Exhibit 4.5
EXECUTION COUNTERPART
WHEN RECORDED, RETURN TO:
▇▇▇▇ ▇▇▇▇, Esq.
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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INDENTURE OF TRUST, MORTGAGE
AND SECURITY AGREEMENT
(T1)
Dated as of August 17, 2000
between
POWERTON TRUST I
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Lease Indenture Trustee
==============================================================================
Powerton Station
Coal-Fired Electric Generating Facility
Land Located in Tazewell County, Illinois
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS...............................................................................................6
SECTION 2. THE LESSOR NOTES..........................................................................................6
Section 2.1 Limitation on Lessor Notes.........................................................................6
Section 2.2 Initial Lessor Notes...............................................................................7
Section 2.3 Execution and Authentication of Lessor Notes.......................................................7
Section 2.4 Issuance and Terms of the Initial Lessor Notes.....................................................7
Section 2.5 Payments from Indenture Estate Only; No Personal Liability of the
Owner Trust, the Owner Participant or the Lease Indenture Trustee..................................8
Section 2.6 Method of Payment..................................................................................9
Section 2.7 Application of Payments...........................................................................10
Section 2.8 Registration, Transfer and Exchange of Lessor Notes...............................................10
Section 2.9 Mutilated, Destroyed, Lost or Stolen Lessor Notes.................................................11
Section 2.10 Optional Purchase upon Lease Event of Default.....................................................11
Section 2.11 Mandatory Prepayment..............................................................................12
Section 2.12 Assumption of Lessor Notes........................................................................13
Section 2.13 Subsequent Lessor Notes...........................................................................16
Section 2.14 Payment of Expenses on Transfer...................................................................18
Section 2.15 Restrictions of Transfer Resulting from Federal Securities Laws; Legend...........................18
Section 2.16 Security for and Parity of Lessor Notes...........................................................19
Section 2.17 Acceptance of the Lease Indenture Trustee.........................................................19
Section 2.18 Taxes; Withholding................................................................................19
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM INDENTURE ESTATE....................................20
Section 3.1 Distribution Prior to Lessor Loan Event of Default................................................20
Section 3.2 Payments Following Event of Loss or Other Early Termination.......................................20
Section 3.3 Payments After Lease Indenture Event of Default...................................................21
Section 3.4 Certain Payments..................................................................................22
Section 3.5 Other Payments....................................................................................23
Section 3.6 ▇▇▇▇▇▇ of Payment to the Owner Trust..............................................................23
Section 3.7 Investment of Amounts Held by Lease Indenture Trustee.............................................24
Section 3.8 Establishment of the Lease Indenture Trustee's Account; and ▇▇▇▇ and Security Interest; Etc.......24
Section 3.9 The Account Bank; Limited Rights of the Owner Trust...............................................25
SECTION 4. COVENANTS OF THE OWNER TRUST; LEASE INDENTURE EVENTS OF DEFAULT; REMEDIES................................27
Section 4.1 Covenants of the Owner Trust......................................................................27
Section 4.2 Lease Indenture Events of Default.................................................................28
Section 4.3 Certain Rights....................................................................................30
Section 4.4 Remedies..........................................................................................31
Section 4.5 Taking Possession of Indenture Estate.............................................................33
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Section 4.6 Remedies Cumulative...............................................................................34
Section 4.7 Discontinuance of Proceedings.....................................................................34
Section 4.8 Waiver of Past Defaults...........................................................................34
Section 4.9 Waiver of Stay, Extension, Moratorium Laws; Equity of Redemption..................................35
SECTION 5. DISCLAIMER OF REPRESENTATIONS; NO SEGREGATION OF MONEYS; FURTHER ASSURANCES; CERTAIN RIGHTS..............35
Section 5.1 No Representations or Warranties as to the Property Interest or other Lessor Security Documents...35
Section 5.2 No Segregation of Moneys; No Interest.............................................................36
Section 5.3 Further Assurances; Financing Statements..........................................................36
Section 5.4 Certain Rights of Owner Trust and Owner Participant...............................................36
SECTION 6. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS.........................................38
Section 6.1 Supplements and Amendments to this Indenture and the Other Documents:.............................38
Section 6.2 Documents Furnished to Holders....................................................................42
Section 6.3 Lease Indenture Trustee Protected.................................................................42
SECTION 7. MISCELLANEOUS............................................................................................42
Section 7.1 Termination of Indenture..........................................................................42
Section 7.2 Governing Law; Counterparts.......................................................................43
Section 7.3 No Legal Title to Indenture Estate in Holders.....................................................43
Section 7.4 Sale of Indenture Estate by Lease Indenture Trustee Is Binding....................................43
Section 7.5 Indenture for Benefit of the Owner Trust, the Owner Participant,
the Equity Investor, any OP Guarantor and the Holders.............................................43
Section 7.6 Notices...........................................................................................43
Section 7.7 Severability......................................................................................44
Section 7.8 No Oral Modifications or Continuing Waivers.......................................................44
Section 7.9 Successors and Assigns............................................................................44
Section 7.10 Headings..........................................................................................44
Section 7.11 Normal Commercial Relations.......................................................................45
Section 7.12 Waiver of Setoff..................................................................................45
Section 7.13 Concerning the Owner Trustee......................................................................45
Section 7.14 Required Holders; Etc.............................................................................45
Section 7.15 The Lease Indenture Trustee.......................................................................46
Section 7.16 Maximum Secured Obligations.......................................................................50
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INDENTURE OF TRUST, MORTGAGE
AND SECURITY AGREEMENT
(T1)
This INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT (T1) (as
amended, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this "INDENTURE"), dated as of August 17, 2000,
between POWERTON TRUST I, a Delaware business trust created for the benefit
of the Owner Participant referred to below, as grantor (the "OWNER TRUST")
and UNITED STATES TRUST COMPANY OF NEW YORK as grantee (the "LEASE INDENTURE
TRUSTEE").
WITNESSETH:
WHEREAS, the Owner Trust and the Facility Lessee will enter into that
certain Facility Lease Agreement (T1), dated as of August 17, 2000 (as
amended, supplemented or otherwise modified from time to time in accordance
with the provisions thereof, the "FACILITY LEASE"), pursuant to which the
Owner Trust will lease to the Facility Lessee and the Facility Lessee will
lease from the Owner Trust for a term of years the Owner Trust's undivided
interest equal to the Undivided Interest Percentage in and to the Powerton
Station (the "FACILITY") with the right to nonexclusive possession thereof
(the "UNDIVIDED INTEREST");
WHEREAS, the Facility Lessee will lease a corresponding interest equal
to the Undivided Interest Percentage in and to the Facility Site with the
right to nonexclusive possession thereof and will grant certain non-exclusive
easements (such undivided leasehold interest, together with such
non-exclusive easements, the "GROUND INTEREST") to the Owner Trust and the
Owner Trust simultaneously therewith will sublease the Ground Interest back
to the Facility Lessee;
WHEREAS, the Facility is more particularly described in Exhibit A
attached hereto and made a part hereof and is located on the Facility Site,
which, together with certain easements, are more particularly described in
Exhibit B attached hereto and made a part hereof;
WHEREAS, the Owner Trust was authorized and directed in the Amended and
Restated Trust Agreement (T1), dated as of August 17, 2000 (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "TRUST AGREEMENT"), between Wilmington Trust Company
and Powerton Generation I, LLC (the "OWNER PARTICIPANT") to execute and
deliver this Indenture;
WHEREAS, in connection with the transactions contemplated by the Trust
Agreement, the Owner Trust entered into the Participation Agreement;
WHEREAS, the Owner Trust, pursuant to the Facility Deed and Bill of
Sale, will purchase the Undivided Interest from Midwest and concurrently
therewith will lease such Undivided Interest to Midwest pursuant to the
Facility Lease;
WHEREAS, in accordance with this Indenture, the Owner Trust will
execute and deliver the Initial Lessor Notes, the proceeds of which will be
used by the Owner Trust to finance a portion of the Purchase Price, and will
grant to the Lease Indenture Trustee the liens and security interests herein
provided;
WHEREAS, this Indenture is regarded as a mortgage under the laws of the
State of Illinois and as a security agreement under the Uniform Commercial
Code of the State of New York; and
WHEREAS, the Owner Trust and the Lease Indenture Trustee desire to
enter into this Indenture, to, among other things, provide for (a) the
issuance by the Owner Trust of the Lessor Notes, (b) the conveyance and
assignment by the Owner Trust to the Lease Indenture Trustee, as part of the
Indenture Estate, of the Undivided Interest, the Ground Interest, the Owner
Trust's interest as tenant under the Facility Site Lease, the Owner Trust's
interest as landlord and sublandlord under the Facility Lease and the
Facility Site Sublease, respectively, the Owner Trust's interest under the
Participation Agreement and all payments and other amounts received or
receivable hereunder or thereunder in accordance herewith (excluding Excepted
Payments and except as otherwise provided herein or therein) as security for,
INTER ALIA, the Owner Trust's obligations to and for the benefit of the
Holders and for the benefit and security of such Holders.
GRANTING CLAUSE:
NOW, THEREFORE, to secure the prompt payment of the principal of and
interest on, and all other amounts due with respect to, the Lessor Notes from
time to time outstanding hereunder, all other amounts owing hereunder by the
Owner Trust and the performance and observance by the Owner Trust of all the
agreements, covenants and provisions contained in the Operative Documents,
and the prompt payment of all amounts from time to time due or to become due
from the Owner Trust to the Lease Indenture Trustee or the Holders under any
of the Operative Documents (collectively, the "LESSOR SECURED OBLIGATIONS"),
and for the uses and purposes and subject to the terms and provisions hereof,
and in consideration of the premises and of the covenants herein contained,
and of the acceptance of the Lessor Notes by the Holders thereof, the Owner
Trust does hereby grant, bargain, sell, assign, transfer, convey, mortgage,
pledge, warrant and confirm with MORTGAGE COVENANTS, unto and for the
security and benefit of, the Lease Indenture Trustee acting for and on behalf
of itself and the Holders from time to time, a first priority security
interest in and mortgage lien on all estate, right, title and interest now
held or hereafter acquired by the Owner Trust in, to and under the following
described property, rights, interests and privileges, whether now or
hereafter acquired, other than Excepted Payments (such property, rights and
privileges as are conveyed pursuant to this granting clause, but excluding
Excepted Payments and the rights to enforce and collect the sums as set forth
herein, being hereinafter referred to as the "INDENTURE ESTATE"):
(1) the Undivided Interest, the Owner Trust's interest in any
Components; the Owner Trust's interest in any Improvements; the Facility
Site Lease and the Ground Interest thereunder; the Facility Lease and all
payments of any kind by the Facility Lessee thereunder (including Rent);
the Facility Site Sublease and the Sublease Ground Interest thereunder and
all payments of any kind by the Facility Lessee thereunder; all tangible
property located on or at or attached to the Facility Land that an
interest in such tangible property arises under applicable real estate law
("FIXTURES"); the Facility Deed, the Bill of Sale, the Operation
Agreement, the Shared Facilities Agreement and all and any interest in any
property now or hereafter granted to the Owner Trust pursuant to any
provision of the Facility Site Lease, Facility Lease or the Facility Site
Sublease; the EME Guarantee and each other Operative Document (other than
the Tax Indemnity Agreement, the Reimbursement Agreement and the EME OP
Guarantee) to which the Owner Trust is a
2
party (the Undivided Interest, the Owner Trust's interest in any
Components, the Owner Trust's interest in any fixtures, Improvements
and the Ground Interest are collectively referred to as the "PROPERTY
INTEREST" and the documents specifically referred to above in this
paragraph (1) (excluding the Tax Indemnity Agreement, the
Reimbursement Agreement and the EME OP Guarantee) are collectively
referred to as the "INDENTURE ESTATE DOCUMENTS"), including, without
limitation, (x) all rights of the Owner Trust or the Facility Lessee
(to the extent assigned by the Facility Lessee to the Owner Trust) to
receive any payments or other amounts or to exercise any election or
option or to make any decision or determination or to give or receive
any notice, consent, waiver or approval or to make any demand or to
take any other action under or in respect of any such document, to
accept surrender or redelivery of the Property Interest or any part
thereof, as well as all the rights, powers and remedies on the part of
the Owner Trust or the Facility Lessee (to the extent assigned by the
Facility Lessee to the Owner Trust), whether acting under any such
document or by statute or at law or in equity or otherwise, arising
out of any Lease Default or Lease Event of Default and (y) any right
to restitution from the Facility Lessee, any sublessee or any other
Person in respect of any determination of invalidity of any such
document;
(2) all rents, royalties, issues, profits, revenues, proceeds,
damages, claims and other income from the property described in this
Granting Clause, including, without limitation, all payments or proceeds
payable to the Owner Trust as the result of the sale of the Property
Interest or the lease or other disposition of the Property Interest, and
all estate, right, title and interest of every nature whatsoever of the
Owner Trust in and to such rents, issues, profits, revenues and other
income and every part thereof (the "REVENUES");
(3) all condemnation proceeds with respect to the Property
Interest or any part thereof (to the extent of the Owner Trust's interest
therein), and all proceeds (to the extent of the Owner Trust's interest
therein) of all insurance maintained pursuant to Section 11 of the
Facility Lease or otherwise;
(4) all other property of every kind and description and interests
therein now held or hereafter acquired by the Owner Trust pursuant to the
terms of any Operative Document, wherever located;
(5) all damages resulting from breach (including, without
limitation, breach of warranty or misrepresentation) or termination of any
of the Indenture Estate Documents or arising from bankruptcy, insolvency
or other similar proceedings involving any party to the Indenture Estate
Documents; and
(6) all proceeds of the foregoing;
BUT EXCLUDING from the Indenture Estate all Excepted Payments, the
rights to enforce and collect the same as set forth herein and all right
title and interest of the Owner Trust in, to or under the EME OP Guarantee
and SUBJECT TO the rights of the Owner Trust under Section 5.4 hereof.
3
Concurrently with the delivery hereof, the Owner Trust is delivering to
the Lease Indenture Trustee on behalf of itself and the other Holders from
time to time the original executed counterpart of the Facility Lease to which
a chattel paper receipt is attached.
TO HAVE AND TO HOLD the Indenture Estate and all parts, rights, members
and appurtenances thereof, to the use, benefit and on behalf of the Lease
Indenture Trustee and the successors and permitted assigns of the Lease
Indenture Trustee forever, and in fee simple as to all parts thereof
constituting real property.
This Indenture is intended to constitute a mortgage under the laws of
the State of Illinois and a security agreement as required under the Uniform
Commercial Code of the State of New York. This Indenture is given to secure
the payment and performance of the Lessor Secured Obligations.
PROVIDED HOWEVER, that if the principal, interest and any other amounts
due in respect of all the Lessor Notes and all other amounts due the Holders
at the time and in the manner required hereby and by the Lessor Notes, the
Facility Lease and the Participation Agreement (but not including Excepted
Payments) shall have been paid, then this Indenture shall be surrendered and
cancelled and upon such surrender and cancellation the rights hereby and
thereby granted and assigned shall terminate and cease and the Lease
Indenture Trustee shall take such actions as are required to be taken by it
pursuant to and as directed under Section 7.1.
Subject to the terms and conditions hereof (including, without
limitation, Section 5.4), the Owner Trust does hereby irrevocably constitute
and appoint the Lease Indenture Trustee the true and lawful attorney of the
Owner Trust (which appointment is coupled with an interest) with full power
(in the name of the Owner Trust or otherwise) to ask, require, demand and
receive any and all moneys and claims for moneys (in each case, including,
without limitation, insurance and requisition proceeds to the extent of the
Owner Trust's interest therein and guaranteed amounts under the EME Guarantee
but excluding in all cases Excepted Payments) due and to become due under or
arising out of the Indenture Estate Documents and all other property which
now or hereafter constitutes part of the Indenture Estate and, to endorse any
checks or other instruments or orders in connection therewith and to file any
claims or to take any action or to institute any proceedings (other than in
connection with the enforcement or collection of Excepted Payments) which the
Lease Indenture Trustee may deem to be necessary or advisable. Pursuant to
the Facility Lease, the Facility Lessee is directed to make all payments of
Rent required to be paid or deposited with the Owner Trust (other than
Excepted Payments) and all other amounts which are required to be paid to or
deposited with the Owner Trust pursuant to the Facility Lease (other than
Excepted Payments) directly to the Lease Indenture Trustee at such address or
addresses as the Lease Indenture Trustee shall specify, for application as
provided in this Indenture. Pursuant to the EME Guarantee, EME is directed to
make all payments of Guaranteed Obligations (as defined in the EME Guarantee)
(other than Excepted Payments) and all other amounts (other than Excepted
Payments) which are required to be paid to or deposited with the Owner Trust
pursuant to the EME Guarantee directly to the Lease Indenture Trustee at such
address or addresses as the Lease Indenture Trustee shall specify, for
application as provided in this Indenture. Further, the Owner Trust agrees
that promptly on receipt thereof, it will transfer to the Lease Indenture
Trustee any and all moneys from time to time received by it constituting part
4
of the Indenture Estate, whether or not expressly referred to in the
immediately preceding sentence, for distribution pursuant to this Indenture.
It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Owner Trust shall remain liable under the Indenture
Estate Documents to perform all of the obligations assumed by it thereunder,
all in accordance with and pursuant to the terms and provisions thereof, and
the Lease Indenture Trustee and the Holders shall have no obligation or
liability under any thereof by reason of or arising out of the assignment
hereunder, nor shall the Lease Indenture Trustee or the Holders be required
or obligated in any manner, except as herein expressly provided, to perform
or fulfill any obligations of the Owner Trust under or pursuant to any of the
Indenture Estate Documents to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file
any claim or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
The Owner Trust agrees that at any time and from time to time, upon the
written request of the Lease Indenture Trustee (acting on the instruction of
any Holder) or any Holder, the Owner Trust will promptly and duly execute and
deliver or cause to be duly executed and delivered any and all such further
instruments and documents necessary to obtain the full benefits of the
assignment hereunder and of the rights and powers herein granted; PROVIDED,
HOWEVER, that the Owner Trust shall have no obligation to execute or deliver
or to cause to be executed or delivered any further instruments or documents
that would give the Lease Indenture Trustee or the Holders greater rights and
powers than the rights and powers of the Owner Trust which have been granted
herein.
The Owner Trust does hereby warrant and represent that it has not
assigned, pledged or granted a lien or security interest in, to or under, and
hereby covenants that, so long as this Indenture shall remain in effect and
the Lien hereof shall not have been released pursuant to Section 7.1 hereof,
it will not assign, pledge or ▇▇▇▇▇ ▇ ▇▇▇▇ or security interest in any of its
estate, right, title or interest in, to or under, the Indenture Estate to
anyone other than the Lease Indenture Trustee for the benefit of the Holders.
The Owner Trust hereby further covenants that with respect to its estate,
right, title and interest in, to or under the Indenture Estate, it will not,
except as provided in this Indenture and except as to Excepted Payments, (i)
and except as provided in Section 5.4 or 6.1 hereof, accept any payment from
the Facility Lessee or any sublessee or EME or enter into any agreement
amending, modifying or supplementing any of the Indenture Estate Documents,
execute any waiver or modification of, or consent under, the terms of any of
the Indenture Estate Documents or revoke or terminate any of the Indenture
Estate Documents, (ii) settle or compromise any claim arising under any of
the Indenture Estate Documents, or (iii) submit or consent to the submission
of any dispute, difference or other matter arising under or in respect of any
of the Indenture Estate Documents to arbitration thereunder.
Subject to Sections 5.4 or 6.1 hereof, the Owner Trust hereby ratifies
and confirms its obligations under the Indenture Estate Documents and does
hereby agree that it will not take or omit to take any action, the taking or
omission of which might result in an alteration or impairment of any of the
Indenture Estate Documents or of any of the rights created by any thereof or
the assignment (subject to the previous paragraph) hereunder.
5
The Lease Indenture Trustee, for itself and its successors and
permitted assigns, hereby agrees that it shall hold the Indenture Estate, in
trust for the benefit and security of (i) the Holders of the Lessor Notes
from time to time outstanding, without any priority of any one Lessor Note
over any other except as herein otherwise expressly provided and (ii) the
Lease Indenture Trustee, and for the uses and purposes and subject to the
terms and provisions set forth in this Indenture.
Accordingly, the Owner Trust, for itself and its successors and
permitted assigns, agrees that all Lessor Notes are to be issued and
delivered and that all property subject or to become subject hereto is to be
held subject to the further covenants, conditions, uses and trusts
hereinafter set forth, and the Owner Trust, for itself and its successors and
permitted assigns, hereby covenants and agrees with the Lease Indenture
Trustee, for the benefit and security of the Holders from time to time of the
Lessor Notes from time to time outstanding and to protect the security of
this Indenture, and the Lease Indenture Trustee agrees to accept the trusts
and duties hereinafter set forth, as follows:
SECTION 1. DEFINITIONS
Unless otherwise defined herein (including Annex A hereto), each
capitalized term used in this Indenture and not otherwise defined herein
shall have the respective meaning set forth in Appendix A to the
Participation Agreement (T1) dated as of August 17, 2000 (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "PARTICIPATION AGREEMENT") among the Facility Lessee,
EME, the Owner Trustee, the Owner Trust, the Owner Participant, the Lease
Indenture Trustee, and United States Trust Company of New York, as Pass
Through Trustees, unless the context hereof shall otherwise require. The
general provisions of Appendix A to the Participation Agreement shall apply
to terms used in this Indenture and specifically defined herein.
SECTION 2. THE LESSOR NOTES
SECTION 2.1 LIMITATION ON LESSOR NOTES. No Lessor Notes may be issued
under the provisions of, or become secured by, this Indenture except in
accordance with the provisions of this Section 2. The aggregate principal
amount of the Lessor Notes which may be authenticated and delivered and
outstanding at any one time under this Indenture shall be limited to the
aggregate principal amount of the Initial Lessor Notes issued on the Closing
Date to the Pass Through Trustees plus the aggregate principal amount of
Additional Lessor Notes issued pursuant to Section 2.12 hereof.
SECTION 2.2 INITIAL LESSOR NOTES. There are hereby created and
established hereunder two series of Lessor Notes consisting of (a) Series A
Lessor Notes in the aggregate principal amount of $107,750,000 with a final
maturity date of July 2, 2009, in substantially the form set forth in Exhibit
C to this Indenture (the "SERIES A LESSOR NOTES"), and (b) Series B Lessor
Notes in the aggregate principal amount of $303,310,000 with a final maturity
date of January 2, 2016, in substantially the form set forth in Exhibit D to
this Indenture (the "SERIES B LESSOR NOTES" and, together with the Series A
Lessor Notes, the "INITIAL LESSOR NOTES" or, individually, an "INITIAL LESSOR
NOTE").
6
SECTION 2.3 EXECUTION AND AUTHENTICATION OF LESSOR NOTES. Each Lessor
Note issued hereunder shall be executed and delivered on behalf of the Owner
Trust by one of its authorized signatories, be in fully registered form, be
dated the date of original issuance of such Lessor Note and be in
denominations of not less than $1,000. Any Lessor Note may be signed by a
Person who, at the actual date of the execution of such Lessor Note, is an
authorized signatory of the Owner Trust although at the nominal date of such
Lessor Note such Person may not have been an authorized signatory of the
Owner Trust. No Lessor Note shall be secured by or be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears thereon a certificate of authentication in the form contained in
Exhibit E (or in the appropriate form provided for in any supplement hereto
executed pursuant to Section 2.13 hereof), executed by the Lease Indenture
Trustee by the manual signature of one of its authorized officers, and such
certificate upon any Lessor Note shall be conclusive evidence that such
Lessor Note has been duly authenticated and delivered hereunder. The Lease
Indenture Trustee shall authenticate and deliver the Series A Lessor Note and
the Series B Lessor Note for original issue in the respective aggregate
principal amount specified in Section 2.2 hereof, upon a written order of the
Owner Trust signed by the Owner Trustee. The Lease Indenture Trustee shall
authenticate and deliver Subsequent Lessor Notes, upon a written order of the
Owner Trust executed by the Owner Trustee and satisfaction of the conditions
specified in Section 2.13 hereof. Such order shall specify the principal
amount of the Subsequent Lessor Notes to be authenticated and the date on
which the original issue of Subsequent Lessor Notes is to be authenticated.
SECTION 2.4 ISSUANCE AND TERMS OF THE INITIAL LESSOR NOTES.
(a) There shall be issued to the respective Pass Through Trustee the
Series A Lessor Note and the Series B Lessor Note, as the case may be, dated
the Closing Date. The aggregate amount of the Initial Lessor Notes shall be
in the principal amount equal to the aggregate principal amount of the Lessor
Notes purchased by the Pass Through Trustees from the Owner Trust pursuant to
Section 2.1(c) of the Participation Agreement.
(b) The principal amount of the Series A Lessor Note shall be due and
payable in installments having a final payment date of July 2, 2009, and the
principal amount of the Series B Lessor Note shall be due and payable in a
series of installments having a final payment date of January 2, 2016. The
principal of each series of Initial Lessor Notes shall be due and payable in
installments on the respective dates (each such date a "PAYMENT DATE") and in
the respective amounts set forth in Annex A attached to the respective
Initial Lessor Note on the date of issuance and authentication thereof. Annex
A to such Initial Lessor Note to the contrary notwithstanding, the last
installment of principal of such Initial Lessor Note shall be equal to the
then unpaid balance of the principal of such Initial Lessor Note. Each
Initial Lessor Note shall bear interest on the principal from time to time
outstanding, from and including the date of issuance thereof (computed on the
basis of a 360-day year of twelve 30-day months) until paid in full at the
rate set forth in such Initial Lessor Note. Each Initial Lessor Note shall
accrue additional interest under the circumstances and at the rate per annum
set forth in the second paragraph of each Initial Lessor Note. Interest on
each Initial Lessor Note shall be due and payable in arrears semi-annually
commencing on January 2, 2001, and on each January 2 and July 2 thereafter
(each such date, an "INTEREST PAYMENT DATE") until paid in full. If any day
on which principal, premium (including, without limitation, Make-Whole
Premium), if any, or interest on the Initial Lessor Notes is payable is not a
Business Day, payment thereof shall be made on the succeeding Business Day
with the same effect as if made on the date on which such payment was due.
7
(c) Interest (computed on the basis of a 360-day year of twelve
30-day months) on any overdue principal and, to the extent permitted by
Applicable Law, on overdue interest or Make-Whole Premium shall be paid on
demand at the Overdue Rate.
SECTION 2.5 PAYMENTS FROM INDENTURE ESTATE ONLY; NO PERSONAL
LIABILITY OF THE OWNER TRUST, THE OWNER PARTICIPANT OR THE LEASE INDENTURE
TRUSTEE. Except as otherwise specifically provided in this Indenture and in the
Participation Agreement, all payments to be made by the Lease Indenture Trustee
in respect of the Lessor Notes or under this Indenture shall be made only from
the Indenture Estate, and the Owner Trust shall have no obligation for the
payment thereof except to the extent that there shall be sufficient income or
proceeds from the Indenture Estate to make such payments in accordance with the
terms of Section 3 hereof, and the Owner Participant shall not have any
obligation for payments in respect of the Lessor Notes or under this Indenture.
The Lease Indenture Trustee and each Holder, by its acceptance thereof, agrees
that it will look solely to the income and proceeds from the Indenture Estate to
the extent available for distribution to the Lease Indenture Trustee or such
Holder, as the case may be, as herein provided and that, except as expressly
provided in this Indenture or the Participation Agreement, none of the Owner
Participant, the Owner Trust, the Trust Company, or the Lease Indenture Trustee
shall be personally liable to such Holder or the Lease Indenture Trustee for any
amounts payable hereunder, under such Lessor Note or for any performance to be
rendered under any Indenture Estate Document or for any liability under any
Indenture Estate Document. Without prejudice to the foregoing, the Owner Trust
will duly and punctually pay or cause to be paid the principal of, premium
(including, without limitation, Make-Whole Premium), if any, and interest on all
Lessor Notes according to their terms and the terms of this Indenture. Nothing
contained in this Section 2.5 limiting the liability of the Owner Trust shall
derogate from the right of the Lease Indenture Trustee and the Holders to
proceed against the Indenture Estate to secure and enforce all payments and
obligations due hereunder and under the Indenture Estate Documents and the
Lessor Notes.
In furtherance of the foregoing, to the fullest extent permitted by
law, each Holder (and each assignee of such Person), by its acceptance thereof,
agrees, as a condition to its being secured under this Indenture, that neither
it nor the Lease Indenture Trustee will exercise any statutory right to negate
the agreements set forth in this Section 2.5.
Nothing herein contained shall be interpreted as affecting the
representations, warranties or agreements of the Owner Trust expressly made in
its individual capacity set forth in the Participation Agreement or the Trust
Agreement.
SECTION 2.6 METHOD OF PAYMENT.
(a) The Owner Trust shall maintain an office or agency where
Lessor Notes may be presented for payment (the "PAYING AGENT"). The Owner Trust
may have one or more additional paying agents. The term "Paying Agent" includes
any additional paying agent. The Owner Trust initially appoints the Lease
Indenture Trustee as Paying Agent in connection with the Lessor Notes.
(b) The Owner Trust shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Owner
Trust shall require each Paying Agent (other than the Lease Indenture Trustee)
to agree in writing that the Paying Agent shall hold in
8
trust for the benefit of Holders or the Lease Indenture Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Lessor Notes and shall notify the Lease Indenture Trustee of any default by
the Owner Trust in making any such payment.
(c) The principal of, premium (including, without limitation,
Make-Whole Premium), if any, and interest on each Lessor Note shall be paid by
the Lease Indenture Trustee in Dollars from amounts available in the Indenture
Estate on the dates provided in the Lessor Notes by mailing a check for such
amount, payable in New York Clearing House funds, to each Holder at the last
address of each such Holder appearing on the Note Register, or by whichever of
the following methods shall be specified by notice from a Holder to the Lease
Indenture Trustee: (a) by crediting the amount to be distributed to such Holder
to an account maintained by such Holder with the Lease Indenture Trustee, (b) by
making such payment to such Holder in immediately available funds at the Lease
Indenture Trustee Office, or (c) in the case of the Initial Lessor Notes and in
the case of other Lessor Notes, if such Holder of such other Lessor Notes is the
Pass Through Trustee, or a bank or other institutional investor, by transferring
such amount in immediately available funds for the account of such Holder to the
banking institution having bank wire transfer facilities as shall be specified
by such Holder, such transfer to be subject to telephonic confirmation of
payment. Any payment made under any of the foregoing methods shall be made
without any presentment or surrender of such Lessor Note, unless otherwise
specified by the terms of the Lessor Note, except that, in the case of the final
payment in respect of any Lessor Note, such Lessor Note shall be surrendered to
the Lease Indenture Trustee. All payments in respect of the Lessor Notes shall
be made (i) as soon as practicable prior to the close of business on the date
the amounts to be distributed by the Lease Indenture Trustee are actually
received by the Lease Indenture Trustee if such amounts are received by 2:00
p.m., New York City time, on a Business Day, or (ii) on the next succeeding
Business Day if received after such time or on any day other than a Business
Day. One or more of the foregoing methods of payment may be specified in a
Lessor Note. Prior to due presentment for registration of transfer of any Lessor
Note, the Owner Trust and the Lease Indenture Trustee may deem and treat the
Person in whose name any Lessor Note is registered on the Note Register as the
absolute owner and holder of such Lessor Note for the purpose of receiving
payment of all amounts payable with respect to such Lessor Note and for all
other purposes, and neither the Owner Trust nor the Lease Indenture Trustee
shall be affected by any notice to the contrary. All payments made on any Lessor
Note in accordance with the provisions of this Section 2.6 shall be valid and
effective to satisfy and discharge the liability on such Lessor Note to the
extent of the sums so paid and neither the Lease Indenture Trustee nor the Owner
Trust shall have any liability in respect of such payment.
SECTION 2.7 APPLICATION OF PAYMENTS. Each payment on any outstanding
Lessor Note shall be applied, FIRST, to the payment of accrued interest
(including interest on overdue principal and, to the extent permitted by
Applicable Law, overdue interest) on such Lessor Note to the date of such
payment, SECOND, to the payment of the principal amount of, and premium
(including, without limitation, Make-Whole Premium), if any, on such Lessor Note
then due (including any overdue installments of principal) thereunder and THIRD,
to the extent permitted by Section 2.11 hereof, the balance, if any, remaining
thereafter, to the payment of the principal amount of, and premium (including,
without limitation, Make-Whole Premium), if any, on such Lessor Note. The order
of application of payments prescribed by this Section 2.7 shall not be deemed to
supersede any provision of Section 3 hereof regarding application of funds.
9
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE OF LESSOR NOTES. The
Owner Trust shall maintain an office or agency where Lessor Notes may be
presented for registration of transfer or for exchange (the "REGISTRAR"). The
Registrar shall keep a register of the Lessor Notes and of their transfer and
exchange. The Owner Trust may have one or more co-registrars. The Owner Trust
initially appoints the Lease Indenture Trustee as Registrar in connection with
the Lessor Notes. The Lease Indenture Trustee shall maintain at the Lease
Indenture Trustee Office a register in which it will provide for the
registration, registration of transfer and exchange of Lessor Notes (such
register being referred to herein as the "NOTE REGISTER"). If any Lessor Note is
surrendered at said office for registration of transfer or exchange (accompanied
by a written instrument of transfer duly executed by or on behalf of the holder
thereof, together with the amount of any applicable transfer taxes), the Owner
Trust will execute and the Lease Indenture Trustee will authenticate and
deliver, in the name of the designated transferee or transferees, if any, one or
more new Lessor Notes (subject to the limitations specified in Sections 2.3 and
2.15 hereof) in any denomination or denominations not prohibited by this
Indenture, as requested by the Person surrendering the Lessor Note, dated the
same date as the Lessor Note so surrendered and of like tenor and aggregate
unpaid principal amount. Any Lessor Note or Lessor Notes issued in a
registration of transfer or exchange shall be entitled to the same security and
benefits to which the Lessor Note or Lessor Notes so transferred or exchanged
were entitled, including, without limitation, rights as to interest accrued but
unpaid and to accrue so that there will not be any loss or gain of interest on
the Lessor Note or Lessor Notes surrendered. Every Lessor Note presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Lease Indenture Trustee duly executed by the Holder thereof or his attorney duly
authorized in writing, and the Lease Indenture Trustee may require opinion of
counsel as to compliance of any such transfer with the Securities Act. The Lease
Indenture Trustee shall make a notation on each new Lessor Note of the amount of
all payments of principal previously made on the old Lessor Note or Lessor Notes
with respect to which such new Lessor Note is issued and the date on which such
new Lessor Note is issued and the date to which interest on such old Lessor Note
or Lessor Notes shall have been paid. The Lease Indenture Trustee shall not be
required to register the transfer or exchange of any Lessor Note during the 15
days preceding the due date of any payment on such Lessor Note.
SECTION 2.9 MUTILATED, DESTROYED, LOST OR STOLEN LESSOR NOTES. Upon
receipt by the Owner Trust and the Lease Indenture Trustee of evidence
satisfactory to each of them of the loss, theft, destruction or mutilation of
any Lessor Note and, in case of loss, theft or destruction, of indemnity
satisfactory to each of them, and upon reimbursement to the Owner Trust and the
Lease Indenture Trustee of all reasonable expenses incidental thereto and
payment or reimbursement for any transfer taxes, and upon surrender and
cancellation of such Lessor Note, if mutilated, the Owner Trust will execute and
the Lease Indenture Trustee will authenticate and deliver in lieu of such Lessor
Note, a new Lessor Note, dated the same date as such Lessor Note and of like
tenor and principal amount. Any indemnity provided by the holder on a Lessor
Note pursuant to this Section 2.9 must be sufficient in the judgment of the
Owner Trust and the Lease Indenture Trustee to protect the Owner Trust, the
Lease Indenture Trustee, the Paying Agent, the Registrar and any co-registrar or
co-paying agent from any loss which any of them may suffer if a Lessor Note is
replaced.
SECTION 2.10 OPTIONAL PURCHASE UPON LEASE EVENT OF DEFAULT. At any
time (i) while a Lease Event of Default shall have occurred and shall be
continuing, (ii) after the Lessor Notes
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shall have become due and payable as provided in Section 4.4 hereof or (iii)
the Lease Indenture Trustee shall have commenced the exercise of material
remedies, the Owner Trust, the Owner Participant or an OP Guarantor may, but
shall not be obligated to, at any time thereafter, elect to purchase all, but
not less than all, of the Lessor Notes then outstanding, or all of the Lessor
Notes then outstanding not held by the Facility Lessee or an Affiliate of the
Facility Lessee, in accordance with the provisions of this Section 2.10. To
exercise such election the Owner Trust, the Owner Participant or an OP
Guarantor, as the case may be, shall give written notice thereof to the Lease
Indenture Trustee and each Holder. Such notice shall designate a date which
is not more than five (5) (nor less than three (3)) Business Days thereafter
as the purchase payment date. Each Holder agrees that such Holder will, upon
payment to such Holder in the manner provided for in Section 2.6 from the
Owner Trust, the Owner Participant or an OP Guarantor, as the case may be, of
an amount equal to the aggregate unpaid principal amount of all Lessor Notes
then held by such Holder, together with accrued and unpaid interest thereon
to the date of payment thereof and all other sums then due and payable to
such Holder hereunder and under the other Operative Documents (but excluding
any Make-Whole Premium), forthwith sell, assign, transfer and convey to the
Owner Trust, the Owner Participant or an OP Guarantor, as the case may be
(without recourse, representation or warranty of any kind except for its own
acts), all of the estate, right, title and interest of such Holder in and to
the Indenture Estate, this Indenture, all Lessor Notes held by such Holder,
the Participation Agreement and the other Operative Documents (excluding all
estate, right, title and interest of such Holder under any of the foregoing
to the extent such estate, right, title or interest is, with respect to an
obligation not then due and payable or past due, with respect to any action,
inaction or state of affairs occurring prior to such sale). The Owner Trust,
the Owner Participant or an OP Guarantor, as the case may be, shall assume
all of such Holder's obligations under the Participation Agreement and this
Indenture arising subsequent to such sale (except to the extent such
obligations relate solely to periods prior to such sale). If the Owner Trust,
the Owner Participant or an OP Guarantor, as the case may be, shall so
request, such Holder will comply with the provisions of Section 2.8 hereof to
enable new Lessor Notes to be issued to the Owner Trust, the Owner
Participant or such OP Guarantor, as the case may be, in such authorized
denominations (as provided in said Section 2.8) as the Owner Trust, the Owner
Participant or such OP Guarantor, as the case may be, shall request. All
charges and expenses required pursuant to Section 2.14 hereof in connection
with the issuance of any such new Lessor Note pursuant to this Section 2.10
shall be borne by the Owner Trust, the Owner Participant or such OP
Guarantor, as the case may be. Any election to purchase the Lessor Notes
under this Section 2.10 shall be irrevocable. For the avoidance of doubt, it
is expressly understood and agreed that no Holder shall be obligated under
this Section 2.10 to sell the Lessor Notes held by it unless such Holder
shall have received on the specified payment date the full amount owing to
such Holder under this Section 2.10.
SECTION 2.11 MANDATORY PREPAYMENT.
(a) Except as otherwise provided in Section 2.12(a), the Lessor
Notes shall be prepaid by the Owner Trust in whole, together with accrued
interest thereon to the date of prepayment, Make-Whole Premium (but only if,
pursuant to Section 2.11(c), the payment of Make-Whole Premium is required to be
made in connection with such prepayment), and all other amounts then payable
hereunder, under the Lessor Notes and under the other Operative Documents to the
Holders in immediately available funds in Dollars at the place and by the time
and otherwise in the manner provided in Section 2.6, on the earliest of:
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(i) if the Facility Lease is terminated pursuant to
Section 13.1 or 13.2 thereof, on the applicable Termination Date; or
(ii) if the Facility Lease is terminated pursuant to
Section 14.1 thereof, on the applicable Obsolescence Termination
Date; or
(iii) if the Facility Lease is terminated pursuant to
Section 10.2(a) thereof, on the applicable Termination Date provided
in Section 10.2(a) of the Facility Lease; or
(iv) if the obligations represented by the Lessor Notes
shall have been refinanced in whole but not in part pursuant to
Section 14.2 of the Participation Agreement, on the date of such
refinancing.
(b) Unless the Facility Lease or the Participation Agreement
requires the Facility Lessee to give notice to the Lease Indenture Trustee of
the event giving rise to a mandatory prepayment, the Owner Trust shall give a
notice of prepayment (subject to revocation as provided below) under this
Section 2.11 to the Lease Indenture Trustee (and the Lease Indenture Trustee
shall thereupon promptly deliver such notice to each Holder) in the manner
specified in Section 7.6 promptly after the Owner Trust shall have received
written notice from the Facility Lessee of any event giving rise to a mandatory
prepayment pursuant to Section 2.11(a) hereof. Any such notice of prepayment
shall specify (i) that it is a notice of prepayment given pursuant to this
Section 2.11, (ii) the date fixed for such prepayment, (iii) the clause of
Section 2.11(a) hereof under which such prepayment is to be made, and (iv) the
amount of and interest on each Lessor Note to be prepaid pursuant to Section
2.11(a) and the amount of the Make-Whole Premiums, if any. Any such notice given
under this Section 2.11 by the Owner Trust may be withdrawn to the same extent
as the corresponding notice under the Facility Lease or the Participation
Agreement, as the case may be.
(c) Make-Whole Premium shall be payable in connection with any
mandatory prepayment of the Lessor Notes pursuant to this Section 2.11 if (i)
such mandatory prepayment is required as a result of a termination of the
Facility Lease pursuant to Section 14.1(a)(ii), (b) or (c) thereof or (ii) the
obligations evidenced by the Lessor Notes shall have been refinanced pursuant to
Section 14.2 of the Participation Agreement. Make-Whole Premium shall not be
payable in connection with any mandatory prepayment of the Lessor Notes pursuant
to this Section 2.11 if such mandatory prepayment is required as a result of a
termination of the Facility Lease pursuant to Section 10.2(a), 13.1, 13.2 or
14.1(a)(i) thereof.
(d) Except as otherwise expressly provided in this Indenture, the
Lessor Notes may not be prepaid in whole or in part.
SECTION 2.12 ASSUMPTION OF LESSOR NOTES.
(a) Upon the occurrence of (x) a Midwest Assumption Event, the
Facility Lessee may notify, or (y) an Owner Participant Assumption Event, the
Owner Participant may notify, in either case, the Lease Indenture Trustee of its
intention to assume the Lessor Notes pursuant to and in accordance with this
Section 2.12. Upon receipt by the Lease Indenture Trustee of such notice,
notwithstanding anything herein or in any other Operative Document to the
contrary, neither the Lease Indenture Trustee nor any Holder shall be entitled
to exercise any remedy
12
under Section 4.4 or 4.5 hereof or under Section 17.1 of the Facility Lease
relating to the event giving rise to such assumption until the earlier to
occur of (x) the date on which, pursuant to this Section 2.12, all of the
Lessor Notes have been assumed by an Eligible Successor and (y) the date
falling 30 days after the Lease Indenture Trustee's receipt of such notice;
PROVIDED, that, if an Owner Participant Assumption Event of the type
specified in clause (a) of the definition thereof shall have occurred and
prior to the end of such 30-day period the Owner Participant shall have
cured, pursuant to Section 4.3 hereof, the Lease Event of Default giving rise
to such Owner Participant Assumption Event, then, solely for purposes of this
Section 2.12, such Owner Participant Assumption Event shall be deemed to be
continuing for a period not to exceed 90 days following the effective date of
such cure so long as during such 90-day period no other Lease Indenture Event
of Default shall occur and remain uncured; PROVIDED, FURTHER, that,
notwithstanding anything to the contrary contained herein, such 90-day period
and the 60-day period referred to clauses (vi) and (vii) below shall run
concurrently and not consecutively. In the event of the occurrence of an
Assumption Event and upon receipt by the Lease Indenture Trustee of the
documents listed below, all the obligations and liabilities of the Owner
Trust under this Indenture and each Lessor Note shall be assumed by an
Eligible Successor and, in the case of a Midwest Assumption Event, the Owner
Trust shall be released and discharged without further act or formality
whatsoever from all obligations and liabilities under this Indenture and each
Lessor Note:
(i) a duly executed Assumption Agreement substantially in
the form of Exhibit F to this Indenture;
(ii) an opinion of counsel to the Eligible Successor
(with customary qualifications and limitations), addressed to the
Lease Indenture Trustee and the Holders of the Lessor Notes, to
the effect that (A) the Eligible Successor is duly organized or
formed, validly existing and in good standing in the jurisdiction
of its organization or formation and is qualified to do business
in each jurisdiction where the nature of its business requires
qualification, (B) the Assumption Agreement and each other
instrument, document or agreement executed and delivered by the
Eligible Successor in connection with the assumption contemplated
by the Assumption Agreement (collectively, the "ASSUMPTION
DOCUMENTS") have been duly authorized, executed and delivered by
the Eligible Successor, (C) each Assumption Document and the
assumption contemplated thereby do not contravene (1) the Organic
Documents of the Eligible Successor, (2) any Contractual
Obligation of the Eligible Successor or (3) Requirements of Law,
(D) no Governmental Approval is necessary or required in
connection with any Assumption Document or the assumption
contemplated thereby (or, if any such Governmental Approval is
necessary or required, that the same has been duly obtained and
is final and in full force and effect and any period for the
filing of notice of rehearing or application for judicial review
of the issuance of such Governmental Approval has expired without
any such notice or application having been made), (E) each
Assumption Document is a legal, valid and binding obligation of
the Eligible Successor, enforceable in accordance with its terms
(except as limited by bankruptcy, insolvency or similar laws of
general application affecting the enforcement of creditors'
rights generally and equitable principles), (F) the Eligible
Successor is not (1) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended or (2) subject to
regulation under PUHCA except
13
pursuant to Section 9(a)(2) or Section 32 thereof and (G) to the
knowledge of such counsel there is no pending or threatened,
action, suit, investigation or proceeding against the Eligible
Successor that questions the validity of any Assumption Document
or the assumption contemplated thereby or which, if adversely
determined, would have a material adverse effect on the ability
of the Eligible Successor to perform its obligations under any
Assumption Document;
(iii) copies of all Governmental Approvals (if any) referred
to in the opinion of counsel referred to in clause (ii) above;
(iv) a supplement to this Indenture which shall, among
other things, (A) in the case of a Midwest Assumption Event,
confirm the release of the Owner Trust thereby effected and (B)
contain provisions appropriately amending this Indenture: (1) to
reflect the fact that the obligations of the Owner Trust under
this Indenture have been assumed directly by the Eligible
Successor; (2) in the case of an Owner Participant Assumption
Event, (x) to include covenants of the Eligible Successor
substantially the same as the covenants of the Facility Lessee
under the Facility Lease, covenants of the Eligible Successor
substantially similar to the covenants of the Facility Lessee and
EME under the Participation Agreement to the extent that such
covenants relate to the use, operation or maintenance of the
Facility, new Indenture Events of Defaults substantially the same
as Sections 16(h) and (k) of the Facility Lease relating to the
Eligible Successor and a new Indenture Event of Default based
upon default by the Eligible Successor in the performance by the
Eligible Successor of its covenants (other than payment
obligations) set forth in the rated, long-term, unsecured
indebtedness of the Eligible Successor that has resulted in, or,
after giving effect to applicable grace periods, would permit,
the acceleration of the maturity of such indebtedness, (y) to
delete Section 4.2(a) hereof and all related references herein to
a Lease Event of Default and (z) to reflect a modification of
Section 5.04 so as to permit the Eligible Successor (to the
exclusion of the Lease Indenture Trustee) to exercise all rights
of the Owner Trust under the Facility Lease and (3) as otherwise
necessary to reflect the foregoing provisions and preserve,
protect and maintain the Lien on the Indenture Estate;
(v) a certificate of an Authorized Officer of the
Eligible Successor stating that (A) the conditions precedent
required by this Indenture for such assumption have been complied
with, (B) there is no pending or, to the knowledge of such
Eligible Successor, threatened, action, suit, investigation or
proceeding against the Eligible Successor that questions the
validity of any Assumption Document or the assumption
contemplated thereby or which, if adversely determined, would
have a material adverse effect on the ability of the Eligible
Successor to perform its obligations under any Assumption
Document and (C) after giving effect to the assumption by the
Eligible Successor, (1) no Lease Indenture Default or Lease
Indenture Event of Default has occurred and is continuing (taking
into account any cure effected pursuant to Section 4.3 hereof),
(2) each representation and warranty of the Eligible Successor or
any of its Affiliates set forth in this Indenture and each other
Operative Document to which it or any of its Affiliates is a
party is true and correct in all material respects and (3) the
Eligible Successor is not insolvent within the meaning of any
applicable preferential transfer, fraudulent conveyance or
bankruptcy law;
14
(vi) ratings letters from each of ▇▇▇▇▇'▇ and S&P to the
effect that, after giving effect to such assumption, the rating
of the long-term, unsecured senior Indebtedness of the Eligible
Successor shall be at least Baa2 by ▇▇▇▇▇'▇ and BBB by S&P;
PROVIDED that if, immediately prior to the assumption of such
Lessor Notes, the long-term, unsecured senior Indebtedness of the
Eligible Successor is not rated by ▇▇▇▇▇'▇ and S&P or such
Indebtedness of the Eligible Successor is rated Baa2 or better by
▇▇▇▇▇'▇ and BBB or better by S&P then, subject to clause
(vii)(A)(3) of this Section 2.12(a), the Eligible Successor shall
not be required to deliver such ratings letters as a condition
precedent to consummating such assumption; and
(vii) in the case of an Owner Participant Assumption Event
where immediately prior to the assumption of such Lessor Notes
either (A) the long-term, unsecured senior Indebtedness of the
Eligible Successor is not rated by ▇▇▇▇▇'▇ and S&P or (B) such
Indebtedness of the Eligible Successor is rated by Baa2 or better
by ▇▇▇▇▇'▇ and BBB or better by S&P, but such Eligible Successor
has not delivered ratings letters that reflect the assumption of
the Lessor Notes by such Eligible Successor, a supplement to this
Indenture which shall effect the following modifications to the
terms of each Lessor Note: (I) for the period commencing on and
including the effective date of such assumption and ending on but
not including the earlier to occur of (x) the date falling 60
days after such effective date and (y) the date on which initial
ratings of the long-term, unsecured senior Indebtedness of the
Eligible Successor are issued by each of ▇▇▇▇▇'▇ and S&P or the
date on which such Eligible Successor has delivered ratings
letters that reflect the assumption of the Lessor Notes by such
Eligible Successor, the interest rate payable on such Lessor
Notes shall increase (in addition to the interest rate thereon in
effect immediately prior to the effective date of such
assumption) and additional interest reflecting such increase
shall accrue with respect to such Lessor Notes at the rate of
0.50% per annum and (II) Section 4.2 hereof shall be amended to
provide that it shall be a "Lease Indenture Event of Default"
hereunder if (w) the initial rating on the long-term, unsecured
senior Indebtedness of the Eligible Successor giving effect to
such assumption from ▇▇▇▇▇'▇ shall be lower than Baa2, (x) such
initial rating from S&P shall be lower than BBB, (y) such initial
ratings shall not have been issued by either of ▇▇▇▇▇'▇ or S&P on
or before the date falling 60 days after the effective date of
such assumption or (z) the Eligible Successor has failed to
deliver, on of before the date falling 60 days after the
effective date of such assumption, ratings letters from each of
S&P and ▇▇▇▇▇'▇ to the effect that, after giving effect to such
assumption of the Lessor Notes by such Eligible Successor, the
rating on the long-term, unsecured senior Indebtedness of such
Eligible Successor is at least equal to Baa2 by ▇▇▇▇▇'▇ and BBB
by S&P.
(b) The credit rating requirements set out in clause (vi) of
Section 2.12(a) hereof shall be deemed to have been satisfied with respect to an
Eligible Successor if (i) the obligations of such Eligible Successor hereunder
and in respect of the Lessor Notes shall have been guaranteed pursuant to an
instrument in writing reasonably acceptable to each Holder by a Person that
would qualify as an "Eligible Successor" hereunder whose long-term unsecured
Indebtedness is rated Baa2 or better by ▇▇▇▇▇'▇ and BBB or better by S&P at the
time required under said clause (vi); and (ii) in addition to the documents
required to be delivered under Section 2.12(a) hereof, the Lease Indenture
Trustee shall have received on the effective date of such assumption each of the
15
documents specified in clauses (ii), (iii) and (v) of Section 2.12(a) hereof as
to such Person with respect to such guarantee.
(c) Notice of any assumption of Lessor Notes shall be given by the
Lease Indenture Trustee to the Holders as promptly as practicable after the
Lease Indenture Trustee has received written notice thereof in accordance with
the first sentence of Section 2.12(a) hereof.
SECTION 2.13 SUBSEQUENT LESSOR NOTES.
(a) The Owner Trust may, subject to the conditions hereafter
provided in this Section 2.13, issue additional Lessor Notes ("SUBSEQUENT LESSOR
NOTES") under and secured by this Indenture, at any time or from time to time
for the purpose of (i) providing funds for a Supplemental Financing pursuant to
Section 14.1 of the Participation Agreement (Subsequent Lessor Notes issued for
such purpose, the "ADDITIONAL LESSOR NOTES") or (ii) refinancing the Lessor
Notes or other Subsequent Lessor Notes pursuant to Section 14.2 of the
Participation Agreement (Subsequent Lessor Notes issued for such purpose, the
"NEW LESSOR NOTES").
(b) Before any Subsequent Lessor Notes shall be issued under the
provisions of this Section 2.13, the Facility Lessee shall have delivered to the
Owner Trust, not less than 5 days nor more than 60 days (or in the case of a
Supplemental Financing under Section 14.1 of the Participation Agreement, 90
days) prior to the proposed date of issuance of such Subsequent Lessor Notes, a
request and authorization to issue such Subsequent Lessor Notes, which request
and authorization shall (i) contain the proposed date of issuance of such Lessor
Notes and the terms thereof and (ii) include a certification by the Facility
Lessee that the terms of such Lessor Notes are in compliance with this Section
2.13 and Section 14.1 or 14.2 of the Participation Agreement, as the case may
be. Such Subsequent Lessor Notes shall have a designation so as to distinguish
such Subsequent Lessor Notes from the Lessor Notes theretofore issued, be dated
their respective dates of issuance, bear interest at such rates (which may be
either fixed or floating) as shall be agreed between the Facility Lessee and the
Owner Trust, and shall be stated to be payable by their terms not later than the
latest date permitted therefor under Section 14.1 or 14.2 of the Participation
Agreement. The Subsequent Lessor Notes shall not be subject to (i) prepayment
except as provided in Section 2.11 hereof, (ii) purchase by the Facility Lessee,
the Owner Trust, the Owner Participant, an OP Guarantor or any Affiliate of any
of them other than as provided in Section 2.10 hereof or (iii) assumption by any
Person except as provided in Section 2.12 hereof.
(c) Except as to any differences in the maturity dates of the
Subsequent Lessor Notes or the rate or rates of interest thereon, such
Subsequent Lessor Notes shall be on a parity with, and shall be entitled to the
same benefits and security of this Indenture, as the other Lessor Notes issued
pursuant to the terms hereof.
(d) The terms, provisions and designations of such Subsequent
Lessor Notes shall be set forth in a supplement to this Indenture executed by
the Owner Trust and the Lease Indenture Trustee. Such Subsequent Lessor Notes
shall be executed, delivered and registered as provided in this Indenture, but
before such Subsequent Lessor Notes shall be delivered and registered there
shall be filed with the Lease Indenture Trustee, in addition to other documents
and certificates required by this Section 2.13, the following, all of which
shall be dated as of the date of the supplement to this Indenture:
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(i) a copy of such supplement (which shall include the
form of such series of Subsequent Lessor Notes);
(ii) in the event that, in accordance with Section 7.1
hereof, a replacement Lease Indenture Trustee has been appointed
in connection with the issuance of such series of Lessor Notes,
evidence of the acceptance of such replacement Lease Indenture
Trustee of such appointment;
(iii) unless the Subsequent Lessor Notes will, upon
issuance, be the only Lessor Notes outstanding, UCC lien
searches, supplemental title reports and such other evidence that
may be reasonably required by the Lease Indenture Trustee
demonstrating that no impairment exists to the first-priority
perfected lien and security interest in the Indenture Estate;
(iv) an officer's certificate of an Authorized Officer of
the Facility Lessee stating that (A) no Lease Default has
occurred and is continuing, (B) the conditions in respect of the
issuance of such Subsequent Lessor Notes contained in this
Section 2.13 have been satisfied, (C) Basic Lease Rent and the
Termination Value are calculated to be sufficient to pay all the
outstanding Lessor Notes, after taking into account the issuance
of such Subsequent Lessor Notes and any related prepayment of
Lessor Notes theretofore outstanding and (D) all conditions to
the Supplemental Financing or refinancing contained in Section
14.1 or 14.2 of the Participation Agreement or in any other
provision of the Operative Documents have been satisfied;
(v) an officer's certificate of the Owner Trust stating
that no Lease Indenture Default has occurred and is continuing;
(vi) an opinion of counsel to the Owner Trust that the
Subsequent Lessor Notes and the supplement to this Indenture have
been duly authorized, executed and delivered by the Owner Trust
and constitute the legal, valid and binding obligations of the
Owner Trust enforceable in accordance with their terms; and
(vii) an opinion of counsel, which may be counsel to the
Facility Lessee, that all conditions of this Section 2.13 to the
issuance of Subsequent Lessor Notes have been satisfied.
SECTION 2.14 PAYMENT OF EXPENSES ON TRANSFER. Upon the issuance of a
new Lessor Note or Lessor Notes pursuant to Section 2.8 or 2.9 hereof, the Owner
Trust or the Lease Indenture Trustee may require from the party requesting such
new Lessor Note or Lessor Notes payment of a sum to reimburse the Owner Trust
and the Lease Indenture Trustee for, or to provide funds for, the payment of any
tax or other governmental charge in connection therewith or any charges and
expenses connected with such tax or governmental charge paid or payable by the
Owner Trust or the Lease Indenture Trustee.
SECTION 2.15 RESTRICTIONS OF TRANSFER RESULTING FROM FEDERAL
SECURITIES LAWS; LEGEND. Each Lessor Note shall be delivered to the initial
Holder thereof without registration of such Lessor Note under the Securities Act
and without qualification of this Indenture under the Trust Indenture Act of
1939, as amended. Prior to any transfer of any such Lessor Note, in whole or in
17
part, to any Person, the Holder thereof shall furnish to the Facility Lessee,
the Lease Indenture Trustee and the Owner Trust an opinion of counsel, which
opinion and which counsel shall be reasonably satisfactory to the Lease
Indenture Trustee, the Owner Trust and the Facility Lessee, to the effect that
such transfer will not violate the registration provisions of the Securities Act
or require qualification of this Indenture under the Trust Indenture Act of
1939, as amended, and all Lessor Notes issued hereunder shall be endorsed with a
legend which shall read substantially as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE OR OTHERWISE DISPOSED OF
EXCEPT WHILE SUCH REGISTRATION IS IN EFFECT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT.
SECTION 2.16 SECURITY FOR AND PARITY OF LESSOR NOTES. All Lessor
Notes issued and outstanding hereunder shall rank on a parity with each other
and shall as to each other be secured equally and ratably by this Indenture,
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance or otherwise.
SECTION 2.17 ACCEPTANCE OF THE LEASE INDENTURE TRUSTEE. Each Holder,
by its acceptance of a Lessor Note, shall be deemed to have consented to the
appointment of the Lease Indenture Trustee.
SECTION 2.18 TAXES; WITHHOLDING. Without limiting the
indemnification obligations of EME under Section 12.1 or 12.2 of the
Participation Agreement, if any amount of principal, interest or other amounts
payable with respect to this Indenture or any Lessor Note becomes subject to any
withholding Tax, the Owner Trust shall withhold such Tax and the Owner Trust
shall pay to each Holder such additional amount so that the net amount actually
received by such Holder, after reduction for such withholding Tax, shall be on
an After-Tax Basis equal to the full amount otherwise due and payable without
regard to whether EME pays such Tax under the Participation Agreement; PROVIDED,
that, notwithstanding the foregoing, the Owner Trust shall be required to pay
such additional amounts only if and to the extent that (i) EME is required to
indemnify the Holder for such withholding amount under Section 12.1 or 12.2 of
the Participation Agreement and (ii) EME has not paid such amount within three
days after notice of nonpayment; PROVIDED, FURTHER, that, the Owner Trust shall,
upon such payment to such Holder, be subrogated to the rights of the Holder in
respect thereof following payment in full to such Holder of all amounts due and
owing to it under Section 12.1 or 12.2 of the Participation Agreement with
respect to such withholding Taxes. If any amount of principal, interest or other
amount payable with respect to this Indenture or any Lessor Note becomes subject
to any withholding Tax and EME is not required to indemnify the Holder for such
withholding amount under Section 12.1 or 12.2 of the Participation Agreement,
the Owner Trust shall withhold such Tax and the Owner Trust shall pay to such
Holder the amount of such principal, interest or other amount net of such
withheld Tax.
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM INDENTURE ESTATE
SECTION 3.1 DISTRIBUTION PRIOR TO LESSOR LOAN EVENT OF DEFAULT.
(a) Except as otherwise provided in Section 3.2 or 3.3 of this
Indenture, each installment of Basic Lease Rent and any payment of Supplemental
Lease Rent constituting
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interest on overdue installments of Basic Lease Rent received by the Lease
Indenture Trustee shall be distributed by the Lease Indenture Trustee in the
following order of priority:
FIRST, so much of such amounts as shall be required to pay in full
the aggregate principal and accrued interest (as well as any interest on
overdue principal and, to the extent permitted by Applicable Law, on
overdue interest) then due and payable under the Lessor Notes shall be
distributed to the Holders ratably, without priority of any Holder over
any other Holder, in the proportion that the amount of such payment then
due and payable under each such Lessor Note bears to the aggregate amount
of the payments then due and payable under all such Lessor Notes; and
SECOND, the balance, if any, of such amounts remaining shall be
distributed to the Owner Trust for distribution by it in accordance with
the terms of the Trust Agreement; PROVIDED, HOWEVER, that if a Lease
Indenture Event of Default shall have occurred and be continuing, then
such balance shall not be distributed as provided in this clause "SECOND"
but shall be held by the Lease Indenture Trustee as part of the Indenture
Estate until the earliest to occur of: (i) receipt by the Lease Indenture
Trustee of written notice from the Required Holders stating that all Lease
Indenture Events of Default shall have been cured or waived, in which
event such balance shall be distributed as provided in this clause
"SECOND," (ii) receipt by the Lease Indenture Trustee of written notice
from the Required Holders stating that Section 3.3 hereof shall be
applicable, in which event such balance shall be distributed in accordance
with the provisions of said Section 3.3, or (iii) unless the Lease
Indenture Trustee shall have commenced to exercise material remedies
pursuant to Section 4.4 hereof, such Lease Indenture Event of Default
shall have continued for a period of 180 days (such period to be extended
if and for so long as the Lease Indenture Trustee shall be precluded by
operation of law or by any judgment or order of any court or regulatory
body of competent jurisdiction from exercising remedies under Section 4
hereof), in which event such balance shall be distributed as provided in
this clause "SECOND" and so long as the Lease Indenture Trustee shall have
failed to commence to exercise material remedies pursuant to Section 4.4
hereof in respect thereof such Lease Indenture Event of Default shall not
thereafter be the basis of a retention of any amount under this proviso.
SECTION 3.2 PAYMENTS FOLLOWING EVENT OF LOSS OR OTHER EARLY
TERMINATION.
(a) Except as otherwise provided in Section 3.3 hereof, any
payment received by the Lease Indenture Trustee with respect to a prepayment
arising pursuant to Section 2.11(a) hereof shall be distributed by the Lease
Indenture Trustee in the following order of priority: FIRST, as provided in
clause "SECOND" of Section 3.3 hereof; SECOND, as provided in clause "THIRD" of
Section 3.3 hereof (but including all Make-Whole Premium (if any) due in respect
thereof required to be paid in accordance with Sections 2.11(a) and (c) hereof);
THIRD, to reimburse such Holder (to the extent not previously reimbursed) for
any reasonable out-of-pocket costs or expenses incurred in connection with such
prepayment; and FOURTH, as provided in clause "FIFTH" of Section 3.3 hereof.
(b) Except as otherwise provided in Section 3.2(a) or 3.3 hereof,
any amounts received directly or indirectly from any Governmental Authority or
insurer or other party not as a result of an Event of Loss or pursuant to any
provision of Section 10.3, Section 10.5 or Section
19
11 of the Facility Lease shall be applied as provided in the applicable
provisions of the Facility Lease and, if and to the extent that any portion
of such amounts are required to be held for the account of the Facility
Lessee and are not at the time required to be paid to the Facility Lessee
pursuant to the applicable provisions of Section 10.3, Section 10.5 or
Section 11 of the Facility Lease, shall be promptly paid to (if not initially
paid directly to the Lease Indenture Trustee) and, thereafter, held by, the
Lease Indenture Trustee as security for the obligations of the Facility
Lessee under the Facility Lease, and at such time as the Lease Indenture
Trustee shall have received written notice from the Facility Lessee (i)
stating that the conditions specified in the Facility Lease for payment of
such amounts to the Facility Lessee shall have been satisfied and (ii)
setting out the portion of such amounts so held by the Lease Indenture
Trustee to be paid to the Facility Lessee, the Lease Indenture Trustee shall
pay to the Facility Lessee the amount specified in such notice.
SECTION 3.3 PAYMENTS AFTER LEASE INDENTURE EVENT OF DEFAULT.
Notwithstanding Section 2.7 hereof, (a) if, during the continuance of a Lease
Indenture Event of Default, the Lease Indenture Trustee (acting on the
instruction of the Required Holders) has elected to pursue remedies in respect
thereof or (b) the entire principal amount of the Lessor Notes shall have become
due and payable as provided herein, all payments (other than Excepted Payments)
received by the Lease Indenture Trustee in respect of, all amounts (other than
Excepted Payments) held or realized by the Lease Indenture Trustee upon, and all
other payments or amounts (other than Excepted Payments) held by the Lease
Indenture Trustee as part of, the Indenture Estate shall be promptly distributed
in the following order of priority:
FIRST, to the Lease Indenture Trustee, so much of such
payments or amounts as shall be required to reimburse the Lease
Indenture Trustee for any amounts payable to it under Section 12.1
of the Participation Agreement and not previously paid to the Lease
Indenture Trustee pursuant to Section 3.4 hereof;
SECOND, so much of such payments or amounts, as shall be
required to pay to the Holders all amounts payable to the Holders
pursuant to the Operative Documents, including, without limitation,
the indemnification provisions of Sections 12.1 and 12.2 of the
Participation Agreement, but excluding principal and interest on the
Lessor Notes, shall be distributed to the Holders as their interests
may appear, and if the aggregate amount shall be insufficient to pay
all such amounts in full, such amount shall be distributed ratably,
without priority of any Holder over any other Holder, in the
proportion that the aggregate amount due each such Holder under this
clause "SECOND" bears to the aggregate amount due to all such
Holders under this clause "SECOND";
THIRD, so much of such payments or amounts remaining as shall
be required to pay in full the aggregate unpaid principal amount of
all Lessor Notes and accrued but unpaid interest thereon to the date
of distribution (as well as any interest on overdue principal and,
to the extent permitted by Requirements of Law, overdue interest at
the Overdue Rate), shall be distributed to the Holders, and if the
aggregate amount so to be distributed shall be insufficient to pay
in full as aforesaid, then such distribution shall be made, ratably,
without priority of one over the other, in the proportion that the
aggregate unpaid principal amount of all Lessor Notes held by each
such Holder, plus the accrued but unpaid interest thereon to the
date of distribution, bears to the aggregate unpaid principal
20
amount of all Lessor Notes, plus the accrued but unpaid interest
thereon to the date of distribution;
FOURTH, to the Holders (other than the Facility Lessee or any
Affiliate thereof), so much of such payments or amounts as shall be
required to reimburse each such Holder for any tax, expense, charge
or other loss (including, without limitation, all amounts to be
expended at the expense of, or charged upon, the tolls, rents,
revenues, issues, products and profits of the Indenture Estate
pursuant to Section 4.5 (b) hereof) incurred by such Holder (to the
extent not previously reimbursed) under the Operative Documents,
including, without limitation, the expenses of any sale, taking or
other proceeding, reasonable attorneys' fees and expenses, court
costs, and any other expenditures incurred or expenditures or
advances made by such Holder in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained
by such Holder, liquidated or otherwise, upon such Lease Indenture
Event of Default shall be applied by such Holder in reimbursement of
such expenses; and
FIFTH, the balance, if any, of such payments or amounts
remaining thereafter shall be paid to the Owner Trust for
distribution in accordance with the terms of the Trust Agreement.
SECTION 3.4 CERTAIN PAYMENTS.
(a) Except as otherwise provided in this Indenture, any payments
received by the Lease Indenture Trustee or any Holder for which provision as to
the application thereof is made in any other Operative Document shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of such Operative Document.
(b) The Owner Trust hereby agrees that if, at any time during the
term of this Indenture, it receives from the Facility Lessee, EME or any
Affiliate of any of them any amount or payment (other than Excepted Payments)
described in Section 3.4(c) hereof, it shall hold such amount or payment in
trust for the benefit of the Lease Indenture Trustee and promptly pay such
amount or payment to the Lease Indenture Trustee. The Owner Trust further agrees
that the obligation to remit such amount or payment shall be secured by this
Indenture.
(c) Any payment of Supplemental Lease Rent received by the Owner
Participant or the Lease Indenture Trustee pursuant to the fourth sentence of
Section 4.3 hereof shall, so long as no Lease Indenture Event of Default shall
have occurred and be continuing, and except to the extent applied as provided in
Section 3.3 hereof, be retained by, or promptly distributed to, the Owner
Participant. Notwithstanding anything to the contrary in this Section 3 and
without regard to whether a Lease Indenture Event of Default shall have occurred
and be continuing, all Excepted Payments specified as such in writing by the
payor or clearly described as such by the payor, or which to the actual
knowledge of an Authorized Officer of the Lease Indenture Trustee constitute
Excepted Payments and received by the Lease Indenture Trustee shall be paid by
the Lease Indenture Trustee forthwith to the Person or Persons entitled thereto.
SECTION 3.5 OTHER PAYMENTS. Any payments in respect of the Indenture
Estate received by the Lease Indenture Trustee no provision for the application
of which is made in the Facility Lease or in another Operative Document or
elsewhere in this Indenture shall (i) to the
21
extent received or realized at any time prior to the payment in full of all
obligations to the Holders secured by the Lien of this Indenture, be
deposited into the Lease Indenture Trustee's Account, and thereafter applied
to the payment of principal, interest, Make-Whole Premium and other amounts
as and when such principal, interest, Make-Whole Premium or other amounts
come due pursuant to priority "FIRST" specified in Section 3.1 hereof or, if
applicable at such time, pursuant to Section 3.2 or 3.3 hereof and (ii) to
the extent received or realized at any time after payment in full of all
obligations to the Holders secured by the Lien of this Indenture, in the
following order of priority: FIRST, to reimburse the Lease Indenture Trustee
and the Holders (to the extent not previously reimbursed) for any reasonable
out-of-pocket costs or expenses to which it is entitled to reimbursement
pursuant to an Operative Document; and SECOND, in the manner provided in
clause "FIFTH" of Section 3.3 hereof.
SECTION 3.6 MANNER OF PAYMENT TO THE OWNER TRUST. Any amounts
distributed hereunder by the Lease Indenture Trustee to the Owner Trust shall be
paid by the Lease Indenture Trustee to the Owner Trust by wire transfer of funds
of the type received by the Lease Indenture Trustee at such offices and to such
account or accounts of such entity or entities as shall be designated in advance
by written notice from the Owner Trust to the Lease Indenture Trustee from time
to time. The Lease Indenture Trustee shall, whether or not the Lien of this
Indenture shall have been discharged in accordance herewith, act as paying agent
for the Owner Trust, in connection with the Lease Indenture Trustee's duties to
make distributions to or for the benefit of the Owner Trust pursuant to this
Section 3 and to accept all revenues, payments, securities, investments and
other amounts received by the Lease Indenture Trustee and to be distributed to
the Owner Trust pursuant thereto or held in trust for the benefit of the Owner
Trust pursuant to the terms of this Indenture. The Owner Trust hereby notifies
and instructs the Lease Indenture Trustee that unless and until the Lease
Indenture Trustee receives written notice to the contrary from the Owner Trust,
all amounts to be distributed to the Owner Trust pursuant to clause "SECOND" of
Section 3.1 hereof shall be distributed by wire transfer of funds of the type
received by the Lease Indenture Trustee to the Owner Participant. In the event
that the Lease Indenture Trustee is unable to distribute any amounts to the
Owner Trust or the Owner Participant on the same day such amounts are received
by the Lease Indenture Trustee, the Lease Indenture Trustee agrees that such
amounts shall be held in trust for the benefit of the Owner Trust or the Owner
Participant, as the case may be, and shall be invested by the Lease Indenture
Trustee for and at the expense and risk of the Owner Trust or the Owner
Participant, as the case may be, in Permitted Investments identified in written
instructions to the Lease Indenture Trustee from the Owner Trust or the Owner
Participant, as the case may be, if such investments are reasonably available.
SECTION 3.7 INVESTMENT OF AMOUNTS HELD BY LEASE INDENTURE TRUSTEE.
Any amounts held by the Lease Indenture Trustee pursuant to the proviso to
clause "SECOND" of Section 3.1 hereof, pursuant to Section 3.2 hereof, or
pursuant to Section 10 or 11 of the Facility Lease shall be invested by the
Lease Indenture Trustee from time to time in Permitted Investments identified in
written instructions to the Lease Indenture Trustee from the Owner Trust, at the
expense of the Owner Trust, or, so long as no Lease Event of Default shall have
occurred and be continuing, from the Facility Lessee acting on behalf of the
Owner Trust, at the expense of the Facility Lessee, if such investments are
reasonably available. Unless otherwise expressly provided in this Indenture, any
income realized as a result of any such investment and any payments by the
Facility Lessee pursuant to the Facility Lease in respect of any losses or
expenses, net of the Lease Indenture Trustee's reasonable fees and expenses in
making such investment, shall be held
22
and applied by the Lease Indenture Trustee in the same manner as the
principal amount of such investment is to be applied, and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lease Indenture Trustee shall not be liable
for any loss resulting from any investment required to be made by it under
this Indenture other than by reason of its willful misconduct or gross
negligence as determined by a court of competent jurisdiction in receiving,
handling or disbursing funds, and any such investment may be sold (without
regard to its maturity) by it without instructions whenever it reasonably
believes such sale is necessary to make a distribution required by this
Indenture.
SECTION 3.8 ESTABLISHMENT OF THE LEASE INDENTURE TRUSTEE'S ACCOUNT;
AND LIEN AND SECURITY INTEREST; ETC.
(a) The Account Bank hereby confirms that it has established at
its office in New York, New York located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ a securities account entitled the "Lease Indenture Trustee's Account" (the
"LEASE INDENTURE TRUSTEE'S ACCOUNT"), which Lease Indenture Trustee's Account
shall be maintained by the Account Bank until the date this Indenture is
terminated pursuant to Section 7.1 hereof. The account number of the Lease
Indenture Trustee's Account established hereunder is 049 65900. The Lease
Indenture Trustee's Account shall not be evidenced by passbooks or similar
writings.
(b) All amounts from time to time held in the Lease Indenture
Trustee's Account shall be maintained (i) in the name of the Owner Trust subject
to the lien and security interest of the Lease Indenture Trustee for the benefit
of the Lease Indenture Trustee and each of the Holders as set forth herein and
(ii) in the custody of the Account Bank for and on behalf of the Lease Indenture
Trustee for the benefit of the Lease Indenture Trustee and each of the Holders
for the purposes and on the terms set forth in this Indenture. All such amounts
shall constitute a part of the Lease Indenture Trustee Account Collateral and
shall not constitute payment of any Indebtedness or any other obligation of the
Owner Trust until applied as hereinafter provided.
(c) As collateral security for the prompt payment in full when due
of the Lessor Secured Obligations owed to the Lease Indenture Trustee and each
Holder, the Owner Trust hereby pledges, assigns, hypothecates and transfers to
the Lease Indenture Trustee for the benefit of the Lease Indenture Trustee and
each of the Holders, and hereby grants to the Lease Indenture Trustee for the
benefit of the Lease Indenture Trustee and each of the Holders, a lien on and
security interest in and to, (i) the Lease Indenture Trustee's Account and any
successor account thereto and (ii) all cash, investments, investment property,
securities or other property at any time on deposit in or credited to the Lease
Indenture Trustee's Account, including all income or gain earned thereon and any
proceeds thereof (the "LEASE INDENTURE TRUSTEE ACCOUNT COLLATERAL").
SECTION 3.9 THE ACCOUNT BANK; LIMITED RIGHTS OF THE OWNER TRUST.
(a) THE ACCOUNT BANK.
(i) ESTABLISHMENT OF SECURITIES ACCOUNT. The Account Bank
hereby agrees and confirms that (A) the Account Bank has established
the Lease Indenture Trustee's Account as set forth in Section 3.8,
(B) the Lease Indenture Trustee's Account is and will be maintained
as a "securities account" (within the meaning of Section 8-501(a) of
the UCC), (C) the Owner Trust is the "entitlement holder" (within
the meaning of Section 8-102(a)(7) of the UCC) in respect of the
"financial assets" (within the meaning of
23
Section 8-102(a)(9) of the UCC) credited to the Lease Indenture
Trustee's Account, (D) all property delivered to the Account Bank
pursuant to this Indenture or any other Operative Document will
be held by the Account Bank and promptly credited to the Lease
Indenture Trustee's Account by an appropriate entry in its
records in accordance with this Indenture, (E) all "financial
assets" (within the meaning of Section 8-102(a)(9) of the UCC) in
registered form or payable to or to the order and credited to the
Lease Indenture Trustee's Account shall be registered in the name
of, payable to or to the order of, or indorsed to, the Account
Bank or in blank, or credited to another securities account
maintained in the name of the Account Bank, and in no case will
any financial asset credited to the Lease Indenture Trustee's
Account be registered in the name of, payable to or to the order
of, or indorsed to, the Owner Trust except to the extent the
foregoing have been subsequently indorsed by the Owner Trust to
the Account Bank or in blank and (F) the Account Bank shall not
change the name or account number of the Lease Indenture
Trustee's Account without the prior written consent of the Lease
Indenture Trustee.
(ii) FINANCIAL ASSETS ELECTION. The Account Bank agrees that
each item of property (including any security, instrument or
obligation, share, participation, interest or other property
whatsoever) credited to the Lease Indenture Trustee's Account shall
be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the UCC.
(iii) ENTITLEMENT ORDERS. Notwithstanding anything in this
Indenture to the contrary, if at any time the Account Bank shall
receive any "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) or any other order from the Lease Indenture
Trustee directing the transfer or redemption of any financial asset
relating to the Lease Indenture Trustee's Account, the Account Bank
shall comply with such entitlement order or other order without
further consent by the Owner Trust or any other Person. The parties
hereto hereby agree that the Lease Indenture Trustee shall have
"control" (within the meaning of Section 8-106(d) of the UCC) of the
Owner Trust's "security entitlements" (within the meaning of Section
8-102(a)(17) of the UCC) with respect to the financial assets
credited to the Lease Indenture Trustee's Account and the Owner
Trust hereby disclaims any entitlement to claim "control" of such
"security entitlements". Unless a Lease Indenture Event of Default
shall have occurred and is continuing, the Lease Indenture Trustee
shall not deliver any entitlement order directing the transfer or
redemption of any financial asset relating to the Lease Indenture
Trustee's Account.
(iv) SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event
that the Account Bank has or subsequently obtains by agreement,
operation of law or otherwise a lien or security interest in the
Lease Indenture Trustee's Account or any security entitlement
credited thereto, the Account Bank agrees that such lien or security
interest shall be subordinate to the lien and security interest of
the Lease Indenture Trustee for the benefit of the Lease Indenture
Trustee and each Holder. The financial assets standing to the credit
of the Lease Indenture Trustee's Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of
any Person other than the Lease Indenture Trustee for the benefit of
the Lease Indenture Trustee and each Holder (except for the
24
face amount of any checks which have been credited to the Lease
Indenture Trustee's Account but are subsequently returned unpaid
because of uncollected or insufficient funds).
(v) NO OTHER AGREEMENTS. The Account Bank and the Owner Trust
have not entered into any agreement with respect to the Lease
Indenture Trustee's Account or any financial assets credited to the
Lease Indenture Trustee's Account other than this Indenture. The
Account Bank has not entered into any agreement with the Owner Trust
or any other Person purporting to limit or condition the obligation
of the Account Bank to comply with entitlement orders originated by
the Lease Indenture Trustee in accordance with Section 3.9(a)(iii)
hereof. In the event of any conflict between this Section 3.9 or any
other agreement now existing or hereafter entered into, the terms of
this Section 3.9 shall prevail.
(vi) NOTICE OF ADVERSE CLAIMS. Except for the claims and
interest of the Lease Indenture Trustee for the benefit of the Lease
Indenture Trustee and each Holder and the Owner Trust in the Lease
Indenture Trustee's Account, the Account Bank does not know of any
claim to, or interest in, the Lease Indenture Trustee's Account or
in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process)
against the Lease Indenture Trustee's Account or in any financial
asset credited thereto, the Account Bank will promptly notify the
Lease Indenture Trustee and the Owner Trust in writing thereof.
(vii) RIGHTS AND POWERS OF THE LEASE INDENTURE TRUSTEE. The
rights and powers granted by the Lease Indenture Trustee to the
Account Bank have been granted in order to perfect its lien and
security interests in the Lease Indenture Trustee's Account, are
powers coupled with an interest and will neither be affected by the
bankruptcy of the Owner Trust nor the lapse of time.
(b) LIMITED RIGHTS OF THE OWNER TRUST. The Owner Trust shall not
have any rights against or to monies held in the Lease Indenture Trustee's
Account, as third party beneficiary or otherwise, or any right to direct the
Account Bank or the Lease Indenture Trustee to apply or transfer monies in the
Lease Indenture Trustee's Account, except the right to receive or make
requisitions of monies held in the Lease Indenture Trustee's Account, as
expressly provided in this Indenture, and to direct the investment of monies
held in the Lease Indenture Trustee's Account as expressly provided in Section
3.7 hereof. Except as expressly provided in this Indenture, in no event shall
any amounts or Cash Equivalent Investments deposited in or credited to the Lease
Indenture Trustee's Account be registered in the name of the Owner Trust,
payable to the order of the Owner Trust or specially indorsed to the Owner Trust
except to the extent that the foregoing have been specially indorsed to the
Lease Indenture Trustee or in blank.
SECTION 4. COVENANTS OF THE OWNER TRUST; LEASE INDENTURE EVENTS OF DEFAULT;
REMEDIES
SECTION 4.1 COVENANTS OF THE OWNER TRUST. The Owner Trust hereby covenants
and agrees as follows:
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(i) the Owner Trust will duly and punctually pay the principal
of and interest on and other amounts (including any Make-Whole
Premium) due under the Lessor Notes and this Indenture in accordance
with the terms hereof and thereof and all amounts payable by it to
the Lease Indenture Trustee and the Holders under any other
Operative Document;
(ii) in the event that an Authorized Officer of the Owner
Trust shall have actual knowledge of a Lease Indenture Event of
Default or a Lease Indenture Default, the Owner Trust will give
prompt written notice of such Lease Indenture Event of Default or
Lease Indenture Default to the Facility Lessee, the Owner
Participant and the Lease Indenture Trustee (and the Lease Indenture
Trustee shall thereupon promptly deliver a copy of such notice to
each Holder);
(iii) in the event that an Authorized Officer of the Owner
Trust shall have actual knowledge of an Event of Loss, then, to the
extent that the Facility Lessee is not required, pursuant to the
Facility Lease, to give notice of such event to the Lease Indenture
Trustee, the Owner Trust will give prompt written notice of such
Event of Loss to the Lease Indenture Trustee, (and the Lease
Indenture Trustee shall thereupon promptly deliver a copy of such
notice to each Holder) and the Owner Participant;
(iv) the Owner Trust will furnish to the Lease Indenture
Trustee true and correct duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and
other instruments furnished to the Owner Trust under the Facility
Lease, to the extent that the same shall not have been (or are not
required to be) furnished to the Lease Indenture Trustee or the
Holders pursuant to the Facility Lease or the Participation
Agreement; and
(v) except as contemplated by the Operative Documents, the
Owner Trust will not incur any Indebtedness or engage in any
business or activity except with the prior written consent of the
Lease Indenture Trustee (acting on the instructions of Required
Holders).
SECTION 4.2 LEASE INDENTURE EVENTS OF DEFAULT. "LEASE INDENTURE
EVENT OF DEFAULT" means any of the following events (whatever the reason for
such Lease Indenture Event of Default and whether such event shall be voluntary
or involuntary or come about or be effected by operation of law or pursuant to
or in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any Governmental Authority):
(a) any Lease Event of Default (other than with respect to
Excepted Payments unless the Facility Lease has been declared in
default pursuant to Section 16(a) thereof) shall have occurred and
be continuing; or
(b) the failure of the Owner Trust to pay when due any
payment of principal of, premium (including, without limitation,
Make-Whole Premium) (if any) or interest on, or any scheduled fees
or other amounts due and payable under or with respect to, any
Lessor Note and such failure shall continue for five Business Days;
or the failure of the Owner Trust to pay when due any other amounts
under or with respect to, any Lessor Note or this Indenture and such
failure shall continue for 30 Business Days after the
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Owner Trust and the Owner Participant receive written demand
therefor from the Lease Indenture Trustee or any Holder; or
(c) any material representation or warranty made by the
Owner Participant or the Owner Trust in this Indenture or in any
other Operative Document to which it is a party or by any OP
Guarantor in its Owner Participant Guaranty, as the case may be,
shall prove to have been inaccurate when made or deemed made in any
material respect; and such misrepresentation or breach of warranty
shall not have been corrected within a period of 30 days following
notice thereof being given to the Owner Trust and the Owner
Participant or such OP Guarantor, as the case may be, by any Holder
(through the Lease Indenture Trustee); PROVIDED that, if such
misrepresentation or breach of warranty is capable of correction but
cannot with diligence be corrected within such 30-day period, such
failure will not constitute a Lease Indenture Event of Default so
long as the party whose representation or warranty was inaccurate
(i) promptly institutes corrective action within such 30-day period
and diligently pursues such corrective action and (ii) the
continuation of such inaccuracy beyond such 30-day period would not
have a Material Adverse Effect (but in no event shall the total
period permitted to correct such misrepresentation or breach of
warranty extend beyond 90 days from the date such notice was
provided); or
(d) any failure (i) by the Owner Trust to observe or perform
any other material covenant or obligation of the Owner Trust
contained in this Indenture or in any Operative Document to which it
is a party (other than as provided in clause (a) above) in any
material respect, or (ii) by the Owner Participant to observe or
perform any material covenant or obligation of the Owner Participant
contained in any Operative Document to which it is a party or (iii)
by any OP Guarantor to observe or perform any material covenant or
obligation of such OP Guarantor contained in any Owner Participant
Guaranty, is not remedied within a period of 30 days following
notice of such failure being given to the Owner Trust and the Owner
Participant or such OP Guarantor, as the case may be, by any Holder
(through the Lease Indenture Trustee); PROVIDED that, if such
failure is capable of remedy but cannot with diligence be remedied
within such 30-day period, such failure will not constitute a Lease
Indenture Event of Default so long as (A) the party failing to
perform promptly commences remedial action within such 30-day period
and diligently pursues such action and (B) the continuation of such
failure beyond such 30-day period would not have a Material Adverse
Effect (but in no event shall the total period permitted to cure
such default extend beyond 120 days from the date such notice was
provided); or
(e) the Owner Participant, the Owner Trust or any OP
Guarantor shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code or
any other federal, state or foreign bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to
controvert in a timely and appropriate manner, any such proceeding
or the filing of any such petition, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator or
similar official for the Owner Trust, the Owner Participant or such
OP Guarantor or any substantial part of the property of any of the
foregoing, (iv) file an answer admitting the material allegations of
a petition filed against it in any such proceeding, (v) make a
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general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as
they become due, or (vii) take corporate action for the purpose of
effecting any of the foregoing; or
(f) an involuntary proceeding is commenced or an involuntary
petition is filed in a court of competent jurisdiction seeking (i)
relief in respect of the Owner Participant, any OP Guarantor or the
Owner Trust under Title 11 of the United States Code or any other
federal, state or foreign bankruptcy, insolvency or similar law now
or hereafter in effect, (ii) the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the Owner
Participant, such OP Guarantor or the Owner Trust or any substantial
part of the property of the foregoing or (iii) the winding-up or
liquidation of the Owner Trust, such OP Guarantor or the Owner
Participant and such proceeding or petition continues undismissed
for 60 days or an order or decree approving or ordering any of the
foregoing continues unstayed and in effect for 60 days.
SECTION 4.3 CERTAIN RIGHTS. In the event of any Lease Default or
Lease Event of Default in the payment of any installment of Basic Lease Rent due
under the Facility Lease, the Owner Trust or the Owner Participant may, but
shall not be obligated to, within ten Business Days after the earlier of (a)
receipt by the Owner Trust of notice of or (b) the Owner Trust acquiring actual
knowledge of the occurrence of such Lease Default or Lease Event of Default,
without the consent or concurrence of the Lease Indenture Trustee or any Holder,
pay, as provided in Section 2.6 hereof, for application in accordance with
Section 3.1 hereof, a sum equal to the amount of all (but not less than all) of
the principal of, interest on and other amounts payable under or in respect of,
the Lessor Notes as shall then be due and payable on the Lessor Notes (without
giving effect to any acceleration pursuant to Section 4.4(b) or (c) hereof). If
any other Lease Default or other Lease Event of Default occurs and the Owner
Trust shall have been furnished (by or for the account of the Owner Participant)
with all funds necessary for remedying such Lease Default or Lease Event of
Default, the Owner Participant may, within ten Business Days after the earlier
of (a) receipt by the Owner Trust of notice of or (b) the Owner Trust acquiring
actual knowledge of the occurrence of such Lease Default or Lease Event of
Default, without the consent or concurrence of the Lease Indenture Trustee or
any Holder, instruct the Owner Trust to exercise the Owner Trust's rights under
Section 20 of the Facility Lease to perform such obligation on behalf of the
Facility Lessee. Solely for the purpose of determining whether there exists a
Lease Indenture Event of Default, (a) any payment by the Owner Participant or
the Owner Trust pursuant to, and in compliance with, the first sentence of this
Section 4.3 shall be deemed to remedy any Lease Default or Lease Event of
Default in the payment of installments of Basic Lease Rent theretofore due and
payable and to remedy any default by the Owner Trust in the payment of any
amount due and payable under the Lessor Notes or hereunder, and (b) any
performance by the Owner Trust of any obligation of the Facility Lessee under
the Facility Lease pursuant to, and in compliance with, the second sentence of
this Section 4.3 shall be deemed to remedy any Lease Default or Lease Event of
Default to the same extent that like performance by the Facility Lessee itself
would have remedied such Lease Default or Lease Event of Default (but any such
payment or performance shall not relieve the Facility Lessee of its duty to pay
all Rent and perform all of its obligations pursuant to the Facility Lease). If,
on the basis specified in the preceding sentence, such Lease Default or Lease
Event of Default shall have been remedied, then any determination that the
Facility Lease, and any declaration pursuant to this Indenture that the Lessor
Notes are due and payable or that a
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Lease Indenture Default or Lease Indenture Event of Default exists hereunder,
based upon such Lease Default or Lease Event of Default shall be deemed to be
rescinded, and the Owner Participant shall (to the extent of any such
payments made by or for the account of the Owner Trust) be subrogated to the
rights of the Holders hereunder to receive such payment of Rent from the
Facility Lessee (and the payment of interest on account of such Rent from the
Facility Lessee being overdue), and shall be entitled, so long as no other
Lease Indenture Default or Lease Indenture Event of Default shall have
occurred or would result therefrom, to receive and retain such payment from
the Facility Lessee; PROVIDED, HOWEVER, that the Owner Participant shall not,
so long as this Indenture shall not have terminated, otherwise attempt to
recover any such amount paid by it or for its account on behalf of the
Facility Lessee pursuant to this Section 4.3 except by demanding of the
Facility Lessee payment of such amount or by commencing an action at law and
obtaining and enforcing a judgment against the Facility Lessee for the
payment of such amount or taking appropriate action in a pending action at
law against the Facility Lessee and the Owner Participant will not obtain any
Lien on any part of the Indenture Estate on account of such payment nor will
any claim of the Owner Participant against the Facility Lessee or any other
party for the repayment thereof impair the prior right and security interest
of the Lease Indenture Trustee and the Holders in and to the Indenture
Estate, as the case may be; PROVIDED, FURTHER, however, that
(a) this Section 4.3 shall not apply with respect to any cure of
any default in the payment of Basic Lease Rent if such cure shall have
previously been effected with respect to (A) four consecutive payments of
Basic Lease Rent immediately preceding the date of such default, or (B)
more than eight payments of Basic Lease Rent; and
(b) neither the Owner Trust nor the Owner Participant shall
(without the prior written consent of the Required Holders) have the right
to cure any Lease Default or Lease Event of Default except as specified in
this Section 4.3.
SECTION 4.4 REMEDIES.
(a) Subject to the second sentence of Section 2.12(a) hereof, if a
Lease Indenture Event of Default shall have occurred and so long as the same
shall be continuing unremedied and, except as provided in the proviso at the
end of this sentence, if the Lessor Notes shall have been accelerated
pursuant to Section 4.4(b) or 4.4(c) hereof, then and in every such case the
Lease Indenture Trustee (acting on the instructions of the Required Holders)
may, if not precluded by law or otherwise, consistent with this Section
4.4(a), exercise any or all of the rights and powers and pursue any and all
of the remedies pursuant to this Section 4 and shall have and may exercise
all of the rights and remedies of a secured party under Requirements of Law
and, in the event such Lease Indenture Event of Default arises as a result of
an event described in clause (a) of Section 4.2 hereof and is continuing
unremedied and Section 4.3 hereof shall either not apply or shall have ceased
to apply with respect to such Lease Indenture Event of Default, any and all
of the remedies pursuant to Section 17 of the Facility Lease) and may take
possession of all or any part of the Indenture Estate covered or intended to
be covered by the Lien created pursuant hereto and may exclude the Owner
Participant, the Owner Trust, the Facility Lessee (to the extent permitted by
Section 17 of the Facility Lease and all Persons claiming under any thereof
or wholly or partly therefrom; PROVIDED, HOWEVER, that, under no
circumstances shall the Lease Indenture Trustee sell any of the Property
Interest or exercise other remedies against the Property Interest seeking to
deprive the Owner Trust or the Owner Participant of their respective
interests therein unless the Lessor Notes have been accelerated. It
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is understood and agreed that, subject to the provisions of this Section 4.4,
the Lease Indenture Trustee (acting on the instructions of the Required Holders)
may exercise any right of sale of the Property Interest available to it, even
though it shall not have taken possession of the Property Interest and shall not
have possession thereof at the time of such sale. It is further agreed and
understood that if the Lease Indenture Trustee (acting on the instructions of
the Required Holders) shall proceed to foreclose on the Lien of this Indenture
or exercise any other material remedy with respect to the Property Interest, the
Lease Indenture Trustee shall substantially simultaneously therewith, to the
extent the Lease Indenture Trustee is then entitled to do so hereunder and under
the Facility Lease proceed (to the extent it has not already done so) to
exercise one or more of the remedies with respect to the Property Interest
referred to in clause (e) or (f) of Section 17.1 of the Facility Lease; PROVIDED
that in the event the Lease Indenture Trustee is stayed or otherwise prevented
by operation of any law from exercising such remedies for a continuous period of
180 days following the commencement of such stay or other prevention, it may
(acting on the instruction of the Required Holders), upon the expiration of such
180-day period, exercise any remedy available to it under this Indenture. For
the avoidance of doubt, it is expressly understood and agreed that the
above-described inability of the Lease Indenture Trustee to exercise any right
or remedy under the Facility Lease shall not prevent the Lease Indenture Trustee
from exercising any of its other rights, powers and remedies under this
Indenture.
(b) If a Lease Indenture Event of Default referred to in clause (e)
or (f) of Section 4.2 shall have occurred, then and in every such case the
unpaid principal of all Lessor Notes then outstanding, together with interest
accrued but unpaid thereon and all other amounts due thereunder or with
respect thereto (but excluding any Make-Whole Premium), shall immediately and
without further act become due and payable, without presentment, demand,
protest or notice, all of which are hereby waived.
(c) If any Lease Indenture Event of Default (other than a Lease
Indenture Event of Default referred to in clause (e) or (f) of Section 4.2)
shall have occurred and be continuing, then and in every such case the Lease
Indenture Trustee (acting on the instruction of the Required Holders) may at
any time declare the Lessor Notes to be due and payable, whereupon the unpaid
principal of all Lessor Notes then outstanding, together with accrued but
unpaid interest thereon and other amounts due thereunder or respect thereto
(but excluding any Make-Whole Premium), shall immediately become due and
payable without presentment, demand, protest or notice, all of which are
hereby waived.
(d) Each Holder shall be entitled, at any sale pursuant to Section
17.1 of the Facility Lease, to credit against any purchase price bid at such
sale by such Holder all or any part of the unpaid obligations owing to such
Holder and secured by the Lien of this Indenture.
(e) Notwithstanding anything to the contrary contained herein, if all
Lessor Notes are held by the Facility Lessee or an Affiliate of the Facility
Lessee, then (i) upon a Lease Indenture Event of Default that is caused by a
Lease Default or Lease Event of Default, the remedies hereunder may be
exercised only with the written consent of the Owner Trust and (ii) only the
Owner Trust may exercise any or all of the remedies under the Facility Lease
with respect to any such Lease Default or Lease Event of Default.
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(f) In addition to all other remedies provided for herein if a Lease
Indenture Event of Default shall have occurred and be continuing, the Lease
Indenture Trustee shall have the right to exercise any STATUTORY POWER OF
SALE and sell the Indenture Estate or any part of the Indenture Estate at
public sale or sales, in order to pay the Lessor Secured Obligations, and all
impositions, if any, with accrued interest thereon, and all expenses of the
sale and of all proceedings in connection therewith, including reasonable
attorney's fees, if incurred.
SECTION 4.5 TAKING POSSESSION OF INDENTURE ESTATE.
(a) Subject to the rights of the Owner Trust and the Owner
Participant under Section 4.3 hereof, and unless an OP Guarantor, the Owner
Participant or the Owner Trust shall have purchased the Lessor Notes pursuant
to Section 2.10 hereof, if a Lease Indenture Event of Default shall have
occurred and be continuing and the Lessor Notes shall have been accelerated
pursuant to Section 4.4(b) or 4.4(c) hereof, at the request of the Required
Holders, the Owner Trust shall promptly execute and deliver or cause to be
delivered to the Lease Indenture Trustee and the Holders such instruments and
other documents as the Required Holders may deem necessary or advisable to
enable the Lease Indenture Trustee at such time or times and place or places
as the Lease Indenture Trustee (acting on the instruction of the Required
Holders) may specify, to obtain possession of all or any part of the
Indenture Estate to which the Holders shall at the time be entitled
hereunder. If the Owner Trust shall for any reason fail to execute and
deliver or cause to be delivered such instruments and documents after such
request by the Lease Indenture Trustee, the Lease Indenture Trustee (acting
on the instruction of the Required Holders) may (i) obtain a judgment
conferring on the Lease Indenture Trustee the right to immediate possession
and requiring the Owner Trust to execute and deliver or cause to be delivered
such instruments and documents to the Lease Indenture Trustee and the Owner
Trust hereby specifically consents to the entry of such judgment to the
fullest extent it may lawfully do so, and (ii) to the extent permitted by
law, pursue all or part of such Indenture Estate, as applicable, wherever it
may be found, subject to Section XIII of the Participation Agreement and
Section 4.2 of the Facility Lease, if applicable. All expenses (including
those of the Lease Indenture Trustee) 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 in connection with a Lease
Event of Default, the Lease Indenture Trustee (acting on the instruction of
the Required Holders) may, from time to time at the expense of the Indenture
Estate, make all such expenditures for maintenance, insurance, repairs,
replacements, alterations, additions and improvements to and of the Indenture
Estate as the Required Holders may deem proper. In each such case, the Lease
Indenture Trustee (acting on the instructions of the Required Holders) or its
designee shall have the right to maintain, use, operate, store, lease,
control or manage the Indenture Estate and to carry on the business and to
exercise all rights and powers of the Owner Trust relating to the Indenture
Estate, as the Required Holders shall deem best, including the right to enter
into any and all such agreements with respect to the maintenance, insurance,
use, operation, storage, leasing, control, management or disposition of the
Indenture Estate or any part thereof as the Required Holders may determine;
and the Lease Indenture Trustee shall be entitled to collect and receive
directly all tolls, rents (including Rent), revenues, issues, income,
products and profits constituting part of the Indenture Estate and every part
thereof, except Excepted Payments, without prejudice, however, to the right
of the Lease Indenture Trustee under any provision of this Indenture to
collect and receive all cash held by, or required to be deposited with, the
Lease
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Indenture Trustee hereunder. Such tolls, rents (including Rent), revenues,
issues, income, products and profits shall be applied to pay the expenses of
use, operation, storage, subleasing, control, management or disposition of
the Indenture Estate and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions and improvements,
and to make all payments which the Lease Indenture Trustee may be required or
may elect (acting on the instruction of the Required Holders) to make, if
any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers
and accountants to examine, inspect and make reports upon the properties and
books and records of the Owner Trust), and all other payments which the Lease
Indenture Trustee may be required or authorized to make under any provision
of this Indenture, as well as reasonable compensation for the services of the
Lease Indenture Trustee, and of all Persons properly engaged and employed by
the Lease Indenture Trustee.
SECTION 4.6 REMEDIES CUMULATIVE. Except as provided herein, each and
every right, power and remedy given to the Lease Indenture Trustee on behalf
of the Holders or any of them specifically or otherwise in this Indenture
shall be cumulative and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in
equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Lease
Indenture Trustee (acting on the instruction of the Required Holders), and
the exercise or the beginning of the exercise of any power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Lease Indenture Trustee in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or
be construed to be a waiver of any default on the part of the Owner Trust or
the Facility Lessee or to be an acquiescence therein.
SECTION 4.7 DISCONTINUANCE OF PROCEEDINGS. In case the Lease Indenture
Trustee (acting on the instruction of the Required Holders) shall have
instituted any proceeding to enforce any right, power or remedy under this
Indenture by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Holders, then and in every such case the Owner Trust, the
Owner Participant, the Lease Indenture Trustee and the Facility Lessee shall,
subject to any determination in such proceedings, be restored to their former
positions and rights hereunder with respect to the Indenture Estate, as the
case may be, and all rights, remedies and powers of the Lease Indenture
Trustee shall continue in effect as if no such proceedings had been
instituted.
SECTION 4.8 WAIVER OF PAST DEFAULTS. Upon the instruction of the
Required Holders, the Lease Indenture Trustee shall waive any past default
hereunder and its consequences and upon any such waiver such default shall
cease to exist and any Lease Indenture Event of Default (as well as any Lease
Event of Default giving rise to such Lease Indenture Event of Default) or
Lease Indenture Default (as well as any Lease Default giving rise to such
Lease Indenture Default) arising therefrom shall be deemed to have been cured
for every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 4.9 WAIVER OF STAY, EXTENSION, MORATORIUM LAWS; EQUITY OF
REDEMPTION. To the maximum extent permitted by law, the Owner Trust shall not
at any time insist upon, or plead, or in any manner whatever claim or take
any benefit or advantage of any applicable present or future stay, extension
or moratorium law, that may affect observance or performance of the
32
provisions of this Indenture; nor claim, take or insist upon any benefit or
advantage of any present or future law providing for the valuation or
appraisal of the Indenture Estate or any portion thereof prior to any sale or
sales thereof that may be made under or by virtue of Section 4.2 or 4.3
hereof; and the Owner Trust, to the extent that it lawfully may, hereby
waives all benefit or advantage of any such law or laws. The Owner Trust for
itself and all who may claim under it, hereby waives, to the maximum extent
permitted by applicable law, any and all rights and equities of redemption
from sale under the power of sale created hereunder or from sale under any
order or decree of foreclosure of this Indenture and (if a Lease Indenture
Default shall have occurred) all notice or notices of seizure, and all right
to have the Indenture Estate marshalled upon any foreclosure hereof. The
Indenture Trustee shall not be obligated to pursue or exhaust its rights or
remedies as against any other part of the Indenture Estate and the Owner
Trust hereby waives any right or claim of right to have the Indenture Trustee
proceed in any particular order.
SECTION 5. DISCLAIMER OF REPRESENTATIONS; NO SEGREGATION OF MONEYS; FURTHER
ASSURANCES; CERTAIN RIGHTS
SECTION 5.1 NO REPRESENTATIONS OR WARRANTIES AS TO THE PROPERTY
INTEREST OR OTHER LESSOR SECURITY DOCUMENTS. NONE OF THE OWNER TRUST, THE
owner trustee, THE TRUST COMPANY OR THE OWNER PARTICIPANT MAKES OR SHALL BE
DEEMED TO HAVE MADE, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE, WORKMANSHIP,
COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE
PROPERTY INTEREST OR ANY PART OF THEREOF, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, INCLUDING ANY ENVIRONMENTAL
LIABILITY, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE
PROPERTY INTEREST OR ANY PART THEREOF WHATSOEVER, except that the Owner Trust
warrants that on the Closing Date it shall have received such rights and
interests that were conveyed to it with respect to the Property Interest
pursuant to the Facility Deed, the Bill of Sale and the Facility Site Lease
subject to the rights of the parties to this Indenture and to Permitted Liens
and Permitted Encumbrances, and the Trust Company warrants that on the
Closing Date the Property Interest shall be free and clear of Owner Trust's
Liens attributable to the Trust Company. None of the Owner Trustee or the
Trust Company makes or shall be deemed to have made any representation or
warranty as to the validity, legality or enforceability of this Indenture,
the Trust Agreement or the Lessor Notes or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trust, the Owner Trustee or the Trust Company in its
individual capacity made under this Indenture or in the Participation
Agreement.
SECTION 5.2 NO SEGREGATION OF MONEYS; NO INTEREST. Any moneys paid to
or retained by the Lease Indenture Trustee pursuant to any provision hereof
and not then required to be distributed to any Holder, the Facility Lessee or
the Owner Trust or the Owner Participant as provided in Section 3 hereof need
not be segregated in any manner except to the extent provided herein or as
otherwise required by Requirements of Law, and may, except as aforesaid, be
33
deposited under such general conditions as may be prescribed by Requirements of
Law, and the Lease Indenture Trustee shall not (except as otherwise provided in
Section 3.7 hereof) be liable for any interest thereon or any losses resulting
from the investment thereof.
SECTION 5.3 FURTHER ASSURANCES; FINANCING STATEMENTS. At any time and
from time to time, upon the request of any Holder (through the Lease
Indenture Trustee), the Facility Lessee or the Owner Participant, the Owner
Trust shall, at the expense of the Owner Trust, promptly and duly execute and
deliver any and all such further instruments and documents presented to it in
execution form as may be specified in such request and as are necessary or
desirable to perfect, preserve or protect the mortgage, first priority
security interests and assignments created or intended to be created hereby,
or to obtain for the Lease Indenture Trustee and the Holders the full benefit
of the specific rights and powers herein granted, including, without
limitation, the execution and delivery of Uniform Commercial Code financing
statements and continuation statements with respect thereto, or similar
instruments relating to the perfection of the mortgage, security interests or
assignments created or intended to be created hereby.
SECTION 5.4 CERTAIN RIGHTS OF OWNER TRUST AND OWNER PARTICIPANT.
(a) Notwithstanding any other provisions of this Indenture other than
Sections 4.4(e) and 5.4(b) hereof, including the Granting Clause, the
following rights (the "SECTION 5.4 RIGHTS") shall be exercisable by the Owner
Trust or the Lease Indenture Trustee (acting on the instruction of the
Required Holders):
(i) at all times the Owner Trust shall have the right,
together with or independently of the Lease Indenture Trustee, (A)
to receive from the Facility Lessee all notices, certificates,
reports, filings, opinions of counsel and other documents and all
information which the Facility Lessee is permitted or required to
give or furnish to the Owner Trust pursuant to any Operative
Document, (B) to exercise inspection rights granted to the Owner
Trust pursuant to Section 12 of the Facility Lease, (C) to exercise,
to the extent necessary to enable it to exercise its rights under
Section 4.3 hereof, the rights of the Owner Trust under Section 20
of the Facility Lease, (D) to request from the Facility Lessee such
further documents or assurances, or request that the Facility Lessee
take such further actions in respect of such party's interests, as
shall be required to be delivered or taken by the Facility Lessee
pursuant to Section 5.7 or 18.14 of the Participation Agreement, and
(E) to give notice of a Lease Default or a Lease Event of Default
pursuant to Section 17 of the Facility Lease; PROVIDED, HOWEVER,
that the rights excepted and reserved by this Section 5.4(a)(i)
shall not be deemed to include the exercise of any remedies provided
for in Section 17.1 of the Facility Lease, except that the Owner
Trust and the Owner Participant may proceed by appropriate court
action or actions, either at law or in equity, to enforce
performance by the Facility Lessee of the applicable covenants and
terms of Excepted Payments or to recover damages for the breach
thereof but not to terminate the Facility Lease;
(ii) so long as a Lease Indenture Event of Default under
clauses (c), (d), (e) or (f) of Section 4.2 hereof shall not have
occurred and be continuing and the Lease Indenture Trustee shall not
have commenced the exercise of material remedies under this
Indenture, the Owner Trust shall have the right, together with the
Lease Indenture Trustee and to the extent permitted by the Operative
Documents and Requirements of Law, (A) to seek specific performance
of the covenants of the Facility Lessee under the Operative
Documents relating to the protection, insurance, maintenance,
possession and use of the
34
Property Interest or (B) to enforce any manufacturer's warranty pursuant
to any of the Operative Documents;
(iii) so long as a Lease Indenture Event of Default under
clauses (c), (d), (e) or (f) of Section 4.2 hereof shall not have
occurred and be continuing and the Lease Indenture Trustee shall not
have commenced the exercise of material remedies under this
Indenture, neither the Owner Trust nor the Lease Indenture Trustee
shall have any right, without the prior consent of the other (A) to
amend, supplement, modify or waive any return condition in Section 5
of the Facility Lease, or (B) to exercise any rights with respect to
the Facility Lessee's use and operation, modification or maintenance
of the Property Interest which the Facility Lease specifically
confers on the Owner Trust; and
(iv) so long as a Lease Indenture Event of Default under
clauses (c), (d), (e) or (f) of Section 4.2 hereof shall not have
occurred and be continuing and the Lease Indenture Trustee shall not
have commenced the exercise of material remedies under this
Indenture, neither the Owner Trust nor the Lease Indenture Trustee
shall have any right, without the prior written consent of the other
except as otherwise provided in Section 6.1, subject to the
limitations contained in Section 3.4 of the Facility Lease, to
exercise the rights, elections and options of the Owner Trust (other
than the right to receive payment), to make any decision or
determination and to give any notice, consent, waiver or approval
with respect to any adjustments of Basic Lease Rent or Termination
Value under Section 3.4 of the Facility Lease.
(b) Notwithstanding the foregoing provisions of this Section 5.4 but
subject to Section 4 hereof, the Lease Indenture Trustee (acting on the
instructions of the Required Holders) shall at all times have the right, to
the exclusion of the Owner Trust and the Owner Participant, to exercise the
remedies set forth in Section 17.1 of the Facility Lease and in Section 4.4
and 4.5 hereof. Notwithstanding anything herein or in any other Operative
Document to the contrary, so long as the Facility Lessee of any Affiliate of
the Facility Lessee is a Holder, neither the Facility Lessee nor any such
Affiliate, in its capacity as Holder, shall have any rights to approve,
consent to, vote on or ratify any action, inaction or determination taken or
made or to be taken or made hereunder; PROVIDED, HOWEVER, that this sentence
shall not apply to the Facility Lessee or any such Affiliate with respect to
those matters set forth in Section 6.1 requiring the consent of all Holders.
(c) Notwithstanding any other provision of this Indenture:
(1) The Owner Trust shall at all times, to the exclusion of
the Lease Indenture Trustee, (i) retain all rights to demand and
receive payment of, and to commence an action for payment of,
Excepted Payments but the Owner Trust shall have no remedy or right
with respect to any such payment against the Indenture Estate nor
any right to collect any such payment by the exercise of any of the
remedies under Section 17 of the Facility Lease; (ii) retain all
rights to exercise the rights granted it under the EME OP Guarantee;
to give all notices (including, without limitation, the right to
give notice of a breach by EME of its covenants contained therein)
under the EME OP Guarantee, to agree to any amendment, supplement or
modification to the EME OP Guarantee; and to take any other action
permitted to be taken by it under or otherwise with respect to the
35
EME OP Guarantee; (iii) to declare a Lease Event of Default arising
under Section 16(p) of the Facility Lease and to declare the
Facility Lease to be in default as a result thereof; and (iv) except
in connection with the exercise of remedies pursuant to the Facility
Lease, retain all rights to exercise the Owner Trust's rights
relating to the Appraisal Procedure and to confer and agree with the
Facility Lessee on Fair Market Rental Value, or any Renewal Lease
Term;
(2) So long as the Lessor Notes have not been accelerated
pursuant to Section 4.2 hereof (or, if accelerated, such
acceleration has theretofore been rescinded) or the Lease Indenture
Trustee shall not have exercised any of its rights pursuant to
Section 4 hereof to take possession of, foreclose, sell or otherwise
take control of all or any part of the Indenture Estate, the Owner
Trust shall retain the right to the exclusion of the Lease Indenture
Trustee to exercise the rights of the Owner Trust under, and to
determine compliance by the Facility Lessee, with the provisions of
Section 10 (other than Section 10.2 and Section 10.4 thereof), 13,
14 and 15 of the Facility Lease; PROVIDED, HOWEVER, that if a Lease
Indenture Event of Default shall have occurred and be continuing,
the Owner Trust shall cease to retain such rights upon notice from
the Lease Indenture Trustee (acting on the instruction of the
Required Holders) stating that such rights shall no longer be
retained by the Owner Trust.
SECTION 6. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS
SECTION 6.1 SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND THE
OTHER DOCUMENTS:
(a) WITHOUT CONSENT OF HOLDERS. Subject to the provisions of
the Participation Agreement, at any time and from time to time the
Owner Trust (but only on the written request of the Owner
Participant) and the Lease Indenture Trustee may, from time to time
and at any time, enter into a supplement hereto without the consent
of the Holders or the Required Holders for one or more of the
following purposes:
(i) to convey, transfer, assign, mortgage or pledge to the
Lease Indenture Trustee as security for the Lessor Notes any property
or assets;
(ii) to evidence the succession of another corporation
to the Trust Company, or successive successions, and the
assumption by the successor corporation of the covenants,
agreements and obligations of the Owner Trust;
(iii) to add to the covenants of the Owner Trust for the
benefit of the Holders of all or any series of Lessor Notes
(and if such covenants are to be for the benefit of less than
all series of Lessor Notes, stating that such covenants are
expressly being included solely for the benefit of such
series) such further covenants, restrictions, conditions or
provisions as the Owner Trust and the Lease Indenture Trustee
shall consider to be for the protection of the Holders of any
series, and to make the occurrence, or the occurrence and
continuance, of a default in complying with any such
additional covenant, restriction, condition or provision a
Lease Indenture Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture
as herein set forth; in respect of any such additional
covenant, restriction, condition or provision, such
36
supplement may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such a Lease Indenture Event of Default or may
limit the remedies available to the Lease Indenture Trustee upon
such a Lease Indenture Event of Default or may limit the right of
the Holders of a majority in aggregate principal amount of the
Lessor Notes of such series to waive such a Lease Indenture Event
of Default;
(iv) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplement which may
be defective or inconsistent with any other provision
contained herein or in any supplement, or to make such other
provisions as the Owner Trust may deem necessary or desirable,
with respect to matters or questions arising under this
Indenture, PROVIDED that no such action shall adversely affect
the interests of the Holders of the Lessor Notes of any
series;
(v) to establish the form and terms of the Lessor
Notes of any series, as permitted by Section 2.13;
(vi) to effect an assumption of the Lessor Notes, as
permitted by Section 2.12;
(vii) to evidence and provide for the acceptance of
appointment hereunder by a successor Lease Indenture Trustee
with respect to the Lessor Notes and to add to or change any
of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder by more than one trustee, all as provided in Section
7.15; and
(viii) subject to Section 6.1(b) with respect to the
provisions of the Indenture Estate Documents referred to
therein, to effect any amendment, modification, supplement,
waiver or consent with respect to any Indenture Estate
Document, provided that no such action shall, in the judgment
of the Lease Indenture Trustee, materially and adversely
affect the interests of the Holders of any of the Lessor Notes
of any series.
The Lease Indenture Trustee is hereby authorized to join with the
Owner Trust in the execution of any such supplement, to make any
further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer, assignment,
mortgage or pledge of any property or assets thereunder, but the
Lease Indenture Trustee shall not be obligated to enter into any
such supplement which affects the Lease Indenture Trustee's own
rights, duties or immunities under this Indenture or otherwise.
(b) INSTRUCTIONS OF REQUIRED HOLDERS; LIMITATIONS. Subject
to the provisions of the Participation Agreement, at any time and
from time to time, (i) the Owner Trust (but only on the written
request of the Owner Participant) and the Lease Indenture Trustee
(but only if so directed by the Required Holders to the extent that
the same is not expressly permitted by Section 6.1(a)), may execute
a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Indenture as specified
in such request, (ii) the Owner Trust (but only on the written
request of the Owner Participant) and, except with respect to
Excepted Payments, the Lease Indenture Trustee (but only if so
directed by the Required Holders to the extent that the same is not
expressly permitted by Section 6.1(a)), may enter into such written
amendment of or
37
supplement to any Indenture Estate Document as may be specified in such
request and (iii) the Owner Trust shall not revoke or otherwise
terminate the Trust Agreement or, if such amendment or supplement would
impair the rights of the Lease Indenture Trustee or any Holder, amend
or supplement the Trust Agreement; PROVIDED, HOWEVER, that, without the
consent of each Holder, except with respect to Excepted Payments, no
such amendment of or supplement to any Indenture Estate Document, and
no waiver or modification of the terms of any thereof, shall, except to
the extent pertaining to the Excepted Payments, (1) modify (A) any of
the provisions of this Section 6.1 or Sections 2.6, 2.8, 2.10, 2.11 or
2.12 hereof, Section 3 hereof (other than Sections 3.6 and 3.7 hereof)
or Section 4 hereof (other than Sections 4.1 and 4.2 hereof), (B) any
of the provisions of Sections 2.3, IV, XII or XIV of the Participation
Agreement to the extent applicable to the Lease Indenture Trustee or
any Holder (including, without limitation, any Pass-Through Trustee or
any Certificateholder), (C) any of the provisions of Section 3.4, 14,
15, 18 or 20 of the Facility Lease or (D) the definitions of the terms
"EXCEPTED PAYMENTS", "PURCHASE PRICE", "OPERATIVE DOCUMENTS", "REQUIRED
HOLDER", "TERMINATION VALUE", "BASIC LEASE RENT", "SUPPLEMENTAL LEASE
RENT", "EVENT OF LOSS", "OWNER TRUST'S LIEN", "RENT", "MAKE-WHOLE
PREMIUM" or any components thereof contained herein or in any Indenture
Estate Document (except to change default definitions by providing for
additional events of default), (2) reduce the amount or extend the time
of payment of any amount owing or payable under any Lessor Note or
reduce the interest payable on any Lessor Note, or alter or modify the
provisions of Section 3 hereof with respect to the order of priorities
in which distribution thereunder shall be made as between the Holders
and the Owner Trust or the Owner Participant or with respect to the
amount or time of payment of any such distribution, (3) reduce, modify
or amend any indemnities or other payment provisions resulting in
Supplemental Lease Rent in favor of any Holder (except as consented to
by each Person adversely affected thereby), (4) reduce the amount or
extend the time of payment of Rent or Termination Value (or any other
amounts payable therewith other than such amounts that constitute
Excepted Payments) as set forth in the Facility Lease, (5) modify,
amend or supplement the Facility Lease with respect to, or consent to
any assignment of the Facility Lease, releasing the Facility Lessee
from its obligations in respect of the payment of Rent or Termination
Value (or other amounts payable therewith other than such amounts that
constitute Excepted Payments) or altering the absolute and
unconditional character of such obligations as set forth in Section 9
of the Facility Lease or change any of the circumstances under which
Termination Value (or other amounts payable therewith) is payable or
(6) take any action which would reduce or extend the term of the
Facility Lease. Notwithstanding the foregoing, (A) without the consent
of the Lease Indenture Trustee (acting with the consent of each
Holder), no such supplement to this Indenture or waiver or modification
of the terms hereof or of any other agreement or document shall permit
the creation of any Lien on the Indenture Estate or any part thereof,
or deprive the Lease Indenture Trustee or any Holder of the benefit of
the Lien of this Indenture on the Indenture Estate, except as provided
in Section 14.2 of the Participation Agreement or in connection with
the exercise of remedies under Section 4 hereof; (B) except as provided
in Section 9.3 of the Participation Agreement, the sections of this
Indenture set forth or referred to in such Section 9.3 may not be
amended without the prior written consent of the Facility Lessee; (C)
subject always to the provisions of Section 3.4(a) of the Facility
38
Lease, no amendment of Exhibits of the Facility Lease to give effect to
adjustments in accordance with Section 3.4(a) of the Facility Lease
shall be deemed to be an amendment to the Facility Lease which requires
the consent of the Holders hereunder; (D) without the necessity of the
consent of any of the Lease Indenture Trustee or any Holder, (I) any
indemnities solely in favor of the Equity Investor, any OP Guarantor,
the Owner Participant, the Owner Trust, the Trust Company or any of
their Affiliates may be modified, amended, or changed in such manner as
shall be agreed to by the Equity Investor, such OP Guarantor, the Owner
Participant, the Owner Trust or the Trust Company, as the case may be,
and the Facility Lessee, (II) the Owner Participant and EME may enter
into any amendment or supplement to the Tax Indemnity Agreement and
(III) the Owner Trust, the Owner Participant, the Equity Investor and
EME may enter into any amendment or supplement to the EME OP Guarantee;
and (E) each Holder shall not unreasonably withhold its consent to an
amendment to Section 5 or 13 of the Facility Lease which amendment does
not change or otherwise affect the timing or the amount of the payments
due thereunder or otherwise adversely affect the Holders.
SECTION 6.2 DOCUMENTS FURNISHED TO HOLDERS. Promptly after the
execution by the Owner Trust or the Lease Indenture Trustee of any document
entered into pursuant to Section 6.1, the Lease Indenture Trustee shall
furnish a copy thereof to the Holders but the failure of the Lease Indenture
Trustee to deliver such conformed copy, or the failure of the Holders to
receive such conformed copies, shall not impair or affect the validity of
such document.
SECTION 6.3 LEASE INDENTURE TRUSTEE PROTECTED. Notwithstanding anything
to the contrary contained herein, if, in the opinion of the Lease Indenture
Trustee, any document required to be executed by it pursuant to Section 6.1
adversely affects any right, duty, immunity or indemnity of or in favor of
the Lease Indenture Trustee under any Lessor Security Document or under any
other Operative Document, the Lease Indenture Trustee may in its discretion
decline to execute such document unless the Person or Persons requesting any
related action shall provide an indemnity that is reasonably satisfactory to
the Lease Indenture Trustee.
SECTION 7. MISCELLANEOUS
SECTION 7.1 TERMINATION OF INDENTURE. Upon (or at any time after)
receipt by the Lease Indenture Trustee of a certificate from each Holder to the
effect that the principal of and interest on, and all other amounts payable to
the Holders hereunder, under all Lessor Notes and under the Operative Documents
otherwise secured hereby have been paid in full, the Lease Indenture Trustee
shall execute and deliver to the Owner Trust an appropriate instrument releasing
the Indenture Estate from the Lien of this Indenture and releasing the Indenture
Estate Documents from the assignment and pledge thereof hereunder, and the Lease
Indenture Trustee shall execute and deliver such instrument as aforesaid and, at
the Owner Trust's expense, will execute and deliver such other instruments or
documents as may be reasonably requested by the Owner Trust to give effect to
such release; PROVIDED, HOWEVER, that this Indenture shall earlier terminate and
this Indenture shall be of no further force or effect upon any sale or other
final disposition by the Lease Indenture Trustee of all property constituting
part of the Indenture Estate and the final distribution by the Lease Indenture
Trustee of all moneys or other property or proceeds constituting part of the
Indenture Estate in accordance with the terms hereof. Further, upon the purchase
or prepayment in full of the Lessor Notes pursuant to Section 2.10 or 2.11
hereof, and receipt by the Lease Indenture Trustee of a certificate from each
Holder to the effect that all other sums payable to the Holders hereunder and
under the Operative Documents, the Lease
39
Indenture Trustee shall execute and deliver to the Owner Trust an appropriate
instrument releasing the Indenture Estate from the Lien of this Indenture and
releasing the Indenture Estate Documents from the assignment and pledge
hereunder, and the Lease Indenture Trustee shall execute and deliver such
instruments as aforesaid. Except as otherwise provided in this Section 7.1,
this Indenture and the Lien created by this Indenture shall continue in full
force and effect in accordance with the terms hereof. Promptly upon receipt
by a Holder of payment in full of the principal of and interest on the Lessor
Notes held by it, and all other amounts payable to it hereunder, under the
Lessor Notes and under the Operative Documents such Holder shall deliver the
appropriate certificate contemplated by the foregoing sentences of this
Section 7.1 to be delivered by it.
SECTION 7.2 GOVERNING LAW; COUNTERPARTS. THIS INDENTURE AND THE LESSOR
NOTES SHALL BE IN ALL RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE
OF ILLINOIS ARE MANDATORILY APPLICABLE UNDER THE LAWS OF THE STATE OF
ILLINOIS. This Indenture may be executed by the parties hereto 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. Regardless of any provision in any other agreement, for
purposes of the Uniform Commercial Code (as in effect from time to time in
the State of New York), the "Securities Intermediary's Jurisdiction" of the
Account Bank with respect to the Lease Indenture Trustee's Account is the
State of New York.
SECTION 7.3 NO LEGAL TITLE TO INDENTURE ESTATE IN HOLDERS. No Holder
shall have legal title to any part of the Indenture Estate except as may result
from the exercise of remedies hereunder. No transfer, by operation of law or
otherwise, of any Lessor Note or other right, title and interest of any Holder
in and to the Indenture Estate or hereunder shall operate to terminate this
Indenture or entitle such Holder or any successor or transferee of such Holder
to an accounting or to the transfer to it of legal title to any part of the
Indenture Estate.
SECTION 7.4 SALE OF INDENTURE ESTATE BY LEASE INDENTURE TRUSTEE IS
BINDING. Any sale or other conveyance of the Indenture Estate or any interest
therein by the Lease Indenture Trustee made pursuant to the terms of this
Indenture shall be effective to transfer or convey all right, title and
interest of the Lease Indenture Trustee, the Owner Trust, the Owner
Participant and the Holders in and to the Indenture Estate. 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 Lease
Indenture Trustee.
SECTION 7.5 INDENTURE FOR BENEFIT OF THE OWNER TRUST, THE OWNER
PARTICIPANT, THE EQUITY INVESTOR, ANY OP GUARANTOR AND THE HOLDERS. Nothing
in this Indenture, whether express or implied, shall be construed to give to
any Person, other than the Owner Trust, the Owner Participant, the Equity
Investor, any OP Guarantor, the Lease Indenture Trustee, the Holders
(including, without limitation, any pledgee of the Lessor Notes) and the
Facility Lessee, any legal or equitable right, remedy or claim under or in
respect of this Indenture.
SECTION 7.6 NOTICES. All notices, instructions or demands required
or permitted by the terms hereof shall be in English and, unless otherwise
specifically provided herein, in writing and must be given in the manner
hereinafter specified. Any written notice instruction or demand shall be given
by United States mail (certified or registered, postage pre-paid, return receipt
requested), by hand-delivery (including overnight mail or courier service), or,
if followed and
40
confirmed by hand delivery (including overnight mail or courier service) or
United States mail, by facsimile. Any notice, instruction or demand delivered
by hand (including overnight mail or courier service) shall become effective
when delivered. Any notice, instruction or demand delivered by United States
mail shall become effective on the date of receipt. Any notice, instruction
or demand delivered by facsimile shall become effective on the date such
facsimile is sent, as established by evidence of proper receipt of such
transmission. Any notice to any party to the Participation Agreement shall be
directed to such party at its address or facsimile numbers set forth in the
Participation Agreement or to such other address or number as any such party
may designate by notice given to the other parties hereto. Any notice to any
Holder shall be directed to such Holder at its address or facsimile numbers
as set forth in the Note Register. Each Person delivering a notice hereunder
shall deliver a copy thereof to the Facility Lessee; PROVIDED that no such
Person shall have any liability for failing to deliver such copy to the
Facility Lessee and all notices otherwise properly delivered pursuant to this
Section 7.6 shall be effective against the Owner Trust regardless of whether
the Person delivering such notice delivers a copy thereof to the Facility
Lessee.
SECTION 7.7 SEVERABILITY. Any provision of this Indenture which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 7.8 NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No terms or
provisions of this Indenture or the Lessor Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party or other Person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof or of any
Lessor Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 7.9 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and permitted assigns of each, 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 ▇▇▇▇▇▇.
SECTION 7.10 HEADINGS. The headings of the various Sections herein and
in the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 7.11 NORMAL COMMERCIAL RELATIONS. Anything contained in this
Indenture to the contrary notwithstanding, the Lease Indenture Trustee, any
Holder or any Affiliate of any of them may conduct any banking or other
financial transactions, and have banking, trustee, custody, administrative
support or other commercial relationships, with any Holder, Facility Lessee,
the Owner Trust, the Owner Participant, the Equity Investor and any OP
Guarantor fully to the same extent as if this Indenture were not in effect,
including, without limitation, the making of loans or other extensions of
credit to any Holder, the Facility Lessee, the Owner Trust, the Owner
Participant, the Equity Investor or such OP Guarantor for any purpose
whatsoever, related to any of the transactions contemplated hereby or
otherwise.
SECTION 7.12 WAIVER OF SETOFF. Each of the Holders hereby irrevocably
waives any and all rights of set-off that it may have in connection with this
Indenture or the Lessor Notes against the Owner Trust, the Facility Lessee or
any other Person by reason of Requirements of Law or
41
otherwise. The Owner Trust hereby irrevocably waives any and all rights of
set-off that it may have in connection with this Indenture or the Lessor
Notes against any Holder, the Facility Lessee, the Facility Sublessee or any
other Person by reason of Requirements of Law or otherwise.
SECTION 7.13 CONCERNING THE OWNER TRUSTEE. The Owner Trustee is
executing this Indenture on behalf of the Owner Trust solely in its capacity
as Owner Trustee under the Trust Agreement and not in its individual capacity
(except as expressly stated herein) and in no case shall the Trust Company
(or any entity acting as Owner Trustee under the Trust Agreement) be
personally liable for or on account of any of the statements,
representations, warranties, covenants or obligations stated to be those of
the Owner Trust or the Owner Trustee hereunder, all such liability, if any,
being expressly waived by the parties hereto and any Person claiming by,
through, or under such party; PROVIDED, however, that the Trust Company (or
any such successor Owner Trustee) shall be personally liable hereunder for
its own gross negligence or willful misconduct or for its breach of its
covenants, representations and warranties contained herein, to the extent
covenanted or made in its individual capacity.
SECTION 7.14 REQUIRED HOLDERS; ETC. As used in this Indenture and
the other Lessor Security Documents, the term "REQUIRED HOLDERS" means Holders
holding at least 50.1% of the principal amount of Lessor Notes outstanding
(disregarding for such computation any Lessor Notes held directly or
beneficially by the Facility Lessee, the Owner Trust, the Owner Participant, the
Equity Investor, any OP Guarantor or any Affiliate of any of them, unless such
Person owns all of the Lessor Notes in accordance with the provisions of this
Indenture). In the event that any Holder has pledged its interests in any of its
Lessor Notes, upon registration in the Note Register, the pledgee will, upon
delivery of a written request of such pledgee to the Lease Indenture Trustee and
the Owner Trust, be treated as the Holder of such Lessor Notes for all purposes
under this Indenture.
SECTION 7.15 THE LEASE INDENTURE TRUSTEE.
(a) Each of the Holders hereby designates and appoints United States
Trust Company of New York to act as the Lease Indenture Trustee under this
Indenture, and each of the Holders hereby acknowledges such appointment and
the rights and powers of the Lease Indenture Trustee under this Indenture.
The Lease Indenture Trustee may take such actions on its behalf under the
provisions of this Indenture and may exercise such powers and perform such
duties as are expressly delegated to the Lease Indenture Trustee by the terms
of this Indenture or which duties have been instructed or directed in
writing, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Indenture, the Lease Indenture Trustee shall not have any duties or
responsibilities, except those expressly set forth in this Indenture, nor
shall the Lease Indenture Trustee have any fiduciary relationship with any
Holder, and no implied covenants, functions or responsibilities shall be read
into this Indenture or otherwise exist against the Lease Indenture Trustee.
The Lease Indenture Trustee shall not be responsible or liable for any action
taken, suffered or omitted to be taken by it in good faith hereunder, or in
connection herewith, or in connection with the Indenture Estate, unless
caused by its gross negligence or willful misconduct as determined by a court
of competent jurisdiction.
(b) In the administration of its duties hereunder, the Lease
Indenture Trustee may perform such duties directly or through agents or
attorneys and may consult with counsel, accountants and other relevant
experts to be selected with due care and employed by it, and the Lease
Indenture Trustee shall not be responsible or liable for any action taken,
suffered or
42
omitted in good faith by it in accordance with the advice or opinion of any
such counsel, accountants or other relevant experts (which shall be complete
authorization and protection to the Lease Indenture Trustee) and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture and shall not be responsible or liable
for any act or omission on the part of any agent or attorney appointed with
due care by it hereunder.
(c) Neither the Lease Indenture Trustee nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall (i) be
liable for any action lawfully taken, suffered or omitted to be taken by it
under or in connection with this Indenture (except for its gross negligence
or willful misconduct as determined by a court of competent jurisdiction) or
(ii) be responsible or liable in any manner to any of the Holders for any
recitals, statements, representations or warranties made by Owner Trust or
any other Person or any representative of any thereof contained in this
Indenture or in any certificate, report, statement or other document referred
to or provided for in, or received by the Lease Indenture Trustee under or in
connection with this Indenture or for the accuracy, value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Indenture
or for any failure of any of the Owner Trust, the Owner Trustee, the Equity
Investor, any OP Guarantor, the Facility Lessee or Facility Sublessee to
perform their respective obligations hereunder. The Lease Indenture Trustee
shall not be responsible for perfecting or continuing the perfection of any
security interest or Lien granted under this Indenture or for filing,
re-filing, recording or re-recording any document, instrument or notice in
any public office at any time or times. The Lease Indenture Trustee shall not
be under any obligation to any Holder to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Indenture, or to inspect the properties, books or records
of the Owner Trust or any other Person.
(d) The Lease Indenture Trustee shall be entitled to rely
conclusively, and shall be fully authorized and protected in so relying, upon
any Lessor Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and purported to have been signed, sent or made by the
proper Person or Persons. In connection with any request of the Required
Holders or making any determinations under this Indenture, the Lease
Indenture Trustee shall be fully authorized and protected in so relying on a
certificate of any Person, purportedly signed by an Authorized Officer of
such Person, setting forth the Lessor Notes held by such Person as of the
date of such certificate, which certificate shall state that the Person
signing such certificate is an Authorized Officer of such Person and shall
state specifically the provision hereof pursuant to which the Lease Indenture
Trustee is being directed to act. The Lease Indenture Trustee shall be
entitled to rely conclusively, and shall be fully authorized and protected in
so relying on such certificate. In the absence of bad faith on its part (as
determined by a court of competent jurisdiction), the Lease Indenture Trustee
may rely conclusively, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates, advice or opinions
furnished to the Lease Indenture Trustee hereunder and conforming to the
respective requirements hereof. The Lease Indenture Trustee shall be fully
justified and protected in failing or refusing to take any action under this
Indenture (i) if such action would, in the opinion of the Lease Indenture
Trustee (upon consultation with counsel), be contrary to Requirements of Law
or the terms of this Indenture, (ii) if such action is not specifically
provided for in this Indenture, and it shall not have received such advice or
43
concurrence of the Required Holders, (iii) while waiting for advice or
instructions requested by the Lease Indenture Trustee from the Holders or
(iv) if, in connection with the taking of any such action that would
constitute an exercise of remedies under this Indenture, it shall not first
be indemnified to its satisfaction against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action. The Lease Indenture Trustee shall in all cases be fully
protected in acting, or in refraining from acting, under this Indenture in
accordance with a request of the Required Holders (except to the extent the
consent of each Holder is required hereunder, in which case the Lease
Indenture Trustee shall be fully protected in acting or refraining from
acting in accordance with the direction of the Holders) and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Holders.
(e) If, with respect to a proposed action to be taken by it, the
Lease Indenture Trustee shall determine in good faith that the provisions of
this Indenture relating to the functions or responsibilities or powers of the
Lease Indenture Trustee are or may be ambiguous or inconsistent, the Lease
Indenture Trustee shall notify the Holders, identifying the proposed action
and the provisions that it considers are or may be ambiguous or inconsistent,
and shall not perform such function or responsibility or exercise such power
unless it shall have received the written confirmation from each of the
Holders that such ▇▇▇▇▇▇ concurs in the circumstances that the action
proposed to be taken by the Lease Indenture Trustee is consistent with the
terms of this Indenture or is otherwise appropriate. The Lease Indenture
Trustee shall be fully authorized and protected in acting or refraining from
acting upon such confirmation received by it from each of the Holders in this
respect, and such confirmation shall be binding upon each such Holder and the
Lease Indenture Trustee. Each Holder may consult with counsel in determining
the appropriateness of the proposed action.
(f) The Lease Indenture Trustee shall not be deemed to have actual,
constructive, direct or indirect knowledge or notice of the occurrence of any
Lease Default, Lease Event of Default, Lease Indenture Default or Lease
Indenture Event of Default or of the acceleration of any Lessor Note by the
Holder thereof unless and until an Authorized Officer of the Lease Indenture
Trustee has received an officer's certificate from an Authorized Officer of
such Holder stating that such an event has occurred. The Lease Indenture
Trustee shall have no obligation whatsoever either prior to or after
receiving such certificate to inquire whether any Lease Default, Lease Event
of Default, Lease Indenture Default or Lease Indenture Event of Default has
in fact occurred and shall be entitled to rely conclusively, and shall be
fully authorized and protected in so relying, on any such certificate so
furnished to it. No provision of this Indenture shall require the Lease
Indenture Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers. In the event that the Lease
Indenture Trustee receives such a certificate regarding the occurrence of any
Lease Default, Lease Event of Default, Lease Indenture Default or Lease
Indenture Event of Default, the Lease Indenture Trustee shall give notice
thereof to the Holders. The Lease Indenture Trustee shall take such action
with respect to such Event of Default as so requested by the Required Holders
pursuant to this Indenture.
(g) The Owner Trust shall pay upon demand to the Lease Indenture
Trustee (but only to the extent that the Owner Trust has received such
amounts from the Facility Lessee or EME) the amount of any and all reasonable
fees, costs and expenses (including disbursements),
44
including the reasonable fees and expenses of its counsel (and any local
counsel) and of any experts and agents, which the Lease Indenture Trustee may
incur in connection with (i) without duplication of amounts payable in
accordance with any fee letter with the Lease Indenture Trustee expressly
with respect to the administration of this Indenture, the preparation,
execution, delivery and administration of this Indenture (including any
amendments hereto), (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Indenture Estate,
(iii) the exercise or enforcement (whether through negotiations, legal
proceedings or otherwise) of any of the rights or remedies of the Lease
Indenture Trustee or the Holders hereunder or (iv) the failure by the Owner
Trust or any other Person to perform or observe any of the provisions hereof
or of any of the other Lessor Security Documents or Indenture Estate
Documents. Each of the Owner Trust and the Lease Indenture Trustee agrees
that the fees set forth in the fee letter dated August 4, 2000 cover the
services of the Lease Indenture Trustee enumerated therein assuming that no
Lease Default, Lease Event of Default, Lease Indenture Default, Lease
Indenture Event of Default or other extraordinary event has occurred. At any
time any Lease Default, Lease Event of Default, Lease Indenture Default or
Lease Indenture Event of Default has occurred and is continuing, the Lease
Indenture Trustee shall be entitled to receive additional fees commensurate
with the time spent by the Lease Indenture Trustee in connection with its
duties hereunder. The Lease Indenture Trustee shall from time to time
determine such fees and send Midwest, EME and the Owner Trust notice thereof,
and such fees shall be payable upon demand. The Owner Trust and the Lease
Indenture Trustee may from time to time agree in writing to modify the fees
payable to the Lease Indenture Trustee and no consent of any other Person
shall be required in order to so modify such fees.
(h) Each of the Holders expressly acknowledges that neither the Lease
Indenture Trustee nor any of its officers, directors, employees, agents or
attorneys has made any representations or warranties to it and that no act by
the Lease Indenture Trustee hereinafter taken, including, without limitation,
any review of the Indenture Estate Documents or of the affairs of the Owner
Trust or any other Person, shall be deemed to constitute any representation
or warranty by the Lease Indenture Trustee to any Holder. Each Holder
represents to the Lease Indenture Trustee that it (i) has, independently and
without reliance upon the Lease Indenture Trustee or any other Holder, and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Indenture
Estate or any obligor under any Indenture Estate Document and (ii) has no
obligation to make any such appraisals, investigations or credit analyses
under this Indenture and has not relied upon the Lease Indenture Trustee for
any information, appraisal, investigation or credit analyses in entering into
this Indenture or acquiring any Lessor Note. Each Holder also represents that
(i) it will, independently and without reliance upon the Lease Indenture
Trustee or any other Holder, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this,
and to make such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition and
creditworthiness of the Indenture Estate or any obligor under any Indenture
Estate Document and (ii) it will not rely upon the Lease Indenture Trustee to
provide any investigation or analyses relating to the Indenture Estate or any
obligor under any Indenture Estate Document. Except for notices, reports and
other documents expressly required to be furnished to the Holders by the
Lease Indenture Trustee hereunder, the Lease Indenture Trustee shall not have
any duty or responsibility to provide any Holder with any
45
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Indenture Estate or
any obligor under any Indenture Estate Document which may come into the
possession of the Lease Indenture Trustee or any of its officers, directors,
employees, agents or attorneys-in-fact.
(i) Either of the Lease Indenture Trustee or the Account Bank may
resign its appointment upon 30 days' notice to the Holders and may be removed
at any time with or without cause by the Required Holders, with any such
resignation or removal to become effective only upon the acceptance of
appointment of a successor Lease Indenture Trustee or Account Bank that (i)
has an office in New York, New York, (ii) has capital, surplus and undivided
profits of at least $100,000,000 and (iii) is experienced in administering
sophisticated financing transactions; PROVIDED, HOWEVER, that if no successor
Lease Indenture Trustee or Account Bank shall have been so appointed within
30 days, the resigning Lease Indenture Trustee or Account Bank may, at the
expense of Owner Trust, petition any court of competent jurisdiction for the
appointment of a new Lease Indenture Trustee or Account Bank. If the Lease
Indenture Trustee or the Account Bank shall resign or be removed as Lease
Indenture Trustee or Account Bank by the Required Holders then the Required
Holders shall (and if no such successor shall have been appointed within 30
days of the Lease Indenture Trustee's or Account Bank's resignation or
removal, the Lease Indenture Trustee may) appoint a successor that (i) has an
office in New York, New York, (ii) has capital, surplus and undivided profits
of at least $100,000,000 and (iii) is experienced in administering
sophisticated financing transactions, whereupon such successor shall succeed
to the rights, powers and duties of the "Lease Indenture Trustee" or "Account
Bank", and the term "Lease Indenture Trustee" or "Account Bank" shall mean
such successor effective upon its acceptance of appointment, and the former
Lease Indenture Trustee's or Account Bank's rights, powers and duties as
Lease Indenture Trustee or Account Bank shall be terminated, without any
other or further act or deed on the part of such former Lease Indenture
Trustee or Account Bank (except that the resigning Lease Indenture Trustee or
Account Bank shall deliver all Indenture Estate then in its possession to the
successor Lease Indenture Trustee or Account Bank) or any of the other
Holders. Such former Lease Indenture Trustee or Account Bank shall give
notice of its resignation or removal to the Owner Trust and all Holders.
After any retiring Lease Indenture Trustee's or Account Bank's resignation or
removal hereunder as Lease Indenture Trustee or Account Bank, the provisions
of this Indenture shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Lease Indenture Trustee or Account
Bank.
(j) The Lease Indenture Trustee and each Holder hereby irrevocably
designate and appoint United States Trust Company of New York, as the Account
Bank under this Indenture. The Account Bank hereby agrees to act as
"securities intermediary" (within the meaning of Section 8-102(a)(14) of the
UCC) with respect to the Lease Indenture Trustee's Account. The Owner Trust
hereby acknowledges that the Account Bank shall act as securities
intermediary with respect to the Lease Indenture Trustee's Account pursuant
to this Indenture. The Account Bank shall not have duties or responsibilities
except those expressly set forth in Sections 3.8 and 3.9 of this Indenture.
The Lease Indenture Trustee, at the written direction of the Required
Holders, may remove and replace the Account Bank pursuant to the terms and
conditions of Section 7.15(i) and direct such Account Bank according to the
terms of this Indenture.
46
SECTION 7.16 MAXIMUM SECURED OBLIGATIONS. The principal amount of the
Lessor Notes initially secured hereby is $411,060,000; the maximum principal
amount, including the principal amount of the initial and, subject to the
provisions of Section 2.5, future Lessor Notes, which may be secured hereby
at any one time is $499,450,800, plus interest and Make-Whole Premium (if
any), plus any disbursements for taxes and insurance on the Facility, plus
interest thereon, and any other sums advanced in accordance with the terms
hereof or any of the other Operative Documents to protect the security of
this Indenture.
47
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed on the day and year first above written.
POWERTON TRUST I,
By: Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee under the Trust Agreement
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
UNITED STATES TRUST COMPANY OF NEW YORK,
as Lease Indenture Trustee,
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 24TH
day of August, 2000, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, VICE PRESIDENT of WILMINGTON TRUST
COMPANY, a Delaware banking corporation, to be the free act and deed on
behalf of the banking corporation as the Owner Trustee under the Amended and
Restated Trust Agreement dated as of August 17, 2000.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Notary Public
My Commission Expires
APRIL 1, 2001
------------------------
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this the 24TH
day of August, 2000, by ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Assistant Vice President of United
States Trust Company of New York, a New York banking corporation, to be the free
act and deed on behalf of the corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
Notary Public
My Commission Expires
MAY 1, 2002
---------------------
ANNEX A
TO
LEASE INDENTURE
---------------
DEFINED TERMS
Unless otherwise defined or the context otherwise requires, terms
for which meanings are provided in this Indenture shall have such meanings when
used in each notice and other communication delivered from time to time in
connection with this Indenture.
"ACCOUNT BANK" means United States Trust Company of New York, in
its capacity as Account Bank hereunder, together with its successors and assigns
in such capacity.
"ADDITIONAL LESSOR NOTES" has the meaning assigned to such term in
Section 2.13 hereof.
"ASSUMPTION AGREEMENT" means an Assumption Agreement executed and
delivered by an Eligible Successor substantially in the form of Exhibit F
hereto.
"ASSUMPTION DOCUMENTS" has the meaning assigned to such term in
Section 2.12(a).
"ASSUMPTION EVENT" shall mean a Midwest Assumption Event or an
Owner Participant Assumption Event.
"ELIGIBLE SUCCESSOR" means (a) in the case of a Midwest Assumption
Event, a designee of Midwest (i) which shall be a direct or indirect
wholly-owned Subsidiary of EME (other than Midwest) or another Person acceptable
to the Holders (in their sole discretion), (ii) that is a "United States person"
within the meaning of Section 7701(a)(30) of the Code and (iii) that is not (A)
an "investment company" or a company "controlled" by and "investment company"
within the meaning of the Investment Company Act of 1940, as amended or (B)
subject to regulation under PUHCA except pursuant to Section 9(a)(2) or Section
32 thereof and (b) in the case of an Owner Participant Assumption Event, a
direct or indirect wholly-owned Subsidiary of Public Service Enterprise Group,
Inc. or another person acceptable to the Holders (in their sole discretion) (i)
that is a "United States person" within the meaning of Section 7701(a)(30) of
the Code and (ii) that is not (1) an "investment company" or a company
"controlled" by and "investment company" within the meaning of the Investment
Company Act of 1940, as amended or (2) subject to regulation under PUHCA except
pursuant to Section 9(a)(2) or Section 32 thereof.
"HOLDER" means a holder of a Lessor Note.
"INDENTURE ESTATE" has the meaning assigned to such term in the
granting clause.
"INDENTURE ESTATE DOCUMENTS" has the meaning assigned to such term
in the Granting Clause.
"INTEREST PAYMENT DATE" has the meaning assigned to such term in
Section 2.4(b) hereof.
"LEASE DEFAULT" means a Lease Event of Default or any condition,
occurrence or event which, with notice or lapse of time or both, would
constitute a Lease Event of Default.
"LEASE INDENTURE DEFAULT" means a Lease Indenture Event of Default
or any condition, occurrence or event which, with notice or lapse of time or
both, would constitute a Lease Indenture Event of Default.
"LEASE INDENTURE EVENT OF DEFAULT" has the meaning assigned to
such term in Section 4.2 hereof.
"LEASE INDENTURE TRUSTEE'S ACCOUNT" has the meaning assigned to
such term in Section 3.8(a) hereof.
"LEASE INDENTURE TRUSTEE ACCOUNT COLLATERAL" has the meaning
assigned to such term in Section 3.8(c) hereof.
"LESSOR NOTE" means each Lessor Note and each Subsequent Lessor
Note.
"LESSOR SECURED OBLIGATIONS" has the meaning assigned to such term
in the Granting Clause.
"MAKE-WHOLE PREMIUM" means an amount equal to the Discounted
Present Value calculated for any Lessor Note subject to mandatory prepayment
pursuant to this Lease Indenture less the unpaid principal amount of such Lessor
Note; provided that the Make Whole Premium shall not be less than zero. For
purposes of this definition, the "Discounted Present Value" of any Lessor Note
subject to mandatory prepayment pursuant to this Lease Indenture shall be equal
to the discounted present value, as of the date of mandatory pre-payment, of all
principal and interest payments scheduled to become due in respect of such
Lessor Note after the date of such mandatory prepayment, calculated using a
discount rate equal to the sum of (i) the yield to maturity on the U.S. Treasury
security having an average life equal to the remaining average life of such
Lessor Note and trading in the secondary market at the price closest to par PLUS
(ii) 0.50%; provided, however, that if there is no U.S. Treasury security having
an average life equal to the remaining average life of such Lessor Note, such
discount rate shall be calculated using a yield to maturity interpolated or
extrapolated on a straight-line basis (rounding to the nearest calendar month,
if necessary) from the yields to maturity for the two U.S. Treasury securities
having average lives most closely corresponding to the remaining life of such
Lessor Note and trading in the secondary market at the price closest to par.
"MIDWEST ASSUMPTION EVENT" shall mean the election of Midwest to
assume the Lessor Notes pursuant to Section 10.2(b) of the Facility Lease.
"NEW LESSOR NOTES" has the meaning assigned to such term in
Section 2.13 hereof.
"NOTE REGISTER" has the meaning assigned to such term in Section
2.9 hereof.
"OWNER PARTICIPANT ASSUMPTION EVENT" shall mean (a) the occurrence
and continuance of a Lease Event of Default or (b) a termination of the Facility
Lease pursuant to Section 14.1 of the Facility Lease together with an election
by the Owner Trust to retain the Undivided Interest pursuant to Section 14.3 of
the Facility Lease.
"OWNER TRUST" has the meaning assigned to such term in the
Recitals.
"PAYMENT DATE" has the meaning assigned to such term in Section
2.4(b) hereof.
"PARTICIPATION AGREEMENT" has the meaning assigned to such term in
the Section 1 hereof.
"PROPERTY INTEREST" has the meaning assigned to such term in the
Granting Clause.
"REGISTRAR" has the meaning assigned to such term in Section 2.8
hereof.
"REQUIRED HOLDERS" has the meaning assigned to such term in
Section 7.14 hereof.
"SUBSEQUENT LESSOR NOTE" has the meaning assigned to such term in
Section 2.13 hereof.
2
EXHIBIT A
TO
LEASE INDENTURE
---------------
DESCRIPTION OF THE FACILITY
---------------------------
EXHIBIT B
TO
LEASE INDENTURE
---------------
DESCRIPTION OF THE FACILITY SITE
--------------------------------
EXHIBIT C
TO
LEASE INDENTURE
---------------
FORM OF SERIES A LESSOR NOTE
THIS NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE
SUCH A REGISTRATION IS IN EFFECT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT
POWERTON TRUST I,
as Owner Trust
SERIES A LESSOR NOTE DUE JULY 2, 2009
No. 1 New York, New York
$[__________] [__________], 20__
POWERTON TRUST I (the "OWNER TRUST") acting pursuant to that
certain ▇▇▇▇▇▇▇ and Restated Trust Agreement (T1) dated as of August 17, 2000
(as the same may from time to time be amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof and,
where applicable, the terms of the other Operative Documents, the "TRUST
AGREEMENT") between the Owner Participant named therein and Wilmington Trust
Company (the "TRUST COMPANY"), hereby promises to pay to United States Trust
Company of New York, as Pass-Through Trustee, or registered assigns, the
principal sum of [__________] Dollars, in installments on the Payment Dates and
in the amounts set forth in Annex A hereto; PROVIDED, HOWEVER, that the final
principal payment hereon shall in any and all events equal the then outstanding
principal balance hereof, together with interest at the rate of 8.30% per annum
(subject to the immediately following paragraph, with respect to an Illiquidity
Event or a Reporting Cessation) on the unpaid principal amount hereof from time
to time outstanding from and including the date hereof until such principal
amount is paid in full. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. Accrued interest hereon shall be payable on each
Interest Payment Date and on the date this Lessor Note is paid in full. This
Lessor Note shall bear interest, to the maximum extent permitted by Requirements
of Law, at the Overdue Rate on any part of the principal amount hereof, and on
any interest or other amounts due hereunder, not paid when due (whether at
stated maturity, by acceleration or otherwise), for the period the same is past
due, payable on demand of the holder hereof.
The Facility Lessee and EME have entered into a Registration
Rights Agreement dated August 17, 2000 (as the same may from time to time be
amended, amended and restated, supplemented or otherwise modified in accordance
with the terms thereof and, where applicable,
-2-
the terms of the other Operative Documents, the "REGISTRATION RIGHTS
AGREEMENT") with the Initial Purchasers described therein. Pursuant to such
Registration Rights Agreement, the Facility Lessee and EME have agreed to use
their reasonable best efforts to (a) cause to become effective on or prior to
the date which is 270 days after the Closing Date (i) the Exchange Offer
Registration Statement or (ii) an Initial Shelf Registration Statement (as
each such term is defined in the Registration Rights Agreement) and to
maintain the respective effectiveness of such Registration Statements (as
defined in the Registration Rights Agreement) as described in the
Registration Rights Agreement. From and after the date on which an
Illiquidity Event (as defined in the Registration Rights Agreement) occurs,
additional interest (in addition to the interest otherwise payable with
respect to this Lessor Note) shall accrue on this Lessor Note until but not
including the date on which such Illiquidity Event shall cease to exist (and
provided no other Illiquidity Event with respect to the Certificates issued
on the Closing Date shall then be continuing), at the rate of 0.50% per
annum, which additional interest shall be payable hereon at the times, in the
manner and subject to the same terms and conditions set forth herein and in
the Indenture (as defined below), as nearly as may be, as though the interest
rate set forth above had been increased by 0.50% per annum. In the event that
either the Facility Lessee or EME ceases to maintain its status as a
reporting company under the Securities Exchange Act of 1934, as amended (such
Act, the "EXCHANGE ACT" and such cessation, a "REPORTING CESSATION")(it being
understood that no Reporting Cessation shall be deemed to occur if the
Securities and Exchange Commission, as from time to time constituted, created
under the Exchange Act, or any successor body will not accept the information
and reports of the Facility Lessee or EME to be filed pursuant to the
Exchange Act), additional interest (in addition to the interest otherwise
payable with respect to this Lessor Note) shall thereafter accrue on this
Lessor Note until but not including the date on which such Reporting
Cessation shall cease to exist (and provided no other Reporting Cessation
shall then be continuing) at the rate of 0.50% per annum, which additional
interest shall be payable hereon at the times, in the manner and subject to
the same terms and conditions set forth herein and in the Indenture (as
defined below), as nearly as may be, as though the interest rate set forth
above had been increased by 0.50% per annum. Anything in the foregoing to the
contrary notwithstanding, in the event that an Illiquidity Event and a
Reporting Cessation shall have occurred and be continuing at the same time,
the maximum amount of additional interest to accrue on this Lessor Note as
set forth above shall be 0.50% per annum.
All payments of principal and interest and all other amounts to be
made by the Owner Trust hereunder or under the Indenture of Trust, Mortgage and
Security Agreement (T1) dated as of August 17, 2000 (as the same may from time
to time be amended, amended and restated, supplemented or otherwise modified in
accordance with the terms thereof and, where applicable, the terms of the other
Operative Documents, the "INDENTURE"; the defined terms therein (including by
cross-reference) not otherwise defined herein being used herein with the same
meanings) among the Owner Trust, and United States Trust Company of New York, as
Lease Indenture Trustee shall be made (i) only from the income and proceeds from
the Indenture Estate and (ii) only to the extent that the Owner Trust shall have
sufficient income or proceeds from the Indenture Estate to enable such payments
to be made in accordance with the terms of the Indenture. Each holder hereof, by
its acceptance of this Lessor Note, agrees that (a) it will look solely to the
income and proceeds from the Indenture Estate to the extent available for
distribution to the holder hereof as above provided and (b) none of the Lease
Indenture Trustee, Owner Participant, the Equity Investor, any OP Guarantor, the
Owner Trustee, Owner Trust or the Trust Company is, or shall be, personally
liable to the holder hereof for any amounts payable
-3-
under this Lessor Note or under the Indenture or for any liability under the
Indenture, except as expressly provided in the Indenture.
Principal, Make-Whole Premium (if any) and interest and other
amounts due hereunder or under the Indenture shall be payable in Dollars by wire
transfer of immediately available funds on the due date thereof to the Lease
Indenture Trustee's Account (by wire transfer of immediately available funds if
not otherwise specified) or to such other account as the holder hereof shall
have designated to the Owner Trust in writing. Payment to the Lease Indenture
Trustee must be received by 12:00 (noon), New York time. If any sum payable
hereunder or under the Indenture falls due on a day which is not a Business Day,
then such sum shall be payable on the next succeeding Business Day and, if paid
on such Business Day, the payment thereof shall be without penalty or interest
(unless calculation of such amount is based on actual days elapsed) or other
adjustment.
The holder hereof, by its acceptance of this Lessor Note, agrees
that each payment of principal and interest or other amounts received by it
hereunder shall be applied, FIRST, to the payment of interest on this Lessor
Note (as well as any interest on overdue principal, and, to the extent permitted
by law, interest and other amounts hereunder) due and payable to the date of
such payment as hereinabove provided, SECOND, to the payment of the principal
of, and Make-Whole Premium, if any, then due hereunder, and THIRD, to the extent
permitted under the Indenture, the balance, if any, remaining thereafter, to the
payment of the principal amount of, and Make-Whole Premium, if any, hereunder.
This Lessor Note is one of the Lessor Notes, and one of the
Initial Lessor Notes, referred to in the Indenture which have been or are to be
issued by the Owner Trust pursuant to the terms of the Indenture. The Indenture
Estate is held by the Lease Indenture Trustee as security for the Lessor Notes.
Reference is hereby made to the Indenture for a statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Lessor Note and of the rights and obligations of the holders of, and the
nature and extent of the security for, the other Lessor Notes, as well as for a
statement of the terms and conditions of the trusts created thereby. By its
acceptance of this Lessor Note, each holder hereof agrees to all of the terms
and conditions in the Indenture and in the Participation Agreement referred to
therein expressed to be binding on the Lease Indenture Trustee or a holder of a
Lessor Note.
There shall be maintained the Note Register for the purpose of
registering this Lessor Note and registering transfers and exchanges of Lessor
Notes at the principal office of the Owner Trustee in the manner provided in
Section 2.8 of the Indenture. As provided in the Indenture and subject to
certain limitations therein set forth, the Lessor Notes are exchangeable for
Lessor Notes of the same series, of any authorized denominations and of like
aggregate original principal amount, as requested by the holder hereof
surrendering the same.
Except as otherwise provided in Section 2.8 of the Indenture,
prior to the due presentment for registration of transfer of this Lessor Note,
the Owner Trust and each holder hereof shall deem and treat the Person in whose
name this Lessor Note is registered on the Note Register as the absolute owner
and holder hereof for the purpose of receiving payment of all amounts payable
with respect to this Lessor Note and for all other purposes whether or not this
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Lessor Note is overdue, and neither the Owner Trust nor any holder hereof shall
be affected by any notice to the contrary.
This Lessor Note is subject to prepayment solely as required by
Section 2.11 of the Indenture, to purchase by the Owner Trust, the Owner
Participant or an OP Guarantor as provided in Section 2.10 of the Indenture and
to assumption by an Eligible Successor in accordance with Section 2.12 of the
Indenture. If at any time a Lease Indenture Event of Default shall have occurred
and be continuing, this Lessor Note may be declared, and under certain
circumstances shall automatically be deemed to be declared, due and payable, all
upon the conditions, in the manner and with the effect provided in the
Indenture.
By its acceptance hereof, the holder of this Lessor Note agrees
that the Owner Trustee is executing this Lessor Note on behalf of the Owner
Trust solely in its capacity as Owner Trustee under the Trust Agreement and not
in its individual capacity and in no case shall the Trust Company (or any entity
acting as Owner Trustee under the Trust Agreement) be personally liable in
respect of the obligations stated to be those of the Owner Trust or the Owner
Trustee hereunder. By its acceptance hereof, the holder of this Lessor Note
represents for the benefit of the Owner Trust, the Owner Participant and the
Facility Lessee that either: (i) no Plan assets have been used to purchase this
Lessor Note or (ii) the purchase and holding of this Lessor Note are either
exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administrative
exemptions or do not constitute a prohibited transaction under such restrictions
of ERISA and the Code.
THIS LESSOR NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE, WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Owner Trust has caused this Lessor Note to
be executed in its name by the Owner Trustee by an officer of the Owner Trustee
thereunto duly authorized, as of the date hereof.
POWERTON TRUST I, as Owner Trust
By: WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as Owner
Trustee under the Trust Agreement
By:
------------------------------------------
Name:
Title:
This is one of the Lessor Notes referred to
in the within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK
as Lease Indenture Trustee
By:
----------------------
Authorized Officer
ANNEX A
to
Series A Lessor Note
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A B
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Payment Principal
Date Payment ($)
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EXHIBIT D
TO
LEASE INDENTURE
---------------
FORM OF SERIES B LESSOR NOTE
THIS NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE
SUCH A REGISTRATION IS IN EFFECT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT
POWERTON TRUST I,
as Owner Trust
SERIES B LESSOR NOTE DUE JANUARY 2, 2016
No. 1 New York, New York
$[__________] [__________], 20__
POWERTON TRUST I (the "OWNER TRUST") acting pursuant to that
certain ▇▇▇▇▇▇▇ and Restated Trust Agreement (T1) dated as of August 17, 2000
(as the same may from time to time be amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof and,
where applicable, the terms of the other Operative Documents, the "TRUST
AGREEMENT") between the Owner Participant named therein and Wilmington Trust
Company (the "TRUST COMPANY"), hereby promises to pay to United States Trust
Company of New York, as Pass-Through Trustee, or registered assigns, the
principal sum of [__________] Dollars, in installments on the Payment Dates and
in the amounts set forth in Annex A hereto; PROVIDED, HOWEVER, that the final
principal payment hereon shall in any and all events equal the then outstanding
principal balance hereof, together with interest at the rate of 8.56% per annum
(subject to the immediately following paragraph, with respect to an Illiquidity
Event or a Reporting Cessation) on the unpaid principal amount hereof from time
to time outstanding from and including the date hereof until such principal
amount is paid in full. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. Accrued interest hereon shall be payable on each
Interest Payment Date and on the date this Lessor Note is paid in full. This
Lessor Note shall bear interest, to the maximum extent permitted by Requirements
of Law, at the Overdue Rate on any part of the principal amount hereof, and on
any interest or other amounts due hereunder, not paid when due (whether at
stated maturity, by acceleration or otherwise), for the period the same is past
due, payable on demand of the holder hereof.
The Facility Lessee and EME have entered into a Registration
Rights Agreement dated August 17, 2000 (as the same may from time to time be
amended, amended and restated,
-2-
supplemented or otherwise modified in accordance with the terms thereof and,
where applicable, the terms of the other Operative Documents, the
"REGISTRATION RIGHTS AGREEMENT") with the Initial Purchasers described
therein. Pursuant to such Registration Rights Agreement, the Facility Lessee
and EME have agreed to use their reasonable best efforts to (a) cause to
become effective on or prior to the date which is 270 days after the Closing
Date (i) the Exchange Offer Registration Statement or (ii) an Initial Shelf
Registration Statement (as each such term is defined in the Registration
Rights Agreement) and to maintain the respective effectiveness of such
Registration Statements (as defined in the Registration Rights Agreement) as
described in the Registration Rights Agreement. From and after the date on
which an Illiquidity Event (as defined in the Registration Rights Agreement)
occurs, additional interest (in addition to the interest otherwise payable
with respect to this Lessor Note) shall accrue on this Lessor Note until but
not including the date on which such Illiquidity Event shall cease to exist
(and provided no other Illiquidity Event with respect to the Certificates
issued on the Closing Date shall then be continuing), at the rate of 0.50%
per annum, which additional interest shall be payable hereon at the times, in
the manner and subject to the same terms and conditions set forth herein and
in the Indenture (as defined below), as nearly as may be, as though the
interest rate set forth above had been increased by 0.50% per annum. In the
event that either the Facility Lessee or EME ceases to maintain its status as
a reporting company under the Securities Exchange Act of 1934, as amended
(such Act, the "EXCHANGE ACT" and such cessation, a "REPORTING CESSATION")(it
being understood that no Reporting Cessation shall be deemed to occur if the
Securities and Exchange Commission, as from time to time constituted, created
under the Exchange Act, or any successor body will not accept the information
and reports of the Facility Lessee or EME to be filed pursuant to the
Exchange Act), additional interest (in addition to the interest otherwise
payable with respect to this Lessor Note) shall thereafter accrue on this
Lessor Note until but not including the date on which such Reporting
Cessation shall cease to exist (and provided no other Reporting Cessation
shall then be continuing) at the rate of 0.50% per annum, which additional
interest shall be payable hereon at the times, in the manner and subject to
the same terms and conditions set forth herein and in the Indenture (as
defined below), as nearly as may be, as though the interest rate set forth
above had been increased by 0.50% per annum. Anything in the foregoing to the
contrary notwithstanding, in the event that an Illiquidity Event and a
Reporting Cessation shall have occurred and be continuing at the same time,
the maximum amount of additional interest to accrue on this Lessor Note as
set forth above shall be 0.50% per annum.
All payments of principal and interest and all other amounts to be
made by the Owner Trust hereunder or under the Indenture of Trust, Mortgage and
Security Agreement (T1) dated as of August 17, 2000 (as the same may from time
to time be amended, amended and restated, supplemented or otherwise modified in
accordance with the terms thereof and, where applicable, the terms of the other
Operative Documents, the "INDENTURE"; the defined terms therein (including by
cross-reference) not otherwise defined herein being used herein with the same
meanings) among the Owner Trust, and United States Trust Company of New York, as
Lease Indenture Trustee shall be made (i) only from the income and proceeds from
the Indenture Estate and (ii) only to the extent that the Owner Trust shall have
sufficient income or proceeds from the Indenture Estate to enable such payments
to be made in accordance with the terms of the Indenture. Each holder hereof, by
its acceptance of this Lessor Note, agrees that (a) it will look solely to the
income and proceeds from the Indenture Estate to the extent available for
distribution to the holder hereof as above provided and (b) none of the Lease
Indenture Trustee, Owner Participant, the Equity Investor, any OP Guarantor, the
Owner Trustee, Owner Trust or
-3-
the Trust Company is, or shall be, personally liable to the holder hereof for
any amounts payable under this Lessor Note or under the Indenture or for any
liability under the Indenture, except as expressly provided in the Indenture.
Principal, Make-Whole Premium (if any) and interest and other
amounts due hereunder or under the Indenture shall be payable in Dollars by wire
transfer of immediately available funds on the due date thereof to the Lease
Indenture Trustee's Account (by wire transfer of immediately available funds if
not otherwise specified) or to such other account as the holder hereof shall
have designated to the Owner Trust in writing. Payment to the Lease Indenture
Trustee must be received by 12:00 (noon), New York time. If any sum payable
hereunder or under the Indenture falls due on a day which is not a Business Day,
then such sum shall be payable on the next succeeding Business Day and, if paid
on such Business Day, the payment thereof shall be without penalty or interest
(unless calculation of such amount is based on actual days elapsed) or other
adjustment.
The holder hereof, by its acceptance of this Lessor Note, agrees
that each payment of principal and interest or other amounts received by it
hereunder shall be applied, FIRST, to the payment of interest on this Lessor
Note (as well as any interest on overdue principal, and, to the extent permitted
by law, interest and other amounts hereunder) due and payable to the date of
such payment as hereinabove provided, SECOND, to the payment of the principal
of, and Make-Whole Premium, if any, then due hereunder, and THIRD, to the extent
permitted under the Indenture, the balance, if any, remaining thereafter, to the
payment of the principal amount of, and Make-Whole Premium, if any, hereunder.
This Lessor Note is one of the Lessor Notes, and one of the
Initial Lessor Notes, referred to in the Indenture which have been or are to be
issued by the Owner Trust pursuant to the terms of the Indenture. The Indenture
Estate is held by the Lease Indenture Trustee as security for the Lessor Notes.
Reference is hereby made to the Indenture for a statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Lessor Note and of the rights and obligations of the holders of, and the
nature and extent of the security for, the other Lessor Notes, as well as for a
statement of the terms and conditions of the trusts created thereby. By its
acceptance of this Lessor Note, each holder hereof agrees to all of the terms
and conditions in the Indenture and in the Participation Agreement referred to
therein expressed to be binding on the Lease Indenture Trustee or a holder of a
Lessor Note.
There shall be maintained the Note Register for the purpose of
registering this Lessor Note and registering transfers and exchanges of Lessor
Notes at the principal office of the Owner Trustee in the manner provided in
Section 2.8 of the Indenture. As provided in the Indenture and subject to
certain limitations therein set forth, the Lessor Notes are exchangeable for
Lessor Notes of the same series, of any authorized denominations and of like
aggregate original principal amount, as requested by the holder hereof
surrendering the same.
Except as otherwise provided in Section 2.8 of the Indenture,
prior to the due presentment for registration of transfer of this Lessor Note,
the Owner Trust and each holder hereof shall deem and treat the Person in whose
name this Lessor Note is registered on the Note Register as the absolute owner
and holder hereof for the purpose of receiving payment of all amounts payable
with respect to this Lessor Note and for all other purposes whether or not this
-4-
Lessor Note is overdue, and neither the Owner Trust nor any holder hereof shall
be affected by any notice to the contrary.
This Lessor Note is subject to prepayment solely as required by
Section 2.11 of the Indenture, to purchase by the Owner Trust, the Owner
Participant or an OP Guarantor as provided in Section 2.10 of the Indenture and
to assumption by an Eligible Successor in accordance with Section 2.12 of the
Indenture. If at any time a Lease Indenture Event of Default shall have occurred
and be continuing, this Lessor Note may be declared, and under certain
circumstances shall automatically be deemed to be declared, due and payable, all
upon the conditions, in the manner and with the effect provided in the
Indenture.
By its acceptance hereof, the holder of this Lessor Note agrees
that the Owner Trustee is executing this Lessor Note on behalf of the Owner
Trust solely in its capacity as Owner Trustee under the Trust Agreement and not
in its individual capacity and in no case shall the Trust Company (or any entity
acting as Owner Trustee under the Trust Agreement) be personally liable in
respect of the obligations stated to be those of the Owner Trust or the Owner
Trustee hereunder. By its acceptance hereof, the holder of this Lessor Note
represents for the benefit of the Owner Trust, the Owner Participant and the
Facility Lessee that either: (i) no Plan assets have been used to purchase this
Lessor Note or (ii) the purchase and holding of this Lessor Note are either
exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administrative
exemptions or do not constitute a prohibited transaction under such restrictions
of ERISA and the Code.
THIS LESSOR NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE, WITH THE LAWS OF THE STATE OF NEW YORK.
-5-
IN WITNESS WHEREOF, the Owner Trust has caused this Lessor Note to
be executed in its name by the Owner Trustee by an officer of the Owner Trustee
thereunto duly authorized, as of the date hereof.
POWERTON TRUST I, as Owner Trust
By: WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as
Owner Trustee under the Trust Agreement
By:
----------------------------------------
Name:
Title:
This is one of the Lessor Notes referred to
in the within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK
as Lease Indenture Trustee
By:
----------------------------
Authorized Officer
ANNEX A
to
Series B Lessor Note
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A B
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Payment Principal
Date Payment ($)
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EXHIBIT E
TO
LEASE INDENTURE
---------------
FORM OF CERTIFICATE OF AUTHENTICATION
This is one of the Lessor Notes referred to
in the within-mentioned Indenture
[_____________________],
as Lease Indenture Trustee
By:
-------------------
Authorized Officer
EXHIBIT F
TO
LEASE INDENTURE
---------------
FORM OF ASSUMPTION AGREEMENT
To: The Holders (as defined below) from time to time
of the Lessor Notes (as defined below) of
Powerton Trust I (the "OWNER TRUST) under the
Indenture of Trust, Mortgage and Security
Agreement (T1) (as the same may from time to
time be amended, amended and restated,
supplemented or otherwise modified in accordance
with the terms thereof and the other Operative
Documents (as defined below), the "INDENTURE")
dated as of August 17, 2000 between the Owner
Trust and the Lease Indenture Trustee referred
to therein.
The undersigned, [____________], a [_________] (the "ELIGIBLE SUCCESSOR")
does hereby covenant and agree with the Holders and the Lease Indenture Trustee
from time to time of the Lessor Notes as follows. Capitalized terms used herein
shall have the meanings assigned thereto in the Indenture.
SECTION 1. The Eligible Successor does hereby agree to, and does hereby
assume unconditionally, (a) the payment of the principal of the Lessor Notes and
of the interest and premium (including, without limitation, Make-Whole Premium)
(if any) thereon, at the rates provided in the Lessor Notes, when and as the
same shall become due and payable, whether at maturity or upon mandatory
prepayment or upon acceleration or otherwise, according to the terms of the
Lessor Notes and of the Indenture, (b) the payment of all other amounts under or
with respect to the Indenture and the Lessor Notes and (c) each and every other
obligation of the Owner Trust under the Indenture and the Lessor Notes.
SECTION 2. The assumption herein contained shall be binding upon the
Eligible Successor, its successors and assigns and shall remain in full force
and effect irrespective of the power or authority of the Owner Trust to issue
the Lessor Notes or to execute, acknowledge and deliver the Indenture or the
validity of the Lessor Notes or the Indenture, or any defense whatsoever that
the Owner Trust may or might have to the payment of the Lessor Notes (principal,
interest or premium (including, without limitation, Make-Whole Premium)), or to
the performance or observance of any of the provisions or conditions of the
Indenture or any Lessor Note, or of the existence or continuance of the Owner
Trust as a legal entity; nor shall said assumption be affected by the merger,
consolidation, or other dissolution of the Owner Trust or the sale or other
transfer of the property of the Owner Trust as an entirety, or substantially so,
to any other person; nor shall the assumption be discharged or impaired by any
act, failure or omission whatsoever on the part of any Holder of any Lessor
Notes or the Lease Indenture Trustee, including, among other such acts, failures
and omissions, the following:
(a) any failure to present any Lessor Notes for payment or to
demand payment thereof, or to give to the Eligible Successor notice of
dishonor and nonpayment of any Lessor Note when and as the same may
become due and payable, or notice of any failure on the part of the Owner
Trust to do any act or thing or to perform or keep any covenant or
agreement by it to be done, kept or performed under the terms of the
Lessor Notes or the Indenture;
-2-
(b) any extension of the obligation of any Lessor Note, either
indefinitely or for any period of time, or any other modification in the
obligations under any Lessor Note or the Indenture or of the Owner Trust
thereon or in connection therewith;
(c) any act or failure to act with regard to any Lessor Note or
the Indenture or anything which might vary the risk of the Eligible
Successor; and
(d) any action taken under the Indenture or the Lessor Notes in
the exercise of any right or power thereby conferred or any failure or
omission on the part of the Lease Indenture Trustee or the Holder of any
Lessor Note to enforce any right or security given under the Indenture or
any Lessor Note, or any waiver of any right or any failure or omission on
the part of the Lease Indenture Trustee or any Holder of any Lessor Note
to enforce any right of any Holder of any Lessor Note against the Owner
Trust;
PROVIDED, always, that the specific enumeration of the above-mentioned acts,
failures, waivers, or omissions shall not be deemed to exclude any other acts
failures, waivers or omissions though not specifically mentioned herein, it
being the purpose and intent of this Assumption Agreement that the obligation of
the Eligible Successor shall be absolute and unconditional to the extent herein
specified and shall not be discharged, impaired or varied except by the payment
of the principal of and interest on any Lessor Note and any premium (including,
without limitation, Make-Whole Premium) thereon in case of prepayment, and then
only to the extent of such payments.
SECTION 3. The Eligible Successor does hereby consent to all of the
terms and conditions of each series of Lessor Notes outstanding and of the
Indenture, and hereby waives any and all rights of notice of any fact or facts
or circumstance or circumstances whatsoever and consents to any extension or
extensions of time of any payment or payments, or of any other act or thing
which any Holder or Holders of any Lessor Note or the Owner Trust may agree to
consent to, either expressly, by acquiescence or otherwise, and ▇▇▇▇▇▇ agrees
not to claim or enforce any rights of subrogation or any other right or
privilege which might otherwise arise on account of any payment made by it or
act or thing done by it on account of or in accordance with its assumption
herein contained, unless and until all of the Lessor Notes have been fully paid
and discharged.
SECTION 4. The assumption herein expressed may be transferred or
assigned at any time or from time to time and shall be considered to be
transferred and assigned upon the transfer of any Lessor Note, whether with or
without the consent of or notice to the Eligible Successor or the Owner Trust.
The Eligible Successor hereby agrees to execute and deliver such instruments and
to do such acts and things requested by the Lease Indenture Trustee as shall be
reasonably necessary to carry out and effectuate the purposes and intents of
this Assumption Agreement. This Assumption Agreement may not be amended or
modified in any respect without the prior
-3-
written consent (evidenced as provided in the Indenture) of the Holders. The
Eligible Successor agrees to file with the Lease Indenture Trustee a duplicate
original of each such consent.
[________________________]
By:
---------------------------------
Title:
ATTEST:
-----------------------------
Title: