EXHIBIT 4.12
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DECLARATION AND AGREEMENT OF TRUST
RELATING TO QM TANKER 1178 TRUST
among
QM TANKER CO. LLC
Owner Participant,
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (CAYMAN) LIMITED
Managing Trustee,
and
WILMINGTON TRUST COMPANY
Delaware Trustee
_________________________________
Dated as of November 19, 1997
_________________________________
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Lease Financing of 1 LR1 Class Crude Oil Tank Vessel
HULL NO. 1178
DECLARATION AND AGREEMENT OF TRUST
RELATING TO QM TANKER 1178 TRUST
DECLARATION AND AGREEMENT OF TRUST (this "Trust Agreement") relating
to QM TANKER 1178 TRUST, dated and effective as of November 19, 1997, among
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Cayman) Limited, a Cayman Islands company (the "Trust
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Company"), as Managing Trustee ("Managing Trustee"), Wilmington Trust Company, a
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Delaware banking corporation (the "Resident Trustee"), as Delaware Trustee
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("Delaware Trustee") (the Managing Trustee and the Delaware Trustee are
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sometimes collectively referred to as the "Owner Trustees" and individually as
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an "Owner Trustee"), and QM TANKER CO. LLC, a Cayman Islands limited life
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company, as beneficial owner of the Trust Estate hereunder (the "Owner
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Participant").
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WHEREAS, the Owner Trustees and the Owner Participant wish to
establish QM TANKER 1178 Trust as a Delaware business trust (the "Trust" or
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"Owner Trust") pursuant to the Business Trust Act and this Trust Agreement for
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the purpose of conducting the activities described in this Trust Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the agreements contained in the other Operative Documents and the
acceptance by the Trust Company and the Resident Trustee of the trusts hereby
created, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
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For the purposes hereof, terms used herein and not otherwise defined
shall have the respective meanings assigned to them in Appendix A (as the same
may from time to time be amended, restated, supplemented or otherwise modified).
Unless otherwise indicated, references in this Trust Agreement to Sections,
subsections, paragraphs and Appendices are to Sections, subsections, paragraphs
and Appendices of this Trust Agreement.
SECTION 2. AUTHORITY TO EXECUTE AND PERFORM
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VARIOUS DOCUMENTS
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2.1 Authority to Execute and Perform Operative Documents and Related
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Documents. The Owner Participant hereby authorizes and directs the Managing
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Trustee and the Managing Trustee agrees for the benefit of the Owner Participant
(i) on the Closing Date, to execute and deliver the Participation Agreement and,
upon receipt of the authorization and direction by the Owner Participant
pursuant to Section 2.11 of the Participation Agreement, to execute and deliver
the Operative Documents contemplated to be executed and delivered by the
Managing Trustee on the Closing Date and take the other actions contemplated to
be taken by the Managing Trustee on the Closing Date in the Operative Documents,
(ii) to execute and deliver any other agreement, instrument or certificate
contemplated by the Operative Documents as the Owner Participant from time to
time may direct in written instructions to the Managing Trustee (collectively,
with the Operative Documents, the "Owner Trust Documents"), (iii) subject to the
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terms of this Trust Agreement and of the other Operative Documents to which the
Managing Trustee is a party, to take whatever action shall be required to be
taken by the Managing Trustee by the terms of, and exercise its rights (upon
instructions received from the Owner Participant) and perform its duties under,
each of the documents, agreements, instruments and certificates referred to in
clauses (i) and (ii) of this Section 2.1 as set forth in such documents,
agreements, instruments and certificates, and (iv) subject to the terms and
limitations of this Trust Agreement and the other Operative Documents to which
it is a party, to take such other action in connection with the foregoing as the
Owner Participant may from time to time direct in written instructions to the
Managing Trustee.
2.2 Authority to Execute and Perform U.K. Documents and Related
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Documents. The Managing Trustee agrees for the benefit of the Owner Participant
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(i) upon receipt of the authorization and direction by the Owner Participant, to
execute and deliver the U.K. Documents contemplated to be executed and delivered
by the Managing Trustee and to take the other actions contemplated to be taken
by the Managing Trustee under the U.K. Documents, (ii) to execute and deliver
any other agreement, instrument or certificate contemplated by the U.K.
Documents as the Owner Participant from time to time may direct in written
instructions to the Managing Trustee (all U.K. Documents to which the Trust is a
party being herein referred to as the "Owner Trust U.K. Documents"), (iii)
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subject to the terms of this Trust Agreement and of the Owner Trust U. K.
Documents to which the Managing Trustee is a party, to take whatever action
shall be
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required to be taken by the Managing Trustee by the terms of, and exercise its
rights (upon instructions received from the Owner Participant) and perform its
duties under, each of the documents, agreements, instruments and certificates
referred to in clauses (i) and (ii) of this Section 2.2 as set forth in such
documents, agreements, instruments and certificates, and (iv) subject to the
terms of this Trust Agreement and the other Operative Documents and U.K
Documents to which it is a party, to take such other action in connection with
the foregoing as the Owner Participant may from time to time direct in written
instructions to the Managing Trustee.
2.3 Authority of Delaware Trustee to Execute and Perform Documents.
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The Delaware Trustee agrees for the benefit of the Owner Participant, upon
receipt of the written authorization and direction by the Owner Participant, to
execute and deliver such documents and to take the other actions contemplated to
be taken by the Delaware Trustee as may be expressly set forth in such
authorization and direction.
SECTION 3. DECLARATION OF BUSINESS TRUST;
ORGANIZATION
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3.1 Appointment of the Owner Trustees; Declaration of Trust. The
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Trust Company is hereby appointed Managing Trustee and the Resident Trustee is
hereby appointed Delaware Trustee and each hereby accepts such appointment. The
Managing Trustee agrees to hold the Trust Estate as Owner Trustee in trust upon
the terms and conditions and for the use and the benefit of the Owner
Participant as herein set forth. It is the intention of the parties hereto that
the trust created by this Trust Agreement constitute a business trust under the
Business Trust Act and that this Trust Agreement constitute the governing
instrument of such business trust. The parties intend, and this Trust Agreement
is intended to cause, the Trust to be characterized as a grantor trust for
federal income tax purposes. The provisions hereof shall be interpreted
accordingly and no party hereto shall take a contrary position for federal
income tax purposes.
3.2 Managing Trustee. The Trust Company agrees that it will hold as
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Managing Trustee all estate, right, title and interest of the Trust in and to
the Vessel Interest, the Owner Trust Documents and the Owner Trust U.K.
Documents, and all money held by the Managing Trustee from time to time
hereunder, including, without limitation, all
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amounts of Hire, insurance proceeds, sales proceeds, rental proceeds, and
requisition, indemnity or other payments of any kind, but specifically excluding
Excepted Payments (collectively, the "Trust Estate"), upon the trusts set forth
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herein and for the use and benefit of the Owner Participant as sole beneficiary,
subject, however, to the provisions of and the Lien created by the Indenture.
3.3 Delaware Trustee. Notwithstanding any other provision of this
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Trust Agreement, the Delaware Trustee shall not be entitled to exercise any of
the duties and responsibilities of the Managing Trustee described in this Trust
Agreement. The Delaware Trustee shall be an Owner Trustee for the sole and
limited purpose of fulfilling the requirements of (S) 3807 of the Business Trust
Act.
3.4 Name. The name of the Trust established by this Trust Agreement
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is QM TANKER 1178 Trust. The Trust's activities may be conducted under such
name or under any other name deemed advisable by the Managing Trustee.
3.5 Purpose. The purposes for which the Trust is formed are (a) to
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carry on, subject to Section 6, the activities referred to in Section 2, and
otherwise administer, maintain, protect and preserve the Trust Estate and (b) to
engage, subject to Section 6, in any and all activities necessary, desirable,
convenient or incidental to the foregoing; provided, however, that so long as
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the Lien of the Indenture shall be in effect and shall not have been discharged
pursuant to the terms thereof, without the prior written consent of the
Indenture Trustee, (i) the Trust will only engage in the business and activities
contemplated by the Operative Documents and the U.K. Documents and activities
incidental thereto and shall not engage in any other business or activities and
(ii) the Trust will not merge or consolidate with any other person.
3.6 Filing of Certificate of Trust. Upon the execution of this Trust
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Agreement, the Owner Trustees shall execute the Certificate of Trust for the
Trust in the form attached hereto as Exhibit A, and the Delaware Trustee shall
cause the filing thereof with the Secretary of State of the State of Delaware.
3.7 Duration of Trust. The Trust shall remain in existence from
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November 19, 1997 until terminated in accordance with Section 9.
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SECTION 4. PAYMENTS
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4.1 Payments from Trust Estate Only. All payments to be made by the
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Managing Trustee under this Trust Agreement shall be made only from the assets
of or income and proceeds from the Trust Estate and only to the extent that the
Owner Trust shall have received income or proceeds from the Trust Estate to make
such payments in accordance with the terms hereof, except as specifically
provided herein. The Owner Participant agrees that it will look solely to the
assets of or the income and proceeds from the Trust Estate to the extent
available for payment as herein provided and that, except as expressly provided
herein, neither the Trust Company nor Resident Trustee shall be liable for any
amounts payable under this Trust Agreement or subject to any liability under
this Trust Agreement, and the Trust shall not incur any indebtedness except as
contemplated by the Operative Documents and the U.K. Documents.
4.2 Method of Payment. (a) All amounts payable to the Owner
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Participant or to the Indenture Trustee pursuant to this Trust Agreement shall
be paid by the Managing Trustee, if to the Owner Participant, by transferring
such amount in immediately available funds to such account at such financial
institution as the Owner Participant from time to time may direct or, if to the
Indenture Trustee, in the manner specified in the Indenture, in either case
without discretion on the part of the Managing Trustee.
(b) Notwithstanding the foregoing, the Managing Trustee will pay, if
so requested by the Owner Participant in writing, any or all amounts payable by
the Managing Trustee hereunder to the Owner Participant either (i) by crediting
such amount or amounts to an account or accounts maintained by the Owner
Participant with the Trust Company in immediately available funds, (ii) by
payment at the address for payment specified in Schedule 1 to the Participation
Agreement in immediately available funds or (iii) by mailing an official bank
check or checks in such amount or amounts payable to the Owner Participant at
such address as the Owner Participant shall have designated in writing to the
Managing Trustee.
(c) The Managing Trustee will pay all amounts payable by the Owner
Trustees hereunder on the day received (or on the next succeeding Business Day
if the funds to be so distributed shall not have been received by the Managing
Trustee prior to 11:00 a.m., New York City time, and the
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Managing Trustee shall not have been reasonably able to distribute such funds to
the Owner Participant on the day received).
SECTION 5. DISTRIBUTIONS
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5.1 Payments to the Indenture Trustee. So long as the Lien of the
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Indenture shall be in effect and shall not have been discharged pursuant to the
terms thereof, (i) if no Indenture Event of Default shall have occurred and be
continuing, all Base Hire, Termination Value and other Hire payable in
connection with an Event of Loss or termination of the Charter Party, insurance
payments and requisition and similar payments, and (ii) if an Indenture Event of
Default shall have occurred and be continuing all Hire and other payments of any
kind payable to the Trust or received by either Owner Trustee (other than, in
either case, Excepted Payments and payments received from the Indenture Trustee)
shall be payable directly to the Indenture Trustee for distribution in
accordance with the provisions of the Indenture, and if any such amount or
payment is received by the Owner Trustees, such amount or payment upon receipt
thereof shall be paid over to the Indenture Trustee without deduction, set-off
or adjustment of any kind for distribution in accordance with the provisions of
the Indenture.
5.2 Payments to the Owner Trustees. Any payment of the type referred
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to in Section 5.1 received by any Owner Trustee after the Indenture shall have
been discharged pursuant to the terms thereof, any payment received from the
Indenture Trustee other than as specified in Section 5.3 and any other amount
received as part of the Trust Estate and for the application or distribution of
which no provision is made herein shall be distributed forthwith upon receipt by
such Owner Trustee in the following order of priority: first, so much of such
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payment as shall be required to reimburse the Owner Trustees for any expenses
not otherwise reimbursed as to which the Owner Trustees entitled to be so
reimbursed pursuant to the provisions hereof shall be retained by the Owner
Trustees; second, so much of the remainder for which provision as to the
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application thereof is contained in any of the Owner Trust Documents or the
Owner Trust U.K. Documents shall be applied and distributed in accordance with
the terms of such Owner Trust Document or the Owner Trust U.K. Document as the
case may be; and third, the balance, if any, shall be paid to the Owner
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Participant.
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5.3 Excepted Payments. Any Excepted Payment received by any Owner
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Trustee shall be paid by such Owner Trustee to the Person to whom such Excepted
Payment is payable pursuant to the terms of the Owner Trust Documents or the
Owner Trust U.K. Documents.
5.4 Certain Distributions to the Owner Participant. All amounts from
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time to time distributable by the Indenture Trustee to the Owner Participant
pursuant to the terms of the Indenture shall, if paid to any Owner Trustee, be
distributed by such Owner Trustee to or at the direction of the Owner
Participant. All amounts received by the Owner Trustees prior to the Closing
Date shall be held and disbursed in accordance with the directions of the Owner
Participant.
5.5 No Shares, etc. The Trust shall not have or issue shares or
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participation certificates or other transferable evidence of ownership.
SECTION 6. CERTAIN DUTIES OF THE OWNER TRUSTEES
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6.1 Notice of Certain Events. In the event that a Responsible
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Officer of the Managing Trustee shall have Actual Knowledge of any Charter Event
of Default, any Indenture Event of Default or any Event of Loss, the Managing
Trustee shall give prompt telephonic notice thereof (promptly confirmed in
writing) to the Owner Participant, the Charterer and the Indenture Trustee,
unless (in the case of notice to the Indenture Trustee or the Charterer) such
Charter Event of Default, Indenture Event of Default or Event of Loss, as the
case may be, has been remedied before the giving of such notice and the Managing
Trustee has Actual Knowledge that the Charter Event of Default, Indenture Event
of Default or Event of Loss has been so remedied. Subject to the terms of
Section 6.3, the Managing Trustee shall, after the occurrence of any such event,
take or refrain from taking such action with respect thereto, not inconsistent
with the provisions of the Operative Documents, with respect thereto as the
Managing Trustee shall be instructed in writing by the Owner Participant. If
the Managing Trustee shall not have received instructions as above provided
within 20 days after such notice of such event to the Owner Participant, the
Managing Trustee may, until it shall have received such instructions and subject
to the provisions of the Owner Trust Documents and the Owner Trust U.K.
Documents, take such action or refrain from taking such action (but shall be
under no duty to take or refrain from taking any action) with respect to
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such Charter Event of Default, Indenture Event of Default or Event of Loss, as
it shall deem advisable in the best interests of the Owner Participant.
6.2 Action Upon Instructions. (a) Subject to the terms of Sections
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6.1 and 6.3, upon the written instructions at any time and from time to time of
the Owner Participant, the Owner Trustees shall take or refrain from taking such
action or actions, not inconsistent with the provisions of any of the Owner
Trust Documents or the Owner Trust U.K. Documents, as may be specified in such
instructions. In the event that an Owner Trustee is unsure of the application
of any provision of this Trust Agreement or any other Owner Trust Document or
the Owner Trust U.K. Documents, such Owner Trustee may request and rely upon
instructions of the Owner Participant.
(b) Notwithstanding anything to the contrary set forth in Section 2.1
hereof, the Managing Trustee shall not, without instructions from the Owner
Participant, (x) exercise any right to retain the Vessel Interest under Article
18 of the Charter Party, or (y) consent to or approve any action or document as
being satisfactory to the Owner Trustee, or waive any condition or the
performance of any obligation in favor of such Owner Trustee or the Trust
Estate, or release the Charterer or the Head Lessor from any obligation under
the Operative Documents or the U.K. Documents.
6.3 Indemnification. Neither Owner Trustee shall be required to take
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or refrain from taking any action under Sections 2.1, 2.2, 2.3, 6.1 or 6.2
(other than the actions specified in the first sentence of Section 6.1) unless
such Owner Trustee shall have been indemnified in its individual capacity by the
Owner Participant, in manner and form reasonably satisfactory to such Owner
Trustee, against any liability, fee, cost or expense (including, without
limitation, reasonable attorneys' fees) which may be incurred or charged in
connection therewith, other than any such liability, fee, cost or expense which
results from the willful misconduct (including, without limitation, willful
breach of contract) or gross negligence of such Owner Trustee, or the failure of
such Owner Trustee to use ordinary care in the receipt and disbursement of
funds, and, if the Owner Participant shall have directed an Owner Trustee to
take or refrain from taking any action under any Owner Trust Document or the
Owner Trust U.K. Document, the Owner Participant agrees to furnish such
indemnity (subject to the foregoing limitation) as shall be reasonably
satisfactory to
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such Owner Trustee, and in addition, to the extent not otherwise paid pursuant
to the terms of any other Owner Trust Document or the Owner Trust U.K. Document,
to pay the reasonable compensation of such Owner Trustee for the services
performed or to be performed by it pursuant to such direction as set forth in
Section 8.2. Neither Owner Trustee shall be required to take any action under
any Owner Trust Document or the Owner Trust U.K. Document if such Owner Trustee
reasonably shall determine, or shall have been advised by counsel, that such
action is likely to result in unindemnified personal liability to such Owner
Trustee or is contrary to the terms hereof or of any documents contemplated
hereby to which such Owner Trustee is a party, or otherwise contrary to law, and
such Owner Trustee in such case shall deliver promptly to the Owner Participant
written notice of the basis of its refusal to act.
6.4 No Duties Except as Specified. Neither Owner Trustee shall have
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any power, right, authority, duty or obligation to manage, control, use, make
any payment in respect of, register, record, insure, inspect, sell, dispose of
or otherwise deal with the Vessel or any other part of the Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
any Owner Trust Document or any Owner Trust U.K. Document, except as expressly
provided by the terms of this Trust Agreement, the Indenture, the Owner Trust
Documents or the Owner Trust U.K. Documents or in written instructions from the
Owner Participant received pursuant to Sections 2.1, 2.2, 2.3, 6.1 or 6.2; and
no implied duties or obligations shall be read into this Trust Agreement against
the Owner Trustees. Notwithstanding and without limiting the foregoing, the
Trust Company agrees that it will, in its individual capacity and at its own
expense, without any right to indemnification hereunder, promptly take all
action necessary to discharge and satisfy in full any Owner's Lien attributable
to it on any part of the Trust Estate and will claim no indemnity therefor
hereunder or under the Participation Agreement or under any other Operative
Document.
6.5 No Action Except Under Specified Documents or Instructions. The
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Owner Trustees shall not have any right, power or authority to, and each Owner
Trustee agrees that it will not manage, control, use, sell, dispose of or
otherwise deal with the Vessel or any other part of the Trust Estate except as
(i) expressly provided by the terms of this Trust Agreement, (ii) expressly
required by the terms of any Owner Trust Document or the Owner Trust U.K.
Document or (iii)
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expressly directed or authorized in written instructions from the Owner
Participant pursuant to Sections 2.1, 2.2, 2.3, 6.1 or 6.2. Except as provided
in this Trust Agreement, the Operative Documents or the U.K. Documents, the
Trust shall not maintain a separate office or possess property (other than the
Trust Estate), office supplies or equipment or have independent bank accounts
other than those bank accounts required to administer the Trust Estate or comply
with the terms of the Indenture, the Operative Documents and the U.K. Documents.
6.6 Tax Returns; Records. The Managing Trustee shall be
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responsible for the maintaining of all appropriate books and records relating to
the receipt and disbursement of all moneys which it may receive or be entitled
to hereunder or under any agreement contemplated hereby. The Managing Trustee
agrees, at the request and expense of the Owner Participant, to prepare or cause
to be prepared and to sign and/or file all tax returns with respect to the
transactions contemplated hereby or any agreement referred to herein; provided,
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however, that the Managing Trustee shall, to the extent it shall have timely
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received all necessary information from the Owner Participant, send a copy of
the contemplated return to the Owner Participant not more than sixty (60) nor
less than thirty (30) days prior to the due date of the return. The Owner
Participant, upon request, will furnish the Managing Trustee with all such
information as may be reasonably required from the Owner Participant in
connection with the preparation of such tax returns. The Managing Trustee shall
keep copies of all returns delivered to or filed by it.
6.7 Absence of Certain Duties. Except in accordance with written
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instructions furnished pursuant to Sections 2.1, 2.2, 2.3, 6.1 and 6.2, and
except as expressly provided in any Operative Document and without limiting the
generality of Section 6.4, neither Owner Trustee shall have any duty (i) to
file, record or deposit any Owner Trust Document or any Owner Trust U.K.
Document, including, without limitation, this Trust Agreement, or any other
document, or to maintain any such filing, recording or deposit, or to refile,
rerecord or redeposit any such document, (ii) to obtain insurance with respect
to the Vessel or to effect or maintain any such insurance, other than to receive
and forward to the Owner Participant any notices, policies, certificates or
binders furnished to the Owner Trust by the Charterer or its insurance brokers,
(iii) to maintain or ▇▇▇▇ the Vessel, (iv) to pay or discharge any tax,
assessment or
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other governmental charge, or any Lien or encumbrance of any kind, owing with
respect to or assessed or levied against any part of the Trust Estate, except as
provided in Section 6.4, (v) to confirm, verify, investigate or inquire into the
failure to receive any reports or financial statements of the Charterer or the
Guarantor, (vi) to inspect the Vessel at any time, or to ascertain or inquire as
to the performance or observance of any of the covenants of the Charterer or any
other Person under any Owner Trust Document or the Owner Trust U.K. Document
with respect to the Vessel or any other part of the Trust Estate or (vii) to
manage, control, use, sell, dispose of or otherwise deal with the Vessel or any
other part of the Trust Estate or any part thereof, except as provided in
clauses (i), (ii) and (iii) of Section 6.5.
6.8 Fixed Investment Trust. Notwithstanding anything herein to the
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contrary, neither Owner Trustee shall be authorized nor have any power to
reinvest the proceeds of the Trust Estate or to otherwise "vary the investment"
of the Owner Participant within the meaning of Treasury Regulations (S)
301.7701-4(c)(1).
6.9 Fiduciary Duty.
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(a) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating to the Trust or to any
other Person, such Indemnitee acting under this Agreement shall not be liable to
the Trust or to any other Person for its good faith reliance on the provisions
of this Agreement. To the extent that provisions of this Agreement restrict the
duties and liabilities of an Indemnitee otherwise existing at law or in equity,
such provisions are agreed by the parties hereto to replace such other duties
and liabilities of such Indemnitee.
(b) Unless otherwise expressly provided herein, whenever a conflict of
interest exists or arises among Indemnitees or between an Indemnitee and a
Person or as a result of any provision of this Agreement or any other agreement
contemplated herein, then the Managing Trustee shall resolve such conflict of
interest considering in each case: (i) the relative interest of each party
(including its own interest) in such conflict, agreement, transaction or
situation; (ii) the benefits and burdens relating to such interests; (iii) any
customary or accepted industry practices; and (iv) any applicable generally
accepted accounting practices or principles. In the absence of bad faith by the
Managing Trustee, the resolution provided by the
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Managing Trustee shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty or obligation of the Managing
Trustee at law or in equity or otherwise; and
(c) If an Indemnitee is permitted or required under this Agreement to
make a decision in its "good faith" or under another express standard, the
Indemnitee shall act under such express standard and shall not be subject to any
other or different standard imposed by this Agreement or by applicable law.
6.10 Place of Administration. The principal place of administration
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of the trusts created hereby shall be in the Cayman Islands.
SECTION 7. THE OWNER TRUSTEES
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7.1 Trustees. The number of Owner Trustees shall initially be two
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(2), and thereafter the number of Owner Trustees shall be such number as shall
be fixed from time to time by a written instrument signed by the Owner
Participant. The Owner Participant is entitled to appoint or remove without
cause any Owner Trustee at any time; provided, however, that the number of Owner
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Trustees shall in no event be less than two (2); and provided, further, that at
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all times there should be at least one Owner Trustee who, if an individual, is a
resident of the State of Delaware or which, if an entity, has its principal
place of business in the State of Delaware.
7.2 Acceptance of Trusts and Duties. Each Owner Trustee accepts the
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trusts hereby created and agrees to perform the same on the terms of this Trust
Agreement. Each Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Trust Estate pursuant to the terms of
this Trust Agreement. Neither the Trust Company nor the Resident Trustee in
their respective individual capacities, shall be answerable or accountable under
any circumstances except, and in the case of such exceptions shall not be
entitled to indemnity hereunder, (i) for such Person's own willful misconduct
(including, without limitation, willful breach of contract) or gross negligence,
(ii) in the case of the inaccuracy of any of such Person's representations or
warranties contained in Section 7.4 hereof or in Section 8 of the Participation
Agreement or in any written certificate delivered pursuant to any Operative
Document or U.K. Document given expressly in such
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Person's individual capacity and not in its capacity as a trustee hereunder,
(iii) as arising from such Person's failure to perform obligations expressly
undertaken by such Person in the last sentence of Section 6.4 hereof or
expressly undertaken by such Person in Section 12.2 of the Participation
Agreement, (iv) for any Tax based on or measured by any fees, commissions or
compensation received by such Person for acting as Owner Trustee in connection
with any of the transactions contemplated by the Operative Documents or the U.K.
Documents, or (v) for such Person's failure to use ordinary care in the receipt
and disbursement of funds.
7.3 Furnishing of Documents. (a) Each Owner Trustee will furnish to
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the Owner Participant, promptly upon receipt thereof, duplicates or copies of
all reports, notices, requests, demands, opinions, certificates, financial
statements and any other instruments furnished to such Owner Trustee under any
Owner Trust Document or any Owner Trust U.K. Document, unless such Owner Trustee
shall have determined that the same already has been actually received by the
Owner Participant.
(b) The Delaware Trustee shall furnish to the Managing Trustee,
promptly upon receipt thereof, a duplicate or copy of all reports, notices,
requests, demands, certificates, financial statements and any other instruments
furnished to the Delaware Trustee and relating to the Trust, this Trust
Agreement or the other parties hereto, provided, that the Delaware Trustee need
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not forward documents to the Managing Trustee if such Person originated the
documents or furnished them to the Delaware Trustee or is to receive any such
documents from any Person other than the Delaware Trustee according to an
express provision hereof or under any document to which the Managing Trustee is
a party.
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7.4 No Representations or Warranties as to the Vessel or Documents.
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(a) NEITHER THE TRUST COMPANY, RESIDENT TRUSTEE, THE MANAGING TRUSTEE NOR THE
DELAWARE TRUSTEE MAKES ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO THE DESIGN OR CONDITION OF THE VESSEL OR ANY PART THEREOF, THE
MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE
TO THE VESSEL OR ANY PART THEREOF, THE QUALITY OF THE MATERIALS OR WORKMANSHIP
THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF
ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, except that each of
the Trust Company and the Resident Trustee hereby represents and warrants that
(i) on the Closing Date, the Trust shall have received whatever right, title
and/or interest in or to the Vessel as was conveyed to the Trust on such date
and (ii) the Vessel Interest shall be free and clear of Owner's Liens
attributable to the Trust Company and the Resident Trustee and (b) neither the
Trust Company, the Resident Trustee, the Managing Trustee nor the Delaware
Trustee makes any representation or warranty as to the validity or
enforceability of any Operative Document, or as to the correctness of any
statement therein, except to the extent that any such representation, warranty
or statement is expressly made in an Operative Document or in any written
certificate delivered pursuant thereto by any of the Owner Trustees, Resident
Trustee, or the Trust Company as the case may be, and except that the Trust
Company and Resident Trustee hereby represent and warrant that (i) this Trust
Agreement has been duly executed and delivered by the Trust Company and Resident
Trustee and each of the Owner Trust Documents has been or will be executed and
delivered by officers of the Trust Company, Resident Trustee or by each Owner
Trustee, as the case may be, who are or will be duly authorized to execute and
deliver documents on its behalf, (ii) each of the Trust Company and the Resident
Trustee have all corporate power and authority to execute, deliver and perform
this Trust Agreement and (iii) assuming the due authorization, execution and
delivery of this Trust Agreement by the Owner Participant, this Trust Agreement
constitutes the legal, valid and binding obligations of the Trust Company and
the Resident Trustee enforceable against the Trust Company and Resident Trustee,
respectively, in accordance with its terms.
7.5 No Segregation of Moneys; No Interest. Except as otherwise
-------------------------------------
provided herein, in any other Operative Document or in written instructions from
the Owner Participant, moneys received by any Owner Trustee hereunder need not
be segre-
14
gated in any manner except to the extent required by law, and may be deposited
under such general conditions as may be prescribed by law, and such Owner
Trustee shall not be liable for any interest thereon.
7.6 Reliance; Advice of Counsel. Neither Owner Trustee shall incur
---------------------------
any liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper reasonably believed by such Owner Trustee in good faith to be
genuine and reasonably believed by such Owner Trustee in good faith to be signed
by the proper party or parties. Any request, direction, order or demand of the
Owner Participant or the Charterer mentioned herein or in any other Operative
Document to which the Owner Trust is a party shall be sufficiently evidenced by
an Officer's Certificate of the Owner Participant or the Charterer, as the case
may be. An Owner Trustee may accept in good faith a certified copy of a
resolution of the Board of Directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter
the manner of ascertainment of which is not specifically prescribed herein, an
Owner Trustee may for all purposes hereof rely on an Officer's Certificate of
the relevant party as to such fact or matter, and such Officer's Certificate
shall constitute full protection to such Owner Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, an Owner Trustee may execute any of the
trusts or powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys, and may consult with counsel, accountants and other
skilled persons to be selected and employed by it, and an Owner Trustee shall
not be liable for anything done, suffered or omitted in good faith by such Owner
Trustee in accordance with the written advice or opinion within the scope of the
competence of any such counsel, accountants or other skilled persons and not
contrary to this Trust Agreement, except for the exercise of reasonable care in
the appointment of counsel, accountants or other skilled persons.
7.7 Not Acting in Individual Capacity. Except as provided in this
---------------------------------
Trust Agreement, in accepting the trusts hereby created each Owner Trustee
agrees to act solely as trustee hereunder and not in its individual capacity;
and all Persons having any claim against an Owner Trustee by reason of the
transactions contemplated by the Owner Trust Documents
15
or the Owner Trust U.K. Documents shall look only to the Trust Estate (or a part
thereof, as the case may be) for payment or satisfaction thereof, except as
specifically provided in this Trust Agreement and except to the extent the Trust
Company or the Resident Trustee otherwise shall agree in any Owner Trust
Document or Owner Trust U.K. Document.
SECTION 8. INDEMNIFICATION; COMPENSATION
-----------------------------
8.1 Indemnification of the Trust Company and Resident Trustee. The
---------------------------------------------------------
Owner Participant agrees to assume liability for, and to indemnify and hold
harmless the Trust Company and the Resident Trustee (which terms shall include,
solely for purposes of this Section 8, each officer, director, employee and
agent thereof) against and from any and all liabilities, obligations, damages,
taxes (excluding any taxes, fees or other charges payable by the Trust Company
or the Resident Trustee or measured by any compensation received by each Owner
Trustee for its services hereunder), claims, actions, suits, out-of-pocket
costs, expenses and disbursements of any kind and nature whatsoever, including,
without limitation, the reasonable fees and expenses of counsel but excluding
internal costs and expenses such as salaries (collectively, "Trust Expenses")
--------------
which may be imposed on, incurred by or asserted at any time against the Trust
Company or the Resident Trustee (whether or not also indemnified by any other
Person); provided, however, that to the extent the Trust Company or the Resident
-------- -------
Trustee shall have actually received any payment in the nature of an indemnity
payment from any such other Person relating to a claim hereunder, the Trust
Company and the Resident Trustee shall not be entitled to the amount of any such
payment pursuant to this Section 8.1 in any way relating to or arising out of
(i) the administration of the Trust Estate or the action or inaction of the
Trust Company or Resident Trustee hereunder or under the other Owner Trust
Documents or the Owner Trust U.K. Documents, (ii) the Vessel or any part
thereof, (iii) the Owner Trust Documents or the Owner Trust U.K. Documents or
any of them, the issuance of the Secured Notes or the making of any investment
in the Vessel, payments made pursuant to any thereof or the enforcement by the
Trust Company or the Resident Trustee of any of such Person's rights under the
Owner Trust Documents or the Owner Trust U.K. Documents, or any other
transaction contemplated by the Owner Trust Documents or the Owner Trust U.K.
Documents, or (iv) the manufacture, financing, construction, purchase,
ownership, acquisition, acceptance, rejection, delivery, nondelivery,
possession, transportation, charter, subcharter,
16
mortgaging, granting of a security interest in, preparation, installation,
condition, transfer of title, rental, use, operation, storage, maintenance,
modification, alteration, repair, assembly, sale, return, abandonment or other
application or disposition of all or any part of the Vessel or any interest
therein, including, without limitation, (A) claims or penalties arising from any
violation of law or liability in tort (strict or otherwise), (B) loss of or
damage to any property or the environment or death or injury to any Person, (C)
latent or other defects, whether or not discoverable and (D) any claim for
patent, trademark or copyright infringement; except only that the Owner
Participant shall not be required to indemnify the Trust Company or the Resident
Trustee for Trust Expenses arising or resulting from any of the matters (1)
described in clauses (i) through (v) of the last sentence of Section 7.2 or (2)
for which the Charterer would not have been required to indemnify the Trust
Company or the Resident Trustee pursuant to Section 14.1(a) or 14.2(b) of the
Participation Agreement (disregarding for this purpose (i) clauses 1, 4, 6, 8, 9
(to the extent any "other exclusion" referred to therein refers to clauses 4, 6,
8, 10, 11, 13, or 19 of the proviso to such 14.1(a)), 10, 11, 13 and 19 of the
proviso to Section 14.1(a) of the Participation Agreement and (ii) clauses 2, 5,
7, 10, 14, 15 and 16 of Section 14.2(b) of the Participation Agreement). The
indemnities contained in this Section 8.1 shall survive the termination of this
Trust Agreement. To secure the foregoing indemnities, each Owner Trustee shall
be entitled to apply any amount otherwise distributable to the Owner Participant
pursuant to Section 5.2 against any such indemnity which has not been paid when
due. The indemnities contained in this Section 8.1 extend to the Trust Company
and the Resident Trustee only and shall not be construed as indemnities of the
Trust Estate.
8.2 Compensation and Expenses. Each Owner Trustee agrees that it
-------------------------
shall have no right against the Owner Participant or the Trust Estate for any
fee as compensation for its services or for its expenses, to the extent that the
Charterer has paid such amounts pursuant to Section 2.10 or 14.1(g) of the
Participation Agreement. Subject to the preceding sentence, the Owner
Participant shall pay, or reimburse each Owner Trustee for, all reasonable
expenses of such Owner Trustee, together with reasonable compensation for its
services hereunder as provided herein, including, without limitation, the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as each Owner Trustee may employ in
connection with
17
the exercise and performance of its or his rights and duties under the Owner
Trust Documents and the Owner Trust U.K. Documents (provided that the Trust
shall not have any employees), unless and to the extent that such Owner Trustee
otherwise receives payment or reimbursement pursuant to any Owner Trust Document
or any Owner Trust U.K. Document, whether or not the transactions contemplated
hereby are consummated.
SECTION 9. TERMINATION OF TRUST AGREEMENT
------------------------------
9.1 Termination of Trust Agreement. Subject to the terms of the
------------------------------
Participation Agreement, the Indenture and Sections 5 and 8.1 hereof, this Trust
Agreement and the trust created hereby shall terminate and the Trust Estate
shall be distributed to the Owner Participant, and this Trust Agreement shall be
of no further force or effect, upon the sale or other final disposition by the
Managing Trustee of all property constituting part of the Trust Estate and the
final distribution by the Managing Trustee of all moneys or other property or
proceeds constituting part of the Trust Estate in accordance with the terms of
Section 5.
9.2 Termination at Option of the Owner Participant. The provisions
----------------------------------------------
of Section 9.1 notwithstanding, but subject to Section 11.2, this Trust
Agreement and the trusts created hereby shall terminate and the Trust Estate
shall be distributed to the Owner Participant, and this Trust Agreement shall be
of no further force and effect, upon the election of the Owner Participant by
notice to each Owner Trustee to revoke the trusts created hereby; provided that,
--------
in addition to the giving of such notice, the Owner Participant, with the
cooperation of each Owner Trustee, shall execute and deliver such written
agreements and instruments and take such actions as shall be necessary in order
to cause the succession of the Owner Participant to all the rights, title,
interests, duties and liabilities of each Owner Trustee under the Owner Trust
Documents and the Owner Trust U.K. Documents (other than obligations
attributable to any gross negligence or willful misconduct of the Trust Company
or the Resident Trustee or any breach by either Owner Trustee of its or his
obligations under the Owner Trust Documents or the Owner Trust U.K. Documents);
provided, however, that prior to any such termination, the Lien of the Indenture
-------- -------
on the Indenture Estate shall have been released, and full payment of the
principal of, or, premium (if any) and interest on the Secured Notes shall have
been made or the Indenture Trustee shall have consented to such termination.
18
The written agreements and instruments referred to in the preceding sentence
shall be reasonably satisfactory in form and substance to each Owner Trustee and
shall release each Owner Trustee from all further obligations of the Owner
Trustees hereunder and under the agreements and other instruments mentioned in
the preceding sentence.
9.3 Distribution of Trust Estate Upon Termination. Upon any
---------------------------------------------
termination of the trust created hereby pursuant to Section 9.1 or 9.2, the
Owner Trustees shall transfer title to the Trust Estate (and assign all their
right, title and interest in, to and under each Operative Document) to the Owner
Participant or its designee. No later than the effective date of termination of
the trust created hereby the Owner Trustees or its designee(s) shall execute and
deliver to the Owner Participant a ▇▇▇▇ of sale and other written instrument or
instruments prepared by the Owner Participant in form and substance reasonably
satisfactory to the Owner Trustees evidencing the transfer of title to the Trust
Estate to the Owner Participant and, no later than the effective date of such
termination, the Owner Participant shall execute and deliver to the Owner
Trustees a written instrument in form and substance reasonably satisfactory to
the Owner Trustees evidencing discharge of the Owner Trustees from their
obligations hereunder and under the other Owner Trust Documents and the Owner
Trust U.K. Documents to which each Owner Trustee is a party except those
theretofore accrued and their obligations to release Owner's Liens.
SECTION 10. SUCCESSOR OWNER TRUSTEES,
-------------------------
CO-OWNER TRUSTEES AND
---------------------
SEPARATE OWNER TRUSTEES
-----------------------
10.1 Resignation and Successors. (a) An Owner Trustee may resign at
--------------------------
any time without cause by giving at least sixty (60) days' prior written notice
to the Owner Participant, with a copy to the Indenture Trustee and the
Charterer, such resignation to be effective on the expiration of such sixty (60)
day period. In addition, the Owner Participant at any time may remove an Owner
Trustee without cause by an instrument in writing delivered to such Owner
Trustee, the Indenture Trustee and the Charterer, such removal to be effective
upon the acceptance of appointment by a successor to such Owner Trustee under
paragraph (b) of this Section 10.1. In case of the resignation or removal of an
Owner Trustee, the Owner Participant may appoint a successor to such Owner
Trustee by an instrument in writing, signed by
19
the Owner Participant. If a successor to an Owner Trustee shall not have been
appointed within thirty (30) days after the giving of written notice of such
resignation or the delivery of the written instrument with respect to such
removal, the Owner Trustee, the Owner Participant, the Indenture Trustee or the
Charterer may apply to any court of competent jurisdiction to appoint a
successor to the Owner Trustee reasonably acceptable to the Owner Participant to
act until such time, if any, as a successor shall have been appointed as above
provided in this Section 10.1. Any successor so appointed by such court shall
immediately and without further act be superseded by any successor to such Owner
Trustee appointed as above provided in this Section 10.1.
(b) Any successor Owner Trustee, however appointed, shall execute and
deliver to the predecessor Owner Trustee an instrument accepting such
appointment and shall give the Owner Participant, the Indenture Trustee and
Charterer written notice of such acceptance. Upon the execution and delivery of
such instrument, such successor Owner Trustee, without further act provided that
any required Governmental Actions have been obtained, shall become vested with
all the estates, properties, rights, powers, duties and trusts of the
predecessor Owner Trustee in the trusts hereunder with like effect as if
originally named an Owner Trustee herein; provided, however, that upon the
-------- -------
written request of such successor Owner Trustee, such predecessor Owner Trustee
shall execute and deliver an instrument transferring to such successor Owner
Trustee, upon the trusts herein expressed, all the estates, properties, rights,
powers, duties and trusts of such predecessor trustee as the Owner Trustee
hereunder, and such predecessor trustee shall duly assign, transfer, deliver and
pay over to such successor Owner Trustee all moneys or other property then held
by such predecessor trustee as the Owner Trustee upon the trusts herein
expressed. Upon the appointment of any successor Owner Trustee hereunder, the
predecessor trustee, pursuant to written instructions of the Owner Participant,
will execute all documents and take all reasonable action within its control in
order to cause such title held in the Trust Estate by such predecessor trustee
to be transferred to the successor Owner Trustee.
(c) Any successor to the Managing Trustee, however appointed, shall
be a bank or trust company incorporated and doing business within the Cayman
Islands or, with the consent of the Owner Participant, the United States and
having a
20
combined capital and surplus of at least $50,000,000 reasonably acceptable to
the Owner Participant, if there be such an institution willing, able and legally
qualified to perform the duties of an Owner Trustee hereunder upon reasonable or
customary terms.
(d) Any corporation into which the Trust Company may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trust Company shall be
a party, or any corporation to which substantially all the corporate trust
business of the Trust Company may be transferred, shall be, subject to
compliance with the terms of paragraph (c) of this Section 10.1, the Managing
Trustee under this Trust Agreement without further act.
(e) Any successor to the Delaware Trustee, however appointed, shall
be a bank or trust company incorporated and doing business within the United
States of America, having its principal place of business in Delaware and having
a combined capital and surplus of at least $50,000,000 reasonably acceptable to
the Owner Participant, if there be such an institution willing, able and legally
qualified to perform the duties of an Owner Trustee hereunder upon reasonable or
customary terms. Any request, approval or consent in writing by the Managing
Trustee shall be sufficient warrant to such additional trustee or separate
trustee, as the case may be, to take such actions as may be so requested,
approved or consented to.
(f) Any corporation into which the Resident Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Resident Trustee shall
be a party, or any corporation to which substantially all the corporate trust
business of Resident Trustee may be transferred, shall be, subject to compliance
with the terms of paragraph (e) of this Section 10.1, the Delaware Trustee under
this Trust Agreement without further act.
10.2 Additional and Separate Trustees. (a) If the Managing Trustee
--------------------------------
or the Owner Participant shall conclude that it is necessary or prudent in order
to conform to the law of any other jurisdiction in which all or any part of the
Trust Estate shall be situated, or to make or defend any claim or bring or
defend any suit with respect to the Trust Estate, the Secured Notes or any
Operative Document, or pursuant to advice of counsel satisfactory to it, or if
the
21
Managing Trustee shall have been directed to do so by the Owner Participant, the
Managing Trustee shall appoint another Person to act as additional or separate
trustee for all or any part of the Trust Estate with such property, title,
right, power or duty as the Managing Trustee and the Owner Participant may
determine. In case any such additional trustee or separate trustee shall resign
or be removed, all the assets, property, rights, powers or duties of such
additional trustee or separate trustee, as the case may be, so far as permitted
by any applicable law, shall vest in and be exercised by a new successor to such
additional trustee, appointed in the manner otherwise provided in this Trust
Agreement.
(b) In the event that either the Owner Participant or the Managing
Trustee shall determine to appoint another Person as additional or separate
trustee, the Managing Trustee and the Owner Participant shall execute and
deliver an agreement supplemental hereto, and all other instruments and
agreements necessary or proper to constitute another bank or trust company, or
one or more Persons approved by the Managing Trustee and the Owner Participant,
either to act as an additional trustee or trustees of all or any part of the
Trust Estate, jointly with the Owner Trustees, or to act as separate trustee or
trustees of all or any part of the Trust Estate, in any such case with such
powers as may be provided in such agreement supplemental hereto, and to vest in
such bank, trust company or Person as such additional trustee or separate
trustee, as the case may be, any property, title, right, or power deemed
necessary or proper by the Managing Trustee or the Owner Participant, subject to
the remaining provisions of this Section 10.2. In the event the Owner
Participant shall not have joined in the execution of such agreement
supplemental hereto within fifteen (15) days after the receipt of a written
request from the Managing Trustee so to do without providing a reasonable basis
for such failure to join, the Managing Trustee may act under the foregoing
provisions of this Section 10.2 without the concurrence of the Owner
Participant; and the Owner Participant hereby appoints the Managing Trustee its
agent and attorney-in-fact to act for the Owner Participant under the foregoing
provisions of this Section 10.2 in the event of the occurrence of either of such
contingencies. No additional trustee hereunder shall be an Affiliate or agent
of the Charterer. The Managing Trustee may execute, deliver and perform any
deed, conveyance, assignment or other instrument in writing as may be required
by an additional trustee or separate trustee for more fully and certainly
22
vesting in and confirming to such Person any property, title, right or power
which, by the terms of such agreement supplemental hereto, are expressed to be
conveyed or conferred to or upon such additional trustee or separate trustee,
and the Owner Participant shall, upon the Managing Trustee's request, join
therein and execute, acknowledge and deliver the same; and the Owner Participant
hereby appoints the Managing Trustee its agent and attorney-in-fact to execute,
acknowledge and deliver any such deed, conveyance, assignment or other
instrument in the event that such Owner Participant shall not itself execute and
deliver the same within fifteen (15) days after receipt by it of such request so
to do.
(c) Every additional trustee and separate trustee hereunder shall, to
the extent permitted by law, be appointed to act and the Owner Trustees shall
act, subject to the following provisions and conditions:
(i) to the extent permitted by applicable law, all powers, duties,
obligations and rights conferred or imposed upon such Owner Trustee in
respect of the receipt, custody, management, investment and payment of
moneys, shall be exercised solely by such Owner Trustee;
(ii) all other rights, powers, duties, and obligations conferred or
imposed upon such Owner Trustee shall be conferred or imposed upon and
exercised or performed by such Owner Trustee and such additional
trustee or trustees and separate trustee or trustees jointly, except
to the extent that under any law of the jurisdiction in which any
particular act or acts are to be performed by such Owner Trustee shall
be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties, and obligations (including the
holding of title to the Trust Estate in any such jurisdiction) shall
be exercised and performed by such additional trustee or trustees or
separate trustee or trustees;
23
(iii) no power hereby given to, or with respect to which it is hereby
provided may be exercised by, any such additional trustee or separate
trustee shall be exercised hereunder by such additional trustee or
separate trustee or except jointly with, or with the consent of, the
Owner Trustee; and
(iv) no trustee hereunder shall be personally liable for reason of any
act or omission of any other trustee hereunder.
(d) If at any time the Managing Trustee and the Owner Participant
shall deem it no longer necessary or prudent in order to conform to any
applicable law or shall be advised by its counsel that it is no longer necessary
or prudent in the interest of the Owner Trustees and the Owner Participant to
maintain the appointment of such additional or separate trustee as provided
herein, the Owner Trustees and the Owner Participant shall execute and deliver
any agreement supplemental hereto and all other instruments and agreements
necessary or proper to remove any such additional or separate trustee. In the
event that the Owner Participant shall not have joined in the execution of such
agreement supplemental hereto, instruments and agreements, the Managing Trustee
may act on behalf of the Owner Participant to the same extent provided above in
this Section 10.2.
(e) Any additional trustee or separate trustee may at any time by an
instrument in writing constitute either Owner Trustee its agent or attorney-in-
fact with full power and authority, to the extent which may be authorized by
applicable law, to do all acts and things and exercise all discretion which it
is authorized or permitted to do or exercise, for and in its behalf and in its
name. In case any such additional trustee or separate trustee shall die, become
incapable of acting, resign or be removed, all the assets, property, rights,
powers, trusts, duties and obligations of such additional trustee or separate
trustee, as the case may be, so far as permitted by law, shall vest in and be
exercised by the Owner Trustees without necessity of any act by any party and
without the appointment of a new successor to such additional or separate
trustee, unless and until a successor is appointed in the manner provided in
this Section 10.2.
24
(f) Each additional or separate trustee appointed pursuant to this
Section 10.2 shall be subject to, and shall have the benefit of, Sections 6.1
through 6.7 and Sections 8.1 and 11.2 insofar as they apply to the Owner
Trustees. No appointing of, or action by, any additional trustee will relieve
the Owner Trustees of any of its obligations hereunder or under any other
Operative Document. Any request, approval or consent in writing by the Managing
Trustee shall be sufficient warrant to such additional trustee or separate
trustee, as the case may be, to take such actions as may be so requested,
approved or consented to.
SECTION 11. SUPPLEMENTS AND AMENDMENTS
--------------------------
11.1 Supplements and Amendments. Subject to the terms of the
--------------------------
Operative Documents and the U.K. Documents, at the written request of the Owner
Participant, this Trust Agreement shall be amended by a written instrument
signed by the Trust Company and the Owner Participant (provided however, that in
-------- -------
the event such amendment adversely affects the duties or obligations of the
Resident Trustee, such amendment shall be signed by the Resident Trustee as
well), but if in the reasonable opinion of the Trust Company (or Resident
Trustee, if applicable) any instrument required to be so executed adversely
affects any right, duty or liability of, or immunity or indemnity in favor of
the Trust Company (or Resident Trustee, if applicable), under this Trust
Agreement or any of the documents contemplated hereby to which it is a party, or
would cause or result in any conflict with or breach of any term, condition or
provision of, or default under, its charter documents or by-laws or any document
contemplated hereby to which it is a party, the Trust Company (or Resident
Trustee, if applicable), in its sole discretion may decline to execute such
instrument.
11.2 Limitation on Amendments. The provisions of Section 11.1
------------------------
notwithstanding, but subject to Sections 11.1(g) and 17.6(b) of the
Participation Agreement, (i) this Trust Agreement may not be revoked or
terminated by the Owner Participant and (ii) the Owner Participant shall not
request the Trust Company or Resident Trustee to execute any amendment which
would result in the trusts created hereunder being terminated or which would
materially adversely affect the Indenture Estate or the holders of the Secured
Notes, in either case prior to the release of the Lien of the Indenture on the
Indenture Estate or prior to the payment in full of the principal of, premium
(if any) and interest on the
25
Secured Notes unless the Indenture Trustee shall have consented to any such
revocation, termination or amendment.
SECTION 12. MISCELLANEOUS
-------------
12.1 No Legal Title to Trust Estate in the Owner Participant. The
-------------------------------------------------------
Owner Participant shall not have legal title to any part of the Trust Estate.
No transfer, by operation of law or otherwise, of any right, title and interest
of the Owner Participant in and to the Trust Estate or hereunder shall operate
to terminate this Trust Agreement or the trusts created hereby or entitle any
successor or transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Estate.
12.2 Sale of the Vessel by the Managing Trustee is Binding. Any
-----------------------------------------------------
sale, transfer or other conveyance of the Vessel or other property included in
the Trust Estate or any part thereof by the Managing Trustee made pursuant to
the terms of this Trust Agreement or any other Operative Document or Owner Trust
U.K. Document shall bind the Owner Participant and shall be effective to
transfer or convey all right, title and interest of the Owner Trustees and the
Owner Participant in and to the Vessel Interest or other property included in
the Trust Estate or part thereof, as the case may be. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application of
any sale or other proceeds with respect thereto by the Owner Trustees.
12.3 Notices. Unless otherwise expressly specified or permitted by
-------
the terms hereof, all notices hereunder shall be given as provided in Section
17.3 of the Participation Agreement.
12.4 Severability of Provisions. Any provision of this Trust
--------------------------
Agreement which may be determined by competent authority to be invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable any remaining terms and provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties
shall negotiate in good faith to replace such provision with an appropriate
legal provision. To the extent permitted by applicable law, the parties hereto
hereby waive any provision
26
thereof that renders any term or provision hereof invalid or unenforceable in
any respect.
12.5 Separate Counterparts. This Trust Agreement 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.
12.6 Successors and Assigns. This Trust Agreement, including the
----------------------
terms and provisions hereof, shall be binding upon the Owner Participant, the
Trust Company, Resident Trustee and each Owner Trustee, whichever is applicable
pursuant to the terms hereof, and their respective successors and assigns, and
inure to the benefit of the Owner Participant, the Trust Company, Resident
Trustee or each Owner Trustee, whichever is applicable pursuant to the terms
hereof, and their respective successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument
or action by the Owner Participant shall bind the successors and assigns of the
Owner Participant.
12.7 Transfer of Owner Participant's Interest. (a) All provisions of
----------------------------------------
Section 15 of the Participation Agreement shall (with the same force and effect
as if set forth in full, mutatis mutandis, in this Section 12.7) be applicable
----------------
to any assignment, conveyance or other transfer by any Owner Participant of any
of its right, title or interest in and to the Trust Estate or this Trust
Agreement or any other Operative Document and notwithstanding (S) 3805(d) of the
Delaware Business Trust Act the Owner Participant may only transfer its interest
in compliance with that provision.
(b) In the event that at any time there shall be more than one Owner
Participant pursuant to the provisions of Section 13 of the Participation
Agreement, then in each such case, as used herein, the term "Owner Participant"
shall be deemed to refer to each such Owner Participant, except that any
reference to consents, approvals or waivers of the "Owner Participant" as used
herein shall require the consent, approval or waiver of each such Owner
Participant. At any time that there shall be required to be made hereunder any
distribution, disbursement, assignment or other transfer of monies or, any other
item whatsoever, then such distribution, disbursement, assignment or other
transfer shall be made pro rata to each Owner Participant existing at such time
in accordance with their respective interests hereunder. If
27
there shall be more than one Owner Participant, no Owner Participant shall be
liable for performance by any other Owner Participant of such other Owner
Participant's obligations under the Operative Documents or the U.K. Documents or
in respect of actions taken by any other Owner Participant except as otherwise
expressly so set forth.
12.8 Headings; Table of Contents. The division of this Trust
---------------------------
Agreement into sections, the provision of a table of contents and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation hereof.
12.9 GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE GOVERNED
-------------
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
JURISDICTION.
12.10 Performance by the Owner Participant. Any obligation of the
------------------------------------
Trust Company, the Resident Trustee or either Owner Trustee hereunder or under
any other Operative Document or other document contemplated hereby, may be
performed by the Owner Participant and any such performance shall not be
construed as a revocation of the trusts created hereby.
12.11 The Owner Trust Documents. If any provision in this Trust
-------------------------
Agreement shall conflict with or otherwise be inconsistent with the terms of any
Owner Trust Document or any Owner Trust U.K. Document, the terms of such Owner
Trust Document or Owner Trust U.K. Document shall control.
12.12 Performance of Obligations to Indenture Trustee. After the
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Indenture shall have been discharged and all of the principal of an premium, if
any, and interest on the Secured Note is paid in full pursuant to the terms
thereof, the provisions of this Trust Agreement which require or permit any
action by, any consent, approval or authorization of, the furnishing of any
document, paper or information to, or the performance of any other obligation
to, the Indenture Trustee shall not be effective, and the Sections hereof
containing such provisions shall be read as though there were no such references
to any such requirements or permissions.
12.13 Trust Agreement for Benefit of Parties Only. Unless otherwise
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expressly provided herein, nothing herein shall be construed to give any Person
other than the Owner
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Trustees and the Owner Participant and to the extent provided in Sections 5.1,
6.1, 9.2, 10.1 and 11.2, the Indenture Trustee and the holders of the Secured
Notes any legal or equitable right, remedy or claim under or in respect of this
Trust Agreement and this Trust Agreement shall be held to be for the sole and
exclusive benefit of the Owner Trustees, the Owner Participant, the Indenture
Trustee and the holders of the Secured Notes.
12.14 Limitation on Owner Participant's Liability. Except as
-------------------------------------------
expressly set forth herein, the Owner Participant shall not have any liability
for the performance of this Trust Agreement.
12.14 No Petition. Unless otherwise agreed in writing by both the
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Indenture Trustee and Owner Participant, each Owner Trustee and the Owner
Participant hereby covenant and agree to the fullest extent permitted by law
that they will not at any time institute on behalf of or against the Trust or
join in any institution on behalf of or against the Trust, of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, proceedings
under any United States Federal or state bankruptcy or similar law.
12.16 Waiver, Etc. No term or provision hereof may be changed,
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waived, discharged or terminated orally, but only by an instrument in writing
entered into in compliance with the terms of Section 11 hereof and any waiver of
the terms hereof shall be effective only in the specific instance and for the
specific purpose given.
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IN WITNESS WHEREOF, the parties hereto have each caused this Trust
Agreement to be duly executed as of the date first above written.
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (CAYMAN)
LIMITED, not in its individual
capacity, except as expressly
provided herein, but solely as
Managing Owner Trustee
By: ________________________
Its:
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as
expressly provided herein, but solely
as Delaware Owner Trustee
By: _______________________
Its:
QM TANKER CO. L.L.C.
By: _______________________
Its:
[QM TANKER 1178 TRUST]
Appendix A
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Exhibit A
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Form of Certificate of Trust of [_______] Trust
This Certificate of Trust (the "Trust"), dated as of November ___,
1997, is being duly executed and filed by Wilmington Trust Company and Deutsche
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Cayman) Limited, a Cayman Islands company, as trustees, to form
a business trust under the Delaware Business Trust Act (12 Del. C. (S)3801 et
------- --
seq.).
---
(a) Name. The name of the business trust formed hereby is
----
[_______________] Trust.
(b) Delaware Trustee. The name and business address of the
----------------
trustee of the Trust with its principal place of business in the
State of Delaware is _________________________.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first-above
written.
[DELAWARE TRUSTEE], as Trustee
By: ____________________________
Name:
Title:
[SPC TRUSTEE], as Trustee
By: ____________________________
Name:
Title: