owner Trustee any money or U.S.
Government Obligations held by it at any time that are not required for the
payment of the amounts described in the proceeding sentence for which money or
U.S. Government Obligations have been deposited pursuant to Section 10.01.
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee. In the case of any
---------------------------------
appointment of a successor to either Owner Trustee pursuant to the Trust
Agreement, or any merger, conversion or consolidation or transfer of
substantially all of the corporate trust business of either Owner Trustee, the
Managing Trustee shall give prompt written notice thereof to the Indenture
Trustee.
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
------------------------------------------------
Successor. (a) The Indenture Trustee or any successor thereto may resign at
---------
any time without cause by giving at least thirty (30) days prior written notice
to the Owner Trust, the Owner Participant, the Charterer and each Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee as provided in Section 8.02(b). In addition, a
Majority in Interest of Holders of Notes may at any time remove the Indenture
Trustee without cause by an instrument in writing delivered to the Owner Trust,
the Owner Participant, the Charterer and the Indenture Trustee, such removal to
be effective upon the acceptance of the trusteeship by a successor Indenture
Trustee as provided in Section 8.02(b). The Owner Trust (acting pursuant to
instructions from the Charterer) may remove the Indenture Trustee if:
(1) the Indenture Trustee fails to comply with Sections 6.06 or
8.02(c) hereof;
(2) the Indenture Trustee is adjudged as bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Indenture Trustee
or its property; or
52
(4) the Indenture Trustee becomes incapable of acting.
In the case of the resignation or removal of the Indenture Trustee, the Owner
Trust (acting pursuant to instructions from the Charterer) may appoint a
successor Indenture Trustee. If a successor Indenture Trustee shall not have
been appointed within thirty (30) days of such notice of resignation or removal,
the Indenture Trustee, the Owner Trust, the Owner Participant, the Charterer or
a Majority in Interest of Holders may apply to any court of competent
jurisdiction to appoint a successor Indenture Trustee qualified under Section
8.02(c) to act until such time, if any, as a successor shall have been appointed
as above provided in this Section 8.02. The successor Indenture Trustee so
appointed by such court shall immediately and without further act be superseded
by any successor Indenture Trustee appointed as above provided in this Section
8.02.
(b) Any successor Indenture Trustee, however appointed, shall execute
and deliver to the Owner Trust and to the predecessor Indenture Trustee an
instrument accepting such appointment, and shall give the Owner Participant, the
Holders and the Charterer written notice of such acceptance. Upon the execution
and delivery of such instrument, such successor Indenture Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers and duties of the predecessor Indenture Trustee hereunder, with like
effect as if originally named the Indenture Trustee herein. Notwithstanding and
without limiting the foregoing, the predecessor Indenture Trustee, upon the
written request of the successor Indenture Trustee, shall execute and deliver an
instrument transferring to such successor Indenture Trustee, upon the trusts
herein expressed applicable to it, all the estates, properties, rights and
powers of such predecessor Indenture Trustee, and such predecessor Indenture
Trustee shall duly assign, transfer, deliver and pay over to such successor
Indenture Trustee all moneys or other property then held by such predecessor
Indenture Trustee hereunder and all books and records relating to the
administration of the Indenture Estate.
(c) There shall at all times be an Indenture Trustee hereunder which
shall be a bank or trust company organized and doing business under the laws of
the United States of America or of any State thereof, authorized under such laws
to exercise corporate trust powers, subject to supervision or examination by
federal or state authority, having a combined capital and surplus of at least
$75,000,000, regularly engaged in or having expertise in leveraged leasing. If
such bank or trust company publishes reports of condition at least annually,
pursuant to applicable law or to the requirements of the aforesaid supervising
or examining authority, then for purposes hereof the combined capital and
surplus of such bank or trust company shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
(d) Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any
53
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation to which substantially all the corporate trust
business of the Indenture Trustee may be transferred, shall, subject to the
terms of paragraph (c) of this Section 8.02, be the Indenture Trustee under this
Indenture without further act.
SECTION 8.03. Co-Trustees and Separate Trustees. (a) If, at any
---------------------------------
time, it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which property shall be held subject to the Lien of this
Indenture, the U.K. Lessor's Mortgage, the U.K. Lessor's Security Assignment or
the Ship Mortgage required by Section 3.04, if applicable, the Indenture Trustee
shall be advised by counsel that it is so necessary or prudent in the interest
of the Holders, or a Majority in Interest of Holders of Notes in writing shall
so request the Indenture Trustee and the Owner Trust, the Indenture Trustee and
the Owner Trust shall execute and deliver all instruments and agreements
necessary or proper either (i) to constitute another bank or trust company or
one or more Persons approved by the Charterer, the Indenture Trustee and the
Owner Trust, either to act as co-trustee or co-trustees of all or any portion of
the Indenture Estate, jointly with the Indenture Trustee originally named herein
or any successor or successors, or to act as separate trustee or trustees of all
or any such portion of the Indenture Estate in each case with such rights,
powers, duties and obligations as may be provided in such supplemental indenture
or such instrument of appointment as the Indenture Trustee or a Majority in
Interest of Holders of Notes may deem necessary or advisable, or (ii) to
clarify, add to or subtract from the rights, powers, duties and obligations
theretofore granted any such additional or separate trustee, subject in each
case to the remaining provisions of this Section 8.03. In the event that the
Charterer or the Owner Trust shall not have joined in the execution of such
instruments and agreements within fifteen (15) days after the receipt of a
written request from the Indenture Trustee to do so, or if an Indenture Event of
Default shall have occurred and be continuing, the Indenture Trustee may act
under the foregoing provisions of this Section 8.03 without the concurrence of
the Charterer or the Owner Trust; and each of the Charterer and the Owner Trust
hereby appoints the Indenture Trustee its agent and attorney-in-fact to act for
it under the foregoing provisions of this Section 8.03(a) in either of such
contingencies. The Indenture Trustee may, in such capacity, execute deliver and
perform any such supplemental indenture, or any such instrument, as may be
required for the appointment of any such co-trustee(s) or separate trustee(s) or
for the clarification of, addition to or subtraction from the rights, powers,
duties or obligations theretofore granted to any such co-trustee(s) or separate
trustee(s). In case any co-trustee(s) or separate trustee(s) appointed under
this Section 8.03(a) shall die, become incapable of acting, resign or be
removed, all the assets, property, rights, powers, trusts, duties and
obligations of such co-trustee(s) or separate trustee(s) shall revert to and
shall vest in and may be exercised by the Indenture Trustee, to the extent
permitted by law until a successor, additional or separate trustee is appointed
as provided in this Section 8.03(a).
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(b) Every co-trustee and separate trustee hereunder, to the extent
permitted by law and except as otherwise expressly provided in any Operative
Document, shall be appointed and act, and the Indenture Trustee and its
successors shall act, subject to the following provisions and conditions:
(i) the Secured Notes shall be authenticated and delivered by the
Indenture Trustee, and all powers, duties, obligations and rights conferred
upon the Indenture Trustee in respect of the receipt, custody, control,
payment and management of moneys, papers or securities, shall be exercised,
solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such co-trustee or co-
trustees or separate trustee or trustees jointly, except to the extent that
under any applicable law or in any jurisdiction in which any particular act
or acts are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such co-
trustee or co-trustees or separate trustee or trustees; but subject to the
same limitations in any exercise of his, her or its power and authority as
those to which the Indenture Trustee is subject under the terms of this
Indenture;
(iii) notwithstanding anything herein contained to the contrary, no
power given hereby to, or which it is provided hereby may be exercised by,
any such co-trustee or co-trustees or separate trustee or trustees, shall
be exercised hereunder by such additional trustee or trustees except
jointly with, or with consent in writing of, the Indenture Trustee;
(iv) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder;
(v) the powers of any co-trustee(s) or separate trustee(s) appointed
pursuant to this Section 8.03 shall not in any case exceed those of the
Indenture Trustee hereunder; and
(vi) the Owner Trust and the Indenture Trustee, at any time, by an
instrument in writing executed by them jointly, may remove any such
trustee, and in that case, by an instrument in writing executed by them
jointly, may appoint a successor or successors to such co-trustee or co-
trustees or separate trustee or trustees, as the case may be, acceptable to
the Charterer. In the event that the Owner Trust shall not have joined in
the execution of any such instrument within fifteen (15) days after the
receipt of a written request from the Indenture Trustee to do so, the
Indenture Trustee shall have the power to remove any such co-trustee or
separate
55
trustee and to appoint a successor co-trustee or separate trustee without
the concurrence of the Owner Trust. In the event that the Indenture
Trustee alone shall have appointed a separate trustee or trustees or co-
trustee or co-trustees as above provided in this Section 8.03, it may at
any time, by an instrument in writing, remove any such separate trustee or
co-trustee, the successor to any such separate trustee or co-trustee so
removed to be appointed by the Owner Trust and the Indenture Trustee, or by
the Indenture Trustee alone, as provided in this Section 8.03.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Indenture Supplements Without Consent of Holders. The
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Owner Trust and the Indenture Trustee, without the consent of any Holder and at
any time and from time to time, may enter into one or more amendments or
supplements to this Indenture, in form satisfactory to each of the Owner Trust
and Indenture Trust, for any of the following purposes:
(a) to subject to the Lien of this Indenture additional property
constituting part of the Indenture Estate, pursuant to a supplement to this
Indenture substantially in the form of Exhibit D to this Indenture;
(b) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture;
(c) to add to the covenants of the Owner Trust for the benefit of the
Holders or to surrender any right or power herein conferred upon the Owner
Trust, the Owner Participant or the Charterer;
(d) to cure any ambiguity, to correct or supplement any provision
herein or in the Secured Notes which may be defective or inconsistent with
any other provisions of this Indenture to make any other changes not
inconsistent with the provisions hereof, provided that such action shall
not adversely affect the interests of any Holder;
(e) to evidence the succession of a new Owner Trustee in accordance
with the Trust Agreement or the succession of a new Indenture Trustee
hereunder or the appointment or removal of any co-trustee or separate
trustee thereunder or hereunder;
(f) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to make any other provisions with respect to
matters or
56
questions arising hereunder so long as such action shall not adversely
affect the interests of the Loan Participants;
(g) to add to the rights of the Loan Participants;
(h) to include on the Secured Notes any legend as may be required by
law;
(i) to provide for the establishment and issuance of Additional Notes
pursuant to Section 2.08; or
(j) to provide for the substitution of a new owner trust in accordance
with Section 3.04.
SECTION 9.02. Supplements and Amendments to Operative Documents With
------------------------------------------------------
Consent Holders of Notes. (a) Without the consent of a Majority in Interest of
------------------------
Holders of Notes, the Owner Trust may not modify, amend or supplement the
Charter, the Participation Agreement, the Trust Agreement, the Head Lease, and
any other Operative Document or U.K. Document included in the Indenture Estate,
or give any consent, waiver, authorization or approval thereunder, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions thereof or of modifying in any manner the rights of the
respective parties thereunder; provided that, so long as no Indenture Event of
Default shall have occurred and be continuing, such agreements may be modified,
amended or supplemented if any such proposed modification, amendment or
supplement is required by this Indenture or if the Indenture Trustee determines
that any such proposed modification, amendment or supplement would not adversely
affect the interests of the Holders; provided, however, that the actions
specified in Section 9.02(c) may be taken without the consent of the Indenture
Trustee or any Holder.
(b) Except as provided in Section 9.01 or 9.02(c) or 9.02(d), at any
time and from time to time, with the consent of a Majority in Interest of
Holders of Notes, whether or not an Indenture Event of Default exists, and upon
the written request of the Owner Trust, the Indenture Trustee (x) shall execute
an amendment or supplement to this Indenture for the purpose of adding
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture, or (y) shall execute an amendment or supplement to, or give
a consent, waiver, authorization or approval, for the purposes of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Participation Agreement or (z) shall consent to any amendment or
supplement to, or give a consent, waiver, authorization or approval, for the
purposes of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, the Charter, the Trust Agreement or any of the other
Operative Documents or U.K. Document; provided, however, that no such amendment
or supplement to this Indenture, or consent, waiver, authorization, approval,
amendment or supplement to the Participation Agreement, the Charter, the Trust
57
Agreement or any such other Operative Document or U.K. Document (whether
pursuant to subsection (a) or (c) of this Section 9.02, and anything in such
subsections or elsewhere in this Indenture to the contrary notwithstanding)
shall, without the consent of each Holder of a Secured Note then Outstanding:
(i) change the stated maturity of the principal of, or any installment
of interest on, or the amount of any payment upon any mandatory or optional
repayment, purchase or redemption of, any Secured Note, or change the
principal amount thereof or any other amount payable in respect thereof or
reduce the Make-Whole Amount, if any, or interest thereon, or impair the
right to institute suit for the enforcement of any such payment or change
mandatory or optional prepayment provisions or change the place of payment
where, or the coin or currency in which, any Secured Note or the interest
thereon is payable;
(ii) permit the creation of any Lien on the Indenture Estate not
otherwise permitted hereunder or deprive any Holder of the benefit of the
Lien of this Indenture upon the Indenture Estate for the security of its
Secured Notes;
(iii) change the percentage of the aggregate principal amount of
Secured Notes Outstanding required to take or approve any action hereunder
or any other Operative Document or to waive compliance therewith;
(iv) modify the definitions of "Indenture Default," "Indenture Event
of Default," "Majority in Interest of Holders of Notes," "Charter Default"
or "Charter Event of Default";
(v) modify the order of priorities in which distributions are to be
made under Article IV;
(vi) reduce the amount or change the time of any payment of Assigned
Hire under the Charter such that such payments would be insufficient to pay
principal of and interest on the Secured Notes as the same become due
hereunder;
(vii) modify, amend or supplement any of the provisions of this
Section 9.02;
(viii) modify, amend or supplement the Charter or the Parent
Guaranty, or consent to any assignment of the Charter (other than an
assignment pursuant to Article 20 of the Charter), in either case releasing
the Charterer or the Guarantor from its respective obligations in respect
of the payment of Assigned Hire payable pursuant to the Charter, or
changing the absolute and unconditional character of such obligations; or
58
(ix) materially adversely affect any indemnities in favor of any Holder as
provided pursuant to the terms of any Operative Document, except as may be
consented to by each Person adversely affected thereby.
(c) Notwithstanding anything to the contrary contained in Section
9.02(b) (except as provided in the proviso to Section 9.02(b)), (x) without the
necessity of the consent of any of the Holders or the Indenture Trustee, the
Owner Trust may and (y) in the case of clause (iii) of this Section 9.02(c),
without the consent of any of the Holders, the Indenture Trustee may, at the
request of the Owner Trust:
(i) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Charter, or give any
consent, waiver, authorization or approval with respect thereto, except
that without compliance with Sections 9.02(a) and 9.02(b), the Owner Trust
shall not modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purposes of adding any provisions to or
changing in any manner or eliminating any of the provisions thereof, or of
modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Charter as originally
executed: Article 2 (if the result thereof would be to shorten the term of
the Charter to a period shorter than the period ending with the maturity
date of the Secured Notes), Articles 3(a) (except to the extent that such
change or modification relates solely to Excess Hire, Bareboat Market Rate,
Excess Hire Rate, Additional Excess Hire or Additional Excess Hire Rate),
3(b), 3(c), (3(e), 3(f) (3g), 5(b), 9, 14, 15, 16, 17, 18, 21, 22, 23 and
Schedule 2 (except to the extent that such change or modification relates
solely to Excess Hire, Bareboat Market Rate, Excess Hire Rate, Additional
Excess Hire or Additional Excess Hire Rate) and any definition of terms
used in the Charter, to the extent that any modification of such definition
would result in a modification of the Charter not permitted pursuant to
this Section 9.02(c); provided that, subject to the next proviso, in the
event an Indenture Event of Default shall have occurred and be continuing,
the Indenture Trustee shall have all rights of the Owner Trust as Owner
under the Charter to modify, amend or supplement the Charter or give any
consent, waiver, authorization or approval thereunder, for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions thereof or of modifying in any manner the rights of the
Owner thereunder; provided further that, without the prior consent of the
Owner Trust, and subject to the Indenture Trustee's rights to exercise
remedies under Article 22 of the Charter without the prior consent of the
Owner Trust, whether or not an Indenture Event of Default shall have
occurred and be continuing, no such action shall be taken with respect to
any of the provisions of Article 1 (if any modification of a definition
contained therein would result in a modification of the Charter not
permitted by this proviso), 3, 11, 14, 15, 16 (except to increase the
amounts or types of insurance the Charterer must provide thereunder at its
expense), 18, 20, 21, 25, 27, 28 and 29 of
59
the Charter, or any other Section of the Charter (including Section 22 of
the Charter) to the extent such action shall affect the amount or timing of
any amounts payable by the Charterer under the Charter as originally
executed (or as subsequently modified with the consent of the Owner Trust)
which, absent the occurrence and continuance of an Indenture Event of
Default, would be distributable to the Owner Trust or the Owner Participant
under Article IV;
(ii) modify, amend or supplement the Trust Agreement, or give any
consent, waiver, authorization or approval with respect thereto, except
that without compliance with Section 9.02(b), the Owner Trust shall not
modify, amend or supplement, or give any consent, waiver, authorization or
approval for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect to the
following provisions of the Trust Agreement as originally executed:
Section 3.2, Section 5.1, Section 9.2, Section 10, Section 11, Section 12.7
and any definition of terms used in the Trust Agreement, to the extent that
any modification of such definition would result in a modification of the
Trust Agreement not permitted pursuant to this Section 9.02(c), and in each
case only to the extent any such action shall adversely impact the
interests of the Holders; and
(iii) modify, amend or supplement the Participation Agreement, or
give any consent, waiver, authorization or approval with respect thereto,
except that without compliance with Section 9.02(a) or Section 9.02(b), the
Owner Trust and the Indenture Trustee shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder, with respect to the following
provisions of the Participation Agreement as originally executed: Section
2, Section 4, Section 6, Section 9, Section 11 (other than an amendment to
add to the covenants of the Charterer), Section 12, Section 13 (insofar as
such Section 13 relates to the Indenture Trustee, the Indenture Estate and
the Holders) and, to the extent the Loan Participants would be adversely
affected thereby, Section 14 and Section 15 and any definition of terms
used in the Participation Agreement to the extent that any modification of
such definition would result in a modification of the Participation
Agreement not permitted pursuant to this Section 9.02(c);
(iv) modify, amend or supplement the Construction Contract; provided
that this provision shall not apply if such modification, amendment or
supplement does not decrease (except to a de minimis extent) the Fair
Market Sales Value of the Vessel or decrease the useful life or utility of
the Vessel; and
60
(v) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture; provided that
the making of any such other provision shall not adversely affect the
interests of the Holders unless such provision corrects a mistake.
(d) The Indenture Trustee, without the consent of any Holder and at
any time and from time to time, may enter into one or more amendments or
supplements to the Participation Agreement, in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to add to the covenants of any other party thereto for the benefit
of the Indenture Trustee or the Holders or to surrender any right or power
therein conferred upon any other party thereto;
(ii) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provisions
thereof, to make any other changes not inconsistent with the provisions thereof,
provided that such action shall not adversely affect the interest of any Holder;
(iii) to provide for the assumption by the Charterer of the
obligations of the Owner Trust under this Indenture in accordance with the terms
and conditions applicable thereto specified in Section 3.04, including, without
limitation, such amendments to this Indenture or the Participation Agreement as
may be necessary or desirable in order to effectuate such assumption and
accomplish the purposes thereof (provided that such amendments to such shall not
adversely affect the interests of the Loan Participants;
(iv) to evidence the succession of a new Owner Trustee in accordance
with the Trust Agreement or the succession of a new Indenture Trustee hereunder
or the appointment or removal of any co-trustee or separate trustee thereunder
or hereunder;
(v) to make any other provisions with respect to matters or questions
arising under the Participation Agreement so long as such action shall not
adversely affect the interests of the Loan Participants;
(vi) to add to the rights of the Indenture Trustee or the Holders; or
(vii) to provide for the establishment and issuance of Additional
Notes pursuant to Section 2.08 hereof.
61
(c) It shall not be necessary for Holders to approve the particular
form of any proposed amendment or supplement to this Indenture, or any
amendment, consent, waiver or other modification of any other Operative
Document, but it shall be sufficient if such action shall approve the substance
thereof.
SECTION 9.03. Execution of Indenture Supplement, Amendments, Etc. In
--------------------------------------------------
executing or accepting the additional trusts created by any amendment or
supplement to this Indenture, or any amendment, consent, waiver or other
modification permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, each of the Indenture Trustee and the Owner
Trust shall be entitled to receive, and (subject to Section 7.01 and Section
7.02) shall be fully protected in relying upon, an opinion of independent
counsel stating that the execution of such amendment or supplement to this
Indenture, or of such amendment, consent, waiver or modification, is authorized
or permitted by this Indenture. Either of the Indenture Trustee or the Managing
Trustee may, but shall not be obligated to, enter into any such amendment or
supplement to this Indenture which affects its own rights, duties or immunities
under this Indenture or otherwise. It shall not be necessary for Holders to
approve the particular form of any proposed amendment or supplement to this
Indenture, or any amendment, consent, waiver or other modification of any other
Operative Document or U.K. Document, but it shall be sufficient if such action
shall approve the substance thereof.
SECTION 9.04. Effect of Indenture Supplement. Upon the execution of
------------------------------
any amendment or supplement to this Indenture pursuant to this Article IX, this
Indenture shall be modified in accordance therewith, and such amendment or
supplement shall form a part of this Indenture for all purposes; and every
Holder of a Secured Note theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.05. Reference in Secured Notes to Indenture Supplements.
---------------------------------------------------
Secured Notes authenticated and delivered after the execution of any amendment
or supplement pursuant to this Article IX may, and shall if required by the
Indenture Trustee, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such amendment or supplement. If the amendment or
supplement to this Indenture shall so provide, new Secured Notes so modified as
to conform, in the opinion of the Indenture Trustee and the Owner Trust, to any
such amendment or supplement may be prepared and executed by the Owner Trust and
authenticated and delivered by the Indenture Trustee in exchange for outstanding
Secured Notes.
SECTION 9.06. Notices of Indenture Supplements and Amendments, Etc.
----------------------------------------------------
Promptly after the execution by the Owner Trust and the Indenture Trustee of any
amendment or supplement to this Indenture, or any amendment, consent, waiver or
other modification pursuant to the provisions hereof, the Indenture Trustee
shall send a conformed copy of such instrument to each Holder, the Charterer,
the Owner Trust and the Owner
62
Participant, but the failure of the Indenture Trustee to send such a conformed
copy shall not impair or affect the validity of such document.
SECTION 9.07. Charterer Rights. Without the consent of the
----------------
Charterer, no amendment or supplement to this Indenture or amendment, waiver or
other modification of any provision of this Indenture shall alter or modify the
provisions of Section 5.09 or this Section 9.07.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Indenture. This Indenture and the
------------------------
trusts created hereby shall terminate, and this Indenture shall be of no further
force or effect, when:
(a) the principal of and interest on and all other amounts due and
payable under all Secured Notes and all other amounts due and payable to
any Holder or the Indenture Trustee hereunder or under any other Operative
Document shall have been paid in full; or
(b) the Indenture Trustee shall have sold or made other final
disposition of all property and all moneys or other property or proceeds
constituting part of the Indenture Estate in accordance with the terms
hereof; or
(c) all Secured Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable (whether upon stated
maturity, as a result of redemption or upon acceleration), or will become
due and payable (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Secured Notes not theretofore
canceled by the Indenture Trustee or delivered to the Indenture Trustee for
cancellation, an amount in cash sufficient without reinvestment thereof to
discharge such indebtedness, including the principal of and interest on the
Secured Notes to the date of such deposit (in the case of Secured Notes
which have become due and payable), or to the maturity thereof, as the case
may be; or
(d) (i) the Owner Trust has deposited or caused to be deposited
irrevocably (except as provided in Section 7.09(b)) with the Indenture
Trustee as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the
63
Holders, (A) money in an amount, or (B) U.S. Government Obligations which,
through the payment of interest and principal in respect thereof in
accordance with their terms, will provide (not later than one Business Day
before the due date or any payment referred to below in this clause) money
in an amount, or (C) a combination of money and U.S. Government Obligations
referred to in the foregoing clause (B), sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Indenture
Trustee, to pay and discharge each installment of principal of and interest
on the Outstanding Secured Notes on the dates such payments of principal or
interest are due (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit), and no Charter Event of Default under paragraph
7 of Article 21 of the Charter shall have occurred and be continuing on the
date of such deposit or at any time during the period ending on the 91st
day after such date; provided, however, that upon the making of the deposit
referred to above in clause (A), the right of the Owner Trust to cause the
redemption of Secured Notes (except a redemption in respect of which
irrevocable notice has theretofore been given) shall terminate; and (ii)
(A) such deposit will not constitute an Indenture Event of Default under
this Indenture or a default or event of default under any other agreement
or instrument to which the Owner Trust or the Charterer is a party or by
which it is bound and (B) the Charterer has delivered to the Indenture
Trustee an Officer's Certificate to the effect that all conditions
precedent relating to the termination of this Indenture under this Section
10.01(d) have been complied with; and (iii) the Charterer has delivered to
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel to
the effect that there has been published by the Internal Revenue Service a
ruling to the effect that Loan Participants will not recognize income, gain
or loss for Federal income tax purposes as a result of the exercise by the
Owner Trust of its option under this Section 10.01(d) and will be subject
to Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised; and (iv) all other amounts then due and payable hereunder to any
Holder or the Indenture Trustee have been paid;
provided, however, that the obligations of the Indenture Trustee contained in
-------- -------
Sections 2.01 through 2.10, 6.11 and 7.09 shall survive. Except as otherwise
provided in the preceding sentence, this Indenture and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
SECTION 10.02. No Legal Title to Indenture Estate in Holders. No
---------------------------------------------
Holder shall have legal title to any part of the Indenture Estate. No transfer,
by operation of law or otherwise, of any Secured Note or other right, title and
interest of any Holder in and to the Indenture Estate or hereunder shall operate
to terminate this Indenture or entitle such Holder
64
or any successor or transferee of such Holder to an accounting or to the
transfer to it of any legal title to any part of the Indenture Estate.
SECTION 10.03. Power of Attorney. The Owner Trust does hereby
-----------------
constitute the Indenture Trustee its true and lawful attorney-in-fact,
irrevocably and coupled with the interest of the Indenture Trustee created by
this Indenture, so long as any Secured Notes are Outstanding and so long as
there are any other amounts due hereunder, under any other Operative Documents,
or under the Secured Notes, with full power (in the name of and as attorney-in-
fact for the Owner Trust or otherwise) to ask for, require, demand and receive
any and all moneys and claims for moneys, and all other property, which now or
hereafter constitutes part of the Indenture Estate, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or to
take any action, or to institute any proceedings, which the Indenture Trustee
may deem to be necessary or advisable in the premises. The Owner Trust has
directed the Indenture Trustee to make all necessary conveyances, assignments,
transfers and deliveries of the Indenture Estate and any rights hereunder
pursuant to the provisions of this Indenture, and for that purpose the Indenture
Trustee may execute all necessary instruments of conveyance, assignment and
transfer, and may substitute one or more persons with like power, and the Owner
Trust hereby ratifies and confirms all that the Indenture Trustee, acting as its
attorney, or any such substitute, shall lawfully do by virtue hereof and whether
pursuant to the exercise of any remedies hereunder or otherwise.
SECTION 10.04. Regarding the Owner Trust and the Owner Trustees. (a)
------------------------------------------------
Except as expressly provided herein, all and each of the representations,
warranties, undertakings and agreements herein made on the part of the Owner
Trust are made and intended not as personal representations, warranties,
undertakings and agreements by or for the purpose or with the intention of
binding the Managing Trustee or the Resident Trustee personally, but are made
and intended for the purpose of binding only the Trust Estate, and this
Indenture is executed and delivered by the Managing Trustee solely in the
exercise of the powers expressly conferred upon it as trustee under the Trust
Agreement; and no personal liability or responsibility is assumed hereunder by,
or at any time shall be enforceable against, the Managing Trustee or any of its
successors in trust on account of any representation, warranty, undertaking or
agreement hereunder of the Owner Trust, either expressed or implied, all such
personal liability, if any, being expressly waived by the Indenture Trustee;
provided, however, that (i) the Indenture Trustee or any Person claiming by,
through or under it, making claim hereunder, may, subject to the terms and
conditions hereof, look to the Trust Estate for satisfaction of such liability
or responsibility and (ii) the Managing Trustee or its successor in trust, as
applicable, shall be personally liable for its own gross negligence and willful
misconduct and for the matters described in clauses (i) through (v) of the last
sentence of Section 7.4 of the Trust Agreement. Subject to the terms and
conditions hereof, each time a successor Managing Trustee is appointed in
accordance with the terms of the Trust Agreement, such successor Managing
Trustee shall, without
65
further act, succeed to all the rights, duties, immunities and obligations of
the predecessor Managing Trustee hereunder and under the other Operative
Documents, and such predecessor Managing Trustee shall be released from all
further duties and obligations hereunder and under the other Operative
Documents, all without the necessity of any consent or approval by the Indenture
Trustee and without in any way altering the terms of this Indenture or such
other Operative Documents or the obligations of the Indenture Trustee hereunder
or thereunder.
(b) As to the aggregate unpaid principal amount of Secured Notes
Outstanding as of any date, the Owner Trust may rely on an Officer's Certificate
of the Indenture Trustee.
(c) No Recourse Against Others. No director, officer, employee or
--------------------------
stockholder, as such, of the Charterer, the Guarantor, the Owner Trustee or the
Owner Participant, as the case may be, shall have any liability for any
obligations of the Charterer, the Guarantor, the Owner Trust or the Owner
Participant, as the case may be, under this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Loan
Participant by accepting a Secured Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Secured Notes.
SECTION 10.05. Notices. All communications, notices and consents
-------
provided for in this Indenture shall be in writing and shall be given in person
or by courier or by means of telex, telecopy or other wire transmission (with
request for assurance of receipt in a manner typical with respect to
communications of that type), or mailed by first class mail or overnight
courier, addressed: (a) in the case of the Owner Trust, to the Owner Trust in
care of Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Cayman) Limited, as Managing Trustee,
Elizabethan Square, P.O. Box 1984, ▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands,
British West Indies, Attention: Managing Director (telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇); (b) in the case of the Indenture Trustee, to State
Street Bank and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department (telephone: (617)
▇▇▇-▇▇▇▇; telecopier: (▇▇▇) ▇▇▇-▇▇▇▇); and, in the case of all other parties, as
set forth in Schedule I to the Participation Agreement or at such other address
as any such Person may from time to time designate by notice duly given in
accordance with the provisions of this Section 10.05 to the other parties hereto
and shall be deemed given when received by (or when proffered to, if receipt is
not accepted) the party to whom it is addressed.
SECTION 10.06. Severability of Provisions. Any provision of this
--------------------------
Indenture which may be determined by competent authority to be invalid or
unenforceable in such jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or
66
unenforceability without invalidating or rendering unenforceable any remaining
terms and provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. The parties shall negotiate in good faith to replace such
provision with an appropriate legal provision. To the extent permitted by
applicable law, the parties hereto waive any provision thereof that renders any
term or provision hereof invalid or unenforceable in any respect.
SECTION 10.07. No Oral Modification or Continuing Waivers. No term
------------------------------------------
or provision of this Indenture or the Secured Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party or the person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof or of any
Secured Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 10.08. Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon each of the parties hereto and their
respective successors and permitted assigns, and inure to the benefit of each of
the parties hereto and their respective successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of such
Holder. This Indenture and the Indenture Estate shall not be affected by any
amendment or supplement to the Trust Agreement or by any other action taken
under or in respect of the Trust Agreement, except as otherwise provided in or
permitted by this Indenture. Each Holder by its acceptance of a Secured Note
agrees to be bound by this Indenture and all provisions of the Operative
Documents applicable to it.
SECTION 10.09. Headings; Table of Contents. The division of this
---------------------------
Indenture into Articles, Sections, subsections and paragraphs, the provision of
a table of contents and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation hereof.
SECTION 10.10. Normal Commercial Relations. Notwithstanding anything
---------------------------
contained in this Indenture to the contrary, any of the Owner Participant, the
Indenture Trustee, the Owner Trust, the Managing Trustee, the Delaware Trustee
or any bank or other affiliate of any such Person may conduct any banking or
other financial transactions and have banking or other commercial relationships
with the Charterer, fully to the same extent as if this Indenture were not in
effect.
SECTION 10.11. Governing Law. THIS INDENTURE SHALL BE GOVERNED BY,
-------------
AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
67
SECTION 10.12. Execution. This Indenture may be executed in separate
---------
counterparts by the parties thereto, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.13. Security Agreement. This Indenture shall constitute a
------------------
security agreement and, in addition to all other rights of the Indenture Trustee
hereunder, the Indenture Trustee shall have for the benefit of the Holders all
of the rights conferred upon secured parties by the UCC and any other similar
legislation as from time to time in effect in any applicable jurisdiction.
SECTION 10.14. Benefits of Indenture. Nothing in this Indenture,
---------------------
whether express or implied, shall be construed to give to any Person other than
the parties hereto, the Holders and (to the extent expressly provided herein)
the Owner Participant any legal or equitable right, remedy or claim under or in
respect of this Indenture or the Secured Notes, and this Indenture shall be held
for the sole and exclusive benefit of the parties hereto, the Holders and, to
the extent expressly provided herein, the Owner Participant.
Appendix A
to Indenture
------------
DEFINITIONS
-----------
Appendix A filed separately.
APP-1
Schedule 1
to Indenture
------------
DESCRIPTION OF VESSEL
---------------------
That certain double-hulled, double-bottomed LR 1 crude oil tank vessel,
designated as Hull No. 1177, to be constructed by Hyundai Heavy Industries Co.,
Ltd. and Hyundai Corporation, in Ulsan, Korea, pursuant to the Construction
Contract, and expected to be delivered in the fourth quarter of 1999. The
Vessel will have a designed deadweight capacity of approximately 105,500 metric
tons.
SCH-1-1
Exhibit A
to Indenture
------------
FORM OF
SERIES 1997 C-1 SECURED NON-RECOURSE DISCOUNT NOTE
QM TANKER 1177 TRUST
Maturity Date: __________
Registered No. ____________New York, New York
Date:
Principal Sum at Full Accrual Date: $ ______Interest Rate Per Annum: %
Full Accrual Date: ________
The following information is supplied for purposes of Sections 1273
and 1275 of the Internal Revenue Code:
Expected yield to maturity for period Original issue discount under Section
from Issue Date to Maturity Date: 1273 of the Internal Revenue Code
% (rounded to two decimal places), (for each $1,000 principal amount at
compounded semiannually on each the Full Accrual Date and at
_____ and ______, commencing on maturity): $
the Full Accrual Date (computed
after giving effect to (i) the Issue Price (for each $1,000
accretion of original issue discount principal amount at maturity): $
prior to the Full Accrual Date and
(ii) payment of interest on each
______ and ______ from and after the
Full Accrual Date to the Maturity
Date at the rate of interest set
forth above).
QM TANKER 1177 TRUST, a trust created pursuant to the Delaware
Business Trust Act (the "Owner Trust"), of which Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(Cayman) Limited and Wilmington Trust Company are acting not in their respective
individual capacities but solely as Owner Trustees (the "Owner Trustees") under
that certain Declaration of Agreement of Trust, dated as of November 19, 1997,
among the Owner Participant named therein and the Owner Trustees (the "Trust
Agreement"), for value received hereby promise to pay to State Street Bank and
Trust Company, as Pass Through Trustee (the "Pass Through Trustee") under that
certain 1997-C Pass Through Trust (the "Pass Through Trust") created by the Pass
Through Trust Agreement, dated as of October 4,
1996, as supplemented and amended by that certain Pass Through Trust Supplement,
dated as of December 5, 1997 (as supplemented and amended, the "Agreement"), or
registered assigns (collectively, the "Holders"), the principal sum of
___________________ DOLLARS ($___________) (or, in the event this Secured
Note shall be redeemed prior to the Full Accrual Date specified above, the
Accreted Value of this Secured Note as of such date) in installments on each
Interest Payment Date defined below as set forth in Schedule I hereof with the
final installment due and payable on the Maturity Date specified above and to
pay interest on the unpaid principal amount of this Secured Note accruing from
the Full Accrual Date until the principal amount of this Secured Note shall have
been paid in full at the Interest Rate specified above (based on a 360-day year
of twelve 30 day months) and (to the extent not prohibited by applicable law) to
pay interest on any overdue principal at the Overdue Rate. Subject to Section
2.03(b) of the Indenture (defined below), the first payment of accrued and
unpaid interest on the unpaid principal of this Secured Note shall be payable on
July 2, 2000 and thereafter on each January 2 and July 2 in each year (each such
date being an "Interest Payment Date"). No interest shall accrue on the
principal amount of this Secured Note prior to the Full Accrual Date as such
amount may be reduced from time to time by the payment of principal installments
thereunder.
This Secured Note shall accrete original issue discount at a rate per
annum, as set forth in Schedule I hereof, such that the yield on this Secured
Note from the date hereof to the Full Accrual Date will equal the semi-annual
bond equivalent rate corresponding to the Interest Rate specified above. The
principal amount of this Secured Note on any date prior to the Full Accrual Date
shall be the Accreted Value, as defined in the Indenture (defined below), and,
from and after the Full Accrual Date, the principal amount of this Secured Note
shall be the full principal sum specified above.
This Secured Note is one of the Secured Notes issued by the Owner
Trust pursuant to the terms of the Trust Indenture, Assignment of Charter and
Head Lease and Security Agreement, dated as of December 5, 1997 (the
"Indenture"), between the Owner Trust and State Street Bank and Trust Company,
not in its individual capacity but solely as Indenture Trustee thereunder, for
the Holder of this Secured Note and the Holders of all other Secured Notes
Outstanding thereunder (the "Indenture Trustee"). Capitalized terms used in
this Secured Note and not otherwise defined shall have the respective meanings
assigned to them in the Indenture.
Each payment of principal and interest shall be due and payable at the
times, places and in the manner as specified herein and in the Indenture.
Each payment on this Secured Note shall be applied, first, to the
payment of accrued interest on this Secured Note to the date of such payment,
second, to the payment of any principal on this Secured Note then due hereunder,
and third, to the payment of the installments of principal remaining unpaid on
this Secured Note in the inverse order of the maturity thereof.
EXHA-2
This Secured Note is one of the Owner Trust's Series 1997 C-1 Secured
Notes, which, together with any Additional Notes and any note or notes issued
from time to time in exchange or substitution therefor in accordance with the
terms of the Indenture, are equally and ratably secured by the Indenture, except
as otherwise provided therein. The property of the Owner Trust (excluding
Excepted Payments) included in the Indenture Estate is pledged, assigned or
mortgaged to the Indenture Trustee, to the extent provided in the Indenture, as
security for the payment of the principal of, Make-Whole Amount, if any, and
interest on this Secured Note and all other Secured Notes issued and outstanding
from time to time under the Indenture. Reference is hereby made to the
Indenture for a description of the Indenture Estate, and for a statement of the
rights of the Holder of, and the nature and extent of the security for, this
Secured Note and of the rights of, and the nature and extent of the security
for, the Holders of the other Secured Notes and of certain rights of the Owner
Trust and the Owner Participant, as well as for a statement of the terms and
conditions of the trusts created by the Indenture, to all of which terms and
conditions the Holder agrees by its acceptance of this Secured Note.
This Secured Note is subject to redemption or purchase in whole as
specified in Article III of the Indenture.
In case an Indenture Event of Default shall occur and be continuing,
the unpaid balance of the principal of the Secured Notes, together with all
accrued but unpaid interest, may be declared or may otherwise become due and
payable in the manner and with the effect provided in Article V of the
Indenture.
The Secured Notes are issuable only as registered notes. There shall
be maintained a note register for the purpose of registering transfers and
exchanges of the Secured Notes at the principal corporate trust office of the
Indenture Trustee, or of any successor Indenture Trustee, in the manner provided
in Section 2.05 of the Indenture. The Owner Trust and the Indenture Trustee may
deem and treat the Person in whose name this Secured Note is registered on the
Note Register as the absolute owner hereof (whether or not this Secured Note
shall be overdue) for the purpose of receiving payments of principal, Make Whole
Amount, if any, and interest and for all other purposes, and neither the Owner
Trust nor the Indenture Trustee shall be affected by any notice to the contrary.
All payments of principal, Make-Whole Amount, if any, and interest to
be made by the Owner Trust and, except as otherwise provided in the Operative
Documents, all payments of any other amounts payable by or on behalf of the
Owner Trust under the Secured Notes or under the Indenture, shall be made only
from the income and proceeds from the Indenture Estate, and only to the extent
that the Indenture Trustee shall have received sufficient income and proceeds
from the Indenture Estate to make such payments in accordance with the
Indenture. The Holder, by its acceptance of this Secured Note, agrees that it
will look solely to the income and proceeds from the Indenture Estate to the
extent available for payment as provided in the Indenture, and that none of the
Owner Participant, the Owner Trust, the Managing Trustee, the Resident Trustee
or the Indenture Trustee
EXHA-3
(whether in their respective individual or trust capacities) shall be personally
liable to the Indenture Trustee or to the Holder for any amounts payable under
this or any Secured Note, nor, except as specifically provided in the Indenture
or any other Operative Document, for any amounts payable or any liability under
the Indenture.
This Secured Note shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been signed by the Indenture
Trustee.
No delay or omission of the Holder to exercise its rights hereunder
shall impair any such right or power or shall be construed to be a waiver of any
Indenture Event of Default or an acquiescence therein. No waiver of any
Indenture Event of Default shall be construed, taken or held to be a waiver of
any other Indenture Event of Default or a waiver, acquiescence in, or consent to
any further or succeeding Indenture Event of Default. The Owner Trust waives
demand, notice and protest in any defense by reason of extension of time for
payment or other indulgence granted by the Holder.
THIS SECURED NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
EXHA-4
IN WITNESS WHEREOF, the Owner Trust has caused this Secured Note to be
duly executed.
Date:
QM TANKER 1177 TRUST
Owner Trust
By: DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (CAYMAN)
LIMITED, not in its individual capacity,
but solely as Managing Trustee under the
Trust Agreement
By:______________________________
Authorized Officer
EXHA-5
Certificate of Authentication
-----------------------------
This Secured Note is one of the Series 1997 C-1 Secured Notes due
_______ of QM TANKER 1177 TRUST, the Owner Trust as described in the within-
mentioned Indenture.
STATE STREET BANK AND
TRUST COMPANY, not in its
individual capacity, but solely
as Indenture Trustee
By:______________________________
Authorized Signatory
EXHA-6
Schedule I to
Exhibit A to
Indenture
---------
SERIES 1997 C-1 SECURED NON-RECOURSE DISCOUNT NOTE
QM TANKER 1177 TRUST
Payment Aggregate Payment
Interest Payment Date Percentage Amount
--------------------- ---------- ------
EXHA-7
Exhibit B-1
to Indenture
------------
SERIES 1997 C-1 SECURED NON-RECOURSE DISCOUNT NOTE
QM TANKER 1177 TRUST
Payment Aggregate Payment
Regular Distribution Date Percentage Amount
------------------------- ---------- ------
January 2, 1998 -- --
July 2, 1998 -- --
January 2, 1999 -- --
July 2, 1999 -- --
January 2, 2000 -- --
July 2, 2000 0.7366% 226,121.13
January 2, 2001 1.5349% 471,216.17
July 2, 2001 1.5862% 486,978.36
January 2, 2002 1.6393% 503,267.78
July 2, 2002 1.6941% 520,102.09
January 2, 2003 1.7508% 537,499.50
July 2, 2003 1.8094% 555,478.86
January 2, 2004 1.8699% 574,059.63
July 2, 2004 1.9324% 593,261.93
January 2, 2005 1.9971% 613,106.54
July 2, 2005 2.0639% 633,614.95
January 2, 2006 2.1329% 654,809.37
July 2, 2006 2.2043% 676,712.74
January 2, 2007 2.2780% 699,348.78
July 2, 2007 2.3542% 722,742.00
January 2, 2008 2.4330% 746,917.72
July 2, 2008 2.5143% 771,902.12
January 2, 2009 2.5984% 797,722.25
July 2, 2009 2.6854% 824,406.05
January 2, 2010 2.7752% 851,982.44
July 2, 2010 2.8680% 880,481.25
January 2, 2011 2.9640% 909,933.35
July 2, 2011 3.0631% 940,370.62
January 2, 2012 3.1656% 971,826.02
July 2, 2012 3.2714% 1,004,333.60
January 2, 2013 3.3809% 1,037,928.55
July 2, 2013 3.4940% 1,072,647.26
January 2, 2014 3.6108% 1,108,527.32
July 2, 2014 3.7316% 1,145,607.55
January 2, 2015 3.8564% 1,183,928.13
July 2, 2015 3.9854% 1,223,530.52
January 2, 2016 4.1188% 1,264,457.62
July 2, 2016 4.2565% 1,306,753.73
January 2, 2017 4.3989% 1,350,464.64
July 2, 2017 4.5461% 1,395,637.68
January 2, 2018 4.6981% 1,442,321.76
EXHB-1
Exhibit B-2
to Indenture
------------
Issuance of Series 1997 C-1 Secured Notes
-----------------------------------------
The issuance of the Series 1997 C-1 Secured Notes issued hereunder shall be
issued to and shall be payable to the Pass Through Trustee under the Pass
Through Trust Agreement with respect to the grantor trust created thereby, in
each case as set forth below:
Mobil Corporation 1997 C Pass Through Trust:
6.69% Certificates due January 2, 2018
EXHB-2
Exhibit C
to Indenture
------------
FORM OF SUBSTITUTION DATE SUPPLEMENT
SUBSTITUTION DATE AGREEMENT dated as of (this "Substitution
------------
Agreement"), among [ ], a trust created
---------
pursuant to (the "Substitute Obligor") under the [Substitute Trust Agreement]
------------------
(as defined below), QM TANKER 1177 Trust, a trust created pursuant to the
Delaware Business Trust Act (the "Owner Trust") under a Declaration of Agreement
of Trust dated as of November 19, 1997, as amended, among Deutsche ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (Cayman) Limited, Wilmington Trust Company and QM TANKER CO. LLC, a
Cayman Islands limited life company, as owner participant, MOBIL EQUIPMENT
FINANCE COMPANY INC., as Charterer, STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity, except as expressly
provided in the Indenture, but solely as Indenture Trustee (the "Indenture
----------
Trustee"), and STATE STREET BANK AND TRUST COMPANY, as Pass Through Trustee,
--------
who each being duly sworn did declare and say as follows.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Indenture;
WHEREAS, the Substitute Obligor was organized pursuant to a Declaration
and Agreement of Trust dated (the "Substitute Trust
----------------
Agreement"), among , as managing trustee
---------
(together with its permitted successors and assigns, the "Managing Trustee"),[
----------------
], as Resident trustee (together with its permitted successors and assigns, the
"Resident Trustee"), each acting not individually, except as otherwise provided
----------------
herein (when acting in such individual capacities, the "
Trust Company" and "Resident Trust Company", respectively), but solely as
------------- ----------------------
trustees for the Substitute Obligor (the Managing Trustee and the Resident
Trustee, collectively in such capacities being, the "Owner Trustees" and each
--------------
individually, an "Owner Trustee"), and
-------------
, as owner participant (the "Owner Participant") as amended and supplemented;
-----------------
and
WHEREAS, the Owner Trust desires to sell, and the Substitute Obligor
desires to purchase all of the Owner Trust's beneficial interest in the Vessel
Interest created under the Operative Documents.
WHEREAS, the Indenture provides for the execution and delivery of a
supplement substantially in the form of this Substitution Agreement, which
supplement shall provide for certain matters relating to the assumption by the
Substitute Obligor of the obligations of the Owner Trust pursuant to Section
3.04 of the Indenture;
NOW, THEREFORE, the parties hereto agree as follows:
1. As of the date of this Substitution Agreement (the "Substitution
Date"), the Owner Trust hereby irrevocably sells, assigns , transfers and
conveys to the Substitute Obligor all of Owner Trust's right, title and interest
in and to the Vessel Interest.
2. The Substitute Obligor hereby (a) accepts the foregoing assignment,
(b) confirms that it is purchasing the Vessel Interest subject to the security
interest and Lien of the Indenture and ratifies the security interest and Lien
which the Owner Trust granted to the Indenture Trustee pursuant to the Granting
Clause of the Indenture in all of the Owner Trust's right, title and interest in
and to the Indenture Estate and (b) explicitly agrees that it is acquiring the
Vessel Interest, and all property relating thereto, constituting a portion of
the Indenture Estate, subject to such security interest and Lien, which shall
remain in full force and effect until the Lien of the Indenture on the Vessel is
discharged in accordance with the terms thereof, and the Indenture Trustee
acknowledges that the Charter and the obligations of Owner Trust thereunder as
the Charterer have been terminated, except as specifically provided for therein.
3. Effective as of the Substitution Date, each party hereto agrees
that the Substitute Obligor shall be deemed to be a party to the Indenture, the
Secured Notes and each other Operative Document to which the Owner Trust is a
party, and all references to the Owner Trust in the Indenture, the Secured Notes
and each other Operative Document shall be deemed to be references to the
Substitute Obligor; provided, however, that any obligations or liabilities of
the Managing Trustee or the Delaware Trustee in its individual capacities
incurred on or prior to the Substitution Date or arising out of or based upon
events occurring on or prior to the Substitution Date, shall remain the
responsibility of the Owner Trust.
4. This Substitution Agreement shall be construed as supplemental to
the Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference in this Substitution Agreement.
5. Representations and Warranties of Owner Trust. Owner Trust hereby
---------------------------------------------
represents and warrants to the Substitute Obligor and the Indenture Trustee as
follows:
(a) Organization and Good Standing. Owner Trust is a trust duly
------------------------------
organized, validly existing and in good standing under the Delaware Business
Trust Act.
EXHC-2
(b) Power and Authority. Owner Trust has full corporate power and
-------------------
authority to execute, deliver and perform this Substitution Agreement and to
consummate the transactions contemplated hereby.
(c) Due Authorization. This Substitution Agreement has been duly
-----------------
authorized, executed and delivered by the Owner Trust, and assuming due
authorization, execution and delivery by the Substitute Obligor and the
Indenture Trustee, constitutes a legal, valid and binding obligation of the
Owner Trust, enforceable against it in accordance with its terms except as such
enforcement may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting the enforcement of creditors' rights or by general principles of
equity.
(d) Compliance with Law. Neither the execution, delivery or
-------------------
performance by the Owner Trust of this Substitution Agreement nor compliance
with the terms and provisions hereof, conflicts or will conflict with or will
result in a breach or violation of any of the terms, conditions or provisions of
any law including, without limitation, the Securities Act of 1933, as amended,
and any law, governmental rule or regulation applicable to the Owner Trust.
6. Representations and Warranties of Substitute Obligor. The
----------------------------------------------------
Substitute Obligor hereby represents and warrants to the Owner Trust and the
Indenture Trustee as follows:
(a) Organization and Good Standing. The Substitute Obligor is a trust
------------------------------
duly organized and validly existing under the Delaware Business Trust Act.
(b) Power and Authority. The Substitute Obligor has full trust power
-------------------
and authority to execute, deliver and perform this Substitution Agreement and to
consummate the transactions contemplated hereby.
(c) Due Authorization. This Substitution Agreement has been duly
-----------------
authorized, executed and delivered by the Substitute Obligor and, assuming the
due authorization, execution and delivery thereof by the Owner Trust and the
Indenture Trustee, constitutes the legal, valid and binding obligation of the
Substitute Obligor, enforceable against it in accordance with its terms, except
as such enforcement may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting the enforcement of creditors' rights or by general principles of
equity.
(d) Compliance with Law. Neither the execution, delivery or
-------------------
performance by the Substitute Obligor of this Substitution Agreement nor
compliance with the terms and provisions hereof, conflicts or will conflict with
or will result in a breach or violation of any of the terms, conditions or
provisions of any law, governmental rule or regulation applicable to Substitute
Obligor.
EXHC-3
(e) Investment Intent. Substitute Obligor is acquiring the Vessel
-----------------
Interest for its own account for investment and with no present intention of
distributing or reselling such Vessel Interest or any part thereof other than a
transfer to an affiliate of the Substitute Obligor or a transfer to another
person in compliance with the provisions of the Securities Act of 1933, as
amended, and the Operative Documents.
7. Counterparts. This Substitution Agreement may be executed in one
------------
or more counterparts, each of which shall be deemed as original, but all of
which together shall constitute one and the same instrument.
8. Successors and Assigns. The terms of this Substitution Agreement
----------------------
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
10. Amendment. No waiver, modification or amendment of any provision
---------
of this Substitution Agreement shall be effective unless it is in writing and
signed by the party against which it is sought to be enforced.
11. Further Assurances. Each party agrees that from time to time
------------------
after the date hereof, it shall execute and deliver or cause to be executed and
delivered such instruments, documents and papers, and take all such further
action as may be reasonably required in order to consummate fully the purposes
of this Substitution Agreement and to implement the transactions contemplated
hereby.
EXHC-4
IN WITNESS WHEREOF, the parties hereto have caused this Substitution
Agreement to be duly executed and delivered on the day and year first above
written.
QM TANKER 1177 TRUST, Owner Trust
By: DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (CAYMAN) LIMITED, not
in its individual capacity, except as
expressly provided in the Indenture, but
solely as Managing Trustee of the Owner Trust
By:____________________________________
Title:
[ ],
Substitute
Obligor
By [ ],
not in its individual capacity, except as
expressly provided herein and in the
Indenture, but solely as Managing Trustee of
the Substitute Obligor
By:____________________________________
Title:
STATE STREET BANK AND TRUST COMPANY, Indenture
Trustee
By:____________________________________
Title:
MOBIL EQUIPMENT FINANCE COMPANY INC., as
Charterer
By:____________________________________
Title:
EXHC-5
STATE STREET BANK AND TRUST COMPANY, as Pass
Through Trustee
By:____________________________________
Title:
EXHC-6
Exhibit D
to Indenture
------------
FORM OF TRUST INDENTURE, ASSIGNMENT OF
CHARTER AND HEAD LEASE AND SECURITY AGREEMENT
SUPPLEMENT NO. ____
This TRUST INDENTURE, ASSIGNMENT OF CHARTER AND HEAD LEASE AND
SECURITY AGREEMENT SUPPLEMENT NO. ____, dated _________________ (this "Indenture
Supplement") between DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (CAYMAN) LIMITED, a Cayman Islands
banking corporation, and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in their individual capacities, but solely as Owner Trustees
(the "Owner Trustees") of QM TANKER 1177 TRUST, a trust created under the
Declaration of Agreement of Trust pursuant to the Delaware Business Trust Act
(the "Owner Trust") and STATE STREET BANK AND TRUST COMPANY, a Massachusetts
-----------
trust company, not in its individual capacity, except as expressly provided
herein, but solely as Indenture Trustee (the "Indenture Trustee").
-----------------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Indenture; and
WHEREAS, the Indenture provides for the execution and delivery of one
or more supplements substantially in the form of this Indenture Supplement,
which supplement shall describe the property from time to time included in the
Indenture Estate;
NOW, THEREFORE, THIS INDENTURE SUPPLEMENT WITNESSETH that, to secure
(i) the prompt payment of the principal of, Make-Whole Amount, if any, and
interest on all Secured Notes from time to time Outstanding under the Indenture
and of all other amounts payable to the Holders (whether as Holders or Loan
Participants) thereunder, under the Secured Notes and under the other Operative
Documents, (ii) the performance and observance by the Owner Trust of all of the
provisions, covenants and agreements contained in the Participation Agreement,
in the Secured Notes and in the other Operative Documents for the benefit of the
Indenture Trustee or the Holders therein, and (iii) the performance and
observance by the Owner Participant of its covenants and agreements contained in
the Operative Documents (the obligations described in the above clauses (i),
(ii) and (iii), collectively, the "Indenture Indebtedness"), and for the uses
and purposes and subject to the terms and provisions thereof, and in
consideration of the premises and of the covenants herein contained and of the
acceptance of the Secured Notes by the Holders thereof:
GRANTING CLAUSE
---------------
The Owner Trust, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to secure the payment
and performance of the Indenture Indebtedness, hereby presently irrevocably
mortgages, hypothecates and pledges unto the Indenture Trustee and creates to
and for the benefit of the Indenture Trustee, a security interest in and
mortgage lien on all of the right, title and interest of the Owner Trust in, to
and under all of the property, rights, interests, and privileges described on
Exhibit I hereto now owned or in the future acquired by the Owner Trust or in
which the Owner Trust now has or may in the future acquire any estate, right,
title or interest (collectively, the "Additional Property"),
TO HAVE AND TO HOLD the aforesaid Additional Property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders, without any priority of any Secured Note over any other, and for
the uses and purposes and subject to the terms and provisions set forth in the
Indenture.
This Indenture Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference in this Indenture Supplement and is hereby ratified,
approved and confirmed. From and after the date hereof, the Indenture Estate
shall include the Additional Property along with the all other property, rights
and interest granted to the Indenture Trustee under the Granting Clause of the
Indenture and the Additional Property shall be subject to the Lien of the
Indenture.
This Indenture Supplement may be executed by the Owner Trust and the
Indenture Trustee in separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
THIS INDENTURE SUPPLEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
EXHD-2
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
Supplement to be duly executed, all as of the date first written above.
QM TANKER 1177, as Owner Trust
By: DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(CAYMAN) LIMITED, not in its individual
capacity, except as expressly provided
herein, but solely as Owner Trustee
By:____________________________________
Title:
STATE STREET BANK AND TRUST COMPANY,
Indenture Trustee
By:____________________________________
Title:
EXHD-3
Exhibit I to
Exhibit D
to Indenture
------------
Description of Additional Property.
EXHD-4
EXHIBIT E
TO INDENTURE
------------
FORM OF FIRST SHIP MORTGAGE
Dated ______________
by
______________________
Shipowner and Mortgagor
to
______________________
Mortgagee
Vessel ______
THIS FIRST SHIP MORTGAGE, made and dated ____________, by (a)
____________________________________ (the "Shipowner"), with an address at
________________________________________________________________, created by the
__________________________ dated as of ______________, as amended and restated
as of _______________ (the "___________"), with the _________________ named
therein, and duly qualified as a _______________ foreign maritime entity, in
favor of (b) _____________________________________________, not in its
individual capacity but solely as Indenture Trustee (the "Mortgagee") under a
Trust Indenture, Assignment of Charter and Head Lease and Security Agreement,
dated as of ____________ (the "Indenture") between the Shipowner and the
Mortgagee.
WHEREAS:
A. The Shipowner is the registered owner of the Republic of
__________________ flag ____ "_____" (the "Vessel"), Official No. __________, of
______ gross tons and _____ net tons, duly documented in the name of the
Shipowner under the laws and flag of the Republic of _____________ with her home
port at the port of ________.
B. Pursuant to the terms of the Indenture, the Shipowner has issued
and sold to the Pass Through Trustee (as defined in the Indenture) its Series
1997-C Secured Notes dated _______________ (the "Secured Notes") in the initial
principal amount of U.S.____________. The form of the Indenture (together with
Appendix A, Definitions, and Exhibits A-E (including the form of the Secured
Notes)) is attached hereto as Exhibit 1 and hereby made a part hereof as though
set forth fully herein. The term "Indenture" as used in this Mortgage shall
mean the Indenture and Appendix A (Definitions) and Exhibit A (Form of Secured
Notes) as attached hereto and as each may be amended, supplemented or modified
from time to time.
C. The Shipowner has entered into a demise charter (as the same may
be amended, supplemented or modified from time to time, the "Charter") with
_________________ (the "Charterer") respecting the Vessel pursuant to which the
Charterer has covenanted and agreed with the Shipowner, inter alia, to operate,
maintain, and insure the Vessel. The form of Article 21 of the Charter defining
Charter Events of Default is attached hereto as Exhibit 2 and hereby made a part
hereof as though set forth fully herein.
E. To secure payment of principal of, interest on, Make-Whole
Amount, if any, and any other amounts which may become due to the Mortgagee or
the holders of Secured Notes pursuant to the terms of the Indenture, the Secured
Notes and the other Operative Documents, the Shipowner has duly authorized the
execution, delivery and recording of this First Ship Mortgage under and pursuant
to the laws of the __________________.
EXHE-1
F. Terms used herein and not otherwise defined herein are used as
defined in, or by reference in, the Indenture.
NOW, THEREFORE, THIS MORTGAGE, WITNESSETH:
That in consideration of the premises and other valuable
consideration, the receipt whereof is hereby acknowledged, and in order to
secure the payment of principal of, interest on, Make-Whole Amount, if any,
respecting the Secured Notes, and all other amounts which may become due under
the Indenture or hereunder (collectively, the "Indebtedness hereby secured) and
to secure the performance and observance of and compliance with the covenants,
terms and conditions herein and in the Secured Notes and the Indenture
contained, the Shipowner has granted, conveyed, mortgaged, pledged, assigned,
transferred, set over and confirmed and does by these presents grant, convey,
mortgage, pledge, assign, transfer, set over and confirm unto the Mortgagee, its
successors and assigns, the whole of the Vessel which term shall include all of
the boilers, engines, machinery, bowsprits, masts, spars, sails, rigging, boats,
anchors, cables, apparel, furniture, fitting, equipment and all other
appurtenances to the Vessel appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements and
replacements hereafter made in or to the Vessel, or any part thereof, or in or
to the equipment and appurtenances aforesaid, but excluding any leased
equipment;
TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and
assigns, to its and its successors' and assigns' own use and behoof forever;
PROVIDED only, and the condition of these presents is such that if the
Shipowner, or its successors or assigns, shall pay or cause to be paid to the
Mortgagee the Indebtedness hereby secured as and when the same shall become due
and payable in accordance with the terms of this Mortgage, the Secured Notes and
the Indenture, and shall perform, observe and comply with the covenants, terms
and conditions in this Mortgage and in the Secured Notes and the Indenture
contained, expressed or implied, to be performed, observed or complied with, by
and on the part of the Shipowner, then these presents and the rights hereunder
shall cease, determine and be void; otherwise to be and remain in full force and
effect.
ARTICLE I
REPRESENTATIONS OF THE SHIPOWNER
(1) Organization. The Shipowner is a trust created under the
------------
_________________________, duly organized and validly existing in good standing
under the laws of the State of Delaware and is duly qualified as a
_______________ foreign
EXHE-2
maritime entity. _______________________________ is Managing Trustee of the
Shipowner.
(2) Documentation. The Vessel is, and the Shipowner covenants that
-------------
it will remain, duly documented in the name of the Shipowner as owner thereof
under the laws and flag of the _______________________, free and clear of all
Liens and encumbrances except Permitted Liens.
ARTICLE II
COVENANTS OF THE SHIPOWNER
(1) Maintenance of Entity Status. The Shipowner covenants that it
----------------------------
will remain duly qualified as a _________________ foreign maritime entity.
(2) Liens. Neither the Shipowner, the Charterer or any other
-----
charterer, the master of the Vessel nor any other Person has or shall have any
right, power or authority to create, incur or permit to be placed or imposed
upon the Vessel any Lien whatsoever, other than the Lien of this Mortgage and
Permitted Liens.
(3) Maintenance of Mortgage. The Shipowner (or the Charterer under
-----------------------
the Charter) shall, at its expense and at no cost to the Mortgagee, comply with
and satisfy all of the provisions of the laws and flag of the
______________________, in order to establish, record and maintain this Mortgage
as a mortgage thereunder on the Vessel except to the extent provided by the
Indenture.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
(1) Event of Default. An Indenture Event of Default shall constitute
----------------
an event of default hereunder.
(2) Remedies. If an Indenture Event of Default shall have occurred
--------
and be continuing, subject to the provisions of Article III, Section (2)(g)
hereof and the Indenture, (x) the Mortgagee shall have the rights and remedies
provided in the Indenture, (y) the Mortgagee shall have all of the rights and
remedies provided mortgagees under the laws of the __________________ and, in
addition, (z) the Mortgagee may:
EXHE-3
(a) Enforce and exercise all or any of its rights and powers as a
first mortgagee at law, in equity, or in admiralty;
(b) Exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the laws of the ____________________________, or by the
applicable laws of any jurisdiction where the Vessel may be found, and initiate
and prosecute such other judicial, extra-judicial, or administrative proceedings
as it may consider appropriate to recover any or all sums due, or declared due,
on the Indebtedness hereby secured out of the Vessel, with the right to enforce
payment of said sum against any assets of the Indenture Estate, and in
connection therewith obtain a decree ordering the sale of the Vessel in
accordance with Section 2(e) of this Article III;
(c) Have a receiver of the Vessel appointed as a matter of right in
any suit hereunder (and any such receiver may have the rights of the Mortgagee
set forth in, or by reference in, this Article III);
(d) Take possession of the Vessel, with or without legal proceedings,
at any place where the Vessel may be found (and the Shipowner, the Charterer or
other Person in possession of the Vessel shall forthwith surrender possession of
the Vessel to the Mortgagee on demand), and the Mortgagee shall have the right,
but shall not be obligated, to manage, insure, maintain, repair, employ, lay up,
hold, charter, lease, operate or otherwise use the Vessel for such period and
under such terms as it may reasonably deem most expedient for its interest,
accounting only for the net profits, if any, arising from such use and charging
against all receipts from such use of the Vessel, all reasonable charges and
expenses in connection with such use;
(e) Sell the Vessel at private sale, on such terms and conditions as
it deems best, free of any claim of the Shipowner and, except as provided by
law, any other Person upon advance notice of twenty-five (25) consecutive days
published in a newspaper authorized to publish legal notices of that kind in New
York, New York, and by sending notice of such sale no later than the date of
first publication, by telegraph, cable, telecopy or telex, to the Shipowner as
provided in Section 10.05 of the Indenture. Any such sale may be held at such
place and at such time as the Mortgagee by notice may have specified, or may be
adjourned by the Mortgagee from time to time by announcement at the time and
place appointed for such sale or for such adjourned sale, and without further
notice or publication the Mortgagee may make any such sale at the time and place
to which the same shall be so adjourned. Any such sale may be conducted without
bringing the Vessel to the place designated for such sale. The Mortgagee or any
holder of a Secured Note may become the purchaser at any such sale, and shall
have the right to credit on the purchase price any and all sums of money due in
respect of the Secured Notes and any other Indebtedness hereby secured;
(f) Accept a conveyance of title to, and to take without legal
process (and the Shipowner or other Person in possession shall forthwith
surrender possession to the
EXHE-4
Mortgagee), the whole or any part of the Vessel wherever the same may be, and to
take possession of and hold the same; and
In addition, so long as the Charter is in effect and no Charter Event
of Default shall have occurred, the Mortgagee shall not, without the prior
written consent of the Charterer exercise any remedy resulting in an in rem
judicial sale of the Vessel.
(3) Conveyance after Sale. Subject to the provisions of Article III,
---------------------
Section (2)(g) hereof, the Shipowner hereby irrevocably appoints the Mortgagee
the true and lawful attorney of the Shipowner, in its name and stead, to make
all necessary transfers of the whole or any part of the Vessel in connection
with a sale, use or other disposition pursuant to Section 2 of Article III
hereof, and for that purpose to execute all necessary instruments of assignment
and transfer. Nevertheless, the Shipowner shall, if so requested by the
Mortgagee, ratify and confirm any sale, assignment, transfer or delivery by
executing and delivering such proper ▇▇▇▇ of sale, assignment, conveyance,
instrument of transfer or other instrument as may be designated in such request.
(4) Shipowner Barred. A sale of the Vessel made pursuant hereto
----------------
whether under the power of sale hereby granted or any judicial proceedings,
shall operate to divest all right, title and interest of any nature whatsoever
of the Shipowner therein and thereto, and shall bar the Shipowner, its
successors and assigns, and, subject to the provisions of Article III, Section
2(g) hereof, all Persons claiming by, through or under them. No purchaser shall
be bound to inquire whether notice has been given or whether any Indenture Event
of Default or event of default hereunder has occurred, or as to the propriety of
the sale, or as to application of the proceeds thereof.
(5) Arrest By Third Party. (a) Subject to the provisions of Article
---------------------
III, Section (2)(g) hereof and any rights of the Charterer (including under
Article 7 of the Charter), in the event that an Indenture Event of Default shall
have occurred and be continuing and the Vessel shall be arrested or detained by
a marshal or other officer of any court of law, equity or admiralty jurisdiction
in any country of the world or by any government or other authority and shall
not be released from arrest or detention within thirty (30) days from the date
of arrest or detention, the Shipowner hereby authorizes the Mortgagee, in the
name of the Shipowner, to apply for and receive possession of and to take
possession of the Vessel with all of the rights and powers that the Shipowner
might have, possess and exercise in any such event. This authorization is
irrevocable.
(b) Subject to the provisions of Article III, Section (2)(g) hereof
and any rights of the Charterer, in the event that an Indenture Event of Default
(including Article 7 of the Charter), shall have occurred and be continuing, the
Shipowner irrevocably authorizes the Mortgagee or its appointees (with full
power of substitution) to appear in the name of the Shipowner in any court of
any country or nation of the world where a suit is pending against the Vessel
because of or on account of any alleged lien or claim against the Vessel from
which the Vessel shall not have been released in accordance with Article 15 of
the Charter.
EXHE-5
(6) Powers of the Mortgagee. Subject to the provisions of Article
-----------------------
III, Section (2)(g) hereof, the Mortgagee is hereby appointed as attorney-in-
fact of the Shipowner, during the continuance of any Indenture Event of Default,
and upon compliance with the terms of the Indenture, in the name of the
Shipowner to demand, collect, receive, compromise and ▇▇▇ for, so far as may be
permitted by law, all freights, hire, earnings, issues, revenues, compensation,
income and profits of the Vessel, and all amounts due from underwriters under
any insurance thereon as payment of losses or as return premiums or otherwise,
salvage awards and recoveries, recoveries in general average or otherwise, and
to make, give and execute in the name of the Shipowner acquittances, receipts,
releases or other discharges for the same, whether under seal or otherwise, and
to endorse and accept in the name of the Shipowner all checks, notes, drafts,
warrants, agreements and all other instruments in writing with respect to the
foregoing.
(7) Application of Proceeds. Any monies collected by the Mortgagee
-----------------------
pursuant to any sale of the Vessel or other enforcement of any of its rights
hereunder on account of the occurrence of an Indenture Event of Default shall be
distributed in accordance with the provisions of Section 4.03 of the Indenture.
(8) No Exclusivity. Subject to the provisions of Article III,
--------------
Section (2)(g) hereof, no right or remedy herein conferred upon or reserved to
the Mortgagee is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or under the
Indenture or now or hereafter existing at law, in equity, in admiralty, by
statute or otherwise. The assertion or employment of any right or remedy
hereunder or otherwise shall not prevent the concurrent or subsequent assertion
or employment of any other right or remedy hereunder or otherwise.
ARTICLE IV
SUNDRY PROVISIONS
(1) Recording. For the purposes of recording this First Ship
---------
Mortgage as required by the __________________________________, as amended, the
total amount of this Mortgage is (i) ______________________________________ and
(ii) interest, Make-Whole Amount, if any, and performance of mortgage covenants.
The discharge amount is the same as the total amount.
(2) Successors and Assigns. All the covenants, promises,
----------------------
stipulations and agreements of the Shipowner contained in this Mortgage shall
bind the Shipowner, its successors and assignees, and shall inure to the benefit
of the Mortgagee, its successors and assigns.
EXHE-6
(3) Agents. Wherever and whenever herein any right, power or
------
authority is granted or given to the Mortgagee, such right, power or authority
may be exercised in all cases by the Mortgagee or such agent or agents as it may
appoint; and the authorized acts of such agent or agents when taken shall
constitute the act of the Mortgagee hereunder.
(4) Notices. Any notice or demand or other communication to the
-------
Shipowner or the Mortgagee under this Mortgage shall be made in accordance with
Section 10.05 of the Indenture.
(5) Governing Law. The provisions of this Mortgage shall, with
-------------
respect to its validity, effect, recordation and enforcement, be governed by and
construed in accordance with the applicable laws of the
__________________________.
EXHE-7
IN WITNESS WHEREOF, the Shipowner has caused this Mortgage to be duly
executed by its authorized representative the day and year first above written.
_____________________________
not in its individual capacity but
solely as the Managing Trustee
By:_____________________
Name:
Title: Attorney-in-Fact
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ___________, _____, before me personally appeared
________________, known to me, and known to be the person who executed the
foregoing instrument, who, being by me duly sworn, did depose and say that he
resides at _______________________________; that he is Attorney-in-Fact of
__________________________________________________________, not in its
individual capacity but solely as the Managing Trustee of the ______________,
the party described in and which executed the foregoing instrument; that he
signed his name thereto by authority of a power of attorney issued by said Trust
and he further acknowledged such mortgage is the free act and deed of such
Trust.
____________________________
Notary Public
[For use in the ______________________]
EXHE-8