Exhibit 4.4
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FORM OF
________________________________________________________________________________
TRUST INDENTURE AND SECURITY AGREEMENT
(1998-1)
Dated as of August 1, 1998
between
[OWNER TRUSTEE],
as Owner Trustee
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
Tank Cars and Covered Xxxxxx Cars
________________________________________________________________________________
Vedder, Price, Xxxxxxx & Kammholz
Chicago, Illinois
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
Section 1.1. Certain Definitions......................................................... 4
ARTICLE II. THE EQUIPMENT NOTES
Section 2.1. Form of Equipment Notes..................................................... 4
Section 2.2. Terms of Equipment Notes.................................................... 9
Section 2.3. Payment from Indenture Estate Only.......................................... 10
Section 2.4. Method of Payment........................................................... 10
Section 2.5. Application of Payments to Principal Amount, Premium and Interest........... 11
Section 2.6. Termination of Interest in Indenture Estate................................. 11
Section 2.7. Transfer of Equipment Notes................................................. 11
Section 2.8. Mutilated, Destroyed, Lost or Stolen Equipment Notes........................ 12
Section 2.9. Payment of Transfer Taxes................................................... 13
Section 2.10. Prepayments................................................................. 13
Section 2.11. Equally and Ratably Secured................................................. 15
ARTICLE III. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE INDENTURE ESTATE;
ASSUMPTION OF OBLIGATIONS OF THE OWNER TRUSTEE BY THE LESSEE
Section 3.1. Basic Rent Distribution..................................................... 15
Section 3.2. Payments in the Event of Prepayment......................................... 16
Section 3.3. Payments after Indenture Default or Indenture Event of Default.............. 17
Section 3.4. Other Payments.............................................................. 19
Section 3.5. Distribution of Excepted Property........................................... 19
Section 3.6. Assumption of Obligations of Owner Trustee by the Lessee.................... 19
ARTICLE IV. REMEDIES OF THE INDENTURE TRUSTEE UPON AN INDENTURE EVENT OF DEFAULT
Section 4.1. Indenture Events of Default................................................. 21
Section 4.2. Acceleration; Rescission and Annulment...................................... 23
Section 4.3. Remedies with Respect to Indenture Estate................................... 23
Section 4.4. Right to Cure; Option to Purchase; Etc...................................... 26
Section 4.5. Rights of Lessee............................................................ 29
Section 4.6. Waiver of Existing Defaults................................................. 29
ARTICLE V. DUTIES OF THE INDENTURE TRUSTEE
Section 5.1. Action upon Indenture Event of Default...................................... 29
Section 5.2. Action upon Instructions.................................................... 30
Section 5.3. Indemnification............................................................. 31
Section 5.4. No Duties Except as Specified in Indenture or Instructions.................. 31
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Section 5.5. No Action Except under Lease, Indenture or Instructions..................... 31
Section 5.6. Disposition of Units........................................................ 32
Section 5.7. Indenture Supplements for Replacements...................................... 32
Section 5.8. Effect of Replacements...................................................... 32
Section 5.9. Withholding Taxes........................................................... 32
Section 5.10. Lessee's Right of Quiet Enjoyment........................................... 33
Section 5.11. Certain Rights of Owner Trustee and Owner Participant....................... 33
ARTICLE VI. THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
Section 6.1. Acceptance of Trusts and Duties............................................. 35
Section 6.2. Absence of Duties........................................................... 35
Section 6.3. No Representations or Warranties as to the Equipment or Documents........... 36
Section 6.4. Segregation of Moneys; No Interest; Investments............................. 36
Section 6.5. Reliance; Agents; Advice of Counsel......................................... 37
Section 6.6. Not Acting in Individual Capacity........................................... 38
ARTICLE VII. CERTAIN LIMITATIONS ON OWNER TRUSTEE'S AND INDENTURE TRUSTEE'S RIGHTS
ARTICLE VIII. SUCCESSOR TRUSTEES
Section 8.1. Notice of Successor Owner Trustee........................................... 38
Section 8.2. Resignation of Indenture Trustee; Appointment of Successor.................. 39
ARTICLE IX. SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS
Section 9.1. Supplemental Indentures without Consent of Holders.......................... 40
Section 9.2. Indenture Trustee Protected................................................. 42
Section 9.3. Request of Substance, Not Form.............................................. 42
Section 9.4. Documents Mailed to Holders................................................. 42
Section 9.5. Amendments, Waivers, Etc. of Other Documents................................ 42
ARTICLE X. MISCELLANEOUS
Section 10.1. Termination of Indenture.................................................... 45
Section 10.2. No Legal Title to Indenture Estate in Holders............................... 45
Section 10.3. Sale of Equipment by Indenture Trustee is Binding........................... 46
Section 10.4. Remedies Cumulative......................................................... 46
Section 10.5. Discontinuance of Proceedings............................................... 46
Section 10.6. Indenture and Equipment Notes for Benefit of Owner Trustee, Indenture
Trustee, Owner Participant and Holders Only................................ 46
Section 10.7. Notices..................................................................... 46
Section 10.8. Severability................................................................ 48
Section 10.9. Separate Counterparts....................................................... 48
Section 10.10. Successors and Assigns...................................................... 48
Section 10.11. Headings.................................................................... 49
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Section 10.12. Governing Law............................................................... 49
Section 10.13. Normal Commercial Relations................................................. 49
Section 10.14. No Recourse Against Others.................................................. 49
Section 10.15. Intercreditor Agreement..................................................... 49
APPENDICES, EXHIBITS AND ANNEXES
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APPENDIX A - Definitions
EXHIBIT A - Form of Trust Indenture Supplement
EXHIBIT B - Terms of Equipment Notes
EXHIBIT C - Loan Participant
ANNEX A - Rated Amortization Schedule
ANNEX B - Scheduled Amortization Schedule
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TRUST INDENTURE AND SECURITY AGREEMENT
(1998-1)
This TRUST INDENTURE AND SECURITY AGREEMENT (1998-1) dated as of August 1,
1998 (this "Indenture"), is by and between [Owner Trustee], not in its
individual capacity, except as otherwise expressly set forth herein, but solely
as trustee under the Trust Agreement referred to below and any successor
appointed in accordance with the terms hereof and of the Trust Agreement (in
such trustee capacity, the "Owner Trustee"), and The First National Bank of
Chicago, a national banking association, as Indenture Trustee hereunder and any
successor appointed in accordance with the terms hereof (the "Indenture
Trustee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Owner Participant and the Owner Trustee in its individual
capacity have entered into the Trust Agreement pursuant to which, among other
things, (i) the Owner Trustee establishes a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of the Equipment Notes, and (ii) the Owner Trustee is
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee and the Indenture Trustee desire by this
Indenture, among other things, (i) to provide for the issuance by the Owner
Trustee of the Equipment Notes, and (ii) to provide for the assignment, mortgage
and pledge by the Owner Trustee to the Indenture Trustee, as part of the
Indenture Estate hereunder, among other things, of, and the grant of a security
interest in, certain of the Owner Trustee's right, title and interest in and to
the Equipment and the Lease and certain payments and other amounts received
hereunder or thereunder, in accordance with the terms hereof, in trust, as
security for, among other things, the Owner Trustee's obligations for the equal
and ratable benefit of the holders of the Equipment Notes; and
WHEREAS, all things necessary to make this Indenture the legal, valid and
binding obligation of the Owner Trustee and the Indenture Trustee, for the uses
and purposes herein set forth, in accordance with its terms, have been done and
performed and have happened.
GRANTING CLAUSE
NOW, THEREFORE, WITNESSETH, that, to secure the prompt payment of the
principal of and interest and Premium, if any, on and all other amounts due with
respect to, the Equipment Notes from time to time outstanding hereunder and the
performance and observance by the Owner Trustee of all the agreements, covenants
and provisions contained herein, in the other Operative Agreements and in the
Equipment Notes all for the benefit of the holders of the Equipment Notes, and
the prompt payment of any and all amounts from time to time owing hereunder and
under the other Operative Agreements by the Owner Trustee, the Owner Participant
and the Lessee to the holders of the Equipment Notes, 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
Equipment Notes by the Loan Participant, the Owner Trustee does hereby sell,
assign, transfer, convey, mortgage, pledge, and confirm unto the Indenture
Trustee, its successors and assigns, for the security and benefit of the holders
of the Equipment Notes from time to time, a first priority security interest in
and mortgage lien on all right, title and interest of the Owner Trustee in and
to the following described property, rights, interests and privileges insofar as
it does not constitute Excepted Property or Excepted Rights (which collectively,
including all property hereafter required to be subjected to the Lien of this
Indenture by any instrument supplemental hereto, but excluding Excepted Property
and Excepted Rights, being herein called the "Indenture Estate"), to wit:
(1) the Lease (including, without limitation, all amounts of Basic Rent,
Supplemental Rent, insurance proceeds and other payments of any kind for or with
respect to the Equipment), the Participation Agreement, the Transfer and
Contribution Agreement, the Intercreditor Agreement, the GATC Xxxx of Sale and
the Xxxx of Sale;
(2) the Equipment, the Replacement Units and all substitutions therefor in
which the Owner Trustee shall from time to time acquire an interest under the
Lease, all as more particularly described in the Indenture Supplements and Lease
Supplements executed and delivered with respect to the Equipment or any such
Replacement Units or any substitutions therefor, as provided in this Indenture
and the Lease;
(3) all requisition proceeds with respect to the Equipment or any Unit
thereof (to the extent of the Owner Trustee's interest therein pursuant to the
terms of the Lease);
(4) all monies and securities now or hereafter paid or deposited or
required to be paid or deposited with the Indenture Trustee pursuant to any term
of this Indenture, the Lease or the Participation Agreement or required to be
held by the Indenture Trustee hereunder or thereunder (including, without
limitation, the Payment Account); and
(5) all proceeds of the foregoing;
PROVIDED, HOWEVER, that the foregoing granting clause shall not subject to the
Lien of this Indenture any (i) Excepted Rights, (ii) Excepted Property or (iii)
payment of amounts which have been distributed to the Owner Trustee or any other
Person in accordance with the provisions of this Indenture.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the Indenture
Trustee, its successors and assigns, in trust for the benefit and security of
the holders of the Equipment
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Notes from time to time, without any priority of any one Equipment Note over any
other, and for the uses and purposes, and subject to the terms and provisions,
set forth in this Indenture.
It is expressly agreed that, notwithstanding anything to the contrary
contained herein, the Owner Trustee shall remain liable under each of the
Operative Agreements to which it is a party to perform all of the obligations,
if any, assumed by it thereunder, all in accordance with and pursuant to the
terms and provisions thereof, and the Indenture Trustee and the holders of the
Equipment Notes shall have no obligation or liability under any of the Operative
Agreements to which the Owner Trustee is a party by reason of or arising out of
this assignment, nor shall the Indenture Trustee (unless the Indenture Trustee
shall have become the "Lessor" under the Lease) or the holders of the Equipment
Notes be required or obligated in any manner to perform or fulfill any
obligations of the Owner Trustee under or pursuant to any of the Operative
Agreements to which the Owner Trustee is a party or, except as herein expressly
provided, to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or 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 Trustee does hereby constitute the Indenture Trustee the true and
lawful attorney of the Owner Trustee, irrevocably, with full power (in the name
of the Owner Trustee or otherwise), to ask, require, demand, receive, compound
and give acquittance for any and all moneys and claims for moneys due and to
become due to the Owner Trustee (other than Excepted Property), under or arising
out of the Lease and the other Operative Agreements and all other property which
now or hereafter constitutes part of the Indenture Estate, or to endorse any
checks or other instruments or orders in connection therewith and to file any
claims or take any action or institute any proceedings which the Indenture
Trustee may deem to be necessary or advisable in the premises. The Owner
Trustee has directed the Lessee to make all payments of Rent (other than
Excepted Property) payable to the Owner Trustee by the Lessee and all other
amounts which are required to be paid to or deposited with the Owner Trustee
pursuant to the Lease (other than Excepted Property) directly to the Indenture
Trustee at such address as the Indenture Trustee shall specify, for application
as provided in this Indenture. The Owner Trustee agrees that promptly on
receipt thereof, it will transfer to the Indenture Trustee any and all moneys
from time to time received by it constituting part of the Indenture Estate, for
distribution by the Indenture Trustee pursuant to this Indenture, except that
the Owner Trustee shall accept for distribution pursuant to the Trust Agreement
any amounts distributed to it by the Indenture Trustee as expressly provided in
this Indenture and any Excepted Property.
The Owner Trustee agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, the Owner Trustee will promptly and
duly execute and deliver or cause to be executed and delivered any and all such
further instruments and documents as the Indenture Trustee may reasonably deem
to be necessary in order to obtain the full benefits of this assignment and of
the rights and powers herein granted.
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The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as the assignment hereunder shall remain in effect, any of its right, title
or interest hereby assigned, to anyone other than the Indenture Trustee, and
that it will not (other than in respect of Excepted Property), except as
provided in or permitted by this Indenture, accept any payment from the Lessee,
enter into an agreement amending or supplementing any of the Operative
Agreements, execute any waiver or modification of, or consent under the terms of
any of the Operative Agreements (other than the Tax Indemnity Agreement), settle
or compromise any claim (other than claims in respect of Excepted Property)
against the Lessee arising under any of the Operative Agreements, or submit or
consent to the submission of any dispute, difference or other matter arising
under or in respect of any of the Operative Agreements, to arbitration
thereunder.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as
follows:
ARTICLE I. DEFINITIONS
Section 1.1. Certain Definitions. Unless the context otherwise requires,
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all capitalized terms used herein and not otherwise defined shall have the
meanings set forth in Appendix A hereto for all purposes of this Indenture. All
references to articles, sections, clauses, schedules and appendices in this
Indenture are to articles, sections, clauses, schedules, exhibits, annexes and
appendices in and to this Indenture unless otherwise indicated.
ARTICLE II. THE EQUIPMENT NOTES
Section 2.1. Form of Equipment Notes. The Equipment Notes shall be
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substantially in the form set forth below:
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_____% EQUIPMENT NOTE
(1998-1)
(Secured by, among others, Lease Obligations of
General American Railcar Corporation II)
Issued in Connection with certain Railroad Rolling Stock
No. ______ [New York, New York]
$_____________ ____, 1998
[Owner Trustee], not in its individual capacity, but solely as owner
trustee (herein in such capacity called the "Owner Trustee") under that certain
Trust Agreement (1998-1), dated as of August 1, 1998, as from time to time
supplemented and amended (herein called the "Trust Agreement"), between the
Owner Trustee in its individual capacity and the institution referred to therein
as the "Owner Participant", hereby promises to pay to __________________, or
registered assigns, the principal sum of $________________ (or such lesser
amount as shall equal the unpaid principal amount of this Equipment Note), in
lawful currency of the United States of America, on the Rated Maturity Date and
on each Payment Date commencing on ___________ ____, 1998 that precedes the
Rated Maturity Date, (i) the principal amount required to be paid on such date
by Sections 2.2 and 3.1 of the Indenture, (ii) interest (computed on the basis
of a 360-day year of twelve 30-day months) on the unpaid principal balance
hereof, from and including the date hereof or the most recent Payment Date for
which interest has been duly paid to but excluding such Payment Date at the Debt
Rate, (iii) without duplication of any amount payable pursuant to clause (ii),
interest (computed on the basis of a 360-day year of twelve 30-day months) on
any Rated Amortization of this Equipment Note, and, to the extent lawful,
interest payable under the foregoing clause (ii), that is not paid on the date
such principal or interest becomes due and payable, for the period from and
including the date such Rated Amortization becomes due and payable to but
excluding the date such principal is paid in full, at the Default Rate, (iv) any
Premium required to be paid on such date by Sections 2.2 and 3.1 of the
Indenture, and (v) any interest (computed on the basis of a 360-day year of
twelve 30-day months) required to be paid on such date by Sections 2.2 and 3.1
of the Indenture on any Premium payable on this Equipment Note.
All payments of principal and interest and Premium, if any, to be made
hereunder and under the Trust Indenture and Security Agreement (1998-1), dated
as of August 1, 1998 as from time to time amended and supplemented (herein
called the "Indenture"; unless otherwise defined herein, defined terms used
herein shall have the meanings assigned to such terms in the Indenture), between
the Owner Trustee and The First National Bank of Chicago, as Indenture Trustee
thereunder for the holder of this Equipment Note and the holders of other
Equipment Notes outstanding thereunder (in such capacity, the "Indenture
Trustee") shall be made only from the
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income and proceeds from the Indenture Estate and only to the extent that the
Indenture Trustee shall have sufficient income or proceeds from the Indenture
Estate to make such payments in accordance with the terms of Article III of the
Indenture. Each holder hereof, by its acceptance of this Equipment Note, agrees
that it will look solely to the income and proceeds from the Indenture Estate to
the extent available for distribution to the holder hereof as provided in the
Indenture and that none of the Owner Trustee, the Owner Participant, the
Indenture Trustee or their permitted successors and assigns is or shall be
personally liable to the holder hereof for any amount payable under this
Equipment Note or the Indenture or, except as expressly provided in the
Participation Agreement or the Indenture, for any liability under the
Participation Agreement or (in the case of the Owner Trustee or the Indenture
Trustee) the Indenture.
Payments with respect to the principal amount hereof, Premium, if any, and
interest thereon shall be payable in U.S. dollars in immediately available funds
at the principal bond and trustee administration office of the Indenture
Trustee, or as otherwise provided in the Indenture. Each such payment shall be
made on the date such payment is due and without any presentment or surrender of
this Equipment Note, except as provided in Section 2.4. Whenever the date
scheduled for any payment to be made hereunder or under the Indenture shall not
be a Business Day, then such payment need not be made on such scheduled date but
may be made on the next succeeding Business Day with the same force and effect
as if made on such scheduled date and (provided that such payment is made on
such next succeeding Business Day) no interest shall accrue on the amount of
such payment from and after such scheduled date to the time of such payment on
such next succeeding Business Day.
Each holder hereof, by its acceptance of this Equipment Note, agrees that
each payment received by it hereunder shall be applied in the order of priority
set forth in Article III of the Indenture.
This Equipment Note is one of the Equipment Notes referred to in the
Indenture which have been or are to be issued by the Owner Trustee pursuant to
the terms of the Indenture and relates to the Units described in Lease
Supplement No. __. The Indenture Estate is held by the Indenture Trustee as
security for the Equipment Notes. Reference is hereby made to the Indenture for
a statement of the rights of the holder of, and the nature and extent of the
security for, this Equipment Note, as well as for a statement of the terms and
conditions of the trusts created by the Indenture, to all of which terms and
conditions in the Indenture each holder hereof agrees by its acceptance of this
Equipment Note.
This Equipment Note is not subject to redemption or prepayment except as
provided in Sections 2.10, 3.2 and 3.3 of the Indenture. This Equipment Note is
subject to purchase by the Owner Trustee as provided in Section 4.4(b) of the
Indenture (including purchase without Make-Whole Amount under certain
circumstances as described therein). The holder hereof, by its acceptance of
this Equipment Note, agrees to be bound by said provisions.
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This Equipment Note is a registered Equipment Note and is transferable, as
provided in the Indenture, only upon surrender of this Equipment Note for
registration of transfer duly endorsed by, or accompanied by a written statement
of transfer duly executed by, the registered holder hereof or his attorney duly
authorized in writing. Prior to the due presentation for registration of
transfer of this Equipment Note, the Owner Trustee and the Indenture Trustee may
deem and treat the registered holder of this Equipment Note as the absolute
owner and holder hereof for the purpose of receiving payment of all amounts
payable with respect hereto and for all other purposes and shall not be affected
by any notice to the contrary.
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT. THIS
EQUIPMENT NOTE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Indenture Trustee by manual signature, this Equipment Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
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IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Note to be
executed by one of its authorized officers as of the date hereof.
[OWNER TRUSTEE], not in its individual capacity except as set forth in
the Indenture, but solely as Owner Trustee
By:
Name:
Title:
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Notes referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
By:
Authorized Officer
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Section 2.2. Terms of Equipment Notes. There shall be issued and delivered
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to the Loan Participant one Equipment Note related to the Lease Supplement
executed and delivered in respect of the Units delivered on the Closing Date in
the maturity, principal amount and bearing the interest rate as set forth in
Exhibit B hereto, and the Equipment Note related to each such Lease Supplement
shall be in a principal amount equal to the loan made by the Loan Participant to
the Owner Trustee pursuant to Section 2 of the Participation Agreement relating
to the Units under such Lease Supplement. Such Equipment Note shall evidence
the loan made by the Loan Participant in connection with the purchase of the
Equipment by the Owner Trustee from the Lessee, shall be substantially in the
form set forth in Section 2.1, with deletions and insertions as appropriate, and
duly authenticated by the Indenture Trustee and dated the Closing Date of the
Equipment.
The principal amount of, Premium, if any, and interest on the Equipment
Notes issued pursuant to the provisions of this Indenture shall be payable as
follows:
(i) accrued and unpaid Regular Interest on the Equipment Notes
shall become due and payable on each Payment Date commencing on
[____________ ____], 1998;
(ii) on each Payment Date that precedes the Rated Maturity Date,
there shall become due and payable an aggregate unpaid principal amount of
the outstanding Equipment Notes equal to the Rated Amortization Amount at
such Payment Date;
(iii) on each Payment Date that precedes the Rated Maturity Date,
there shall become due and payable, in addition to any aggregate unpaid
principal amount of the outstanding Equipment Notes that becomes due and
payable on that Payment Date pursuant to clause (ii) above, an aggregate
unpaid principal amount of the outstanding Equipment Notes equal to any
Scheduled Obligations Due;
(iv) any accrued and unpaid Default Interest on the Equipment
Notes shall become due and payable on each Payment Date;
(v) if the Scheduled Amortization Amount at any Payment Date
exceeds the aggregate principal amount of the Equipment Notes paid on that
Payment Date, then (y) the amount equal to the difference between (1) the
greater of (A) the principal amount of the Equipment Notes paid on such
Payment Date and (B) the Rated Amortization Amount payable on such Payment
Date and (2) the Scheduled Amortization Amount payable on such Payment Date
shall constitute a "Payment Deficiency" for the period from and including
that Payment Date to but excluding the next succeeding Payment Date and (z)
on the next succeeding Payment Date, there shall become payable a Late
Payment Premium with respect to such Payment Deficiency.
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Notwithstanding the foregoing, the final payment made under each Equipment
Note shall be in an amount sufficient to discharge in full the unpaid principal
of and all accrued and unpaid interest on, unpaid Premium (if any), and any
other amounts due under, such Equipment Note.
Any unpaid portion of Late Payment Premium that has accrued under the
Equipment Notes shall bear interest (computed on the basis of a 360-day year of
twelve 30-day months) from the date such Late Payment Premium became payable
until such Late Payment Premium is paid in full at a rate per annum equal to
[1.5]%. Any unpaid portion of Make-Whole Amount, if any, that has accrued and
any other amounts (other than principal, interest and Premium) payable under the
Equipment Notes which are overdue shall bear interest at the Default Rate from
the date such amount became payable until such amount is paid in full. The
Owner Trustee shall cause such interest to be paid on such amount on the date or
dates provided for in this Indenture, pro rata among the Equipment Notes.
All amounts payable pursuant to this Section 2.2 shall be payable from
funds to be withdrawn from the Payment Account pursuant to Section 3.1 in the
priority set forth therein.
No Equipment Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless it shall have been authenticated
by or on behalf of the Indenture Trustee by manual signature.
Section 2.3. Payment from Indenture Estate Only. All payments to be made
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under the Equipment Notes and this Indenture shall be made only from the income
and the proceeds from the Indenture Estate and only to the extent that the
Indenture Trustee shall have received sufficient income or proceeds from the
Indenture Estate to make such payments in accordance with the terms of Article
III hereof. Each holder of an Equipment Note, by its acceptance of such
Equipment Note, agrees that it will look solely to the income and proceeds from
the Indenture Estate to the extent available for distribution to such holder as
herein provided and that none of the Owner Trustee, the Owner Participant, the
Indenture Trustee or their permitted successors and assigns is or shall be
personally liable to the holder of any Equipment Note for any amount payable
under such Equipment Note or the Indenture or, except as expressly provided in
the Participation Agreement or the Indenture, for any liability under the
Participation Agreement or (in the case of the Owner Trustee or the Indenture
Trustee) the Indenture.
Section 2.4. Method of Payment. (a) The principal of and Premium, if any,
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and interest on each Equipment Note will be payable in U.S. dollars in
immediately available funds at the principal corporate trust administration
office of the Indenture Trustee or as otherwise directed in the manner provided
herein. Notwithstanding the foregoing or any provision in any Equipment Note to
the contrary, the Indenture Trustee will pay, or cause to be paid, if so
requested by any holder of an Equipment Note by written notice to the Owner
Trustee and the Indenture Trustee, all amounts payable by the Owner Trustee
hereunder to such holder or a nominee therefor either (i) by transferring by
wire in immediately available funds to an account maintained by such
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holder with a bank in the United States the amount to be distributed to such
holder or (ii) by mailing a check denominated in U.S. dollars to such holder at
such address as such holder shall have specified in such notice, in any case
without any presentment or surrender of any Equipment Note, except that the
holder of an Equipment Note shall surrender such Equipment Note to the Indenture
Trustee upon payment in full of the principal amount of and interest on such
Equipment Note and such other sums payable to such holder hereunder or under the
Equipment Note.
(b) Whenever the date scheduled for any payment to be made hereunder
or under any Equipment Note shall not be a Business Day, then such payment need
not be made on such scheduled date but may be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled date,
and (provided that such payment is made on such next succeeding Business Day) no
interest shall accrue on the amount of such payment from and after such
scheduled date to the time of such payment on such next succeeding Business Day.
Section 2.5. Application of Payments to Principal Amount, Premium and
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Interest. In the case of each Equipment Note, each payment of principal thereof
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and Premium, if any, and interest thereon shall be applied in the order of
priority set forth in Article III hereof; provided, that the Owner Trustee may
only prepay such Equipment Note in accordance with the provisions of Sections
2.10, 3.2 and 3.3 hereof.
Section 2.6. Termination of Interest in Indenture Estate. A holder shall
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have no further interest in, or other right with respect to, the Indenture
Estate when and if the principal amount of and interest on all Equipment Notes
held by such holder and all other sums payable to such holder hereunder and
under such Equipment Notes and under the Participation Agreement shall have been
paid in full.
Section 2.7. Transfer of Equipment Notes. The Indenture Trustee shall
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maintain at its corporate trust administration office in Chicago, Illinois or in
the city in which the corporate trust office of a successor Indenture Trustee is
located, a register for the purpose of registering transfers and exchanges of
Equipment Notes. A holder of an Equipment Note intending to transfer such
Equipment Note to a new payee, or to exchange any Equipment Note or Equipment
Notes held by it for an Equipment Note or Equipment Notes of a different
denomination or denominations, may surrender such Equipment Note or Equipment
Notes to the Indenture Trustee at such principal corporate trust administration
office of the Indenture Trustee, together with a written request from such
holder for the issuance of a new Equipment Note or Equipment Notes, specifying
the denomination or denominations (each of which shall be not less than
$[100,000] or a whole multiple thereof or such smaller denomination as may be
necessary due to the original issuance of Equipment Notes of the applicable
maturity in an aggregate principal amount not evenly divisible by $[100,000]) of
the same, and, in the case of a surrender for registration of transfer, the name
and address of the transferee or transferees. Promptly upon receipt of such
documents, the Owner Trustee will issue, and the Indenture Trustee will
authenticate, a new
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Equipment Note or Equipment Notes in the same aggregate principal amount and
dated the same date or dates as, with the same payment schedule, in the form set
forth in Section 2.1, having the same maturity and bearing the same interest
rate as the Equipment Note or Equipment Notes surrendered, in such denomination
or denominations and payable to such payee or payees as shall be specified in
the written request from such holder. All Equipment Notes issued upon any
registration of transfer or exchange of Equipment Notes shall be the valid
obligations of the Owner Trustee evidencing the same respective obligations, and
entitled to the same security and benefits under this Indenture, as the
Equipment Notes surrendered upon such registration of transfer or exchange. The
Indenture Trustee shall make a notation on each new Equipment Note or Equipment
Notes of the amount of all payments or prepayments of principal and interest
previously made on the old Equipment Note or Equipment Notes with respect to
which such new Equipment Note or Equipment Notes is or are issued. From time to
time, the Indenture Trustee will provide the Owner Trustee and the Lessee with
such information as either of them may request as to the registered holders of
Equipment Notes. The Owner Trustee shall not be required to exchange any
surrendered Equipment Notes as above provided during the 10-day period preceding
the due date of any payment on such Equipment Notes.
Prior to the due presentment for registration of transfer of an Equipment
Note, the Owner Trustee and the Indenture Trustee may deem and treat the
registered holder of such Equipment Note as the absolute owner and holder of
such Equipment Note for the purpose of receiving payment of all amounts payable
with respect to such Equipment Note and for all other purposes and shall not be
affected by any notice to the contrary.
The Indenture Trustee will promptly notify the Owner Trustee and the Lessee
of each request for a registration of transfer of an Equipment Note. The
Indenture Trustee will promptly cancel and destroy all Equipment Notes
surrendered for transfer or exchange pursuant to this Section.
Section 2.8 Mutilated, Destroyed, Lost or Stolen Equipment Notes. If any
----------------------------------------------------
Equipment Note shall become mutilated, destroyed, lost or stolen, the Owner
Trustee shall, upon the written request of the holder of such Equipment Note,
issue, and the Indenture Trustee shall authenticate and deliver in replacement
thereof, a new Equipment Note in the form set forth in Section 2.1, payable to
the same holder in the same principal amount, of the same maturity, with the
same payment schedule, bearing the same interest rate and dated the same date as
the Equipment Note so mutilated, destroyed, lost or stolen. The Indenture
Trustee shall make a notation on each new Equipment Note of the amount of all
payments or prepayments of principal and interest theretofore made on the
Equipment Note so mutilated, destroyed, lost or stolen and the date to which
interest on such old Equipment Note has been paid. If the Equipment Note being
replaced has become mutilated, such Equipment Note shall be surrendered to the
Indenture Trustee and forwarded to the Owner Trustee by the Indenture Trustee.
If the Equipment Note being replaced has been destroyed, lost or stolen, the
holder of such Equipment Note shall furnish to the Owner Trustee and the
Indenture Trustee such security or indemnity as may be required by them to save
the Owner Trustee and the Indenture Trustee harmless and evidence satisfactory
to the Owner
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Trustee and the Indenture Trustee of the destruction, loss or theft of such
Equipment Note and of the ownership thereof.
Section 2.9 Payment of Transfer Taxes. Upon the transfer of any Equipment
-------------------------
Note or Equipment Notes pursuant to Section 2.7, the Owner Trustee or the
Indenture Trustee may require from the party requesting such new Equipment Note
or Equipment Notes payment of a sum to reimburse the Owner Trustee or the
Indenture Trustee for, or to provide funds for the payment of, any tax or other
governmental charge in connection therewith.
Section 2.1 Prepayments. (a) Each Equipment Note shall be prepaid in
-----------
whole or in part by the Owner Trustee on a Rent Payment Date upon at least 25
days' prior notice from the Owner Trustee (or the Lessee on its behalf) to the
Indenture Trustee in the event that the Lease as applicable to any Unit or Units
related to such Equipment Note is terminated pursuant to Section 10 of the
Lease, at a price equal to the sum of (i) as to principal thereof, an amount
equal to the product obtained by multiplying the unpaid principal amount of such
Equipment Note as at the date of such prepayment (after deducting therefrom the
principal installment, if any, paid on the date of such prepayment) by a
fraction, the numerator of which shall be the Equipment Cost of such Unit or
Units and the denominator of which shall be the aggregate Equipment Cost of all
Units included in the Indenture Estate under the related Indenture Supplement
immediately prior to the date of such prepayment, (ii) as to interest, the
aggregate amount of interest accrued and unpaid in respect of the principal
amount to be prepaid pursuant to clause (i) above on the date of such payment
after giving effect to the application of any Basic Rent paid on the date of
such prepayment, (iii) any unpaid Late Payment Premium (and accrued and unpaid
interest thereon) in respect of the principal amount to be prepaid pursuant to
clause (i), (iv) a premium in an amount equal to the Make-Whole Amount, if any,
applicable in respect of the principal amount to be prepaid pursuant to clause
(i) above on the date of such prepayment, and (v) all other amounts payable
hereunder or under the other Operative Agreements to the holders of the
Equipment Notes in respect of the principal amount to be prepaid pursuant to
clause (i).
(b) Each Equipment Note shall be prepaid in whole or in part by the
Owner Trustee on a Rent Payment Date upon at least 25 days' prior notice from
the Owner Trustee (or the Lessee on its behalf) to the Indenture Trustee in
connection with the occurrence of an Event of Loss or the deemed occurrence of
an Event of Loss pursuant to Section 9.1 of the Lease with respect to any Unit
or Units related to such Equipment Note (if such Unit or Units are not replaced
pursuant to Section 11.2(i) of the Lease) at a price equal to the sum of (i) as
to principal thereof, an amount equal to the product obtained by multiplying the
aggregate unpaid principal amount of such Equipment Note as at such prepayment
date (after deducting therefrom the principal installment, if any, paid on such
date) by a fraction, the numerator of which shall be the Equipment Cost of such
Unit or Units and the denominator of which shall be the aggregate Equipment Cost
of all Units included in the Indenture Estate under the related Indenture
Supplement immediately prior to such date, (ii) as to interest, the aggregate
amount of interest accrued and unpaid in respect of the principal amount to be
prepaid pursuant to clause (i) above to but not including the date of
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prepayment after giving effect to the application of any Basic Rent paid on the
date of such prepayment, (iii) any unpaid Late Payment Premium (and accrued and
unpaid interest thereon) in respect of the principal amount to be prepaid
pursuant to clause (i), but without the payment of any Make-Whole Amount, and
(iv) all other amounts payable hereunder or under the other Operative Agreements
to the holders of the Equipment Notes in respect of the principal amount to be
prepaid pursuant to clause (i).
(c) (A) Unless Lessee shall have elected pursuant to Section 6.9 of
the Participation Agreement to assume all of the rights and obligations of the
Owner Trustee under this Indenture in respect of the Equipment Notes, each
Equipment Note shall be prepaid in whole by the Owner Trustee on the
Determination Date specified by Lessee to Owner Trustee and Indenture Trustee in
accordance with Section 6.9 of the Participation Agreement, in the event that
Lessee exercises the purchase option under Section 6.9 of the Participation
Agreement with respect to all Units related to such Equipment Note, at a price
equal to the sum of (i) as to principal thereof, the aggregate unpaid principal
amount of such Equipment Note as at the date of such prepayment in whole under
Section 6.9 of the Participation Agreement, (ii) as to interest, the aggregate
amount of interest accrued and unpaid in respect of the principal amount to be
prepaid pursuant to clause (i) above on the date of such prepayment after giving
effect to the application of any Basic Rent paid on the date of such prepayment,
(iii) any unpaid Late Payment Premium (and accrued and unpaid interest thereon)
on such Equipment Note, (iv) a premium in an amount equal to the aggregate Make-
Whole Amount, if any, applicable in respect of the principal amount to be
prepaid pursuant to clause (i) above on the date of such prepayment, and (v) all
other amounts payable hereunder or under the other Operative Agreements to the
holders of the Equipment Notes in respect of the principal amount to be prepaid
pursuant to clause (i).
(B) Unless Lessee shall have elected pursuant to Section 22.1 of
the Lease to assume all of the rights and obligations of the Owner Trustee under
this Indenture in respect of the Equipment Notes, each Equipment Note shall be
prepaid in whole or in part by the Owner Trustee on the Determination Date
specified by Lessee to Owner Trustee and Indenture Trustee in accordance with
Section 22.1 of the Lease, in the event that Lessee exercises the purchase
option under Section 22.1 of the Lease, with respect to all Units related to
such Equipment Note, at a price equal to the sum of (i) as to principal thereof,
the aggregate unpaid principal amount of such Equipment Note as at the date of
such prepayment in whole under Section 22.1 of the Lease (after deducting
therefrom the principal installment, if any, paid on the date of such
prepayment) by a fraction, the numerator of which shall be the Equipment Cost of
such Unit or Units and the denominator of which shall be the aggregate Equipment
Cost of all Units included in the Indenture Estate under the related Indenture
Supplement immediately prior to the date of such prepayment, (ii) as to
interest, the aggregate amount of interest accrued and unpaid in respect of the
principal amount to be prepaid pursuant to clause (i) above on the date of such
prepayment after giving effect to the application of any Basic Rent paid on the
date of such prepayment, (iii) any unpaid Late Payment Premium (and accrued and
unpaid interest thereon) on such Equipment Note, (iv) a premium in an amount
equal to the aggregate Make-Whole Amount, if
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any, applicable in respect of the principal amount to be prepaid pursuant to
clause (i) above on the date of such prepayment, and (v) all other amounts
payable hereunder or under the other Operative Agreements to the holders of the
Equipment Notes in respect of the principal amount to be prepaid pursuant to
clause (i). (d) In the event of a refunding or refinancing pursuant to Section
10.2 of the Participation Agreement, all Equipment Notes shall be prepaid in
whole but not in part on the Refunding Date specified by the Lessee to the
Indenture Trustee in accordance with Section 10.2(f) of the Participation
Agreement at a price equal to the unpaid principal amount thereof together with
accrued but unpaid interest thereon, plus, any unpaid Late Payment Premium (and
accrued and unpaid interest thereon) on such Equipment Notes, plus, a premium in
an amount equal to the Make-Whole Amount, if any, and all other amounts due and
payable hereunder or under the other Operative Agreements to the holders of the
Equipment Notes.
(e) The Indenture Trustee shall give prompt notice of any prepayment
of any of the Equipment Notes to all holders of the Equipment Notes as soon as
the Indenture Trustee shall have knowledge that such prepayment is expected to
occur, which notice shall specify the Equipment Note or Notes to be prepaid, the
principal amount of such Equipment Note or Notes to be prepaid and the expected
date of prepayment which date shall be not less than 25 days after the date of
such notice.
Section 2.11. Equally and Ratably Secured. All Equipment Notes at any time
---------------------------
outstanding under this Indenture shall be equally and ratably secured hereby
without preference, priority or distinction on account of the date or dates or
the actual time or times of the issue or maturity of such Equipment Notes so
that all Equipment Notes at any time issued and outstanding hereunder shall have
the same rights, Liens and preferences under and by virtue of this Indenture.
ARTICLE III. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
FROM THE INDENTURE ESTATE; ASSUMPTION OF
OBLIGATIONS OF THE OWNER TRUSTEE BY THE LESSEE
Section 3.1 Basic Rent Distribution. Except as otherwise provided in
-----------------------
Section 3.3 or 3.5, each installment of Basic Rent, as well as any installment
of interest on overdue installments of Basic Rent and any other moneys paid over
by the Lessee or the Owner Trustee to the Indenture Trustee for such purpose,
shall be deposited into the Payment Account maintained by the Indenture Trustee
pursuant to Section 6.4(c) hereof and distributed by the Indenture Trustee as
promptly as possible (it being understood that any payments of Basic Rent
received by the Indenture Trustee on a timely basis and in accordance with the
provisions of Section 3.5 of the Lease shall be distributed on the date received
in the funds so received) in the following order of priority:
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first, to the holders of the Equipment Notes, an amount equal to all
-----
interest accrued and unpaid on the Equipment Notes as of such date,
computed on the basis of a 360-day year of twelve 30-day months (but not
including interest on past due principal and interest or interest on
Premium),
second, after giving effect to the first clause above, so much of such
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installment or payment remaining as shall be available to pay to the
holders of the Equipment Notes, an amount equal to any Rated Amortization
Amount of principal due on the Equipment Notes as of such date,
third, after giving effect to the second clause above, so much of such
-----
installment or payment remaining as shall be available to pay to the
holders of the Equipment Notes, an amount equal to any Scheduled
Obligations Due as of such Payment Date,
fourth, after giving effect to the third clause above, so much of such
------
installment or payment remaining as shall be available to pay the
Accumulated Equity Deficiency Amount to the Owner Trustee for distribution
in accordance with the terms of the Trust Agreement,
fifth, after giving effect to the fourth clause above, so much of such
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installment or payment remaining as shall be available to pay to the
holders of the Equipment Notes accrued and unpaid interest on past due
principal and accrued and unpaid interest (but not including interest on
Premium),
sixth, after giving effect to the fifth clause above, so much of such
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installment or payment remaining as shall be available to pay to the
holders of the Equipment Notes, an amount equal to any interest on Late
Payment Premium then due and owing on the Equipment Notes,
seventh, after giving effect to the sixth clause above, so much of
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such installment or payment remaining as shall be available to pay to the
holders of the Equipment Notes, an amount equal to any Late Payment Premium
then due and owing on the Equipment Notes, and
eighth, the balance, if any, of such Payment Account, to the Owner
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Trustee for distribution in accordance with the terms of the Trust
Agreement.
To the extent there are insufficient proceeds in the Payment Account
to pay all amounts pursuant to clauses "first", "second", "third", "fourth",
"sixth", and "seventh", in the order of priority set forth therein, any partial
payment with respect to any such clause shall be made pro rata in respect of
--- ----
such clause in proportion to the unpaid principal amounts of the
outstanding Equipment Notes on such date.
Section 3.2 Payments in the Event of Prepayment. (a) Except as otherwise
-----------------------------------
provided in Section 3.3 or 3.5, in the event of any prepayment of an Equipment
Note or Notes, in whole or in part, in accordance with the provisions of Section
2.10 any amount received by the Indenture Trustee
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shall in each case be distributed and paid in the following order of priority:
first, so much of such amount as shall be required to pay the aggregate amount
-----
of the principal, Premium, if any, and interest and all other amounts to be paid
on such Equipment Note or Notes pursuant to Section 2.10 shall be paid to the
holders of such Equipment Note or Notes, such prepayment to be made ratably to
such Equipment Note or Notes to which such prepayment relates, without priority
of one over any other, in the proportion that the amount to be prepaid on each
such Equipment Note bears to the aggregate amount to be paid on all such
Equipment Notes; and second, the balance, if any, of such amount remaining
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thereafter shall be distributed to the Owner Trustee for distribution in
accordance with the terms of the Trust Agreement.
(b) Except as otherwise provided in Section 3.3 or 3.5 hereof, any
amounts received directly or through the Lessee from any governmental authority
or other party pursuant to Section 11 of the Lease with respect to any Unit as
the result of an Event of Loss, to the extent that such amounts are not at the
time required to be paid to the Lessee pursuant to said Section 11, and any
amounts of insurance proceeds for damage to the Indenture Estate received
directly or though the Lessee from any insurer pursuant to Section 12 of the
Lease with respect thereto as the result of an Event of Loss, to the extent such
amounts are not at the time required to be paid to the Lessee pursuant to said
Section 12, shall be applied as provided in clause (a) of this Section 3.2;
provided that, if any Replacement Unit is to be substituted for the Unit subject
to such Event of Loss as provided in Section 11.2 of the Lease and Section 5.7
hereof, any proceeds which result from such Event of Loss and are paid to the
Indenture Trustee shall be held by the Indenture Trustee as part of the
Indenture Estate as security for the obligations of the Lessee under the
Operative Agreements and invested in accordance with the terms of Section 6.4(b)
hereof and, unless theretofore applied in accordance with the provisions of the
Lease and this Indenture, such proceeds shall, to the extent payable to the
Lessee under the Lease, be released to the Lessee upon or in connection with the
replacement thereof as provided in such Sections.
Section 3.3. Payments after Indenture Default or Indenture Event of
------------------------------------------------------
Default. (a) Except as provided in Section 3.5, all payments received and
amounts realized by the Indenture Trustee after an Indenture Event of Default
shall have occurred and be continuing and after the Indenture Trustee has
declared (as assignee from the Owner Trustee of the Lease) the Lease to be in
default pursuant to Section 15 thereof or has declared the Equipment Notes to be
accelerated pursuant to Section 4.2, as the case may be, or has elected to
foreclose or otherwise exercise any remedies under this Indenture (including any
amounts realized by the Indenture Trustee from the exercise of any remedies
pursuant to Section 15 of the Lease or Article IV), as well as all payments or
amounts then held or thereafter received by the Indenture Trustee as part of the
Indenture Estate while such Indenture Event of Default shall be continuing,
shall be distributed forthwith by the Indenture Trustee in the following order
of priority:
First, so much of such payments or amounts as shall be required to
-----
reimburse the Indenture Trustee for any fees which are due and payable for its
services under this Indenture and any tax, expense (including reasonable
attorneys' fees) or other loss incurred by the Indenture Trustee (to
17
the extent reimbursable and not previously reimbursed and to the extent incurred
in connection with its duties as Indenture Trustee) shall be distributed to the
Indenture Trustee;
Second, so much of such payments or amounts as shall be required to
------
reimburse the holders of the Equipment Notes for payments made by them to the
Indenture Trustee pursuant to Section 5.3 (to the extent not previously
reimbursed), and to pay such holders of the Equipment Notes the amounts payable
to them pursuant to the provisions of the Participation Agreement, shall be
distributed to such holders of the Equipment Notes, without priority of one over
the other, in accordance with the amount of the payment or payments made by, or
payable to, each such holder;
Third, so much of such payments or amounts remaining as shall be
-----
required to pay the principal of, Premium, if any, and accrued interest (to the
date of distribution) on all Equipment Notes (including any accrued interest on
any Premium), then due and payable to the Loan Participant, whether by
declaration of acceleration pursuant to Section 4.2 or otherwise, shall be
applied in the following order of priority: first, to the interest accrued and
unpaid on the Equipment Notes, second, to any Premium then due and owing under
the Equipment Notes, third, to all other amounts due and owing under the
Equipment Notes (other than principal), and fourth, to the unpaid principal of
the Equipment Notes, and in case the aggregate amount so to be distributed shall
be insufficient to pay in full the aforesaid amounts in clauses "first" through
"fourth", any partial distribution with respect to any such clause shall be made
pro rata in respect of such clause in proportion to the unpaid principal amounts
--- ----
of the outstanding Equipment Notes;
Fourth, the balance, if any, of such payments or amounts remaining
------
thereafter shall be distributed to the Owner Trustee for distribution in
accordance with the terms of the Trust Agreement.
(b) Except as provided in Sections 3.3(a) and 3.5, if an Indenture
Default or Indenture Event of Default shall have occurred and be continuing, the
Indenture Trustee shall not make any distribution to the Owner Trustee but shall
hold amounts otherwise distributable to the Owner Trustee as collateral security
for the obligations secured hereby and invested as provided in Section 6.4(b)
until the earlier to occur of (a) the date on which such Indenture Default or
Indenture Event of Default shall have been cured or waived, and (b) the date on
which such acceleration occurs and such amounts are applied pursuant to Section
3.3(a); provided, that if any amounts are held pursuant to this Section 3.3(b)
for a period of 90 days, then (x) all amounts then held by the Indenture Trustee
under this Section 3.3(b) with respect to such Indenture Default or Indenture
Event of Default which have been so held for at least 60 days shall on the 91st
day be distributed to the Owner Trustee for distribution in accordance with the
terms of the Trust Agreement and (y) any such amounts which are being held
pursuant to this Section 3.3(b) with respect to such Indenture Default or
Indenture Event of Default but which have not been released pursuant to clause
(x) because they had not been held for at least 60 days at the time the funds
are released pursuant to clause (x) and any other amounts thereafter held by the
Indenture Trustee with respect to such Indenture Default or Indenture Event of
Default shall, on the 61st
18
day following the date on which such amount was initially received by the
Indenture Trustee, thereafter be distributed to the Owner Trustee for
distribution in accordance with the terms of the Trust Agreement.
Section 3.4. Other Payments. Except as otherwise provided in Section 3.3
--------------
or 3.5, (a) any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Lease or the
Participation Agreement or elsewhere in this Article III, and (b) all payments
received and amounts realized by the Indenture Trustee under the Lease or
otherwise with respect to the Equipment to the extent received or realized at
any time after payment in full of the principal of and interest and Premium, if
any, on all Equipment Notes, as well as any other amounts remaining as part of
the Indenture Estate after payment in full of the principal of and interest and
Premium, if any, shall be distributed forthwith by the Indenture Trustee in the
order of priority set forth in Section 3.3(a), except that in the case of any
payment described in clause (b) of this Section 3.4, such payment shall be
distributed omitting clause "third" of such Section 3.3(a) on all Equipment
Notes issued hereunder.
Any payments received by the Indenture Trustee for which provision as to
the application thereof is made in the Lease or the Participation Agreement but
not elsewhere in this Indenture shall be applied to the purposes for which such
payments were made in accordance with the provisions of the Lease or the
Participation Agreement, as the case may be.
Section 3.5. Distribution of Excepted Property. All amounts constituting
---------------------------------
Excepted Property received by the Indenture Trustee shall be paid promptly by
the Indenture Trustee to the Person or Persons entitled thereto.
Section 3.6. Assumption of Obligations of Owner Trustee by the Lessee. In
--------------------------------------------------------
the event that the Lessee shall have elected to assume all of the rights and
obligations of the Owner Trustee under this Indenture in respect of the
Equipment Notes and any other obligations or liabilities of the Owner Trustee
(whether as trustee or in its individual capacity) from which the Owner Trustee
will be released hereby upon such purchase in connection with the purchase by
the Lessee of Units pursuant to Section 6.9 of the Participation Agreement or
Section 22.1 of the Lease and, if on or prior to the applicable purchase date:
(a) The Lessee shall have delivered to the Indenture Trustee and the
Owner Trustee a certificate, dated the date of such purchase, of a Responsible
Officer of the Lessee stating that the Lessee has paid to the Owner Trustee all
amounts required to be paid to the Owner Trustee pursuant to Section 3.3 of the
Lease in connection with such purchase and assumption;
(b) no Indenture Default shall have occurred and be continuing
immediately subsequent to such purchase or assumption after giving effect to the
indenture supplement referred to below and the Indenture Trustee and the Owner
Trustee shall have received a certificate, dated the date of such purchase, of a
Responsible Officer of the Lessee to such effect;
19
(c) the Indenture Trustee shall have received, on or prior to the
date of such purchase, evidence of all filings, recordings and other action
referred to in the opinion or opinions of counsel referred to below;
(d) the Indenture Trustee and the Owner Trustee shall have received
an opinion or opinions of counsel for the Lessee, dated the date of such
purchase which without unusual qualification and permitting reliance on proposed
Treasury Regulations shall be to the effect that, after giving effect to the
indenture supplement referred to below:
(i) this Indenture, the indenture supplement referred to below
and the Equipment Notes issued thereunder each constitutes the legal, valid and
binding obligation of the Lessee, enforceable against the Lessee in accordance
with their respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity, and except as
limited by applicable laws which may affect the remedies provided for in this
Indenture, which laws, however, do not in the opinion of such counsel make the
remedies provided for in this Agreement inadequate for the practical realization
of the rights and benefits provided for in this Indenture;
(ii) all filings and recordings and other action necessary or
appropriate to protect the interests of the Indenture Trustee in the Units to be
so purchased by the Lessee have been accomplished;
(iii) no holder of Equipment Notes will be required to recognize
gain or loss for tax purposes in connection with such assumption; and
(iv) covering such other matters as the Indenture Trustee shall
reasonably request that are customary for transactions of this type;
(e) upon delivery of an indenture supplement giving effect to such
assumption reasonably satisfactory to the Indenture Trustee and amending the
Indenture to incorporate such covenants, events of default, agreements, terms
and conditions from the Lease as may be reasonably required by the Indenture
Trustee, and execution and delivery of Equipment Notes reflecting such
assumption, each dated the date of such purchase; and
(f) the Lessee shall have delivered to the Indenture Trustee and the
Pass Through Trustee a written confirmation from each Rating Agency that such
assumption would not result in a (i) reduction of the rating of the Pass Through
Certificates below the then current rating for such Pass Through Certificates or
(ii) a withdrawal or suspension of the rating of the Pass Through Certificates;
20
then, automatically and without the requirement of further action by any Person,
effective as of the date of such purchase, the Owner Trustee shall be released
from all of its obligations under the Equipment Notes and under this Indenture
in respect of the Equipment Notes or otherwise and the Lien of this Indenture
upon the sale proceeds and other amounts paid or payable to the Owner Trustee
shall be discharged. If requested by the Owner Trustee, the Indenture Trustee
shall execute and deliver an instrument, in form and substance satisfactory to
the Owner Trustee, confirming such release and discharge.
ARTICLE IV. REMEDIES OF THE INDENTURE TRUSTEE UPON AN INDENTURE
EVENT OF DEFAULT
Section 4.1. Indenture Events of Default. The following events shall
---------------------------
constitute "Indenture Events of Default" and each such Indenture Event of
Default shall be deemed to exist and continue so long as, but only so long as,
it shall not have been remedied:
(a) a Lease Event of Default (other than a Lease Event of Default by
reason of a default by the Lessee to pay any amounts which are part of the
Excepted Property); provided that a Lease Event of Default arising solely from
the Lessee's failure to make any payment of Supplemental Rent, including
indemnity or tax indemnity payment as set forth in Section 14(b) of the Lease
shall not constitute an "Indenture Event of Default" hereunder unless and until
the Indenture Trustee, acting solely upon the direction of a Super-Majority in
Interest, shall expressly declare such Lease Event of Default to be an
"Indenture Event of Default"; or
(b) default (not attributable to a default by the Lessee under the
Lease) by the Owner Trustee in making any payment when due of the Rated
Amortization Amount of, Make-Whole Amount, if any, or interest (other than
interest on overdue principal and interest) on, any Equipment Note or Equipment
Notes, and the continuance of such default unremedied for three Business Days
after the same shall have become due and payable; or
(c) any failure by the Owner Trustee or the Owner Participant to
observe or perform any covenant or obligation (other than payment of Scheduled
Amortization Amount) of them or any of them, in this Indenture or the Equipment
Notes (other than as set forth in clause (b) above) or in the Participation
Agreement or by any Person guaranteeing or supporting the obligations of the
Owner Participant or the Owner Trustee under the Operative Agreements in any
related guarantee or support agreement, if such failure is not remedied within a
period of 30 days after there has been given to the Owner Trustee, the Owner
Participant and the Lessee or such Person, as the case may be, by the Indenture
Trustee or by any holder of an Equipment Note a written notice specifying such
failure and requiring it to be remedied; provided that, if such failure is
--------
capable of being remedied, and the remedy requires an action other than, or in
addition to, the payment of money, no such failure (other than one relating to
the payment of such money) shall constitute an Indenture Event of Default
hereunder for an additional period of 30 days after the expiration of the
aforesaid 30-day period so long as the Owner Trustee or the Owner Participant
21
or such Person, as the case may be, is diligently proceeding to remedy such
failure and shall in fact remedy such failure within such period; or the
disaffirmance or repudiation by any Person that has guaranteed or may guarantee
or support the obligations of the Owner Participant or the Owner Trustee under
the Operative Agreements; or
(d) any representation or warranty made by the Owner Trustee or the
Owner Participant under the Participation Agreement, or by the Owner Trustee
hereunder, or by any representative of the Owner Trustee or the Owner
Participant in any document or certificate furnished to the Indenture Trustee or
the Loan Participant in connection herewith or therewith or pursuant hereto or
thereto or by any Person guaranteeing or supporting the obligations of the Owner
Participant or the Owner Trustee under the Operative Agreements in any related
guarantee or support agreement, shall prove at any time to have been incorrect
in any material respect as of the date made and such incorrectness shall remain
material and continue unremedied for a period of 30 days after the Indenture
Trustee or any holder of an Equipment Note has given to the Owner Trustee and
the Owner Participant or such Person, as the case may be, a written notice
specifying such incorrectness, stating that such incorrectness is a default
hereunder and requiring it to be remedied; provided that, if such incorrectness
is capable of being remedied, no such incorrectness shall constitute an
Indenture Event of Default hereunder for an additional period of 15 days after
the expiration of the aforesaid 30-day period so long as the Owner Trustee or
the Owner Participant or such Person, as the case may be, is diligently
proceeding to remedy such incorrectness and shall in fact remedy such
incorrectness within such period; provided that such incorrect representation or
warranty shall be deemed to be remedied only after the Indenture Trustee
receives an opinion of counsel stating that all adverse consequences thereof, if
any, have been remedied; or
(e) the Owner Trustee (as Owner Trustee and not in its individual
capacity) or the Owner Participant or any Person that has guaranteed or may
guarantee or support the obligations of the Owner Participant or the Owner
Trustee under the Operative Agreements, as the case may be, shall (i) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
similar law now or hereafter in effect, or seeking the appointment of a trustee,
receiver, liquidator, custodian or similar official of it or any substantial
part of its property, or (ii) consent to any such relief or to the appointment
of or taking possession by any such official in any voluntary case or other
proceeding commenced against it, or (iii) admit in writing its inability to pay
its debts generally as they come due, or (iv) make a general assignment for the
benefit of creditors, or (v) take any action to authorize any of the foregoing;
or
(f) an involuntary case or other proceeding shall be commenced
against the Owner Trustee (as Owner Trustee and not in its individual capacity)
or the Owner Participant or any Person that has guaranteed or may guarantee or
support the obligations of the Owner Participant or the Owner Trustee under the
Operative Agreements seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter
22
in effect, or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 60 days.
Section 4.2. Acceleration; Rescission and Annulment. (a) If an Indenture
--------------------------------------
Event of Default occurs and is continuing, the Indenture Trustee may, subject to
clause (b) of this Section 4.2, and upon the directions of a Majority in
Interest shall, subject to Section 4.4, declare the unpaid principal amount of
all Equipment Notes then outstanding, Late Payment Premium and accrued interest
thereon and on the Equipment Notes to be due and payable, it being agreed that
no Make-Whole Amount shall be payable in such event. At any time after the
Indenture Trustee has declared the unpaid principal amount of all Equipment
Notes then outstanding to be due and payable and prior to the sale of any of the
Indenture Estate pursuant to this Article IV, a Majority in Interest, by written
notice to the Owner Trustee, the Lessee and the Indenture Trustee, may rescind
and annul such declaration and thereby annul its consequences if: (i) there has
been paid to or deposited with the Indenture Trustee an amount sufficient to pay
all overdue installments of interest and Late Payment Premium (and accrued
interest thereon) on the Equipment Notes, and the principal of any Equipment
Notes that has become due otherwise than by such declaration of acceleration,
(ii) the rescission would not conflict with any judgment or decree, and (iii)
all other Indenture Defaults and Indenture Events of Default, other than
nonpayment of principal, Late Payment Premium or interest on the Equipment Notes
that have become due solely because of such acceleration, have been cured or
waived.
(b) If an Indenture Event of Default referred to in clause (e) or (f)
of Section 4.1 shall have occurred, or a Lease Event of Default under clause (g)
or (h) of Section 14 of the Lease shall have occurred, then and in every such
case the unpaid principal amount of all Equipment Notes then outstanding, Late
Payment Premium and accrued interest thereon and on the Equipment Notes shall
immediately and without further act become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
Section 4.3. Remedies with Respect to Indenture Estate. (a) After an
-----------------------------------------
Indenture Event of Default shall have occurred and so long as such Indenture
Event of Default shall be continuing, then and in every such case the Indenture
Trustee, as assignee hereunder of the Lease or as mortgagee hereunder of the
Equipment or otherwise, may, and when required pursuant to the provisions of
Article V hereof shall, subject to Sections 4.4 and 4.5, exercise any or all of
the rights and powers and pursue any and all of the remedies pursuant to Section
15 of the Lease and this Article IV and may recover judgment in its own name as
Indenture Trustee against the Indenture Estate and may take possession of all or
any part of the Indenture Estate, and may exclude the Owner Trustee and the
Owner Participant and all Persons claiming under any of them wholly or partly
therefrom; provided, however, that nothing contained in this Indenture shall
permit or require the Indenture Trustee to take any action contrary to, or to
disturb, the Lessee's rights under the Lease, except in accordance with the
provisions of the Lease.
23
(b) Subject to Section 4.4 and Section 4.5, the Indenture Trustee
may, if at the time such action may be lawful and always subject to compliance
with any mandatory legal requirements, either with or without taking possession,
and either before or after taking possession, and without instituting any legal
proceedings whatsoever, and having first given notice of such sale by registered
mail to the Owner Trustee, the Owner Participant and the Lessee once at least 20
days prior to the date of such sale or the date on which the Indenture Trustee
enters into a binding contract for a private sale, and any other notice which
may be required by law, sell and dispose of the Indenture Estate, or any part
thereof, or interest therein, at public auction to the highest bidder or at
private sale in one lot as an entirety or in separate lots, and either for cash
or on credit and on such terms as the Indenture Trustee may determine, and at
any place (whether or not it be the location of the Indenture Estate or any part
thereof) and time designated in the notice above referred to; provided, however,
that, notwithstanding any provision herein to the contrary, the Indenture
Trustee shall not sell any of the Indenture Estate or exercise any other
remedies which would result in the exclusion of the Owner Trustee from the
Indenture Estate or any part thereof unless a declaration of acceleration has
been made pursuant to Section 4.2; provided further, that, in the event the
circumstances contemplated by Section 4.4(c) exist, the Indenture Trustee shall
not be allowed to deliver the notice required by this Section 4.3(b) (x) until
the earlier of (1) such time as such circumstances no longer exist or (2) the
expiration of the [90-day] period set forth in Section 4.4(c) or (y) if the
circumstances contemplated by the second proviso of Section 4.4(c) then exist.
Any such public sale or sales may be adjourned from time to time by announcement
at the time and place appointed for such sale or sales, or for any such
adjourned sale or sales, without further notice, and the Indenture Trustee or
the holder or holders of any Equipment Notes, or any interest therein, may bid
and become the purchaser at any such public sale. The Indenture Trustee may
exercise such right without possession or production of the Equipment Notes or
proof of ownership thereof, and as representative of the holders may exercise
such right without including the holders as parties to any suit or proceeding
relating to foreclosure of any property in the Indenture Estate. The Owner
Trustee hereby irrevocably constitutes the Indenture Trustee the true and lawful
attorney-in-fact of the Owner Trustee (in the name of the Owner Trustee or
otherwise) for the purpose of effectuating any sale, assignment, transfer or
delivery for enforcement of the Lien of this Indenture, whether pursuant to
foreclosure or power of sale or otherwise, to execute and deliver all such bills
of sale, assignments and other instruments as the Indenture Trustee may consider
necessary or appropriate, with full power of substitution, the Owner Trustee
hereby ratifying and confirming all that such attorney or any substitute shall
lawfully do by virtue hereof. Nevertheless, if so requested by the Indenture
Trustee or any purchaser, the Owner Trustee shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Indenture Trustee or such purchaser all bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as may be
designated in any such request.
(c) Subject to Section 4.4 and Section 4.5, the Owner Trustee agrees,
to the fullest extent that it lawfully may, that, in case one or more of the
Indenture Events of Default shall have occurred and be continuing, then, in
every such case, the Indenture Trustee may take possession of all or
24
any part of the Indenture Estate and may exclude the Owner Trustee and the Owner
Participant and all Persons claiming under any of them wholly or partly
therefrom. At the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such instruments of title
and other documents as the Indenture Trustee may deem necessary or advisable to
enable the Indenture Trustee or an agent or representative designated by the
Indenture Trustee, at such time or times and place or places as the Indenture
Trustee may specify, to obtain possession of all or any part of the Indenture
Estate. If the Owner Trustee shall fail for any reason to execute and deliver
such instruments and documents to the Indenture Trustee, the Indenture Trustee
may pursue all or part of the Indenture Estate wherever it may be found and may
enter any of the premises of the Lessee wherever the Indenture Estate may be or
be supposed to be and search for the Indenture Estate and, subject to Section
4.4 and Section 4.5, take possession of and remove the Indenture Estate. Upon
every such taking of possession, the Indenture Trustee 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 any of the Indenture Estate, as it may deem proper. In each such
case, the Indenture Trustee shall have the right to use, operate, store, control
or manage the Indenture Estate, and to carry on the business and to exercise all
rights and powers of the Owner Trustee relating to the Indenture Estate, as the
Indenture Trustee shall deem best, including the right to enter into any and all
such agreements with respect to the maintenance, operation, leasing or storage
of the Indenture Estate or any part thereof as the Indenture Trustee may
determine; and the Indenture Trustee shall be entitled to collect and receive
all tolls, rents, revenues, issues, income, products and profits of the
Indenture Estate and every part thereof, without prejudice, however, to the
right of the Indenture Trustee under any provision of this Indenture to collect
and receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder. Such tolls, rents, revenues, issues, income, products and
profits shall be applied to pay the expenses of holding and operating 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 Indenture Trustee may be required or may elect to make, if
any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Indenture Estate), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee, and of all persons properly engaged and employed by the
Indenture Trustee, including the reasonable expenses of the Indenture Trustee.
(d) If an Indenture Event of Default occurs and is continuing and the
Indenture Trustee shall have obtained possession of a Unit, the Indenture
Trustee shall not be obligated to use or operate such Unit or cause such Unit to
be used or operated directly or indirectly by itself or through agents or other
representatives or to lease, license or otherwise permit or provide for the use
or operation of such Unit or Equipment by any other Person unless (i) the
Indenture Trustee shall have been able to obtain insurance in kinds, at rates
and in amounts satisfactory to it in its discretion to
25
protect the Indenture Estate and the Indenture Trustee, as trustee and
individually, against any and all liability for loss or damage to such Unit and
for public liability and property damage resulting from use or operation of such
Unit and (ii) funds are available in the Indenture Estate to pay for all such
insurance or, in lieu of such insurance, the Indenture Trustee is furnished with
indemnification from the holders of the Equipment Notes or any other Person upon
terms and in amounts satisfactory to the Indenture Trustee in its discretion to
protect the Indenture Estate and the Indenture Trustee, as trustee and
individually, against any and all such liabilities.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement is the registered holder
of any Equipment Note issued hereunder, the Indenture Trustee is not authorized
or empowered to acquire title to any Indenture Estate or take any action with
respect to any Indenture Estate so acquired by it if such acquisition or action
would cause the trust created by the Trust Agreement or the Pass Through Trust
Agreement to fail to qualify as a "grantor trust" for federal income tax
purposes.
Section 4.4. Right to Cure; Option to Purchase; Etc.
--------------------------------------
(a) Right to Cure. (A) If there shall occur a Lease Event of Default
-------------
in respect of the payment of Basic Rent as described in Section 14(a) of the
Lease, then as long as no other Indenture Event of Default (other than arising
from such failure to pay Basic Rent or which is concurrently being cured
pursuant to this Section 4.4(a)) shall have occurred and be continuing the Owner
Participant or the Owner Trustee may (but need not) pay to the Indenture
Trustee, at any time prior to the expiration of a period of [10 Business Days]
(a "[10-Day Period]") after receiving written notice of such Indenture Event of
Default from the Indenture Trustee (prior to the expiration of which [10-Day]
Period the Indenture Trustee shall not declare the Lease in default pursuant to
Section 15 thereof or exercise any of the rights, powers or remedies pursuant to
such Section 15 or this Article IV), an amount equal to the Rated Amortization
Amount due and payable, together with any interest due thereon on account of the
delayed payment thereof, and such payment by the Owner Participant or the Owner
Trustee shall be deemed to cure any Indenture Event of Default which arose from
such failure of the Lessee (but such cure shall not relieve the Lessee of any of
its obligations and shall not cure any other Indenture Event of Default) or (B)
if there shall occur a Lease Event of Default in respect of any other payment of
Rent (other than Basic Rent) or a Lease Event of Default shall have occurred and
be continuing, which Lease Event of Default is curable by the payment of money
(it being understood that actions such as the obtaining of insurance or the
procuring of maintenance services can be so effected), and, in each case, such
Lease Event of Default constitutes an Indenture Event of Default then as long as
no other Indenture Event of Default (other than arising from such Indenture
Event of Default or which is concurrently being cured pursuant to this Section
4.4(a)) shall have occurred and be continuing the Owner Participant or the Owner
Trustee may (but need not) pay to the Indenture Trustee, at any time prior to
the expiration of a period of [30 days] (a "[30-Day Period]") after receiving
written notice of such Lease Event of Default from the Indenture Trustee (prior
to the expiration of which [30-Day] Period the Indenture Trustee shall
26
not declare the Lease in default pursuant to Section 15 thereof or exercise any
of the rights, powers or remedies pursuant to such Section 15 or this Article
IV), an amount equal to the full amount of such payment of Rent, together with
any interest due thereon on account of the delayed payment thereof or otherwise
make such payment as shall effect such cure, and such payment by the Owner
Participant or the Owner Trustee shall be deemed to cure any Indenture Event of
Default which arose from such Lease Event of Default (but such cure shall not
relieve the Lessee of any of its obligations); provided however, Owner
Participant and Owner Trustee, collectively, shall not be entitled to (x) cure
more than eighteen consecutive or thirty-six total defaults in the payment of
Basic Rent, or (y) cure other Lease Events of Default if the outstanding amount
which has been paid by the Owner Participant or the Owner Trustee and not
reimbursed to such parties by the Lessee pursuant to this clause (y) exceeds in
the aggregate $[10,000,000], which amount shall be adjusted by the Indenture
Trustee after the Closing Date by notice to the Owner Trustee not more
frequently than annually by reference only to increases (and without regard to
decreases) in the Consumer Price Index released by the Bureau of Labor
Statistics, United States Department of Labor since the date of this Indenture.
Upon any cure by the Owner Participant or the Owner Trustee in accordance with
the first sentence of this Section 4.4(a), the Owner Participant or the Owner
Trustee shall, to the extent of their respective payments, be subrogated to the
rights of the Indenture Trustee, as assignee hereunder of the Owner Trustee to
receive such payment of Rent (and any interest due thereon on account of the
delayed payment thereof) or right of reimbursement, and shall be entitled to
receive such payment upon its receipt by the Indenture Trustee as aforesaid (but
in each case only if the Rated Obligations Due and the Scheduled Obligations Due
shall have been paid in full); provided that neither the Owner Participant nor
the Owner Trustee shall attempt to recover any such amount paid by it on behalf
of the Lessee pursuant to this Section 4.4(a) except, subject to the
Intercreditor Agreement, by demanding of the Lessee payment of such amount or by
prosecuting an action against the Lessee to require the payment of such amount;
provided further, that with respect to any amounts advanced by and owing to the
Owner Trustee and the Owner Participant, the Owner Trustee and the Owner
Participant shall be expressly subordinated to the right of the holders of the
Equipment Notes to receive any and all Rated Obligations Due and Scheduled
Obligations Due then due and owing on the Equipment Notes prior to any payment
from the Lessee to the Owner Trustee or the Owner Participant.
(b) Option to Purchase Equipment Notes. In the event that (i) at any
----------------------------------
time one or more Lease Events of Default shall have occurred and be continuing,
(ii) the Equipment Notes shall have been accelerated pursuant to Section 4.2 or
(iii) the Indenture Trustee, as assignee hereunder of the Lease, shall have
declared the Lease to be in default and shall have commenced the exercise of any
significant remedy in respect of the Units under the Lease, then and in any such
case, upon 30 days' notice (which notice shall be irrevocable) from the Owner
Trustee to the Indenture Trustee designating a date of purchase (the "Purchase
Date") which shall be a Determination Date, each holder of an Equipment Note
will be obligated to, upon and subject to receipt by the Indenture Trustee from
the Owner Trustee or its nominee of an amount equal to the aggregate unpaid
principal amount of all Equipment Notes, together with accrued interest
27
thereon to the Purchase Date, plus all other sums then due and payable to such
holder of an Equipment Note hereunder, but without any Make-Whole Amount,
forthwith sell, assign, transfer and convey to the Owner Trustee or its nominee
on the Purchase Date all of the right, title and interest of such holder in and
to the Equipment Notes then held by such holder, and the Owner Trustee or its
nominee shall assume all of such holder's obligations under the Participation
Agreement; provided that the Owner Trustee or its nominee must purchase all and
not less than all of the Equipment Notes then outstanding; and provided further
that if such option is exercised pursuant to clause (i) above at a time when
there shall have occurred and be continuing for less than 180 days a Lease Event
of Default (and none of the events described in clauses (ii) and (iii) above
shall have occurred), a Make-Whole Amount shall be due and payable to such
holder of an Equipment Note hereunder. During such 30-day notice period, the
Indenture Trustee shall not exercise any of the rights, remedies or powers
pursuant to Section 15 of the Lease or this Article IV, so long as the Owner
Participant (or any nominee of the Owner Participant reasonably acceptable to
the Indenture Trustee) has notified the Indenture Trustee that the notice so
provided by the Owner Trustee or its nominee pursuant to this Section 4.4(b)
constitutes the binding obligation of the Owner Trustee or its nominee to
purchase the Equipment Notes.
(c) Restrictions on Certain Actions. Notwithstanding any provision to
-------------------------------
the contrary contained in this Indenture, the Indenture Trustee shall not
foreclose the Lien of this Indenture or otherwise exercise remedies hereunder
which would result in the exclusion of the Owner Trustee from the Indenture
Estate or any part thereof as a result of an Indenture Event of Default that
constitutes or occurs solely by virtue of one or more Lease Events of Default
(at a time when no other Indenture Event of Default unrelated to any Lease Event
of Default shall have occurred and be continuing) unless the Indenture Trustee,
as security assignee of the Owner Trustee, has proceeded or is then currently
proceeding, to the extent it is then entitled to do so hereunder and under the
Lease and is not then stayed or otherwise prevented from doing so by operation
of law, to terminate the Lease and repossess the Equipment as provided for in
Section 15 of the Lease with respect to the Equipment, provided that in the
event the Indenture Trustee shall be so stayed or otherwise prevented from
exercising such remedies under the Lease, it shall in any event refrain from so
foreclosing or exercising such other remedies hereunder for a period of not less
than [90] days, and further provided that in the event the Lessee as debtor in a
proceeding under Chapter 11 of the Bankruptcy Code (or any trustee appointed for
the Lessee as debtor in any such bankruptcy case) shall have assumed the Lease
with the approval of the bankruptcy court having jurisdiction over such case,
under Section 365 of the Bankruptcy Code or any amended or successor version
thereof, and no Lease Event of Default other than as specified in Section 14(g)
or Section 14(h) of the Lease has occurred and is continuing and no Indenture
Event of Default unrelated to a Lease Event of Default occurring solely pursuant
to Section 14(g) or 14(h) of the Lease shall have occurred and be continuing,
the Indenture Trustee shall refrain from so foreclosing or exercising such other
remedies hereunder. Subject to Sections 4.4(a) and 4.4(b), nothing in this
Section 4.4(c) shall prevent the Indenture Trustee from foreclosing or
exercising such other remedies hereunder to the extent the Lessee fails to
comply with any provisions of
28
any order issued in connection with the assumption of the Lease and the
Indenture Trustee has been stayed or otherwise prevented from exercising such
remedies under the Lease for a period of not less than [90] days.
Section 4.5 Rights of Lessee. Notwithstanding the provisions of this
----------------
Indenture, including, without limitation, Section 4.3, so long as no Lease Event
of Default shall have occurred and be continuing, neither the Indenture Trustee
nor the Owner Trustee shall take any action contrary to, or disturb, the
Lessee's rights under the Lease, except in accordance with the provisions of the
Lease, including, without limitation, (i) the right to receive all monies due
and payable to it in accordance with the provisions of the Lease and (ii) the
Lessee's rights to possession and use of, and of quiet enjoyment of, the
Equipment.
Section 4.6 Waiver of Existing Defaults. A Majority in Interest, by
---------------------------
notice to the Indenture Trustee on behalf of all holders of the Equipment Notes,
may waive any past default hereunder and its consequences, except a default:
(i) in the payment of the principal of, Premium, if any, or interest on any
Equipment Note, or (ii) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent of the
holder of each Equipment Note affected. Upon any such waiver, such default
shall cease to exist, and any Indenture Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
ARTICLE V. DUTIES OF THE INDENTURE TRUSTEE
Section 5.1 Action upon Indenture Event of Default. If any payments of
--------------------------------------
Basic Rent or payments of the Rated Amortization Amount of or interest or
Premium, if any, on the Equipment Notes due and payable on any Rent Payment Date
shall not have been paid in full on such Rent Payment Date, the Indenture
Trustee shall give telephonic notice within one Business Day (followed by prompt
written notice) to the Owner Trustee, the Collateral Agent, the Owner
Participant, the Loan Participant and the Lessee specifying the amount and
nature of such deficiency in payment. In the event the Indenture Trustee shall
have knowledge of an Indenture Event of Default or an Indenture Default, the
Indenture Trustee shall give prompt notice of such Indenture Event of Default or
Indenture Default to the Lessee, the Owner Trustee, the Owner Participant and
the Loan Participant by telegram, facsimile, or telephone (to be promptly
confirmed in writing). In the event the Owner Trustee shall have knowledge of
an Indenture Event of Default or an Indenture Default, the Owner Trustee shall
give notice of such Indenture Event of Default or Indenture Default in the same
manner to the Lessee, the Indenture Trustee, the Owner Participant and the Loan
Participant. Subject to the terms of Section 5.3 and Section 4.1(a), the
Indenture Trustee shall take such action, or refrain from taking such action,
with respect to such Indenture Event of Default or Indenture Default as the
Indenture Trustee shall be instructed in writing by a Majority in Interest. If
the Indenture Trustee shall not have received instructions as above provided
within 20 days after the mailing of notice of such
29
Indenture Event of Default or such Indenture Default to the Loan Participant by
the Indenture Trustee, the Indenture Trustee may, but shall not be obligated to,
take such action, or refrain from taking such action, with respect to such
Indenture Event of Default or Indenture Default as it shall determine to be
advisable in the best interests of the Loan Participant. Notwithstanding any
provision to the contrary contained in this Section 5.1, the Indenture Trustee
shall not declare the Lease to be in default solely in respect of the Lessee's
failure to make any payment of Basic Rent within [10 Business Days] after the
same shall have become due, unless the [10-Day] Period within which, pursuant to
Section 4.4(a), the Owner Participant or the Owner Trustee are entitled to cure
such failure shall have expired. For all purposes of this Indenture, in the
absence of actual knowledge, neither the Owner Trustee nor the Indenture Trustee
shall be deemed to have knowledge of an Indenture Event of Default (except, in
the case of the Indenture Trustee, the failure of the Lessee to pay any
installment of Basic Rent that is required to be paid directly to the Indenture
Trustee within the [10 Business Days] after the same shall become due or the
failure of the Lessee to maintain insurance as required under Section 12 of the
Lease if the Indenture Trustee shall receive notice thereof from an insurer or
insurance broker) unless notified in writing by the Lessee, the Owner Trustee,
one or more Loan Participants or the Owner Participant; and "actual knowledge"
(as used in the foregoing clause) of the Owner Trustee or the Indenture Trustee
shall mean actual knowledge of an officer in the [Corporate Trust
Administration] of the Owner Trustee or the Corporate Trust Department of the
Indenture Trustee, as the case may be. Whenever the Indenture Trustee gives any
notice hereunder to the holders of the Equipment Notes it shall provide a copy
thereof to each Rating Agency.
Section 5.2. Action upon Instructions. Subject to the terms of Sections
------------------------
5.1 and 5.3, upon the written instructions at any time and from time to time of
a Majority in Interest, the Indenture Trustee shall take such of the following
actions as may be specified in such instructions (subject to the rights of the
other parties thereto, except to the extent assigned hereunder): (i) subject to
and solely to the extent permitted by the terms hereof and of the Lease, give
such notice, direction or consent, or exercise such right, remedy or power
hereunder or under the Lease or in respect of any part or all of the Indenture
Estate or take such other action as shall be specified in such instructions; and
(ii) after an Indenture Event of Default shall have occurred and so long as such
Indenture Event of Default shall be continuing, subject to Section 5.11, approve
as satisfactory to it all matters required by the terms of the Lease to be
satisfactory to the Owner Trustee, it being understood that without the written
instructions of a Majority in Interest the Indenture Trustee shall not take any
action described in clauses (i) and (ii) above.
Upon the expiration or earlier termination of the Lease Term with respect
to any Unit under the Lease, or, if and so long as no Indenture Event of Default
shall have occurred and be continuing, upon the transfer by the Owner Trustee to
the Lessee or its designee of any Unit pursuant to Section 10 or 11 of the Lease
or the retention by the Owner Trustee of any Unit pursuant to Section 10.3 of
the Lease, then the Indenture Trustee shall in either such case, upon the
written request of the Owner Trustee, and receipt by the Indenture Trustee of
funds necessary to prepay the Equipment Notes required to be prepaid in
connection with such purchase, termination,
30
retention or Event of Loss, execute and deliver to, or as directed in writing
by, the Owner Trustee an appropriate instrument (in due form for recording)
furnished by the Owner Trustee or the Lessee releasing the affected Unit or
Units from the Lien of this Indenture.
Section 5.3. Indemnification. (a) The Indenture Trustee shall not be
---------------
required to take any action or refrain from taking any action under Section 5.1
(other than the first two sentences thereof) or 5.2 or Article IV if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk is not reasonably assured to it. The
Indenture Trustee shall not be required to take any action under Section 5.1 or
5.2 or Article IV, nor shall any other provision of this Indenture be deemed to
impose a duty on the Indenture Trustee to take any action, if the Indenture
Trustee shall have been advised in writing by independent counsel that such
action is contrary to the terms hereof or of the Lease or the Participation
Agreement, or is otherwise contrary to law.
(b) Each Loan Participant may, but shall not be required to, participate
in any indemnification of the Indenture Trustee given pursuant to paragraph (a)
of this Section 5.3. Each Loan Participant so participating shall be entitled to
reimbursement for such participation in accordance with Article III.
Section 5.4. No Duties Except as Specified in Indenture or Instructions.
----------------------------------------------------------
The Indenture Trustee shall not have any duty or obligation to manage, control,
use, sell, dispose of or otherwise deal with the Equipment or any other part of
the Indenture Estate, or to otherwise take or refrain from taking any action
under, or in connection with, this Indenture, the Lease, or the Participation
Agreement, except as expressly provided by the terms of this Indenture or as
expressly provided in written instructions received pursuant to the terms of
Section 5.1 or 5.2; and no implied duties or obligations shall be read into this
Indenture against the Indenture Trustee. Each of the Owner Trustee (only in its
individual capacity) and the Indenture Trustee nevertheless agrees that it will,
at its own cost and expense, promptly take such action as may be necessary duly
to discharge any Lien on all or any part of the Indenture Estate, or on any
properties of the Owner Trustee assigned, pledged or mortgaged as part of the
Indenture Estate, which result from claims against it in its individual capacity
not related to the ownership of the Equipment (in the case of the Owner
Trustee), administration of the Indenture Estate (in the case of the Indenture
Trustee) or any other transaction under this Indenture or the Trust Agreement or
any document included in the Indenture Estate.
Section 5.5. No Action Except under Lease, Indenture or Instructions. The
-------------------------------------------------------
Indenture Trustee agrees that it will not manage, control, use, sell, dispose of
or otherwise deal with the Equipment or other property constituting part of the
Indenture Estate except (i) as required by the terms of the Lease and the
Participation Agreement, (ii) in accordance with the powers granted to, or the
authority conferred upon, the Indenture Trustee pursuant to this Indenture, or
(iii) in accordance with the express terms hereof or with written instructions
pursuant to Section 5.1 or 5.2.
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Section 5.6. Disposition of Units. At any time and from time to time prior
--------------------
to the expiration of the Lease Term, any Unit for which the provisions of
Section 11.4(a) of the Lease have been satisfied may be disposed of in
accordance with the provisions of Section 11.4(a) of the Lease, and the Owner
Trustee shall, from time to time, direct the Indenture Trustee to, provided no
Lease Event of Default shall have occurred and be continuing, execute and
deliver to it, or as directed in writing by the Owner Trustee, an appropriate
instrument furnished by the Owner Trustee or the Lessee releasing such Unit from
the Lien of the Indenture, but only in respect of such Unit.
Section 5.7. Indenture Supplements for Replacements. In the event of a
--------------------------------------
Replacement Unit being substituted as contemplated by Section 11.2 of the Lease,
the Owner Trustee and the Indenture Trustee agree for the benefit of the holders
of the Equipment Notes and the Lessee, subject to compliance by the Lessee with
its obligations set forth in Section 11 of the Lease, to execute and deliver an
Indenture Supplement substantially in the form of Exhibit A hereto and, provided
that no Lease Event of Default, or Lease Default pursuant to Section 14(a),
14(b), 14(g) or 14(h), shall have occurred and be continuing, execute and
deliver to the Lessee an appropriate instrument releasing the Unit being
replaced from the Lien of the Indenture.
Section 5.8. Effect of Replacements. In the event of the substitution of
----------------------
a Replacement Unit, all provisions of this Indenture relating to the Unit or
Units being replaced shall be applicable to such Replacement Unit with the same
force and effect as if such Replacement Unit was the same Unit being replaced.
Section 5.9. Withholding Taxes. The Indenture Trustee, as agent for the
-----------------
Owner Trustee, shall exclude and withhold from each payment of principal,
Premium, if any, and interest and other amounts due hereunder or under the
Equipment Notes any and all withholding taxes applicable thereto as required by
law. The Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future taxes or similar charges
are required to be withheld with respect to any amounts payable in respect of
the Equipment Notes, to withhold such amounts and timely pay the same to the
appropriate authority in the name of and on behalf of the holders of the
Equipment Notes, that it will file any necessary withholding tax returns or
statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each holder of an Equipment Note appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such holders may reasonably request from time to time.
Section 5.10. Lessee's Right of Quiet Enjoyment. Notwithstanding anything
---------------------------------
to the contrary contained in this Indenture, so long as the Lessee is in
compliance with its obligations under the Lease (including applicable grace
periods) and no Lease Event of Default has occurred and is continuing
unremedied, the Indenture Trustee will comply with Section 8 of the
Participation Agreement to the same extent as if it were the Lessor under the
Lease. Each holder of an
32
Equipment Note, by its acceptance thereof, consents in all respects to the terms
of the Lease and the Participation Agreement and agrees to the provisions of
this Section 5.10.
Section 5.11. Certain Rights of Owner Trustee and Owner Participant.
-----------------------------------------------------
Notwithstanding any other provisions of this Indenture, including the Granting
Clause, but subject always to the penultimate paragraph of this Section 5.11,
the following rights (the "Excepted Rights") shall be reserved to the Owner
Trustee or Owner Participant, as the case may be (as separate and independent
rights) to the extent described herein:
(a) subject to the Intercreditor Agreement, the Owner Trustee or the
Owner Participant shall at all times retain the right, to the exclusion of the
Indenture Trustee, (i) to demand, collect, xxx for or otherwise obtain all
amounts included in Excepted Property from the Lessee, exercise any election or
option or make any decision or determination or give or receive any notice,
consent, waiver or approval in respect of any Excepted Property and seek
equitable remedies to require the Lessee to maintain the insurance coverage
referred to in Section 12 of the Lease and specific performance of the covenants
of the Lessee under the Lease relating to the protection, maintenance,
possession and use of the Units; provided, that the rights referred to in this
clause (a) shall not be deemed to include the exercise of any remedies provided
for in Section 15.1 of the Lease other than the right to proceed by appropriate
court action, either at law or in equity, to enforce payment by the Lessee of
such amounts included in Excepted Property or obtain specific performance by the
Lessee of such insurance covenant or for specific performance of any other
covenant of the Lessee or to recover damages for the breach thereof and (ii) to
adjust Basic Rent, the percentages relating to Stipulated Loss Value and
Termination Value and Early Purchase Price as provided in Section 3.4 of the
Lease and Section 2.6 of the Participation Agreement, subject always to the
second paragraph of Section 3.2 of the Lease and the second sentence of the
definitions of "Stipulated Loss Value", "Termination Value" and "Early Purchase
Price";
(b) (i) the Indenture Trustee shall not, without the consent of the
Owner Trustee, enter into, execute and deliver amendments or modifications in
respect of any of the provisions of the Lease or the Intercreditor Agreement,
and (ii) unless an Indenture Event of Default shall have occurred and be
continuing, the Indenture Trustee shall not, without the consent of the Owner
Trustee, which consent shall not be withheld if no right or interest of the
Owner Trustee or the Owner Participant shall be materially diminished or
impaired thereby, (A) enter into, execute and deliver waivers or consents in
respect of any of the provisions of the Lease or the Intercreditor Agreement, or
(B) approve any accountants, engineers, appraisers or counsel as satisfactory to
render services for or issue opinions to the Owner Trustee pursuant to the
Operative Agreements (other than counsel rendering tax opinions issued to the
Owner Participant or the Owner Trustee, the approval of which shall be reserved
exclusively to the Owner Participant or the Owner Trustee, as the case may be);
provided that, whether or not an Indenture Event of Default has occurred and is
continuing the Owner Trustee's consent shall be required with respect to any
waivers or consents in respect of any of the provisions of Sections 6, 8 or 12
of the Lease, or of
33
any other Section of the Lease or the Intercreditor Agreement to the extent such
action shall affect (x) the amount or timing of, or the right to enforce payment
of, any Excepted Property, (y) the timing or priority of any transfer or
distribution of funds pursuant to the Intercreditor Agreement or the release of
funds from, or the imposition of caps on, the Cash Trapping Account (as defined
in the Intercreditor Agreement) or (z) the amount or timing of any amounts
payable by the Lessee under the Lease or the Intercreditor Agreement as
originally executed (or as subsequently modified with the consent of the Owner
Trustee) which, absent the occurrence and continuance of an Indenture Event of
Default hereunder, would be distributable to the Owner Trustee under Article III
hereof;
(c) at all times, whether or not an Indenture Event of Default has
occurred and is continuing, the Owner Trustee and the Owner Participant shall
have the right, together with the Indenture Trustee, (i) to receive from the
Lessee, the Manager, the Insurance Manager and the Collateral Agent all notices,
certificates, reports, filings, opinions of counsel and other documents and all
information which any thereof is permitted or required to give or furnish to the
Owner Trustee pursuant to any Operative Agreement (including pursuant to Section
13 of the Lease and Sections 2.5(a) and 3.14 of the Intercreditor Agreement),
(ii) to exercise inspection rights pursuant to Section 13 of the Lease and
Section 2.5(b) of the Intercreditor Agreement, (iii) to retain all rights with
respect to insurance maintained for its own account which Section 12 of the
Lease specifically confers on the Owner Participant or the Owner Trustee in its
individual capacity and (iv) to exercise, to the extent necessary to enable it
to exercise its rights under Section 4.4 hereof, the rights of the Owner Trustee
to give any notices of default under Section 15 of the Lease;
(d) so long as no Indenture Event of Default has occurred and is
continuing (other than an Indenture Event of Default caused by a Lease Event of
Default), the Owner Trustee shall have the right, together with the Indenture
Trustee, (i) to consent to any amendment or modification of the Lessee's
certificate of incorporation or bylaws in accordance with Section 6.2(q) of the
Intercreditor Agreement, and (ii) to consent to the Lessee's entering into any
additional lease and related documents in accordance with Section 6.4(f) of the
Intercreditor Agreement;
(e) except as expressly provided to the contrary in clauses (a), (b),
(c) and (d) above, so long as no Indenture Event of Default has occurred and is
continuing, all rights (including options, elections, determinations, consents,
approvals, waivers and the giving of notices) of the Owner Trustee and the Owner
Participant, as the case may be, under the Lease and the Intercreditor Agreement
to the exclusion of the Indenture Trustee and any holder of an Equipment Note
and without the consent of the Indenture Trustee or any holder of an Equipment
Note; provided that the foregoing shall not, nor shall any other provision of
this Section 5.11, limit (A) any rights separately and expressly granted to the
Indenture Trustee or any holder of an Equipment Note under the Lease or the
other Operative Agreements (including, without limitation, Section 9.5 hereof,
Sections 8.2 and 8.4 of the Management Agreement and Sections 6.02 and 6.03 of
the Insurance Agreement) or (B) the right of the Indenture Trustee or any holder
of an Equipment
34
Note to receive any funds to be delivered to the Owner Trustee under the Lease
or the Intercreditor Agreement (except with respect to Excepted Property).
Notwithstanding the foregoing provisions of this Section 5.11, but subject
always to Section 4.5 hereof and to the rights of the Owner Participant under
Section 4.4 hereof, the Indenture Trustee shall at all times have the right, to
the exclusion of the Owner Trustee and the Owner Participant, to (A) demand,
collect, xxx for or otherwise receive and enforce the payment of all Rent due
and payable under the Lease (other than any thereof constituting an Excepted
Property or Excepted Right), (B) declare the Lease to be in default under
Section 15 thereof and (C) subject only to the provisions of Sections 4.3 and
4.4 hereof, exercise the remedies set forth in such Section 15 (other than in
connection with the Excepted Property) and in Article IV hereof.
The term "Indenture Event of Default" as used in this Section 5.11 only
shall have the meaning attributed to such term in Section 4.1 but excluding the
proviso in Section 4.1(a) thereof.
ARTICLE VI. THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
Section 6.1. Acceptance of Trusts and Duties. The Indenture Trustee
-------------------------------
accepts the trusts hereby created and applicable to it and agrees to perform the
same but only upon the terms of this Indenture and agrees to receive and
disburse all moneys received by it constituting part of the Indenture Estate in
accordance with the terms hereof. The Indenture Trustee shall not be answerable
or accountable under any circumstances, except for its own willful misconduct or
gross negligence (or negligence or willful misconduct in the case of application
or investment of moneys constituting the Indenture Estate) or breach of any of
its representations or warranties or covenants set forth herein or in the
Participation Agreement, or failure in the performance of its obligations under
the last sentence of Section 5.4, and the Owner Trustee shall not be liable for
any action or inaction of the Indenture Trustee and the Indenture Trustee shall
not be liable for any action or inaction of the Owner Trustee. The Owner
Trustee shall not be deemed a trustee for, or agent of, the holders of the
Equipment Notes for any purpose.
Section 6.2. Absence of Duties. Except in accordance with written
-----------------
instructions or requests furnished pursuant to Section 5.1 or Section 5.2 and
except as provided in, and without limiting the generality of, Section 5.4, the
Indenture Trustee shall have no duty (i) to see to any registration of the
Equipment or any recording or filing of the Lease, or of this Indenture or any
other document, or to see to the maintenance of any such registration, recording
or filing, (ii) to see to any insurance on the Equipment or to effect or
maintain any such insurance, whether or not the Lessee shall be in default with
respect thereto, (iii) to confirm, verify or inquire into the failure to receive
any financial statements of the Lessee or (iv) to inspect the Equipment at any
time or ascertain or inquire as to the performance or observance of any of the
Lessee's covenants under the Lease with respect to the Equipment.
Notwithstanding the foregoing, the Indenture Trustee will furnish to any Loan
Participant, so long as such Loan Participant or its nominees shall hold any of
the Equipment Notes and to each of the Rating Agencies, promptly upon
35
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee under this Indenture, to the extent that the same shall
not have been furnished to the Indenture Trustee and the Loan Participants or
the Rating Agencies, as the case may be, pursuant to the Lease or the
Participation Agreement.
Section 6.3. No Representations or Warranties as to the Equipment or
-------------------------------------------------------
Documents. Neither the Owner Trustee nor the Owner Trustee in its individual
---------
capacity nor the Indenture Trustee makes or shall be deemed to have made (i) any
representation or warranty, express or implied, as to the value, condition,
design, operation, merchantability or fitness for use of the Equipment or as to
their title thereto, or any other representation or warranty with respect to the
Equipment whatsoever, or (ii) any representation or warranty as to the validity,
legality or enforceability of this Indenture, the Trust Agreement, the
Participation Agreement, the Equipment Notes, the Lease, any Lease Supplement,
any Indenture Supplement or any other document or instrument or as to the
correctness of any statement contained in any thereof (except as to the
representations and warranties made by the Owner Trustee in its individual
capacity as set forth in Section 3.1 of the Participation Agreement), except
that the Owner Trustee and the Indenture Trustee each in its individual capacity
hereby confirms the representations and warranties made by it in its individual
capacity in Sections 3.1 and 3.3, respectively, of the Participation Agreement.
Section 6.4. Segregation of Moneys; No Interest; Investments. (a) Subject
-----------------------------------------------
to Section 6.4(b) and 6.4(c), no moneys received by the Indenture Trustee
hereunder need be segregated in any manner except to the extent required by law,
and any such moneys may be deposited under such general conditions for the
holding of trust funds as may be prescribed by law applicable to the Indenture
Trustee, and, except as otherwise agreed by the Owner Trustee or the Indenture
Trustee, as the case may be, neither the Owner Trustee nor the Indenture Trustee
shall be liable for any interest thereon.
(b) Any amounts held by the Indenture Trustee pursuant to the express
terms of this Indenture or the Lease and not required to be distributed as
herein provided shall be invested and reinvested by the Indenture Trustee from
time to time in Specified Investments at the written direction and at the risk
and expense of the Lessee, except that in the absence of any such direction,
such amounts need not be invested and reinvested and except that after a Lease
Event of Default shall have occurred and be continuing, such amounts shall be so
invested and reinvested by the Indenture Trustee in Indenture Investments. Any
net income or gain realized as a result of any such investments or reinvestment
shall be held as part of the Indenture Estate and shall be applied by the
Indenture Trustee at the same times, on the same conditions and in the same
manner as the amounts in respect of which such income or gain was realized are
required to be distributed in accordance with the provisions hereof or of the
Lease pursuant to which such amounts were required to be held and if no Lease
Event of Default shall have occurred and be continuing any excess shall be paid
to the Collateral Agent. Any such Specified Investments or Indenture
Investments may be sold or otherwise reduced to cash (without regard to maturity
36
date) by the Indenture Trustee whenever necessary to make any application as
required by such provisions. The Indenture Trustee shall have no liability for
any loss resulting from any such investment or reinvestment other than by reason
of the willful misconduct or gross negligence of the Indenture Trustee.
(c) On or prior to the Closing Date, the Indenture Trustee shall
establish and thereafter maintain, in the name of the Indenture Trustee, for the
benefit of the holders of the Equipment Notes, at the offices of the Indenture
Trustee, a segregated account (the "Payment Account") bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the holders of the Equipment Notes, but subject to the terms and conditions of
this Indenture. The Indenture Trustee shall have sole dominion and control over
the Payment Account and all amounts on deposit therein, including the sole power
to direct withdrawals from the Payment Account. Amounts may be withdrawn from
the Payment Account only in accordance with the provisions of Article III of
this Indenture and only by officers and employees authorized by the Indenture
Trustee in writing.
Section 6.5. Reliance; Agents; Advice of Counsel. The Indenture Trustee
-----------------------------------
shall incur no liability to anyone acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Indenture Trustee may accept a copy
of a resolution of the Board of Directors of any party to the Participation
Agreement, certified by the Secretary or an Assistant Secretary of such party as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted by said Board 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 described herein, the Indenture Trustee may for all purposes
hereof rely on a certificate, signed by an officer of the Lessee, as to such
fact or matter, and such certificate shall constitute full protection to the
Indenture Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Indenture Trustee shall furnish to the Owner
Trustee upon request such information and copies of such documents as the
Indenture Trustee may have and as are necessary for the Owner Trustee to perform
its duties under Article II hereof. The Indenture Trustee shall assume, and
shall be fully protected in assuming, that the Owner Trustee is authorized by
the Trust Agreement to enter into this Indenture and to take all action
permitted to be taken by it pursuant to the provisions hereof, and need not
inquire into the authorization of the Owner Trustee with respect thereto. In the
administration of the trusts hereunder, the Indenture Trustee may execute any of
the trusts or powers hereof and perform its powers and duties hereunder directly
or through agents or attorneys and may, at the reasonable expense of the
Indenture Estate, consult with independent counsel, accountants and other
skilled persons to be selected and employed by it, and the Indenture Trustee
shall not be liable for anything done, suffered, or omitted in good faith by it
in accordance with the written advice or opinion of any such independent
counsel, accountants or other skilled persons acting within such persons' area
of competence (so long as the Indenture Trustee shall have exercised reasonable
care in selecting such persons).
37
Section 6.6 Not Acting in Individual Capacity. The Owner Trustee and the
---------------------------------
Indenture Trustee each acts hereunder solely as trustee hereunder and, in the
case of the Owner Trustee, under the Trust Agreement and not in its individual
capacity unless otherwise expressly provided; and all Persons, other than the
holders of Equipment Notes to the extent expressly provided in this Indenture,
having any claim against the Owner Trustee or the Indenture Trustee by reason of
the transactions contemplated hereby shall, subject to the Lien and priorities
of payment as herein provided, look only to the Indenture Estate for payment or
satisfaction thereof.
ARTICLE VII. CERTAIN LIMITATIONS ON OWNER TRUSTEE'S
AND INDENTURE TRUSTEE'S RIGHTS
Each of the Owner Trustee and the Indenture Trustee agrees that it shall
have no right against the holders of the Equipment Notes or the Indenture Estate
(except in the case of the Indenture Trustee as expressly provided in Section
4.3 hereof) for any fee as compensation for its services hereunder or any
expenses or disbursements incurred in connection with the exercise and
performance of its powers and duties hereunder or any indemnification against
liability which it may incur in the exercise and performance of such powers and
duties but, on the contrary, shall look solely to the Lessee for such payment
and indemnification and that neither the Owner Trustee nor the Indenture Trustee
shall have any Lien on the Indenture Estate as security for such compensation,
expenses, reasonable counsel fees, if any, disbursements and indemnification.
ARTICLE VII. SUCCESSOR TRUSTEES
Section 8.1 Notice of Successor Owner Trustee. In the case of any
---------------------------------
appointment of a successor Owner Trustee pursuant to the Trust Agreement or any
merger, conversion, consolidation or sale of substantially all the business
involving the Owner Trustee pursuant to the Trust Agreement, the successor Owner
Trustee shall give prompt written notice thereof to the Indenture Trustee, the
Lessee and the holders of all Equipment Notes at the time outstanding.
Section 8.2 Resignation of Indenture Trustee; Appointment of Successor.
----------------------------------------------------------
The resignation or removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee shall become effective only upon the successor
Indenture Trustee's acceptance of appointment as provided in this Section 8.2.
The Indenture Trustee or any successor thereto may resign at any time without
cause by giving at least 30 days' prior written notice to the Owner Trustee, the
Owner Participant, the Lessee and the holders of the Equipment Notes. A
Majority in Interest may at any time remove the Indenture Trustee without cause
by an instrument in writing delivered to the Owner Trustee, the Owner
Participant, the Lessee and the Indenture Trustee. The Owner Trustee may remove
the Indenture Trustee if: (1) the Indenture Trustee fails to comply with
Section 8.2(c); (2) the Indenture Trustee is adjudged a bankrupt or an
insolvent; (3) a receiver or public officer takes charge of the Indenture
Trustee or its property; or (4) the Indenture Trustee becomes incapable of
performing its duties hereunder.
38
(a) In the case of the resignation or removal of the Indenture
Trustee, the Owner Trustee shall, unless otherwise directed by a Majority in
Interest, promptly appoint a successor Indenture Trustee, provided that a
Majority in Interest may appoint, within one year after such resignation or
removal, a successor Indenture Trustee which may be other than the successor
Indenture Trustee appointed as provided above, and such successor Indenture
Trustee appointed as provided above shall be superseded by the successor
Indenture Trustee so appointed by a Majority in Interest. If a successor
Indenture Trustee shall not have been appointed and accepted its appointment
hereunder within 60 days after the Indenture Trustee gives notice of resignation
or is removed as provided above, the retiring Indenture Trustee, the Lessee, the
Owner Trustee or a Majority in Interest may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee. Any
successor Indenture Trustee so appointed by such court shall immediately and
without further act be superseded by any successor Indenture Trustee appointed
as provided in the proviso to the first sentence of this paragraph (a) within
one year from the date of the appointment by such court.
(b) Any successor Indenture Trustee, however appointed, shall execute
and deliver to the Owner Trustee and the Lessee and to the predecessor Indenture
Trustee an instrument accepting such appointment, and thereupon such successor
Indenture Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trusts of the predecessor
Indenture Trustee hereunder in the trusts hereunder applicable to it with like
effect as if originally named the Indenture Trustee herein; but nevertheless,
upon the written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to such
Indenture Trustee, upon the trusts herein expressed applicable to it, all the
estates, properties, rights, powers and trusts of such predecessor Indenture
Trustee, and such Indenture Trustee shall duly assign, transfer, deliver and pay
over to such successor Indenture Trustee all moneys or other property then held
by such predecessor Indenture Trustee hereunder.
(c) The Indenture Trustee shall be a bank or trust company organized
under the laws of the United States or any State thereof having a combined
capital and surplus of at least $[100,000,000], if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation to which substantially all the corporate
trust business of the Indenture Trustee may be transferred, shall, subject to
the terms of paragraph (c) of this Section, be the Indenture Trustee under this
Indenture without further act.
39
ARTICLE IX. SUPPLEMENTS AND AMENDMENTS
TO THIS INDENTURE AND OTHER DOCUMENTS
Section 9.1 Supplemental Indentures without Consent of Holders. (a) The
--------------------------------------------------
Owner Trustee and the Indenture Trustee, at any time and from time to time,
without notice to or the consent of any holders of any Equipment Notes (except
that the Indenture Trustee shall give notice to each of the Rating Agencies),
may enter into one or more indentures supplemental hereto for any of the
following purposes:
(i) to correct or amplify the description of any property at
any time subject to the Lien of this Indenture or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subject to the Lien of this Indenture or to subject to the Lien of this
Indenture any Unit or Units substituted for any Unit or Units in accordance
with the Lease; provided, however, that indenture supplements entered into
for the purpose of subjecting to the Lien of this Indenture any Unit or
Units substituted for any Unit or Units in accordance with the Lease need
only be executed by the Owner Trustee; or
(ii) to evidence the succession of another trustee to the Owner
Trustee and the assumption by any such successor of the covenants of the
Owner Trustee herein and in the Equipment Notes contained, or to evidence
(in accordance with Article VIII) the succession of a new Indenture Trustee
hereunder; or
(iii) to add to the covenants of the Owner Trustee, for the
benefit of the holders of the Equipment Notes, or to surrender any right or
power herein conferred upon the Owner Trustee; or
(iv) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising hereunder so long as any such action does not
adversely affect the interests of the holders of the Equipment Notes;
provided that no such supplement to this Indenture or waiver or modification of
the terms hereof shall adversely affect in a substantive manner the interests of
the Lessee without the Lessee's prior written consent, and in no event shall the
terms of (x) the proviso to the first sentence of Section 4.3(a) or (y) Section
4.5 be so altered or modified without such Lessee consent.
(b) Supplemental Indentures with Consent of Majority In Interest.
------------------------------------------------------------
With the written consent of a Majority in Interest, the Owner Trustee (but only
on the written request of the Owner Participant) may, and the Indenture Trustee,
subject to Section 9.2 hereof, shall, at any time and from time to time, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights and obligations of
holders of the Equipment
40
Notes and of the Owner Trustee under this Indenture; provided, however, without
the consent of each holder of an Equipment Note affected thereby, no such
supplemental indenture shall:
(1) change the final maturity of the principal of any Equipment
Note, or change the dates or amounts of payment of any installment of the
principal of, Premium, if any, or interest on any Equipment Note, or reduce
the principal amount thereof or the Premium, if any, or interest thereon,
or change to a location outside the United States the place of payment
where, or the coin or currency in which, any Equipment Note or the Premium,
if any, or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment of principal or Premium, if
any, or interest on or after the date such principal or Premium, if any, or
interest becomes due and payable; or
(2) create any Lien with respect to the Indenture Estate ranking
prior to, or on a parity with, the security interest created by this
Indenture except such as are permitted by this Indenture, or deprive any
holder of an Equipment Note of the benefit of the Lien on the Indenture
Estate created by this Indenture; or
(3) reduce the percentage in principal amount of the Equipment
Notes, the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holders is required for any waiver (of
compliance with certain provisions of this Indenture, or of certain
defaults hereunder and their consequences) provided for in this Indenture;
or
(4) modify any provisions of this Section 9.1(b), except to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the holder of each Equipment Note affected
thereby;
provided that so long as no Lease Event of Default shall have occurred and be
continuing, no such supplement to this Indenture or waiver or modification of
the terms hereof shall adversely affect in a substantive manner the interests of
the Lessee without the Lessee's prior written consent, and in no event shall the
terms of (x) the proviso to the first sentence of Section 4.3(a) or (y) Section
4.5 be so altered or modified without such Lessee consent.
Section 9.2 Indenture Trustee Protected. If in the opinion of the
---------------------------
Indenture Trustee any document required to be executed pursuant to the terms of
Section 9.1 adversely affects any right, duty, immunity or indemnity in favor of
the Indenture Trustee under this Indenture, the Participation Agreement or the
Lease, the Indenture Trustee may in its discretion decline to execute such
document.
Section 9.3 Request of Substance, Not Form. It shall not be necessary for
------------------------------
the consent of the holders of Equipment Notes under Section 9.1(b) to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
41
Section 9.4 Documents Mailed to Holders. Promptly after the execution by
---------------------------
the Indenture Trustee of any document entered into pursuant to Section 9.1(b),
the Indenture Trustee shall mail, by first-class mail, postage prepaid, a
conformed copy thereof to each holder of an Equipment Note at its address last
known to the Indenture Trustee, but the failure of the Indenture Trustee to mail
such conformed copies shall not impair or affect the validity of such document.
Section 9.5 Amendments, Waivers, Etc. of Other Documents. (a)
--------------------------------------------
Notwithstanding any provision of this Indenture to the contrary, without the
consent of a Majority in Interest, the respective parties to the Lease, the
Participation Agreement, the Intercreditor Agreement and the Trust Agreement may
not modify, amend or supplement any of such agreements, or give any consent,
waiver, authorization or approval under any of such agreements, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the respective
parties thereunder; provided, however, that the actions specified in subsection
(b) of this Section 9.5 may be taken, except as otherwise expressly provided
therein, without the consent of the Indenture Trustee or of a Majority in
Interest or any holder of an Equipment Note.
(b) Subject to the provisions of subsection (c) of this Section 9.5,
the respective parties to the Lease, the Trust Agreement and the Participation
Agreement, at any time and from time to time without the consent of the
Indenture Trustee or of a Majority in Interest or any holder of an Equipment
Note, may:
(1) so long as no Indenture Event of Default shall have occurred
and be continuing, modify, amend or supplement the Lease, or give any
consent, waiver, authorization or approval with respect thereto, except
that without the consent of a Majority in Interest, the parties to the
Lease shall not modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Lease: Sections 2, 3.1 (if
the result thereof would be to shorten the Basic Term to a period shorter
than the period ending with the final maturity of the Equipment Notes),
3.2, 3.3, 3.4, 3.5 (except insofar as it relates to the address or account
information of the Owner Trustee or Indenture Trustee) (other than as such
Sections 3.1 through 3.5 may be amended pursuant to Section 3.4 of the
Lease as originally executed), 4, 6 (but only to the extent such Section is
made operative by Section 15), 7, 8, 9, 10 (except that additional
requirements may be imposed on the Lessee's ability to terminate the Lease
with respect to a Unit), 11 (except that additional requirements may be
imposed on the Lessee's ability to replace a Unit subject to an Event of
Loss), 12 (except that additional insurance requirements may be imposed on
the Lessee), 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 (if the result thereof
would be to provide any renewal or purchase option contained in such
Section prior to the final maturity of the Equipment Notes), 24, 25.1,
25.4, 25.6, 25.10, and any definition of terms used in the Lease,
42
to the extent that any modification of such definition would result in a
modification of the Lease not permitted as aforesaid in this clause (1) of
subsection (b); provided that, subject to Section 5.11 hereof, in the event
an Indenture Event of Default shall have occurred and be continuing, the
Indenture Trustee shall have all rights of the Owner Trustee as "Lessor"
under the Lease to modify, amend or supplement the Lease or give any
consent, waiver, authorization or approval thereunder, for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions thereof or of modifying in any manner the rights of the
"Lessor" thereunder;
(2) modify, amend or supplement the Trust Agreement, or give any
consent, waiver, authorization or approval with respect thereto, except
that without the consent of a Majority in Interest, the parties to the
Trust Agreement shall not modify, amend or supplement, or give any consent,
waiver, authorization or approval for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions thereof
or of modifying in any manner the rights of the respective parties
thereunder, with respect to Sections [2.1, 2.2, 3.1, 4.4, 7.1, 7.2, 9.1,
10.1, 10.2, 10.7, 10.11] or any other Section of the Trust Agreement if
such action would materially adversely affect the interest of the Loan
Participants, and any definition of terms used in the Trust Agreement, to
the extent that any modification of such definition would result in a
modification of the Trust Agreement not permitted pursuant to this
subsection (b);
(3) modify, amend or supplement the Participation Agreement, or
give any consent, waiver, authorization or approval with respect thereto,
except that without the consent of a Majority in Interest, the parties to
the Participation Agreement shall not modify, amend or supplement, or give
any consent, waiver, authorization or approval for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the
respective parties thereunder, with respect to the following provisions of
the Participation Agreement: Sections 1, 2, 3, 4, 5, 6, 7, 10.2, 10.5,
10.7, 10.9 and 10.13(a), each provision of the Participation Agreement
which specifically refers to the Indenture Trustee or Loan Participants and
any definition of terms used in the Participation Agreement, to the extent
that any modification of such definition would result in a modification of
the Participation Agreement not permitted pursuant to this Section 9.5(b);
and
(4) modify, amend or supplement any of said agreements in order
to cure any ambiguity, to correct or supplement any provision thereof which
may be defective or inconsistent with any other provision thereof or any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided any
such action shall not adversely affect the interests of the holders of the
Equipment Notes.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to subsection
(b) of this Section 9.5, and anything in such subsections or elsewhere
43
in this Indenture to the contrary notwithstanding, shall, without the consent of
the holder of each Equipment Note affected thereby:
(1) modify, amend or supplement the Lease in such a way as to
extend the time of payment of Basic Rent or Stipulated Loss Value and any
other amounts payable under, or as provided in, the Lease upon the
occurrence of an Event of Loss or Termination Value and any other amounts
payable under, or as provided in, the Lease upon termination thereof or
reduce the amount of any installment of Basic Rent so that the same is less
than the payment of interest and principal (in accordance with Scheduled
Amortization) on the Equipment Notes, as the case may be, to be made from
such installment of Basic Rent or reduce the aggregate amount of Stipulated
Loss Value and any other amounts payable under, or as provided in, the
Lease upon the occurrence of an Event of Loss so that the same is less than
the accrued interest on and principal (in accordance with Scheduled
Amortization) of the Equipment Notes required to be paid at the time of
such payments, or reduce the amount of Termination Value, Early Purchase
Price and any other amounts payable under, or as provided in, the Lease
upon termination thereof so that the same is less than the accrued interest
on and principal (in accordance with Scheduled Amortization) of the
Equipment Notes required to be paid at the time of such payments;
(2) modify, amend or supplement the Lease in such a way as to, or
consent to any assignment of the Lease or give any consent, waiver,
authorization or approval which would, release the Lessee from its
obligation in respect of payment of Basic Rent or Stipulated Loss Value and
any other amounts payable under, or as provided in, the Lease upon the
occurrence of an Event of Loss, or Termination Value or Early Purchase
Price and any other amounts payable under, or as provided in, the Lease
upon termination thereof, except as provided in the Lease; or
(3) modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties under the
respective documents, in respect of (i) the second paragraph of Section 3.2
of the Lease, (ii) Section 2.6(c) of the Participation Agreement, (iii) the
second sentence of the definitions of "Early Purchase Price", "Stipulated
Loss Value", and "Termination Value" and (iv) Section 8.9 of the
Intercreditor Agreement.
ARTICLE X. MISCELLANEOUS
Section 10.1. Termination of Indenture. With respect to the Equipment,
------------------------
this Indenture and the trusts created hereby shall terminate and this Indenture
shall be of no further force or effect upon the earliest to occur of (i) the
termination of the Lease Term with respect to all Units by Lessee pursuant to
Section 10 or Section 22.1 thereof and upon payment in full to the Indenture
Trustee of the amounts required to be paid pursuant to Section 2.10(a) or
Section 2.10(c), as the case may be, in respect of all Units, (ii) the
termination of the Lease with respect to all Units pursuant to Section 11
thereof and upon payment in full to the Indenture Trustee of the amounts
required
44
to be paid pursuant to Section 2.10(b) in respect of all Units, and (iii) the
payment in full of the principal amount of and interest on all Equipment Notes
outstanding hereunder and all other sums payable to the Indenture Trustee and
the holders of the Equipment Notes hereunder and under such Equipment Notes and
under the Participation Agreement.
Section 10.2. No Legal Title to Indenture Estate in Holders. No holder of
---------------------------------------------
an Equipment Note shall have legal title to any part of the Indenture Estate.
No transfer, by operation of law or otherwise, of any Equipment Note or other
right, title and interest of any holder of an Equipment Note in and to the
Indenture Estate or hereunder shall operate to terminate this Indenture or the
trusts hereunder or entitle 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 10.3. Sale of Equipment by Indenture Trustee is Binding. Any sale
-------------------------------------------------
or other conveyance of the Equipment by the Indenture Trustee made pursuant to
the terms of this Indenture or the Lease shall bind the holders of the Equipment
Notes, the Owner Trustee and the Owner Participant and shall be effective to
transfer or convey all right, title and interest of the Indenture Trustee, the
Owner Trustee, the Owner Participant and such holders of the Equipment Notes in
and to the Equipment. No purchaser or other grantee shall be required to
inquire as to the authorization, necessity, expediency or regularity of such
sale or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Indenture Trustee.
Section 10.4. Remedies Cumulative. Each and every right, power and remedy
-------------------
herein specifically given to the Indenture Trustee or otherwise in this
Indenture shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
time or thereafter any other right, power or remedy. No delay or omission by
the Indenture Trustee in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or the
Lessee or to be an acquiescence therein.
Section 10.5. Discontinuance of Proceedings. In case the Indenture
-----------------------------
Trustee shall have proceeded to enforce any right, power or remedy under this
Indenture by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Owner
Trustee, the Owner Participant, the Indenture Trustee and the Lessee shall be
restored to their former positions and rights hereunder with respect to the
Indenture Estate, and all rights, remedies and powers of the Indenture Trustee
shall continue as if no such proceedings had been undertaken (but otherwise
without prejudice).
45
Section 10.6. Indenture and Equipment Notes for Benefit of Owner Trustee,
-----------------------------------------------------------
Indenture Trustee, Owner Participant and Holders Only. Nothing in this
-----------------------------------------------------
Indenture, whether express or implied, shall be construed to give to any Person
other than the Owner Trustee (individually and as trustee), the Indenture
Trustee, the Owner Participant (as set forth herein) and the holders of the
Equipment Notes any legal or equitable right, remedy or claim under or in
respect of this Indenture or any Equipment Note.
Section 10.7. Notices. Unless otherwise expressly specified or permitted
-------
by the terms hereof, all communications and notices provided for herein shall be
in writing or by facsimile capable of creating a written record, and any such
notice shall become effective (i) upon personal delivery thereof, including,
without limitation, by overnight mail or courier service, (ii) in the case of
notice by United States mail, certified or registered, postage prepaid, return
receipt requested, upon receipt thereof, or (iii) in the case of notice by such
facsimile, upon confirmation of receipt thereof, provided such transmission is
promptly further confirmed in writing by either of the methods set forth in
clause (i) or (ii), in each case addressed to the following Person at its
respective address set forth below or at such other address as such Person may
from time to time designate by written notice to the other Persons listed below:
If to the Owner Trustee: [Owner Trustee]
Attention: ________________
Fax No.: ________________
Confirmation No.: _________
with copies to Owner Participant.
If to Owner Participant: [Owner Participant]
Attention: _________________
Fax No.: __________________
Confirmation No.: __________
If to the Indenture Trustee: The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Services Division
Fax No.: [(000) 000-0000]
Confirmation No.: [(000) 000-0000]
46
If to Lessee: General American Railcar Corporation II
c/o General American Transportation Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer (1998-1)
Fax No.: (000) 000-0000
Confirmation No.: (000) 000-0000
If to a Loan Participant: At such address as is set forth on Schedule 2 of
the Participation Agreement or, if not so specified, at the address set forth in
the register maintained pursuant to Section 2.7 hereof, or at such address as
such Loan Participant shall have furnished by notice to the Owner Trustee and
the Indenture Trustee.
If to a Rating Agency: Standard & Poor's Ratings Group
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [Xxxxxx Xxxxxx]
Structured Finance Ratings
Fax No.: [(000) 000-0000]
Confirmation No.: [(000) 000-0000]
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [Xxxxxxxxx Xxxxxx]
Structured Finance
Fax No.: [(000) 000-0000]
Confirmation No.: [(000) 000-0000]
Notwithstanding the foregoing provisions, for purposes of Sections 4.1,
4.2, 4.4, 5.1 and 5.2, written notice shall be deemed given when it is in fact
received (by mail or otherwise) by any addressee at the respective addresses
specified above.
Section 10.8. 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. In the event of any
inconsistency or conflict between any provision of this Indenture and any
provision of the Trust Agreement, such provision in this Indenture shall govern
and control.
47
Section 10.9. Separate Counterparts. This Indenture may be executed in
---------------------
any number of counterparts (and each of the parties hereto shall not be required
to execute the same counterpart). Each counterpart of this Indenture including a
signature page executed by each of the parties hereto shall be an original
counterpart of this Indenture, but all of such counterparts together shall
constitute one instrument.
Section 10.10. Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon, and inure to the benefit of, the Owner
Trustee and its successors and permitted assigns, the Owner Participant and its
successors and permitted assigns, and the Indenture Trustee and its successors
and permitted assigns, and each holder of an Equipment Note, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument
or action by any holder of an Equipment Note shall bind the successors and
assigns of such holder.
Section 10.11. Headings. The headings of the various Articles and Sections
--------
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10.12. Governing Law. This Indenture shall in all respects be
-------------
governed by, and construed in accordance with, the laws of the State of New
York, including all matters of construction, validity and performance, without
regard to principles of conflict of laws.
Section 10.13. Normal Commercial Relations Anything contained in this
---------------------------
Indenture to the contrary notwithstanding, the Owner Participant, the Owner
Trustee or the Indenture Trustee or any affiliate of the Owner Participant, the
Owner Trustee or the Indenture Trustee may enter into commercial banking or
other financial transactions, and conduct banking or other commercial
relationships, with the Lessee, any holder of an Equipment Note or the Indenture
Trustee (in its individual capacity or otherwise) 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 for any purpose whatsoever.
Section 10.14. No Recourse Against Others. No director, officer, employee
--------------------------
or stockholder, as such, of Lessee, Owner Trustee, Owner Participant or
Indenture Trustee shall have any liability for any obligations of Lessee, Owner
Participant, Owner Trustee or Indenture Trustee or under the Equipment Notes or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each holder of the Equipment Notes by accepting
an Equipment Note waives and releases all such liability. The waiver and release
are part of the consideration of the Equipment Notes.
Section 10.15. Intercreditor Agreement. Each party hereto agrees that,
-----------------------
notwithstanding anything to the contrary contained herein or in any other
Operative Agreement, the exercise by such party of any and all rights and/or
remedies that such party may have hereunder is subject in all respects to the
terms of the Intercreditor Agreement.
48
* * *
49
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed by their respective officers or attorneys-in-fact, as the case may be,
thereunto duly authorized, as of the day and year first above written.
[Owner Trustee],
not in its individual capacity except as set forth in Section 6.3 hereof, but
solely as Owner Trustee
By:
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
By:
Name:
Title:
50
State of)
) SS:
County of)
On this ____ day of _______________, 1998, before me personally
appeared _________________________, to me personally known, who being by me duly
sworn, did say that he is the _________________________ of [Owner Trustee], that
said instrument was signed on such date on behalf of said corporation by
authority of its Board of Directors, and he acknowledged that the execution of
the foregoing instrument was the free act and deed of said corporation.
__________________________
Notary Public
[Notarial Seal]
My commission expires:
State of)
) SS:
County of)
On this ____ day of _______________, 1998, before me personally
appeared _________________________, to me personally known, who being by me duly
sworn, did say that he is __________________________ of The First National Bank
of Chicago, that said instrument was signed on such date on behalf of said
corporation by authority of its Board of Directors, and he acknowledged that the
execution of the foregoing instrument was the free act and deed of said
corporation.
__________________________
Notary Public
[Notarial Seal]
My commission expires:
51
EXHIBIT A
TRUST INDENTURE SUPPLEMENT NO._
(1998-1)
This Indenture Supplement No. ___ (1998-1), dated ____________ (this
"Indenture Supplement"), of [Owner Trustee], not in its individual capacity but
solely as trustee (the "Owner Trustee") under the Trust Agreement (1998-1),
dated as of August 1, 1998 (the "Trust Agreement"), between the Owner Trustee in
its individual capacity and [Owner Participant], as Owner Participant;
WITNESSETH:
WHEREAS, the Trust Indenture and Security Agreement (1998-1) dated as of
August 1, 1998 (the "Indenture"), between the Owner Trustee and The First
National Bank of Chicago, as Indenture Trustee (the "Indenture Trustee"),
-----------------
provides for the execution and delivery of Indenture Supplements thereto
substantially in the form hereof each of which shall particularly describe the
Units covered by a related Lease Supplement under the Lease, by having attached
thereto a copy of such related Lease Supplement, and shall specifically mortgage
such Units to the Indenture Trustee;
WHEREAS, the Indenture includes the Equipment described in the copy of
Lease Supplement No. __ attached hereto and made a part hereof; and
[WHEREAS, an executed counterpart of the Indenture is attached to this
Indenture Supplement;]
NOW, THEREFORE, in order to secure the prompt payment of the principal of,
and Premium, if any, and interest on all of the Equipment Notes from time to
time outstanding under the Indenture and the performance and observance by the
Owner Trustee of all the agreements, covenants and provisions in the Indenture
for the benefit of the holders of the Equipment Notes and in the Equipment
Notes, subject to the terms and conditions of the Indenture, and in
consideration of the premises and of the covenants contained in the Indenture
and of the acceptance of the Equipment Notes by the holders thereof, and of the
sum of $1.00 paid to the Owner Trustee by the Indenture Trustee at or before the
delivery hereof, the receipt whereof is hereby acknowledged, the Owner Trustee
(i) has sold, assigned, transferred, pledged and confirmed, and does hereby
sell, assign, transfer, pledge and confirm, a security interest in and mortgage
lien on all right, title and interest of the Owner Trustee in and to the
property comprising the Equipment described in the copy of Lease Supplement No.
__ attached hereto, and (ii) has sold, assigned, transferred and set over, a
security interest in and mortgage lien on all of the right, title and interest
of the Owner Trustee under, in and to such Lease Supplement (excluding, however,
any rights to Excepted Property thereunder), referred to above, to the
Indenture Trustee, its successors and assigns, in the trust created by the
Indenture for the benefit of the holders from time to time of the Equipment
Notes.
To have and to hold all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the benefit and
security of the holders from time to time of the Equipment Notes and for the
uses and purposes and subject to the terms and provisions set forth in the
Indenture.
This Supplement shall be construed as supplemental to the Indenture
and shall form a part of it, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement may be executed by the Owner Trustee in separate
counterparts, each of which when so executed and delivered is an original, but
all such counterparts shall together constitute but one and the same Supplement.
AND FURTHER, the Owner Trustee hereby acknowledges that the Equipment
referred to in the aforesaid Lease Supplement attached hereto and made a part
hereof has been delivered to the Owner Trustee and is included in the property
of the Owner Trustee covered by all the terms and conditions of the Trust
Agreement, subject to the pledge or mortgage thereof under the Indenture.
* * *
A-2
IN WITNESS WHEREOF, the Owner Trustee has caused this Indenture
Supplement to be duly executed by one of its duly authorized officers, as of the
day and year first above written.
[Owner Trustee],
not in its individual capacity, but solely as Owner Trustee
By:
Name:
Title
A-3
State of)
) SS:
County of)
On this ____ day of ____________, 1998, before me personally appeared
__________________________, to me personally known, who being by me duly sworn,
did say that he is ______________________ of [Owner Trustee], that said
instrument was signed on such date on behalf of said corporation by authority of
its Board of Directors, and he acknowledged that the execution of the foregoing
instrument was the free act and deed of said corporation.
___________________________ Notary Public
[Notarial Seal]
My commission expires:
A-4
EXHIBIT B
TERMS OF EQUIPMENT NOTE
Principal Amount Interest Rate Rated Maturity Date
---------------- ------------- -------------------
$_______________ ________% _________________, 20___
EXHIBIT C
LOAN PARTICIPANT
Percentage of
Loan Participant Principal Amount
---------------- -----------------
Equipment Note The First National Bank of 100%
Chicago, as Trustee under the
Pass Through Trust
Agreement
ANNEX A
RATED AMORTIZATION SCHEDULE
[to come]
C-2
ANNEX B
SCHEDULED AMORTIZATION SCHEDULE
[to come]
C-3
FORM OF
Appendix A
to
Participation Agreement
Lease Agreement
Trust Indenture
Trust Agreement
(1998-1)
DEFINITIONS
General Provisions
The following terms shall have the following meanings for all purposes of
the Operative Agreements referred to below, unless otherwise defined in an
Operative Agreement or the context thereof shall otherwise require, and such
meanings shall be equally applicable to both the singular and the plural forms
of the terms herein defined. In the case of any conflict between the provisions
of this Appendix A and the provisions of the main text of any Operative
Agreement, the provisions of the main text of such Operative Agreement shall
control the construction of such Operative Agreement.
Unless otherwise required by the context, (i) references to agreements
shall be deemed to mean and include such agreements as the same may be amended,
supplemented and otherwise modified from time to time, and (ii) references to
parties to agreements shall be deemed to include the permitted successors and
assigns of such parties.
Defined Terms
"AAR" shall mean the Association of American Railroads or any successor
---
thereto.
"Accounts" shall mean the Collection Account, the Operating Account, the
--------
Liquidity Reserve Account, the Special Reserves Account, the Non-Shared Payments
Account, the Stipulated Loss Value Deficiency Account, the Cash Trapping Account
and the Excess Cash Account specified in Section 3.1 of the Intercreditor
Agreement.
"Accumulated Equity Deficiency Amount" shall mean, on any Payment Date, an
------------------------------------
amount equal to any aggregate outstanding and then unpaid Equity Portion of
Basic Rent.
"Adjusted Payment Amount" shall mean, for each Adjusted Principal Period,
-----------------------
the product of (i) the sum of all principal payments made during such Adjusted
Principal Period (excluding
any Prepaid Amount), and (ii) the Adjustment Multiplier at the Payment Date
occurring for such Adjusted Principal Period.
"Adjusted Principal Period" shall mean, at any Payment Date (the "Relevant
-------------------------
Payment Date"), (i) in the event no Prepayment has been made, the period from
the Closing Date to, but not including, the Relevant Payment Date, or (ii) in
the event one or more Prepayments have been made on or prior to the Relevant
Payment Date, each of the following periods, without duplication: (a) the
period from the Closing Date to, but not including, the first Payment Date
thereafter on which a Prepayment has been made on the Relevant Payment Date, (b)
each period, if any, between two Payment Dates on which successive Prepayments
have been made, in each case including the Payment Date upon which such period
commences to, but not including, the Payment Date upon which such period ends,
and (c) the period from the Payment Date immediately preceding the Relevant
Payment Date on which a Prepayment was made to, but not including, the Relevant
Payment Date.
"Adjustment Multiplier" shall mean, for any Adjusted Principal Period at
---------------------
any Payment Date, a fraction, the numerator of which shall be the aggregate
Equipment Cost of all Units included in the Indenture Estate immediately after
such Payment Date (excluding the Equipment Cost of any Excluded Unit) and the
denominator of which shall be the aggregate Equipment Cost of all Units included
in the Indenture Estate at the commencement of such Adjusted Principal Period.
"Administrative Services Agreement" shall mean the Administrative Services
---------------------------------
Agreement (1998-1) dated as of August 1, 1998, between GATC and the Company.
"Affiliate" shall mean, with respect to any Person, any other Person which
---------
directly or indirectly controls, or is controlled by, or is under a common
control with, such Person. The term "control" means the possession, directly or
-------
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" shall have
----------- ----------
meanings correlative to the foregoing.
"After-Tax Basis" shall mean, with respect to any payment due to any
---------------
Person, that the amount of such payment is supplemented by a further payment or
payments so that the sum of all such payments, after reduction for all Taxes
payable by such Person by reason of the receipt or accrual of such payments,
shall be equal to the payment due to such Person.
"Alternative Minimum Tax" shall mean the alternative minimum tax imposed
------------------------
under Section 55 of the Code.
"Appraisal" shall have the meaning assigned thereto in Section 4.3(a) of
---------
the Participation Agreement.
2
"Average Life Date" shall mean, with respect to an Equipment Note, the date
-----------------
which follows (i) in the case of an Equipment Note being prepaid, the prepayment
date or, (ii) in the case of an Equipment Note not being prepaid, the date of
such determination, by a period equal to the Remaining Weighted Average Life of
such Equipment Note.
"Bankruptcy Code" shall mean Chapter 11 of Title 11 of the United States
---------------
Code, 11 U.S.C. (S)101 et. seq.
--- ----
"Base Component" shall have the meaning assigned thereto in Section 5.2 of
--------------
the Management Agreement.
"Basic Rent" shall mean, with respect to any Unit, all rent payable by the
----------
Lessee to the Lessor pursuant to Section 3.2 of the Lease for the Basic Term for
such Unit, and all rent payable pursuant to Section 22.4 of the Lease for any
Renewal Term for such Unit.
"Basic Term" shall have the meaning assigned thereto in Section 3.1 of the
----------
Lease.
"Basic Term Commencement Date" shall mean the Closing Date.
----------------------------
"Basic Term Expiration Date" shall mean _____________, 20__.
--------------------------
"Basic Term Purchase Price" shall mean, with respect to any Unit, the
-------------------------
amount equal to the product of the percentage set forth in Section 6 of the
Participation Agreement and the Equipment Cost for such Unit.
"Beneficial Interest" shall mean the interest of the Owner Participant
-------------------
under the Trust Agreement.
"Xxxx of Sale" shall mean the full warranty xxxx of sale, dated the Closing
------------
Date or the date that any Replacement Unit is subjected to the Lease, from the
Lessee to the Owner Trustee covering the Units delivered on the Closing Date or
such Replacement Unit, as the case may be.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
------------
which commercial banking institutions are authorized or required by law,
regulation or executive order to be closed in New York, New York, Chicago,
Illinois, the city and state in which the principal corporate trust office of
the Owner Trustee is located, or, until the Lien of the Indenture has been
discharged, the city and state in which the principal corporate trust office of
the Indenture Trustee is located.
"Car Service Contract" shall have the meaning assigned thereto in the first
--------------------
recital clause of the Management Agreement.
"Certificateholder" means the Person in whose name a Pass Through
-----------------
Certificate is registered in the register for Pass Through Certificates of a
particular series.
"Claims" shall mean any and all costs, expenses, liabilities, obligations,
------
losses, damages, penalties, actions or suits or claims of whatsoever kind or
nature (whether or not on the basis of negligence, strict or absolute liability
or liability in tort), including, without limitation, all
3
reasonable out-of-pocket costs, disbursements and expenses (including legal fees
and expenses) paid or incurred in connection therewith or related thereto.
"Closing" shall have the meaning assigned thereto in Section 2.3(b) of the
-------
Participation Agreement.
"Closing Date" shall mean the date on which the Closing occurs.
------------
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
----
to time.
"Collateral Agent" shall have the meaning assigned thereto in the
----------------
Intercreditor Agreement.
"Collection Account" shall have the meaning assigned thereto in the
------------------
Intercreditor Agreement.
"Company" or "Lessee" shall mean General American Railcar Corporation II, a
------- ------
Delaware corporation.
"Company Documents" shall have the meaning assigned thereto in the
-----------------
Intercreditor Agreement.
"Company Fleet" shall mean, collectively, the Equipment [and the
-------------
"Equipment" under the Other Leases].
"Contiguous United States" shall mean the continental United States (except
------------------------
Alaska).
"Credit Bankrupt" shall mean a Person which is subject to any bankruptcy or
---------------
insolvency proceeding, for reasons other than the occurrence of an extraordinary
adverse event or circumstance which has led such Person to seek protection from
its creditors, or is not paying its debts as they become due.
"Customer" shall have the meaning assigned thereto in the first recital
--------
clause of the Management Agreement.
"Debt Rate" shall mean an interest rate equal to ____% per annum (computed
---------
on the basis of a 360-day year of twelve 30-day months).
"Default Interest" shall mean interest on any amount of the Rated
----------------
Amortization Amount of, or Regular Interest on, Equipment Notes that was not
paid when such amount became due and payable.
"Default Rate" shall mean the lesser of [1.5]% over the Debt Rate and the
------------
maximum interest rate from time to time permitted by law.
4
"Determination Date" shall mean a Payment Date.
------------------
"Early Purchase Date" shall mean the early purchase date specified on
-------------------
Schedule 6 to the Participation Agreement.
"Early Purchase Price" shall mean, with respect to any Unit, the amount
--------------------
equal to the product of the percentage set forth in Schedule 6 to the
Participation Agreement and the Equipment Cost for such Unit. Notwithstanding
anything to the contrary contained in the Lease or in the Participation
Agreement, the Early Purchase Price for such Unit (both before and after any
adjustment pursuant to Section 2.6 of the Participation Agreement) will, under
any circumstances and in any event, be an amount which, together with any other
amounts required to be paid by the Lessee under the Lease in connection with its
exercise of the option under Section 22.1 of the Lease, will be at least
sufficient to pay in full as of the Early Purchase Date the Accumulated Equity
Deficiency Amount, the aggregate unpaid principal of the Equipment Notes issued
in respect of such Unit, together with all unpaid interest, Late Payment Premium
and Make-Whole Amount, if any, thereon accrued to the date on which such amount
is paid in accordance with the terms hereof and all other amounts then due to
the holders of the Equipment Notes in respect of such Unit.
"Eligible Group" shall mean a number and type of Units which, after the
--------------
purchase by the Lessee of such Units, will (i) leave no fewer than 800 Equipment
Units (as defined in the Intercreditor Agreement) subject to this Lease or Other
Leases, and (ii) result in an allocation of Equipment Units (as defined in the
Intercreditor Agreement) substantially similar to the allocation of Equipment
Units (as defined in the Intercreditor Agreement) immediately prior to the
purchase of such Units by the Lessee.
"Equipment" shall mean, collectively, those items of railroad rolling stock
---------
described in the Lease Supplements and the Indenture Supplements, together with
any and all accessions, additions, improvements to and replacements from time to
time incorporated or installed in any item thereof which are the property of the
Owner Trustee pursuant to the terms of a Xxxx of Sale or the Lease.
"Equipment Cost" shall mean, for each Unit, the purchase price therefor
--------------
paid by the Owner Trustee to the Lessee pursuant to Section 2 of the
Participation Agreement and as set forth in Schedule 1 to the Participation
Agreement with respect to such Unit. Notwithstanding anything to the contrary
contained in the Operative Agreements, the Equipment Cost for any Replacement
Unit shall be deemed to be the Equipment Cost or deemed Equipment Cost of the
Unit replaced by such Replacement Unit.
5
"Equipment Notes" shall mean the Equipment Notes, each substantially in the
---------------
form set forth in Section 2.1 of the Indenture, issued by the Owner Trustee
pursuant to Section 2.2 of the Indenture, and authenticated by the Indenture
Trustee, in principal amounts, maturities and bearing interest at the rates and
payable as provided in Section 2.2 of the Indenture and secured as provided in
the Granting Clause of the Indenture, and shall include any Equipment Note
issued in exchange therefor or replacement thereof pursuant to Section 2.7 or
2.8 of the Indenture.
"Equity Portion of Basic Rent" shall mean, at any Payment Date, the excess
----------------------------
of the amount of Basic Rent payable under the Lease on such Payment Date over
the Scheduled Amortization Amount payable under the Indenture on such Payment
Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, or any successor law.
"Event of Loss" shall have the meaning assigned thereto in Section 11.1 of
-------------
the Lease.
"Excepted Property" shall mean (i) all indemnity payments (including,
-----------------
without limitation, payments pursuant to Section 7 of the Participation
Agreement, payments under the Tax Indemnity Agreement and payments pursuant to
Section [5.04 of the Intercreditor Agreement]) to which the Owner Participant,
the Owner Trustee, in its individual capacity, or any of their respective
successors, permitted assigns, directors, officers, employees, servants and
agents is entitled pursuant to the Operative Agreements, (ii) any right, title
or interest of the Owner Trustee, in its individual capacity, or the Owner
Participant to any payment which by the terms of Section 17 of the Lease or any
corresponding payment under Section 3.3 of the Lease shall be payable to or on
behalf of the Owner Trustee, in its individual capacity, or to the Owner
Participant, as the case may be, (iii) any insurance proceeds payable under
insurance maintained by the Owner Trustee, in its individual capacity, or the
Owner Participant pursuant to Section 12.5 of the Lease, (iv) any insurance
proceeds payable to or on behalf of the Owner Trustee, in its individual
capacity, or to the Owner Participant, under any public liability insurance
maintained by the Lessee pursuant to Section 12 of the Lease (which shall
include the amount of any self-insured retention paid by the Lessee) or by any
other Person, (v) Transaction Costs or other amounts or expenses paid or payable
to, or for the benefit of the Owner Trustee, in its individual capacity, or the
Owner Participant pursuant to the Participation Agreement or the Trust
Agreement, (vi) all right, title and interest of the Owner Participant or the
Owner Trustee, in its individual capacity, in or relating to any portion of the
Units and any other property (tangible or intangible), rights, titles or
interests to the extent any of the foregoing has been released from the Lien of
the Indenture pursuant to the terms thereof, (vii) upon termination of the
Indenture pursuant to the terms thereof with respect to any Unit, all remaining
amounts which shall have been paid or are payable by the Lessee and calculated
on the basis of Stipulated Loss Value, (viii) any rights of the Owner
Participant or the Owner Trustee, in its individual capacity, to demand,
collect, xxx for, or otherwise receive and enforce payment of the foregoing
amounts, (ix) any amount payable to the Owner Participant by any Transferee as
the purchase price of the Owner Participant's interest in the Trust Estate in
compliance with the terms of the
6
Participation Agreement and the Trust Agreement and (x) the respective rights of
the Owner Trustee, in its individual capacity, or the Owner Participant to the
proceeds of and interest on the foregoing.
"Excepted Rights" shall have the meaning assigned thereto in Section 5.11
---------------
of the Indenture.
"Excluded Unit" shall mean, at any Payment Date, any Unit (i) for which the
-------------
applicable Lease is to be terminated pursuant to Section 10 of the Lease on such
Payment Date, (ii) which suffers an Event of Loss or a deemed Event of Loss
under Section 9.1 of the Lease and is not replaced pursuant to Section 11.2(i)
prior to or on such Payment Date, or (iii) which is to be purchased by the
Lessee pursuant to Section 6.9 of the Participation Agreement or Section 22.1 of
the Lease, as the case may be, on such Payment Date; provided that the principal
amount of the Equipment Note or Notes which corresponds to the Equipment Cost of
such Unit is to be prepaid in accordance with Section 2.10 of the Indenture on
such Payment Date.
"Existing Car Service Contracts" shall have the meaning assigned thereto in
------------------------------
the fourth recital clause of the Participation Agreement.
"Extended Unit" shall have the meaning assigned thereto in Section 22.7 of
-------------
the Lease.
"Fair Market Rental Value" or "Fair Market Sales Value" with respect to any
------------------------ -----------------------
Unit, shall mean the cash rent or cash price obtainable for such Unit in an
arm's length lease or sale between an informed and willing lessee or purchaser
under no compulsion to lease or purchase, as the case may be, and an informed
and willing lessor or seller, under no compulsion to lease or sell, as the case
may be, as the same shall be specified by agreement between the Lessor and the
Lessee. If the parties are unable to agree upon a Fair Market Rental Value
and/or a Fair Market Sales Value within 30 days after delivery of notice by the
Lessee pursuant to Section 22.2 of the Lease, or otherwise where such
determination is required, within a reasonable period of time, such value shall
be determined by appraisal. The Lessee will, within 15 days after such 30-day
period, provide the Lessor with the name of an appraiser that would be
satisfactory to the Lessee, and the Lessor and the Lessee shall consult with
each other with the intent of selecting a mutually acceptable appraiser. If a
mutually acceptable appraiser is selected, the Fair Market Rental Value or the
Fair Market Sales Value, as the case may be, shall be determined by such
appraiser, and the Lessee shall bear the cost thereof. If the Lessee and the
Lessor are unable to agree upon a single appraiser within such 15-day period,
two independent qualified appraisers, one chosen by the Lessee and one chosen by
the Lessor shall jointly determine such value, and the Lessor shall bear the
cost of the appraiser selected by the Lessor, and the Lessee shall bear the cost
of the appraiser selected by the Lessee. If such appraisers cannot agree on the
amount of such value within 15 days of appointment, one independent qualified
appraiser shall be chosen by the American Arbitration Association. All three
appraisers shall make a determination within a period of 15 days following
appointment, and shall promptly communicate such determination in writing to the
Lessor and the Lessee. If there shall be a panel of three appraisers, the three
appraisals shall be averaged, and such average shall be the Fair Market Rental
Value or Fair
7
Market Sales Value, as the case may be. The determination made shall be
conclusively binding on both the Lessor and the Lessee. If there shall be a
panel of three appraisers, the Lessee and the Lessor shall equally share the
cost of the third appraiser. If such appraisal is pursuant to Section 6.1(e) of
the Lease or is in connection with the exercise of remedies set forth in Section
15 of the Lease, the Lessee shall pay the costs of such appraisal.
Notwithstanding any of the foregoing, for the purposes of Section 15 of the
Lease, the Fair Market Rental Value or the Fair Market Sales Value, as the case
may be, shall be zero with respect to any Unit if the Lessor is unable to
recover possession of such Unit in accordance with the terms of paragraph (b) of
Section 15.1 of the Lease.
"FRA" shall mean the Federal Railroad Administration or any successor
---
thereto.
"Functional Group" shall mean each and all of the various groups of Units
----------------
so designated in Schedule 1 to the Participation Agreement.
"GATC" shall mean General American Transportation Corporation, a New York
----
corporation.
"GATC Assignment" shall mean the assignment by GATC to the Lessee of the
---------------
Existing Car Service Contracts on the Closing Date.
"GATC Xxxx of Sale" shall mean the Xxxx of Sale, dated the Closing Date and
-----------------
executed and delivered by GATC pursuant to the Transfer and Contribution
Agreement, conveying the Equipment to the Lessee.
"Hazardous Substances" shall mean any hazardous or toxic substances,
--------------------
materials or wastes, including, but not limited to, those substances, materials,
and wastes listed in the United States Department of Transportation Hazardous
Materials Table (49 CFR (S) 172.101) or by the Environmental Protection Agency
as hazardous substances (40 CFR (S) 302.4), or such substances, materials and
wastes which are or become regulated under any applicable local, state or
federal law or the equivalent under applicable foreign laws including, without
limitation, any materials, waste or substance which is (a) petroleum, (b)
asbestos, (c) polychlorinated biphenyls, (d) defined as a "hazardous material,"
"hazardous substance" or "hazardous waste" under applicable local, state or
federal law or the equivalent under applicable foreign laws, (e) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act of 1977,
(f) defined as "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act of 1976, or (g) defined as "hazardous substances"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980.
"Incentive Component" shall have the meaning assigned thereto in Section
-------------------
5.3 of the Management Agreement.
"Indemnified Person" shall have the meaning assigned thereto in Section
------------------
7.2(b) of the Participation Agreement.
8
"Indenture" or "Trust Indenture" shall mean the Trust Indenture and
--------- ---------------
Security Agreement (1998-1), dated as of August 1, 1998 between the Owner
Trustee, in the capacities described therein, and the Indenture Trustee. The
term "Indenture" shall include, except where the context otherwise requires,
---------
each Indenture Supplement entered into pursuant to the terms of the Indenture.
"Indenture Default" shall mean an Indenture Event of Default or an event
-----------------
which, with notice or the passage of time or both, would become an Indenture
Event of Default.
"Indenture Estate" shall have the meaning assigned thereto in the Granting
----------------
Clause of the Indenture.
"Indenture Event of Default" shall have the meaning assigned thereto in
--------------------------
Section 4.1 of the Indenture.
"Indenture Investment" shall mean any obligation issued or guaranteed by
--------------------
the United States of America or any of its agencies for the payment of which the
full faith and credit of the United States of America is pledged and with a
final maturity on or before the date which is the earlier of (a) ninety days
from the date of purchase thereof and (b) the first Payment Date occurring after
the date of purchase thereof.
"Indenture Supplement" shall mean an Indenture Supplement (1998-1) dated
--------------------
the Closing Date or the date that any Replacement Unit is subjected to the Lien
of the Indenture, substantially in the form of Exhibit A to the Indenture,
between the Owner Trustee, in the capacities described therein, and the
Indenture Trustee, covering the Units delivered on the Closing Date or such
Replacement Unit, as the case may be. A "related" Indenture Supplement, when
-------
used with respect to any Unit or Units, shall mean the Indenture Supplement
under which such Unit or Units is or are included in the Indenture Estate.
"Indenture Trustee" shall mean The First National Bank of Chicago, a
-----------------
national banking association, as trustee under the Indenture and any successor
institution.
"Indenture Trustee Agreements" shall mean the Operative Agreements to which
----------------------------
the Indenture Trustee is or will be a party.
"Inflation Factor" means, with respect to any calendar year, the quotient
----------------
(expressed as a decimal) obtained by dividing (i) the PPI published in respect
of the most recently ended calendar year (the "New Year"), by (ii) the PPI
published in respect of the calendar year immediately preceding the New Year.
"PPI", for purposes hereof, means, with respect to any calendar year or any
---
period during any calendar year, the "Producer Price Index" applicable to the
capital equipment sector as published by the Bureau of Labor Statistics for the
United States Department of Labor. If the PPI shall be converted to a different
standard reference base or otherwise revised after the date hereof, PPI shall
thereafter be calculated with use of such new or
9
revised statistical measure published by the Bureau of Labor Statistics or, if
not so published, as may be published by any other reputable publisher of such
price index selected by the Manager.
"Initial Manager" shall mean GATC.
---------------
"Insurance Agreement" shall mean the Insurance Agreement dated as of August
-------------------
1, 1998 between the Lessee and GATC.
"Insurance Letter" shall mean that certain letter dated August __, 1998
----------------
(1998-1) from the Lessee and the Manager to the Owner Trustee, which contains
the acknowledgment and consent of the Owner Participant, the Pass Through
Trustee and the Indenture Trustee.
"Insurance Manager" shall have the meaning assigned thereto in the
-----------------
Insurance Agreement.
"Interchange Rules" shall mean the interchange rules or supplements thereto
-----------------
of the AAR, as the same may be in effect from time to time.
"Intercreditor Agreement" shall mean the Collateral Agency and
-----------------------
Intercreditor Agreement dated as of August 1, 1998 among the Lessee, the
Collateral Agent, the Owner Trustee, the Indenture Trustee, GATC, as Manager,
GATC, as Insurance Manager and certain other Persons.
"Investment Banker" shall mean an independent investment banking
-----------------
institution of national standing appointed by the Lessee or, if the Indenture
Trustee does not receive notice of such appointment at least ten days prior to a
scheduled prepayment date or if a Lease Event of Default under the Lease shall
have occurred and be continuing, appointed by the Indenture Trustee.
"Late Payment Interest" shall mean (i) in the case of the Accumulated
---------------------
Equity Deficiency Amount, interest at the Late Rate, (ii) in the case of that
portion of any overdue payment of Stipulated Loss Value or Termination Value
that is in excess of the principal amount of the Equipment Notes then
outstanding and which are allocated to the Units with respect to which such
payment is made, interest at the Late Rate, (iii) in the case of a portion of
overdue Basic Rent equal to any Payment Deficiency, interest at a rate equal to
the sum of the Debt Rate and the rate specified in the definition of "Late
Payment Premium," (iv) in the case of any interest referred to in clause (iii)
of this definition or any Late Payment Premium that is overdue, interest at the
rate specified in the definition of "Late Payment Premium," and (v) in respect
of any other overdue amount, including, without limitation, in the case of the
Equipment Notes and Basic Rent in respect thereof, interest at the Default Rate.
"Late Payment Premium" shall mean, with respect to any Payment Deficiency
--------------------
to which a Late Payment Premium is payable on a Payment Date, an amount of
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the Payment Deficiency, for the period
10
from and including the Payment Date immediately preceding such Payment Date to
but excluding such Payment Date, at a rate equal to 1.5% per annum.
"Late Rate" shall mean an interest rate per annum equal to the Debt Rate
---------
plus 1.5% per annum.
"Lease" or "Lease Agreement" or "Equipment Lease" shall mean the Equipment
----- --------------- ---------------
Lease Agreement (1998-1), relating to the Equipment, dated as of August 1, 1998,
between the Owner Trustee, in the capacities described therein, as Lessor, and
the Lessee. The term "Lease" shall, except where the context otherwise
-----
requires, include each Lease Supplement entered into pursuant to the terms of
the Lease.
"Lease Default" shall mean a Lease Event of Default or an event which, with
-------------
notice or passage of time or both, would become a Lease Event of Default.
"Lease Event of Default" shall have the meaning assigned thereto in Section
----------------------
14 of the Lease.
"Lease Supplement" shall mean a Lease Supplement (1998-1), dated the
----------------
Closing Date or the date that any Replacement Unit is subjected to the Lease,
substantially in the form of Exhibit A to the Lease, between the Lessor and the
Lessee, covering the Units delivered on the Closing Date or such Replacement
Unit, as the case may be. A "related" Lease Supplement, when used with respect
-------
to any Unit or Units, shall mean the Lease Supplement under which such Unit or
Units is or are leased.
"Lease Term" shall mean, with respect to any Unit, the Basic Term
----------
applicable to such Unit and any Renewal Term applicable to such Unit then in
effect.
"Lessee Agreements" shall mean the Operative Agreements to which the Lessee
-----------------
is or will be a party.
"Lessor" shall have the meaning assigned thereto in the recitals to the
------
Lease.
"Lessor's Lien" means any Lien affecting, on or in respect of, the
-------------
Equipment, the Lease or any other part of the Trust Estate arising as a result
of (i) claims against the Lessor (in its individual capacity or as Owner
Trustee) or the Owner Participant, in each case unrelated to the transactions
contemplated by the Operative Agreements, or (ii) acts or omissions of the
Lessor (in its individual capacity or as Owner Trustee) or the Owner
Participant, in each case unrelated to the transactions contemplated by the
Operative Agreements or in breach of any covenant or agreement of such Person
set forth in any of the Operative Agreements, or (iii) taxes imposed against the
Lessor (in its individual capacity or as Owner Trustee) or the Owner Participant
or the Trust Estate which are not required to be indemnified against by the
Lessee pursuant to the Participation Agreement or under the Tax Indemnity
Agreement.
11
"Lien" shall mean any mortgage, pledge, security interest, lien,
----
encumbrance, lease, disposition of title or other charge of any kind on
property.
"Limited Use Property" shall have the meaning set forth in Rev. Proc. 76-
--------------------
30, 1976-2 C.B. 647.
"Loan Participant" shall mean and include each registered holder from time
----------------
to time of an Equipment Note issued under the Indenture, including, so long as
it holds any Equipment Notes issued thereunder, the Pass Through Trustee under
the Pass Through Trust Agreement.
"Loan Participant's Commitment" shall have the meaning assigned thereto in
-----------------------------
Section 2.2(b) of the Participation Agreement.
"Lockbox" shall have the meaning assigned thereto in Section 6.2(a) of the
-------
Management Agreement.
"Lockbox Agreement" shall mean the agreement by and between GATC, as
-----------------
Trustee for itself, individually, General American Railcar Corporation II, and
the Lockbox Bank.
"Lockbox Bank" shall have the meaning assigned thereto in Section 6.2(a) of
------------
the Management Agreement.
"Majority In Interest" shall mean, as of a particular date of determination
--------------------
and with respect to any action or decision of the holders of the Equipment
Notes, the holders of more than 50% of the aggregate unpaid principal amount of
the Equipment Notes, if any, then outstanding which are affected by such
decision or action, excluding any Equipment Notes held by the Owner Participant
or the Lessee or an Affiliate of the Owner Participant or the Lessee unless all
Equipment Notes are so held.
"Make-Whole Amount" shall mean, with respect to the principal amount of any
-----------------
Equipment Note to be prepaid on any prepayment date, the amount which the
Investment Banker determines as of the third Business Day prior to such
prepayment date to equal the product obtained by multiplying (a) the excess, if
any, of (i) the sum of the present values of all the remaining scheduled
payments of principal and interest, based upon Scheduled Amortization, from the
prepayment date to the Scheduled Maturity Date of such Equipment Note,
discounted monthly on the day of each month at a rate equal to the Treasury Rate
plus [.15]%, based upon a 360-day year of twelve 30-day months, over (ii) the
aggregate unpaid principal amount of such Equipment Note , based upon Scheduled
Amortization, plus any accrued but unpaid interest thereon by (b) a fraction,
the numerator of which shall be the aggregate unpaid principal amount of such
Equipment Note to be prepaid on such prepayment date and the denominator of
which shall be the aggregate unpaid principal amount of such Equipment Note;
provided that the aggregate unpaid principal amount of such Equipment Note for
--------
the purpose of clause (a)(ii) and (b) of this definition shall be determined
after deducting the principal installment, if any, due on such prepayment date.
12
"Management Agreement" shall mean the Operation, Maintenance, Servicing and
--------------------
Remarketing Agreement dated as of August 1, 1998 between the Company and the
Manager.
"Management Fee" shall have the meaning assigned thereto in Section 5.1 of
--------------
the Management Agreement.
"Manager" shall mean General American Transportation Corporation, a New
-------
York corporation, and any Successor Manager under the Management Agreement.
"Manager Agreements" shall mean the Operative Agreements to which the
------------------
Manager is or is to be a party.
"Manager's Cost" shall have the meaning assigned thereto in Section 5.4(a)
--------------
of the Management Agreement.
"Manager's Fleet" shall have the meaning assigned thereto in Section 2.2(j)
---------------
of the Management Agreement.
"Marks Company" shall have the meaning assigned thereto in Section 6.4 of
-------------
the Management Agreement.
"Minimum Units" shall mean 100 Units (or, if less than 100 Units are then
-------------
subject to the Lease or being stored pursuant to the terms of the Lease, all
Units).
"Modification" shall have the meaning assigned thereto in Section 9.2 of
------------
the Lease.
"Net Economic Return" shall mean the anticipated net after-tax yield and
-------------------
total after-tax cash flow expected by the original Owner Participant with
respect to the Equipment (both through the Early Purchase Date and the Basic
Term Expiration Date), utilizing the multiple investment sinking fund method of
analysis and the same assumptions as used by such Owner Participant in making
the computations of Basic Rent, Stipulated Loss Value and Termination Value,
terms of Equipment Notes and Early Purchase Price initially set forth in
Schedules 3, 4, 5 and 6 to the Participation Agreement.
"Non-Shared Payments Account" shall be the Account specified in Section 3.1
---------------------------
of the Intercreditor Agreement.
"Non-Severable Modification" shall mean any Modification that is not
--------------------------
readily removable without impairing, other than in a de minimis respect, the
----------
value, utility or remaining useful life of the Equipment or any Unit immediately
prior to removal of such modification.
13
"Notice of Delivery" shall have the meaning assigned thereto in Section
------------------
2.3(a) of the Participation Agreement.
"Officer's Certificate" shall mean a certificate signed (i) in the case of
---------------------
a corporation, by the President, any Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of such corporation, (ii) in
the case of a partnership, by the Chairman of the Board, the President or any
Vice President, the Treasurer or an Assistant Treasurer of a corporate general
partner, (iii) in the case of a commercial bank or trust company, by the
Chairman or Vice Chairman of the Executive Committee or the Treasurer, any Trust
Officer, any Vice President, any Executive or Senior or Second or Assistant Vice
President, or any other officer or assistant officer customarily performing the
functions similar to those performed by the persons who at the time shall be
such officers, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject, and (iv) in the case
of a limited liability company, any manager thereof and any President, Managing
Director or Vice President thereof.
"Operative Agreements" shall mean the Transfer and Contribution Agreement,
--------------------
the GATC Xxxx of Sale, the Participation Agreement, the Xxxx of Sale, the Trust
Agreement, the Pass Through Trust Agreement, the Pass Through Trust Supplements,
the Pass Through Certificates, the Equipment Notes, the Lease, the Lease
Supplements, the Indenture, the Indenture Supplements, the Tax Indemnity
Agreement, the Intercreditor Agreement, the Purchase Agreement, the Management
Agreement, the Insurance Agreement, the Insurance Letter and the Lockbox
Agreement.
["Other Leases" means (i) the Equipment Lease Agreement (1998-2) dated as
------------
of August 1, 1998 between the Lessee and [Owner Trustee], not in its individual
capacity but solely as Owner Trustee under a Trust Agreement dated as of
[_________], 1998 with [______________________], and (ii) the Equipment Lease
Agreement (1998-3) dated as of August 1, 1998 between the Lessee and [Owner
Trustee], not in its individual capacity but solely as Owner Trustee under a
Trust Agreement dated as of [_____________], 1998 with [__________________].
"Outside Renewal Date" shall have the meaning assigned thereto in Section
--------------------
22.5 of the Lease.
"Owner Participant" shall mean [Owner Participant], a [__________________],
-----------------
and its successors and permitted assigns.
"Owner Participant Agreements" shall mean the Operative Agreements to which
----------------------------
the Owner Participant is or will be a party.
["Owner Participant Parent Guarantee" shall mean that certain Guarantee
----------------------------------
(1998-1) dated as of August 1, 1998 executed by [Owner Participant Parent] in
favor of the Lessee, GATC, the Owner Trustee, the Indenture Trustee and the Pass
Through Trustee.]
14
"Owner Participant's Commitment" shall have the meaning assigned thereto in
------------------------------
Section 2.2(a) of the Participation Agreement.
"Owner Trustee" shall mean [Owner Trustee,] not in its individual capacity
-------------
but solely as Owner Trustee under the Trust Agreement and its successors
thereunder.
"Owner Trustee Agreements" shall mean the Operative Agreements to which the
------------------------
Owner Trustee, either in its individual or fiduciary capacity, is or will be a
party.
["Owner Trustee Parent Guarantee" shall mean that certain Guarantee (1998-
------------------------------
1) dated as of August 1, 1998 executed by Owner Trustee Parent, in favor of the
Lessee, GATC, the Owner Participant, the Indenture Trustee and the Pass Through
Trustee.]
"Parent" means GATX Corporation, a New York corporation.
------
"Participants" shall mean, collectively, the Loan Participant and the Owner
------------
Participant.
"Participation Agreement" shall mean the Participation Agreement (1998-1)
-----------------------
dated as of August 1, 1998, among the Lessee, the Manager, the Pass Through
Trustee, the Owner Participant, the Owner Trustee and the Indenture Trustee.
"Pass Through Certificates" or "Certificates" shall mean the Pass Through
------------------------- ------------
Certificates issued pursuant to each of the Pass Through Trust Supplements and
the Pass Through Trust Agreement.
"Pass Through Trust Agreement" shall mean the Pass Through Trust Agreement,
----------------------------
dated as of August 1, 1998, between the Lessee and the Pass Through Trustee.
"Pass Through Trust Estate" shall mean the Trust (as defined in the Pass
-------------------------
Through Trust Agreement) created by the Pass Through Trust Supplement.
"Pass Through Trust Supplement" shall mean Trust Supplement No. 1 dated
-----------------------------
______________, 1998 between the Lessee and the Pass Through Trustee, which
supplements the Pass Through Trust Agreement (i) by creating a separate trust
for the holders of certain Pass Through Certificates, (ii) by authorizing the
issuance of such Pass Through Certificates and (iii) by establishing the terms
of such Pass Through Certificates.
"Pass Through Trustee" shall mean The First National Bank of Chicago, in
--------------------
its capacity as trustee under the Pass Through Trust Agreement, as supplemented
by the Pass Through Trust Supplements, and each other Person which may from time
to time act as successor trustee under the Pass Through Trust Agreement, as
supplemented by the Pass Through Trust Supplement.
"Pass Through Trustee Agreements" shall mean the Operative Agreements to
-------------------------------
which the Pass Through Trustee is or will be a party.
15
"Payment Account" shall have the meaning assigned thereto in Section 6.4(c)
---------------
of the Indenture.
"Payment Date" shall mean the __ day of each month through and including
------------
the Rated Maturity Date, commencing ___________, 1998, provided that if any such
date shall not be a Business Day, then "Payment Date" shall mean the next
------------
succeeding Business Day; provided, however, that interest and Late Payment
-------- -------
Premium payable on such Payment Date, and all other calculations as of such
Payment Date, shall be computed as of the date which would have been a Payment
Date if such date were a Business Day.
"Payment Deficiency" shall have the meaning assigned thereto in Section 2.2
------------------
of the Indenture.
"Permitted Liens" shall mean: (i) the interests of the Lessee and the
---------------
Owner Trustee under the Lease and the Lease Supplements; (ii) the interest of
the Lessee and any sublessee as provided in any Permitted Sublease; (iii) any
Liens for taxes, assessments, levies, fees and other governmental and similar
charges not yet due and payable or the amount or validity of which is being
contested in good faith by appropriate proceedings so long as there exists no
material risk of sale, forfeiture, loss, or loss of or interference with use or
possession of any Unit or interference with the payment of Rent; (iv) any Liens
of mechanics, suppliers, materialmen, laborers, employees, repairmen and other
like Liens arising in the ordinary course of Lessee's (or if a sublease is then
in effect, any sublessee's) business securing obligations which are not yet due
and payable or the amount or validity of which is being contested in good faith
by appropriate proceedings so long as there exists no material risk of sale,
forfeiture, loss, or loss of or interference with use or possession of any Unit
or interference with the payment of Rent; (v) the Lien granted to the Indenture
Trustee under and pursuant to the Indenture, and the respective rights of the
Loan Participant, the Indenture Trustee, the Owner Participant and the Owner
Trustee under the Operative Agreements; (vi) Liens arising out of any judgment
or award against the Lessee (or any sublessee permitted pursuant to Section 8.3
of the Lease) with respect to which an appeal or proceeding for review is being
presented in good faith and for the payment of which adequate reserves have been
provided as required by generally accepted accounting principles or other
appropriate provisions have been made and with respect to which there shall have
been secured a stay of execution pending such appeal or proceeding for review
and there exists no material risk of sale, forfeiture, loss, or loss of or
interference with the use or possession of any Unit or any interest therein or
interference with the payment of Rent, and (vii) salvage rights of insurers
under insurance policies maintained pursuant to Section 12 of the Lease.
"Permitted Subleases" shall have the meaning assigned thereto in Section
-------------------
8.3 of the Lease.
"Person" shall mean an individual, partnership, limited liability company,
------
corporation, trust, association or unincorporated organization, and a government
or agency or political subdivision thereof.
16
"Premium" shall mean any Make-Whole Amount and any Late Payment Premium
-------
payable pursuant to the Indenture.
"Prepaid Amount" shall mean, at any Payment Date, the aggregate principal
--------------
amount that was prepaid, if any, pursuant to Section 2.10 of the Indenture prior
to and including such Payment Date.
"Prepayment" shall mean a prepayment of outstanding principal under the
----------
Equipment Notes in accordance with Section 2.10 of the Indenture at any Payment
Date.
"Prepayment Multiplier" shall mean, at any Payment Date, a fraction, the
---------------------
numerator of which shall be the aggregate Equipment Cost of all Units then
included in the Indenture Estate as of such Payment Date (excluding the
Equipment Cost of any Excluded Unit) and the denominator of which shall be the
aggregate Equipment Cost of all Units originally included in the Indenture
Estate as of the Closing Date.
"Pricing Date" shall mean the date on which the Purchase Agreement is
------------
executed and delivered by the Lessee and the Underwriters.
"Projected Coverage Ratio" as of any Calculation Date (as defined in the
------------------------
Intercreditor Agreement), shall mean the ratio of (i) the sum of projected
Available Amounts (as defined in the Intercreditor Agreement) for the six-month
period immediately succeeding such Calculation Date to (ii) the sum of Basic
Rent due or to become due and payable on the six consecutive Rent Payment Dates
which occur following such Calculation Date, as such amounts are certified to by
an officer's certificate signed by an authorized representative of each of the
Company and the Manager.
"Prospectus" shall mean the Prospectus dated August __, 1998 relating to
----------
the offering of the Pass Through Certificates.
"Rated Amortization" shall mean the amount of principal of the Equipment
------------------
Notes specified for each Payment Date set forth in Annex A to the Indenture.
"Rated Amortization Amount" shall mean, at any Payment Date, the excess, if
-------------------------
any, of (i) the product of (A) the sum of all amounts specified in Annex A to
the Indenture as Rated Amortization opposite the respective dates occurring on
or before such Payment Date and (B) the Prepayment Multiplier, over (ii) the sum
of the Adjusted Payment Amount for each Adjusted Principal Period prior to such
Payment Date.
"Rated Maturity Date" shall mean ____________, 20__.
-------------------
17
"Rated Obligations Due" shall mean, at any Payment Date, the sum of (a) the
---------------------
Rated Amortization Amount at such Payment Date plus (b) accrued and unpaid
----
Regular Interest that is due and payable on such Payment Date (computed on the
basis of [a 360-day year of twelve 30-day months]).
"Rating Agencies" shall mean, at any time, Standard & Poor's Ratings Group,
---------------
a division of McGraw Hill, Inc. and Xxxxx'x Investors Service, Inc., or any
successor to any such corporation's business of rating securities which is then
providing a rating for the Pass Through Certificates.
"Refunding Date" shall have the meaning assigned thereto in Section 10.2(a)
--------------
of the Participation Agreement.
"Regular Interest" shall mean interest on the unpaid portions of the
----------------
principal amounts of the outstanding Equipment Notes (computed on the basis of
[a 360-day year of twelve 30-day months]).
"Reimbursable Services" shall have the meaning assigned thereto in Section
---------------------
5.4 of the Management Agreement.
"Related Indemnitee Group" shall have the meaning assigned thereto in
------------------------
Section 7.2(b) of the Participation Agreement.
["Related Transactions" shall mean the additional leveraged lease
--------------------
transactions evidenced by the Other Leases and with respect to which the Pass
Through Trustee has agreed to acquire the related equipment notes.]
"Remaining Weighted Average Life" shall mean, with respect to any date of
-------------------------------
prepayment or any date of determination of any Equipment Note, the number of
days equal to the quotient obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining principal payment
on such Equipment Note (assuming that after such date, principal payments are
made only in the Scheduled Amortization Amounts) by (ii) the number of days
from and including the prepayment date or date of determination to but excluding
the scheduled payment date of such principal payment by (b) the unpaid principal
amount of such Equipment Note.
"Renewal Term" shall mean, with respect to any Unit, any term in respect of
------------
which the Lessee shall have exercised its option to renew the Lease for such
Unit pursuant to Section 22.4 thereof, [including any Fixed Rate Renewal Term]
or in respect of which the Lease Term has been deemed to have been renewed as
provided in Section 22.7 of the Lease.
"Rent" shall mean all Basic Rent and Supplemental Rent.
----
18
"Rent Payment Date" or "Payment Date" shall mean the [__] day of each month
----------------- ------------
occurring during the Lease Term, commencing [_____________], 1998, provided that
if any such date shall not be a Business Day, then "Rent Payment Date" or
"Payment Date" shall mean the next succeeding Business Day.
"Replacement Unit" shall mean a covered xxxxxx car or tank car, as the case
----------------
may be, which shall have been leased under the Lease pursuant to Section 11.4 of
the Lease.
"Required Modification" shall have the meaning assigned thereto in Section
---------------------
9.1 of the Lease.
"Responsible Officer" shall mean, with respect to the subject matter of any
-------------------
covenant, agreement or obligation of any party contained in any Operative
Agreement, the President, or any Vice President, Assistant Vice President,
Treasurer, Assistant Treasurer or other officer, who in the normal performance
of his or her operational responsibility would have knowledge of such matter and
the requirements with respect thereto; and when used in connection with the
Lessee, "Responsible Officer" shall include any such officer of the Manager or
the Insurance Manager acting on behalf of the Lessee under the Management
Agreement or the Insurance Agreement, as the case may be.
"Scheduled Amortization" shall mean the amount of principal of the
----------------------
Equipment Notes specified for each Payment Date set forth in Annex B to the
Indenture.
"Scheduled Amortization Amount" shall mean, at any Payment Date, the
-----------------------------
excess, if any, of (i) the product of (A) the sum of all amounts specified in
Annex B to the Indenture as Scheduled Amortization opposite the respective dates
occurring on or before such Payment Date and (B) the Prepayment Multiplier, over
(ii) the sum of the Adjusted Payment Amount for each Adjusted Principal Period
prior to such Payment Date.
"Scheduled Obligations Due" shall mean, at any date, an amount equal to the
-------------------------
excess, if any, of (i) the Scheduled Amortization Amount at such date over (ii)
the Rated Amortization Amount at such date.
"Scheduled Closing Date" shall have the meaning assigned thereto in Section
----------------------
2.7(b) of the Participation Agreement.
"Security" shall have the meaning assigned thereto in Section 2(1) of the
--------
Securities Act of 1933, as amended.
"Services Standard" shall have the meaning assigned thereto in Section 2.2
-----------------
of the Management Agreement.
"Servicing Agreement" shall mean the Management and Servicing Agreement
-------------------
dated as of [___________, 1998] between GATC and the Marks Company.
19
"Severable Modification" shall mean any Modification that is readily
----------------------
removable without causing material damage to the Equipment or any Unit and
without diminishing, other than in a de minimis respect, the value, utility or
----------
useful life of such Unit below the value, utility or useful life of such Unit
immediately prior to such Modification, assuming that such Unit was then in the
condition required to be maintained by the terms of the Lease.
"Special Purchase Defeasance" shall mean, with respect to any election by
---------------------------
the Lessee to purchase Units under Section 22.1 or 22.3 of the Lease, the
deposit by the Lessee with the Indenture Trustee prior to the date as of which
the Lessor shall have declared the Lease to be in default as a result of a Lease
Event of Default under Section 14(c), 14(d), 14(e), 14(f) or 14(i) of the Lease
(in circumstances where such Lease Event of Default occurs after the date of the
Lessee's notice to purchase under Section 22.1 or 22.3 but before the Early
Purchase Date or the expiration of the Basic Term or any Renewal Term, as
applicable), of an amount sufficient to pay (i) the Early Purchase Price,
together with all other amounts due and owing by the Lessee under the Operative
Agreements, with respect to those Units which the Lessee has elected to purchase
on the Early Purchase Date under Section 22.1 of the Lease, or (ii) the Fair
Market Sales Value or Basic Term Purchase Price, together with all other amounts
due and owing by the Lessee under the Operative Agreements, with respect to
those Units which the Lessee has elected to purchase at the expiration of the
Basic Term or any Renewal Term, as applicable, under Section 22.3 of the Lease.
All amounts deposited by the Lessee with the Indenture Trustee in connection
with a Special Purchase Defeasance shall be held and invested by the Indenture
Trustee in accordance with Section 6.4(b) of the Indenture pending consummation
of the purchase of the related Units on the Early Purchase Date or upon the
expiration of the Basic Term or the related Renewal Term, as applicable.
"Specified Investments" (i) direct obligations of, and obligations fully
---------------------
guaranteed as to timely payment by, the United States of America (having
remaining maturities of no more than the number of remaining days until the next
Monthly Transfer Date), (ii) commercial paper (having remaining maturities of no
more than the number of days remaining until the next [Monthly Transfer Date]
having, at the time of the investment or contractual commitment to invest
therein, a rating from each Rating Agency in its highest investment category),
(iii) a Guaranteed Investment Contract (a "GIC") from an [Acceptable GIC]
---
provider, (iv) a GIC provided by GATX, provided that such obligations are
supported by an [Acceptable Letter of Credit], (v) investments in funds rated in
the highest investment category by each Rating Agency and (vi) repurchase
agreements and similar short term instruments.
"STB" shall mean the Surface Transportation Board of the United States
---
Department of Transportation, or any successor thereto.
"Stipulated Loss Value" for any Unit as of any date of determination shall
---------------------
mean the amount determined by multiplying the Equipment Cost for such Unit by
the percentage set forth in Schedule 4 to the Participation Agreement opposite
the Rent Payment Date on which such Stipulated Loss Value is being determined;
provided that during any Renewal Term, "Stipulated Loss Value" shall be
determined as provided in Section 22.6 of the Lease. Notwithstanding
20
anything to the contrary contained in the Lease or in the Participation
Agreement, Stipulated Loss Value for such Unit (both before and after any
adjustment pursuant to Section 2.6 of the Participation Agreement) will, under
any circumstances and in any event, be an amount which, together with any other
amounts required to be paid by the Lessee under the Lease in connection with an
Event of Loss, will be at least sufficient to pay in full as of the date of
payment thereof the aggregate unpaid principal of the Equipment Notes issued in
respect of such Unit, together with all unpaid interest, Late Payment Premium
and Make-Whole Amount, if any, thereon accrued to the date on which such amount
is paid in accordance with the terms hereof and all other amounts then due to
the holders of the Equipment Notes.
"Storage Period" shall have the meaning assigned thereto in Section
--------------
6.1(c)(i) of the Lease.
"Storage Period Commencement Date" shall have the meaning assigned thereto
--------------------------------
in Section 6.1(c)(i) of the Lease.
"Sublease Payments" shall mean all amounts paid or payable by or on behalf
-----------------
of, or credited to, the Company under, or in respect of, a Car Service Contract,
including, without limitation, all service charges, rentals, excess mileage
charges, delivery costs reimbursed by the Customer and cancellation or penalty
payments, as well as all amounts paid or payable by the Customer as
reimbursement, indemnity, fees or commissions, or on account of assumed
financial responsibility or liability or otherwise.
"Sublessees" shall mean the lessees under Permitted Subleases.
----------
"Subsidiary" of any Person shall mean any corporation, association, or
----------
other business entity of which more than 50% (as determined by reference to the
total number of votes) of the voting stock outstanding at the time of
determination shall at such time be owned, directly or indirectly, by such
Person or by any other corporation, association or trust which is itself a
Subsidiary within the meaning of this definition, or collectively by such Person
and any one or more such Subsidiaries.
"Successor Lockbox Trustee" shall have the meaning assigned thereto in
-------------------------
Section 6.3 of the Management Agreement.
"Successor Manager" shall have the meaning assigned thereto in Section 8.4
-----------------
of the Management Agreement.
"Super-Majority in Interest" as of a particular date of determination shall
--------------------------
mean with respect to any action or decision of the holders of the Equipment
Notes, the holders of 100% of the aggregate unpaid principal amount of the
Equipment Notes, if any, then outstanding, excluding any Equipment Notes held by
the Owner Participant or the Lessee or an Affiliate of the Owner Participant or
the Lessee.
21
"Supplemental Rent" shall mean all amounts, liabilities and obligations
-----------------
(other than Basic Rent) which the Lessee is obligated to pay under the Operative
Agreements to or on behalf of any of the other parties thereto, including, but
not limited to, Termination Value and Stipulated Loss Value payments.
"Tax Indemnitee" shall have the meaning assigned thereto in Section 7.1 of
--------------
the Participation Agreement.
"Tax Indemnity Agreement" shall mean the Tax Indemnity Agreement (1998-1)
-----------------------
dated as of August 1, 1998 between GATC and the Owner Participant.
"Taxes" shall have the meaning assigned thereto in Section 7.1(b) of the
-----
Participation Agreement.
"Terminated Units" shall have the meaning assigned thereto in Section 10.1
----------------
of the Lease.
"Termination Date" shall have the meaning assigned thereto in Section 10.1
----------------
of the Lease.
"Termination Value" for any Unit as of any date of determination shall mean
-----------------
the amount determined by multiplying the Equipment Cost for such Unit by the
percentage set forth in Schedule 4 to the Participation Agreement opposite the
Rent Payment Date on which such Termination Value is being determined; provided
--------
that during any Renewal Term, "Termination Value" shall be determined as
provided in Section 22.6 of the Lease. Notwithstanding anything to the contrary
contained in the Lease or in the Participation Agreement, Termination Value for
such Unit (both before and after any adjustment pursuant to Section 2.6 of the
Participation Agreement) will, under any circumstances and in any event, be an
amount which, together with any other amounts required to be paid by the Lessee
under the Lease in connection with such termination, will be at least sufficient
to pay in full as of the date of payment thereof the aggregate unpaid principal
of the Equipment Notes issued in respect of such Unit, together with all unpaid
interest, Late Payment Premium and Make-Whole Amount, if any, thereon accrued to
the date on which such amount is paid in accordance with the terms thereof and
all other amounts then due to the holders of the Equipment Notes.
"Total Equipment Cost" shall mean the sum of the Equipment Costs for each
--------------------
Unit.
"Total Managed Fleet" shall mean the Manager's Fleet and the Company Fleet.
-------------------
"Transaction Costs" shall have the meaning assigned thereto in Section
-----------------
2.5(a) of the Participation Agreement.
"Transfer and Contribution Agreement" shall mean the Transfer and
-----------------------------------
Contribution Agreement dated as of August 1, 1998 between GATC and the Company.
22
"Transferee" shall have the meaning assigned thereto in Section 6.1(a) of
----------
the Participation Agreement.
"Treasury Rate" shall mean with respect to prepayment of each Equipment
-------------
Note, a per annum rate (expressed as a monthly equivalent and as a decimal and,
in the case of United States Treasury bills, converted to a bond equivalent
yield), determined to be the per annum rate equal to the monthly yield to
maturity for United States Treasury securities maturing on the Average Life Date
of such Equipment Note, as determined by interpolation between the most recent
weekly average yields to maturity for two series of United States Treasury
securities, (A) one maturing as close as possible to, but earlier than, the
Average Life Date of such Equipment Note and (B) the other maturing as close as
possible to, but later than, the Average Life Date of such Equipment Note, in
each case as published in the most recent H.15(519) (or, if a weekly average
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such Equipment Note is reported in the most recent H.15(519), as
published in H.15(519)). H.15(519) means "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication, published by the Board
of Governors of the Federal Reserve System. The most recent H.15(519) means the
latest H.15(519) which is published prior to the close of business on the third
Business Day preceding the scheduled prepayment date.
"Trust" shall mean the trust created under the Trust Agreement.
-----
"Trust Agreement" shall mean that certain Trust Agreement (1998-1), dated
---------------
as of August 1, 1998, between the Owner Participant and [Owner Trustee].
"Trust Estate" shall have the meaning assigned thereto in Section 2.2 of
------------
the Trust Agreement.
"Trustee" shall mean each of the Owner Trustee, the Indenture Trustee or
-------
the Pass Through Trustee, and "Trustees" shall mean the Owner Trustee, Indenture
--------
Trustee and the Pass Through Trustee, collectively.
"Underwriters" shall mean Salomon Brothers Inc. and Xxxxxx Xxxxxxx & Co.
------------
Incorporated.
"Underwriting Agreement" shall mean that certain Purchase Agreement between
----------------------
the Lessee and the Underwriters, relating to the sale and purchase of the Pass
Through Certificates.
"Unit" shall mean each unit or item of Equipment.
----
"Unit Monthly Fee" shall have the meaning assigned thereto in Section
----------------
5.2(b) of the Management Agreement.
23
