TRUST INDENTURE AND SECURITY AGREEMENT
dated as of December 15, 1999
among
FIRST SECURITY TRUST COMPANY OF NEVADA
not in its individual
capacity except as otherwise expressly provided herein,
but solely as Nonaffiliated Partner Trustee under the
Trust Agreement dated as of December 15, 1999 with
Beneficiaries,
BJ SERVICES EQUIPMENT II, L.P.,
a Delaware Limited Partnership
and
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee.
Well Services Equipment
(BJ Services Trust No. 1999-1)
CONTENTS
SECTION PAGE
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . .2
1.2 Excluded Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
1.3 HABENDUM CLAUSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.4 Attachment of Security Interest. . . . . . . . . . . . . . . . . . . . .8
1.5 Effect of Assignment . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.6 Appointment of Indenture Trustee . . . . . . . . . . . . . . . . . . . .8
1.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . .9
1.8 Representations and Warranties . . . . . . . . . . . . . . . . . . . . .9
2. THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1 Notes; Title, Dating and Terms . . . . . . . . . . . . . . . . . . . . 10
2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . 10
2.3 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.4 Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 Indenture Trustee as Agent; Ownership of Notes . . . . . . . . . . . . 12
2.6 Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . 13
2.7 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.8 Payment on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.9 Payment from Indenture Estate Only; Nonrecourse Obligations;
Excess Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.10 Execution and Delivery of Notes upon Original Issuance . . . . . . . . 16
2.11 Security for and Parity of Notes . . . . . . . . . . . . . . . . . . . 16
2.12 Application of Payments to Notes . . . . . . . . . . . . . . . . . . . 17
2.13 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . 17
2.14 Late Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.15 Definition of Premium. . . . . . . . . . . . . . . . . . . . . . . . . 17
2.16 Special Rights of Holders. . . . . . . . . . . . . . . . . . . . . . . 19
3. RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE . . . 19
3.1 Payment Upon Delivery of Units . . . . . . . . . . . . . . . . . . . . 19
3.2 Payments Upon Event of Loss, Obsolescence or ET Right or
Special P.O. Right; Certain Prepayments. . . . . . . . . . . . . . . . 20
3.3 Application of Priority Distributions. . . . . . . . . . . . . . . . . 20
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SECTION PAGE
3.4 Application of Certain Amounts Upon Event of Loss. . . . . . . . . . . 21
3.5 Amounts During Indenture Event of Default. . . . . . . . . . . . . . . 21
3.6 Amounts for Which Application is Provided in Other Basic
Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.7 Amounts for Which No Application is Otherwise Provided . . . . . . . . 23
3.8 Excepted Property. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.9 Notice of Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . 23
4. COVENANTS OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP . . . . . . . . . 24
5. DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE
INDENTURE ESTATE DURING CONTINUATION OF PARTNERSHIP. . . . . . . . . . . . . 24
5.1 Disposition, Substitution and Release of Property Included in
the Indenture Estate During Continuation of Partnership. . . . . . . . 24
5.2 Possession of Units. . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.3 Release of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.4 Release of Units - Consent of Holders. . . . . . . . . . . . . . . . . 27
5.5 Protection of Purchaser. . . . . . . . . . . . . . . . . . . . . . . . 27
6. PREPAYMENT OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.1 Prepayment of Notes upon Event of Loss, Obsolescence, ET Date
or Special P.O. Date . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.2 Notice of Prepayment to Holders. . . . . . . . . . . . . . . . . . . . 29
6.3 Deposit of Prepayment Price. . . . . . . . . . . . . . . . . . . . . . 30
6.4 Notes Payable on Prepayment Date . . . . . . . . . . . . . . . . . . . 30
7. NONAFFILIATED PARTNER TRUSTEE AND INDENTURE TRUSTEE. . . . . . . . . . . . . 30
7.1 Prepayment of Moneys for Note Payments Held by Indenture
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 No Representations or Warranties as to Units or Documents. . . . . . . 31
8. DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 Indenture Events of Default. . . . . . . . . . . . . . . . . . . . . . 31
8.2 Acceleration; Rescission and Annulment; Limitations. . . . . . . . . . 33
8.3 Other Remedies Available to Indenture Trustee. . . . . . . . . . . . . 33
8.4 Waiver of Nonaffiliated Partner Trustee and Partnership. . . . . . . . 43
8.5 Waiver of Existing Defaults. . . . . . . . . . . . . . . . . . . . . . 44
8.6 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.7 Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . . . 44
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SECTION PAGE
8.8 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . 44
8.9 Indenture Trustee May File Proofs of Claim . . . . . . . . . . . . . . 45
9. INDENTURE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.1 Rights and Duties of Indenture Trustee . . . . . . . . . . . . . . . . 45
9.2 Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . 46
9.3 Funds May Be Held by Indenture Trustee; Investments. . . . . . . . . . 47
9.4 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.6 Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . 49
9.7 Successor Indenture Trustee by Merger, etc.. . . . . . . . . . . . . . 50
9.8 Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . 50
9.9 Trustee's Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.10 Withholding Taxes; Information Reporting . . . . . . . . . . . . . . . 51
9.11 Co-Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10. SATISFACTION AND DISCHARGE; TERMINATION OF OBLIGATIONS . . . . . . . . . . . 52
10.1 Satisfaction and Discharge of Agreement; Termination of
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.2 Survival of Certain Obligations. . . . . . . . . . . . . . . . . . . . 52
10.3 Moneys to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 52
10.4 Moneys to Be Returned to Nonaffiliated Partner Trustee . . . . . . . . 52
11. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.1 Amendments to This Indenture Without Consent of Holders. . . . . . . . 52
11.2 Supplements to Partnership Agreement, Guaranty, Services
Agreement and O&M Agreement Without Holder Consent . . . . . . . . . . 53
11.3 Amendments With Consent of Holders . . . . . . . . . . . . . . . . . . 54
11.4 Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . 55
11.5 Indenture Trustee Protected. . . . . . . . . . . . . . . . . . . . . . 55
11.6 Opinion of Counsel Conclusive as to
Supplements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
12. ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS. . . . . . . . . . . . . 56
12.1 Actions to Be Taken upon Exercise of Certain Rights. . . . . . . . . . 56
13. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
13.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
13.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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SECTION PAGE
13.3 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . 58
13.4 Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . 58
13.5 Indenture for Benefit of Nonaffiliated Partner Trustee,
Indenture Trustee, Beneficiaries and Holders . . . . . . . . . . . . . 58
13.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
13.7 No Oral Modifications or Continuing Waivers. . . . . . . . . . . . . . 58
13.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 59
13.9 Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . 59
13.10 No Legal Title to Indenture Estate in Holders. . . . . . . . . . . . . 59
13.11 Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . 59
13.12 Directly or Indirectly . . . . . . . . . . . . . . . . . . . . . . . . 59
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-1
iv
Attachments
Exhibit A Note
Exhibit B Indenture Supplement No. 1
v
TRUST INDENTURE AND SECURITY AGREEMENT dated as of December 15, 1999
among FIRST SECURITY TRUST COMPANY OF NEVADA, a Nevada banking corporation,
not in its individual capacity except as otherwise expressly provided herein,
but solely as Nonaffiliated Partner Trustee, BJ SERVICES EQUIPMENT II, L.P.,
a Delaware Limited Partnership and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, as Indenture Trustee hereunder.
R E C I T A L S:
A. Beneficiaries and First Security Trust Company of Nevada, a
Nevada banking corporation, have entered into the Trust Agreement whereby,
among other things, (i) Nonaffiliated Partner Trustee has established a
certain trust for the use and benefit of Beneficiaries, to be subject,
however, to the Lien of the Indenture created pursuant hereto and (ii)
Nonaffiliated Partner Trustee has been authorized and directed to execute and
deliver this Indenture.
B. Before the Commencement Date, General Partner and
Organizational Limited Partner formed Partnership pursuant to the Initial
Partnership Agreement, and General Partner contributed the Initial Units to
Partnership.
C. Nonaffiliated Partner Trustee, Indenture Trustee and other
parties have entered into the Participation Agreement providing for the
commitment of the Note Purchasers to purchase Notes in an aggregate amount
not to exceed $90,000,000.
D. Subject to the terms of the Participation Agreement,
Nonaffiliated Partner Trustee on the Commencement Date will enter into the
Partnership Agreement (which amends and restates the Initial Partnership
Agreement) with General Partner, Affiliated Partner and Organizational
Limited Partner and will make a capital contribution to Partnership.
E. The proceeds of the Notes are to be used by Nonaffiliated
Partner Trustee to finance a portion of the Nonaffiliated Partner Trustee's
capital contribution to Partnership on the Commencement Date.
F. The parties desire by this Indenture, among other things, (i)
to provide for the issuance by Nonaffiliated Partner Trustee of the Notes in
accordance with this Indenture, (ii) to provide for the assignment, mortgage
and pledge by Nonaffiliated Partner Trustee to Indenture Trustee, as part of
the Indenture Estate hereunder, among other things, of Nonaffiliated Partner
Trustee's
Partnership Interest and of certain of Nonaffiliated Partner Trustee's right,
title and interest under certain Basic Documents and certain payments and
other amounts received hereunder or thereunder, and (iii) to provide for the
assignment, mortgage and pledge by Partnership to Indenture Trustee, as part
of the Indenture Estate hereunder, among other things, of all of
Partnership's right title and interest in and to the Units (but not the Other
Equipment and certain of Partnership's right, title and interest under
certain Basic Documents and certain payments and other amounts received with
respect thereto, all in accordance with the terms hereof, as security for,
among other things, the payment and performance of the Notes and
Nonaffiliated Partner Trustee's other obligations to Holders and to Indenture
Trustee, for the ratable benefit and security of Holders.
G. The Holders (i) by entering into the Participation Agreement,
have made it possible for Nonaffiliated Partner Trustee to make its capital
contribution to Partnership and, accordingly, have conferred financial and
other benefits on Partnership and Partners and (ii) would not enter into the
transactions contemplated by the Basic Documents without the grant by
Partnership and Nonaffiliated Partner Trustee of the Liens provided hereunder.
H. All things necessary to make this Indenture the legal, valid
and binding obligation of Nonaffiliated Partner Trustee, Partnership and
Indenture Trustee, for the uses and purposes herein set forth, in accordance
with its terms, have been done and performed and have happened.
I. For all purposes of this Indenture, except as otherwise defined
herein or unless the context otherwise requires:
(a) capitalized terms used herein shall have the meanings
assigned to them in APPENDIX A attached hereto and made a part hereof;
(b) the words "herein", "hereof" and "hereunder", and other
words of similar import, refer to this Indenture as a whole and not to any
particular Section or other subdivision hereof; and
(c) all references in this Indenture to Sections and
Exhibits refer to Sections and Exhibits of this Indenture unless otherwise
indicated.
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NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. SECURITY
1.1 GRANT OF SECURITY INTEREST.
To secure the prompt payment of the principal of, Premium, if any,
and interest on the Notes from time to time Outstanding in accordance with their
terms and to secure the payment, performance and observance by Nonaffiliated
Partner Trustee and Partnership of all the agreements, covenants and provisions
for the benefit of the Holders and Indenture Trustee contained herein and in the
Basic Documents to which Partnership or Nonaffiliated Partner Trustee is,
respectively, a party (collectively, the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions hereof,
(i) Nonaffiliated Partner Trustee does hereby grant, bargain,
sell, assign, transfer, convey, pledge and confirm, unto Indenture
Trustee, its successors and assigns, for the security and benefit of the
Indenture Trustee, for itself, and for the Holders from time to time a
security interest in and lien on, all estate, right, title and interest
of Nonaffiliated Partner Trustee in, to and under the following described
property, agreements, rights, interests and privileges, whether now owned
or hereafter acquired, arising or existing (which collectively,
including, without limitation, all property hereafter specifically
subjected to the Lien of this Indenture by Nonaffiliated Partner Trustee
by any instrument supplemental hereto, but excluding the Excepted
Property, are herein called the "Nonaffiliated Partner Trustee Indenture
Estate"):
(A) the Partnership Agreement and Nonaffiliated Partner
Trustee's Partnership Interest under the Partnership Agreement
(including all instruments or certificates owned or held by or
established in favor of Nonaffiliated Partner Trustee with respect
to such Partnership Interest) and all rights, authority, powers
and privileges of Nonaffiliated Partner Trustee as a holder of
such Partnership Interest and all payments and distributions
thereunder of whatever kind or character and whether in cash or
other property, at any time made or distributable to Nonaffiliated
Partner Trustee
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thereunder or in respect thereof, whether due or to become due
and whether representing profits, distributions, repayment of
capital contributions or otherwise (including all amounts of
Priority Distributions, Supplemental Priority Distributions,
Special Distributions, Disposition Amount, ET Amount, Special
P.O. Amount and payments of any kind required to be made to
Nonaffiliated Partner Trustee thereunder), including, without
limitation, the immediate and continuing right of Nonaffiliated
Partner Trustee to receive and collect all distributions and
any other payments or other amounts and the right of
Nonaffiliated Partner Trustee to exercise any election or
option or to make any decision or determination or to give or
receive any notice, consent, waiver or approval or to consent to
any amendment, modification or waiver or to make any claims or
demands under or to take any other action provided under or in
respect of the Partnership Agreement, the Services Agreement or
the O&M Agreement or to accept surrender of any Unit or Units,
including all the rights and powers of Nonaffiliated Partner
Trustee to the exclusion of General Partner and any other
Partner, to declare the O&M Agreement and the Services Agreement
to be in default, to terminate such agreements and exercise all
rights and remedies thereunder and under the Partnership
Agreement, including, without limitation, the commencement,
conduct and consummation of legal, administrative and other
proceedings as permitted thereunder or by law, the liquidation of
Partnership, and all rights and powers of Nonaffiliated Partner
Trustee to the exclusion of General Partner and any other Partner
following a BJ Event of Default to amend, modify or waive such
agreements and to exercise the other rights contained in Section
7 of the Partnership Agreement;
(B) all rights, authority, powers and privileges of, and
all payments and distributions payable to, Nonaffiliated Partner
Trustee under Sections 5.11 through 5.18 and Section 5.22 of the
Participation Agreement;
(C) without limiting the foregoing clause (A) or (B),
all rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this
Indenture which relate to such Partnership Interest, including,
without limitation,
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the immediate and continuing right to receive any of the
foregoing;
(D) all moneys and securities now or hereafter paid or
deposited or required to be paid or deposited to or with Indenture
Trustee by or for the account of Nonaffiliated Partner Trustee
pursuant to any term of any Basic Document and held or required to
be held by Indenture Trustee hereunder that relate to Partnership,
the Units or to the Notes;
(E) the Guaranty, including, without limitation, all
covenants and warranties in favor of Nonaffiliated Partner Trustee
and all other rights and remedies of Nonaffiliated Partner Trustee
thereunder, whether now owned or hereafter acquired; and
(F) all proceeds of the foregoing (Nonaffiliated Partner
Trustee, concurrently, with the delivery hereof, having delivered
to Indenture Trustee originals of the executed Partnership
Agreement, O&M Agreement, Services Agreement, Guaranty and the
relevant Partnership Agreement Supplement and O&M Agreement
Supplement and executed counterparts of the Trust Agreement); and
(ii) Partnership does hereby grant, bargain, sell, assign,
transfer, convey, pledge and confirm, unto Indenture Trustee, its
successors and assigns, for the security and benefit of the Indenture
Trustee, for itself, and for the Holders from time to time a security
interest in and lien on, all estate, right, title and interest of
Partnership in, to and under the following described property,
agreements, rights, interests and privileges, whether now owned or
hereafter acquired, arising or existing (which collectively, including,
without limitation, all property hereafter specifically subjected to the
Lien of this Indenture by Partnership by any instrument supplemental
hereto, but excluding the Excepted Property, are herein called the
"Partnership Indenture Estate" and together with the Nonaffiliated
Partner Trustee Indenture Estate herein called the "Indenture Estate"):
(A) the Units and all replacements thereof and
substitutions therefor in which Partnership shall from time to
time acquire an interest under the Contribution Agreements and the
Partnership Agreement, as more
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particularly described in the Indenture Supplement, Partnership
Agreement Supplement and O&M Agreement Supplement executed and
delivered with respect to such Units;
(B) without limiting the foregoing clause(A), all rents,
issues, profits, revenues and other income of the property
subjected or required to be subjected to the Lien of this
Indenture which relate to the Contribution Agreements, the Units
or the Notes, including, without limitation, the immediate and
continuing right to receive any of the foregoing;
(C) all insurance proceeds, sale proceeds or proceeds
arising out of a taking, condemnation, requisition or
appropriation by any government authority with respect to
Partnership, the Units or any Unit, including, without limitation,
the immediate and continuing right to receive any of the
foregoing;
(D) all moneys and securities now or hereafter paid or
deposited or required to be paid or deposited to or with Indenture
Trustee by or for the account of Partnership pursuant to any term
of any Basic Document and held or required to be held by Indenture
Trustee hereunder that relate to the Units or to the Notes;
(E) all Contribution Agreements, including, without
limitation, all covenants and warranties in favor of Partnership
and all other rights and remedies of Partnership thereunder,
whether now owned or hereafter acquired; and
(F) all proceeds of the foregoing (Partnership,
concurrently, with the delivery hereof, having delivered to
Indenture Trustee originals of the executed Partnership Agreement,
O&M Agreement, Services Agreement, Contribution Agreements,
Guaranty and the relevant Partnership Agreement Supplement and O&M
Agreement Supplement and executed counterparts of the Trust
Agreement);
excluding however, all Excepted Property. Such mortgage, charge, hypothec,
security interest and assignment shall attach to the Partnership Agreement, the
O&M Agreement and the Services Agreement and the amounts due and to become due
thereunder upon the
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execution and delivery of this Agreement, the Participation Agreement, the
Partnership Agreement, the O&M Agreement and the Services Agreement; such
security interest shall attach to the Units specifically described in a
supplement hereto upon the execution and delivery of such supplement. The
mortgage, charge, hypothec, security interest and assignment granted hereunder
shall in all events be subject to the terms and conditions of this Indenture
and the rights of Nonaffiliated Partner Trustee and Partnership, respectively
hereunder.
There shall be excluded from the foregoing grant of security interest
and assignment all Excepted Property. It is further expressly agreed and
stipulated that the foregoing grant shall not include any Other Equipment,
including any Replacement Items.
1.2 EXCLUDED RIGHTS.
(a) Notwithstanding the foregoing assignment, Nonaffiliated
Partner Trustee and Partnership, respectively, shall have the right, not to the
exclusion of Indenture Trustee:
(i) to receive from Partnership, General Partner,
Affiliated Partner, Service Taker and Operator, respectively, duplicate copies
of all notices, documents, reports and other information that Partnership,
General Partner, Affiliated Partner, Service Taker and Operator are required or
permitted to give to Nonaffiliated Partner Trustee or Partnership under the
Partnership Agreement, the Services Agreement, the O&M Agreement, the
Participation Agreement or any other Basic Document;
(ii) to inspect the Units and Partnership's, General
Partner's, Affiliated Partner's, Service Taker's, and Operator's respective
records with respect thereto and with respect to the Partnership Agreement, O&M
Agreement and the Services Agreement;
(iii) to provide or carry insurance in addition to that
required to be carried by Operator pursuant to the O&M Agreement so long as
such additional insurance does not adversely affect Operator's insurance or the
cost thereof or impair the collectibility of such insurance carried by
Operator; and
(iv) in the case only of Nonaffiliated Partner Trustee,
subject to the limitations of Section 8.3(e)(i)(5), to make advances to protect
or preserve the Units, and to pay, purchase, contest or compromise any
insurance premium, encumbrance, charge, tax, lien or other sum that in the
reasonable judgment of
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Nonaffiliated Partner Trustee appears to affect the Units to enable it to
exercise its rights under this Indenture.
(b) If no Indenture Event of Default exists, Nonaffiliated
Partner Trustee and Partnership shall have the right:
(i) jointly with and not to the exclusion of Indenture
Trustee, to consent or withhold consent to any amendment, modification or waiver
of any provision of the Partnership Agreement, Sections 5.11 through 5.18 and
5.22 of the Participation Agreement, any provision of the O&M Agreement, any
provision of the Services Agreement to which Nonaffiliated Partner Trustee has
the right to join or consent pursuant to Section 11.2 of the Services Agreement,
it being the intention of the parties that consent of Nonaffiliated Partner
Trustee and Indenture Trustee shall be required for any such amendment,
modification or waiver;
(ii) to the exclusion of Indenture Trustee, but jointly
with Nonaffiliated Partner Trustee and Partnership, to adjust the Priority
Distributions, Disposition Values, Disposition Amount pursuant to and in
accordance with Section 2.7 of the Participation Agreement, and to amend the
Partnership Agreement to reflect any such adjustment, if such adjustment or
amendment does not reduce the amounts payable under the Partnership Agreement on
any date below that necessary to pay in full, when due, the principal of,
Premium, if any, and the interest on the Notes due or to become due on such
date; and
(iii) to the exclusion of Indenture Trustee, but jointly
with Nonaffiliated Partner Trustee and Partnership to determine the "Fair Market
Value" pursuant to Section 5.17 of the Participation Agreement.
(c) During the continuance of an Indenture Event of Default and
until Indenture Trustee forecloses on the Indenture Estate, Nonaffiliated
Partner Trustee shall have the right, jointly with and not to the exclusion of
Indenture Trustee, to consent or withhold consent to any amendment, modification
or waiver of Sections 3.1, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15.1, 15.2, 15.3,
17, 19, 20, 22, 23.1 and 23.8 of the O&M Agreement, Sections 3.1, 4, 5, 6, 7.1,
7.2, 7.3, 9, 10, 12 and 13.1 of the Services Agreement, Sections 2.4, 3, 4, 6,
7, 9, 10, 11, 13.1, 13.2 and 13.5 of the Partnership Agreement and Sections 5.11
through 5.18 and 5.22 of the Participation Agreement, it being the intention of
the parties that consent of both Nonaffiliated Partner Trustee and
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Indenture Trustee shall be required for any such amendment, modification or
waiver.
(d) Subject to Section 1.2(b)(iii), Nonaffiliated Partner
Trustee and Indenture Trustee shall jointly determine the "Fair Market Value"
pursuant to the Basic Documents.
1.3 HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the property described in
Section 1.1 (exclusive of Excepted Property, Other Equipment and Replacement
Items) unto Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the Holders from time to time, without any preference,
priority or distinction of any one Note over any other Note under this
Indenture, and for the benefit and security of Indenture Trustee and for the
uses and purposes and subject to the terms and provisions set forth in this
Indenture.
1.4 ATTACHMENT OF SECURITY INTEREST.
This Indenture, as supplemented from time to time, is intended to and
shall create and grant to Indenture Trustee a security interest in each of the
Units (but not the Other Equipment or Replacement Items or the Excepted
Property), which security interest shall attach on the Commencement Date or
other date on which Partnership acquires an interest in such Units. The
security interests created by this Indenture and the Indenture Supplements and
granted to Indenture Trustee hereunder and thereunder in the Indenture Estate
other than the Units shall likewise attach on the Commencement Date.
1.5 EFFECT OF ASSIGNMENT.
Anything herein contained to the contrary notwithstanding, Nonaffiliated
Partner Trustee or Partnership, as the case may be, shall remain liable under
each of the Basic Documents to which it is a party to perform all of the
obligations assumed by it thereunder, all in accordance therewith and Indenture
Trustee and the Holders shall have no obligation or liability under any of the
Basic Documents to which Nonaffiliated Partner Trustee or Partnership, as the
case may be, is a party by reason of or arising out of any assignment hereunder,
nor shall Indenture Trustee (except as to Indenture Trustee, if Indenture
Trustee becomes Nonaffiliated Partner Trustee under the Partnership Agreement)
or the Holders be required or obligated in any manner to perform or
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fulfill any obligations of Nonaffiliated Partner Trustee or Partnership, as the
case may be, under or pursuant to any of the Basic Documents to which
Nonaffiliated Partner Trustee or Partnership, as the case may be, 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.
1.6 APPOINTMENT OF INDENTURE TRUSTEE.
Subject to the terms and conditions hereof, Nonaffiliated Partner Trustee
and Partnership do each hereby constitute Indenture Trustee the true and lawful
attorney of Nonaffiliated Partner Trustee or Partnership, as the case may be,
irrevocably, with full power (in the name of Nonaffiliated Partner Trustee or
Partnership, as the case may be, 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 Nonaffiliated Partner Trustee or Partnership, as the case
may be, (other than with respect to the Excepted Property) under or arising out
of the Partnership Agreement, the Services Agreement or the O&M Agreement to
endorse any checks or other instruments or orders in connection therewith, to
file any claims or take any action or institute any proceedings which Indenture
Trustee may deem to be necessary or advisable in the premises. Nonaffiliated
Partner Trustee and Partnership have agreed, in the Partnership Agreement, that
Partnership shall make all Priority Distributions, Supplemental Priority
Distributions and Special Distributions distributable to Nonaffiliated Partner
Trustee directly to Indenture Trustee in accordance with this Indenture (for so
long as the Lien of this Indenture shall not have been discharged). Promptly on
receipt thereof, Nonaffiliated Partner Trustee or Partnership, as the case may
be, shall transfer to Indenture Trustee any and all moneys from time to time
received by it constituting part of the Indenture Estate, for distribution by
Indenture Trustee pursuant to this Indenture, except that Nonaffiliated Partner
Trustee shall accept for distribution pursuant to the Trust Agreement or
Partnership Agreement, as the case may be, any amounts distributed to it by
Indenture Trustee as expressly provided in this Indenture and any Excepted
Property.
1.7 FURTHER ASSURANCES.
Nonaffiliated Partner Trustee and Partnership each agrees that, at any
time and from time to time, upon the written request
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of Indenture Trustee, Nonaffiliated Partner Trustee or Partnership, as the case
may be, will, at General Partner's expense as provided in the Participation
Agreement, promptly and duly execute, acknowledge and deliver or cause to be
duly executed, acknowledged and delivered to Indenture Trustee any and all such
further acts, deeds, conveyances, transfers and assurances as Indenture Trustee
may reasonably request for the perfection or protection of the Lien being
herein provided for in the Indenture Estate, whether now owned or hereafter
acquired. All property described or referred to in Section 1.1 hereafter
acquired by Nonaffiliated Partner Trustee or Partnership, as the case may be,
shall, without further act, assignment or conveyance by Nonaffiliated Partner
Trustee, Partnership or Indenture Trustee, become subject to the Lien of this
Indenture as fully and completely as if originally described herein.
1.8 REPRESENTATIONS AND WARRANTIES.
Nonaffiliated Partner Trustee does hereby warrant and represent that it
has the right, power and authority under the Trust Agreement and Partnership
Agreement, and Partnership does hereby warrant and represent that it has the
right, power and authority under the Partnership Agreement, to grant a Lien on,
and a security interest in, all property comprising the Indenture Estate and
that it has not granted, bargained, sold, assigned, transferred, conveyed or
pledged a security interest in or lien on, and hereby covenants that it will not
grant, bargain, sell, assign, transfer, convey or pledge a security interest in,
or lien on, so long as this Indenture remains in effect, any of its right, title
or interest in the Indenture Estate to anyone other than Indenture Trustee.
Nonaffiliated Partner Trustee will warrant and defend such security interest
against all Persons claiming by, through or under Nonaffiliated Partner Trustee.
Partnership will warrant and defend such security interest against all Persons
claiming by, through or under Partnership.
SECTION 2. THE NOTES.
2.1 NOTES; TITLE, DATING AND TERMS.
(a) The Notes shall be substantially in the form set forth in
EXHIBIT A or in the form or forms set forth in the Indenture Supplement. The
Notes shall be (i) dated the original date of issuance, (ii) issued in such
maturities, aggregate principal amounts, subject to repayment or redemption in
the aggregate and bear interest as the same are specified in Exhibit B
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to the Indenture Supplement, and (iii) each subject to repayment or redemption
as specified herein and therein. Accrued interest on each Note shall be
payable on each Payment Date until the principal thereof is paid or made
available for payment in full.
(b) The Notes shall be issued in registered form only. The
Notes may not be prepaid or redeemed (or purchased in lieu of prepayment or
redemption), in whole or in part, except as provided in this Indenture.
(c) All computations of interest accruing on any Note shall be
made on the basis of a year of 360 days consisting of twelve 30-day months.
(d) The aggregate outstanding principal amount of the Notes
shall not exceed at any time $90,000,000. The Notes shall have the same Payment
Dates as to both principal and interest.
(e) The principal of, Premium (as defined in Section 2.15), if
any, and interest on the Notes shall be payable in immediately available funds
at the principal corporate trust office of Indenture Trustee.
(f) All payments in respect of the Notes shall be made in
United States dollars.
2.2 EXECUTION AND AUTHENTICATION.
(a) Notes shall be executed on behalf of Nonaffiliated Partner
Trustee by manual signature of the president, a senior vice president, a vice
president, an assistant vice president, its treasurer, its secretary, an
assistant secretary, an assistant treasurer or other authorized officer of
Nonaffiliated Partner Trustee.
(b) Immediately after the execution of the Notes, Nonaffiliated
Partner Trustee shall deliver such Notes to Indenture Trustee for authentication
and, subject to the provisions of Section 2.10, Indenture Trustee shall
authenticate the Notes by manual signature upon written orders of Nonaffiliated
Partner Trustee. Notes shall be authenticated on behalf of Indenture Trustee by
any authorized officer or signatory of Indenture Trustee.
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(c) A Note shall not be valid or obligatory for any purpose
or entitled to any security or benefit hereunder until executed on behalf of
Nonaffiliated Partner Trustee by the manual signature of the officer of
Nonaffiliated Partner Trustee specified in Section 2.2(a) and until
authenticated on behalf of Indenture Trustee by the manual signature of the
authorized officer or signatory of Indenture Trustee specified in Section
2.2(b). Such signatures shall be conclusive evidence that such Note has been
duly executed, authenticated and issued under this Indenture and any
Indenture Supplement.
(d) The authentication by Indenture Trustee of any Note
issued hereunder shall not be construed as a representation or warranty by
Indenture Trustee as to the validity or security of this Indenture or such
Note, and Indenture Trustee shall in no respect be liable or answerable for
the use made of such Note or the proceeds thereof.
2.3 REGISTER. Indenture Trustee shall maintain an office where the
Notes may be presented for registration of transfer or for exchange. At such
office, the registrar (the "Registrar") shall keep a register (the
"Register") with respect to the Notes and their transfer and exchange. The
names and addresses of Holders, the transfers of the Notes and the names and
addresses of the transferees of all Notes shall be registered in the
Register. Indenture Trustee may appoint one or more co-registrars (the
"Co-Registrars") for the Notes and Indenture Trustee may terminate the
appointment of any Co-Registrar at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
2.4 TRANSFER AND EXCHANGE. At the option of a Holder and subject
to Section 2.3 and Section 6.2 of the Participation Agreement, Notes may be
presented for exchange or surrendered for transfer for an equal aggregate
principal amount of other Notes, having the same date of original issue,
Payment Dates, Debt Rate and Maturity Date as the Notes so to be exchanged or
transferred at the office of the Registrar. Whenever any Note or Notes are
so presented or surrendered, Nonaffiliated Partner Trustee shall execute and
deliver to Indenture Trustee, and Indenture Trustee shall authenticate and
deliver to the Holder, the replacement Note or Notes which such Holder or the
transferee, as the case may be, is entitled to receive. Each replacement
Note shall bear a notation by Indenture Trustee of (a) the aggregate amounts
of principal of, and Premium, if any, on such replacement Note that were paid
to any Holder of the replaced Note at any time prior to the delivery of the
replacement Note, and (b) the date to which
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interest on such replacement Note had been paid to any Holder of the replaced
Note prior to the delivery of the replacement Note.
Any Note issued in connection with an exchange or transfer of existing
Notes shall be in a principal amount not less than the lesser of (a) the
then outstanding principal amount of the Note presented for exchange or
transfer and (b) $1,000,000, subject to Section 6.2 of the Participation
Agreement.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of Nonaffiliated Partner Trustee,
evidencing the same obligations, and entitled to the same security and
benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by Indenture Trustee or Nonaffiliated Partner
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer or exchange in form satisfactory to, Indenture Trustee and
Nonaffiliated Partner Trustee, duly executed by the requesting Holder or such
Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes.
The Registrar shall not be required (a) to register the transfer of
or to exchange any Note during a period beginning at the opening of business
10 days before the day of the scheduled prepayment (or purchase in lieu of
prepayment where applicable) of Notes pursuant to Section 6.1 or 8.3(e) and
ending at the close of business on the scheduled date of prepayment (or
purchase) or (b) to register the transfer of or to exchange any Note called
for prepayment (or purchase in lieu of prepayment where applicable) pursuant
to such Section 6.1 or 8.3(e).
2.5 INDENTURE TRUSTEE AS AGENT; OWNERSHIP OF NOTES.
(a) Indenture Trustee is hereby appointed the agent of
Nonaffiliated Partner Trustee for the payment, registration, transfer and
exchange of Notes. Subject to the provisions of Section 2.8, Notes may be
presented for payment at, and notices or demands with respect to the Notes or
this Indenture may be served
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or made at, the principal corporate trust office of Indenture Trustee.
Indenture Trustee shall promptly notify Nonaffiliated Partner Trustee of any
such presentment, notice or demand; provided, however, that the failure of
Indenture Trustee to so notify Nonaffiliated Partner Trustee shall not affect
the obligations of Nonaffiliated Partner Trustee hereunder or under the Notes
or, absent gross negligence or wilful misconduct, give rise to any liability
of Indenture Trustee to Nonaffiliated Partner Trustee or to any other Person
for any such failure.
(b) Ownership of the Notes shall be proved by the Register
kept by the Registrar. Prior to due presentment for registration of transfer
of any Note, Nonaffiliated Partner Trustee and Indenture Trustee shall deem
and treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of,
Premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and neither Nonaffiliated
Partner Trustee nor Indenture Trustee shall be affected by notice to the
contrary.
2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If any Note is
mutilated, destroyed, lost or stolen, Nonaffiliated Partner Trustee shall,
upon the written request of the relevant Holder, issue and execute, and
Indenture Trustee shall authenticate and deliver to the relevant Holder in
replacement thereof, a new Note of the same date of original issue and having
the same Payment Dates, Debt Rate and Maturity Date, payable to the same
Holder in the same principal amount and dated the same date as the Note so
mutilated, destroyed, lost or stolen. If the Note being replaced has become
mutilated, such Note shall be surrendered to Indenture Trustee. If the Note
being replaced has been destroyed, lost or stolen, the relevant Holder shall
furnish to Nonaffiliated Partner Trustee and Indenture Trustee (i) such
security or indemnity as may be required by them to save Nonaffiliated
Partner Trustee and Indenture Trustee harmless and (ii) evidence
satisfactory to Nonaffiliated Partner Trustee and Indenture Trustee of the
destruction, loss or theft of such Note and of the ownership thereof. If the
original Holder or such other Person that is an institutional investor is the
owner of any such destroyed, lost or stolen Note, then the affidavit of the
President, any Vice President, Assistant Vice President, Treasurer or
Secretary of the original Holder or such other Person setting forth the fact
of destruction, loss or theft and of its ownership of the Note, at the time
thereof, shall be accepted as satisfactory evidence thereof, and no indemnity
shall be required as a condition to the execution
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and delivery of a new Note other than the written agreement of such original
Holder or other Person reasonably satisfactory to Nonaffiliated Partner
Trustee and Indenture Trustee to indemnify (including for any costs and
expenses, including reasonable attorneys' fees) Nonaffiliated Partner Trustee
and Indenture Trustee for any claims or actions against them resulting from
the issuance of such new Note or the reappearance of the old Note. Each Note
issued pursuant to this Section 2.6 shall bear a notation by Indenture
Trustee of (a) the aggregate amounts of principal of, and Premium, if any,
on, such mutilated, destroyed, lost or stolen Note that were paid to any
Holder thereof at any time before the delivery of such new Note and (b) the
date to which interest on such mutilated, destroyed, lost or stolen Note had
been paid to any Holder thereof at or prior to the time of such delivery.
2.7 CANCELLATION. All Notes surrendered for the purpose of
payment, redemption, transfer or exchange shall be delivered to Indenture
Trustee for cancellation or, if surrendered to Indenture Trustee, shall be
canceled by it, and no Notes shall be issued in lieu thereof except as
expressly required or permitted by this Indenture. Indenture Trustee shall
deliver a certificate to Nonaffiliated Partner Trustee specifying any
cancellation of Notes that has been made. All such canceled Notes shall be
held by Indenture Trustee until this Indenture is discharged, at which time
Indenture Trustee shall either deliver such canceled Notes in a manner
necessary to effect the discharge and release of this Indenture or, if no
such delivery is necessary, such Notes shall be delivered to or disposed of
as directed by Nonaffiliated Partner Trustee.
2.8 PAYMENT ON NOTES.
(a) The principal of, the Premium, if any, interest on, and
any other amounts payable with respect to, the Notes shall be payable at the
principal office of Indenture Trustee, in lawful money of the United States
of America without surrender or presentation of such Note and without any
notation being made thereon. The Holder (or the Person for whom such Holder
is a nominee) will, before selling, transferring or otherwise disposing of
such Note, present such Note to Indenture Trustee for transfer and notation
as provided in Section 2.4. Any payment or prepayment of amounts due on the
Notes in accordance with the terms thereof and hereof which is due on a date
that is not a Business Day shall be payable, at the election of Nonaffiliated
Partner Trustee, on the next following Business Day without penalty or
reduction of, or increase in, the amount of interest that is payable thereon.
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(b) Notwithstanding Section 2.8(a), if any Note is held by
the original Note Purchaser, a permitted successor or assign that is an
institutional investor or a nominee thereof, Indenture Trustee shall, if
requested in writing by such Holder, pay interest on such Note and pay or
prepay the principal thereof and the Premium, if any, thereon and shall pay
all other amounts due with respect to such Note, by check, duly mailed, by
first-class mail, postage prepaid, or delivered to such Holder at its address
appearing on the Register. Upon written notice from any Holder that is an
original Note Purchaser, a permitted successor or assign that is an
institutional investor or a nominee thereof, which notice shall be given not
less than 30 days before the payment or prepayment of the Notes (and Section
2.16 shall constitute such written notice and wire transfer instructions
until otherwise designated in the case of the Note Purchasers), Indenture
Trustee will pay interest on such Note and pay or prepay the principal
thereof and the Premium, if any thereon, by wire transfer of immediately
available funds to such institution in the continental United States as such
Holder may designate in such notice, such wire transfers to be made on each
date on which such payment or prepayment is due if, and only so long as, such
institution has facilities for the receipt of a wire transfer. Indenture
Trustee will transmit any such wire transfer from its offices not later than
1:00 p.m. (New York time) on each date on which payment or prepayment is due
if, and only so long as, available funds therefor have been received by
Indenture Trustee by 11:00 a.m. (New York time) on such date or, if Indenture
Trustee has not received such available funds, Indenture Trustee will
transmit such wire transfer promptly upon receipt of such available funds.
(c) A Holder shall have no further interest in, or other
right with respect to, the Indenture Estate when and if the principal amount
of, Premium, if any, and interest on all Notes held by such Holder and all
other sums payable to such Holder and secured hereunder are paid in full.
2.9 PAYMENT FROM INDENTURE ESTATE ONLY; NONRECOURSE OBLIGATIONS;
EXCESS AMOUNTS.
(a) All amounts payable by Indenture Trustee and
Nonaffiliated Partner Trustee under the Notes, this Indenture and the
relevant Indenture Supplement shall be made only from the income and proceeds
of the Indenture Estate and each Holder by its acceptance of its Note agrees
that (i) it will look solely to such Indenture Estate for the payment of such
amounts, to the extent
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available for distribution to it as herein provided, and (ii) none of
Nonaffiliated Partner Trustee, any Beneficiary, Indenture Trustee or any of
their permitted successors or assigns, is or shall be personally liable to
any Holder for any amount payable under such Note or this Indenture, except,
in the case of Nonaffiliated Partner Trustee and Indenture Trustee and any of
their permitted successors or assigns, as expressly provided in this
Indenture. Notwithstanding any other provision of this Indenture, including
Section 9, First Security shall be liable hereunder in its individual
capacity for its own willful misconduct or gross negligence or, in the case
of the holding or transfer of funds, the failure to act with the same care as
it uses in the handling of its own funds.
(b) First Security is entering into this Indenture solely as
Nonaffiliated Partner Trustee under the Trust Agreement and not in its
individual capacity, and in no case whatsoever shall First Security, or any
entity acting as successor trustee under the Trust Agreement, be personally
liable for, or for any loss in respect of, any statements, representations,
warranties, agreements or obligations hereunder or thereunder; provided that
First Security shall be liable hereunder (i) for the performance of its
agreements under Sections 3.5(c), 5.5 and 5.9 of the Participation Agreement,
and (ii) for its own willful misconduct or gross negligence or, in the case of
the holding and transfer of funds, the failure to act with the same care as
it uses in the handling of its own funds. If a successor Nonaffiliated
Partner Trustee is appointed in accordance with the terms of Section 8 of the
Trust Agreement and the Participation Agreement, such successor Nonaffiliated
Partner Trustee shall, without any further act, succeed to all of the rights,
duties, immunities and obligations hereunder, and its predecessor
Nonaffiliated Partner Trustee and First Security shall be released from all
further duties and obligations hereunder, without prejudice to any claims
against such predecessor Nonaffiliated Partner Trustee or First Security, for
any default by such predecessor Nonaffiliated Partner Trustee or First
Security, respectively, in the performance of its obligations hereunder prior
to such appointment.
(c) If (i) all or any part of the Trust Estate becomes the
property of, or any Beneficiary becomes, a debtor subject to the reorganization
provisions of the Bankruptcy Reform Act of 1978 or any successor provision,
(ii) pursuant to such reorganization provisions, First Security or any
Beneficiary is required, by reason of First Security or any Beneficiary being
held to have recourse liability to the Holders or Indenture Trustee,
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directly or indirectly, to make payment on account of the principal of,
Premium, if any, or interest on the Notes and (iii) any Holder or Indenture
Trustee actually receives any Excess Amount (as defined below) which reflects
any payment by First Security or any Beneficiary on account of clause (ii)
above, then such Holder or Indenture Trustee, as the case may be, shall
promptly refund to First Security or such Beneficiary (whichever shall have
made such payment) such Excess Amount. For purposes of this Section 2.9,
"Excess Amount" means the amount by which any payment required to be made by
First Security or any Beneficiary under clause (ii) above exceeds the amount
which would have been received by the Holder(s) or Indenture Trustee if First
Security or such Beneficiary had not become subject to the recourse liability
referred to in clause (ii) above.
2.10 EXECUTION AND DELIVERY OF NOTES UPON ORIGINAL ISSUANCE.
Nonaffiliated Partner Trustee shall issue, execute and deliver to Indenture
Trustee, and Indenture Trustee shall authenticate and deliver to Holders, the
Notes for original issuance only upon payment by Holders pursuant to the
Participation Agreement of an amount equal to the aggregate original
principal amount of the Notes.
2.11 SECURITY FOR AND PARITY OF NOTES. It is the intention of the
parties hereto that all Notes issued and Outstanding hereunder rank on a
parity with each other Note and, that as to each other Note, they be secured
equally and ratably by the collateral described in this Indenture and any
Indenture Supplement without preference, priority or distinction of any one
thereof over any other by reason of difference in time of issuance, or
otherwise, and that each such Note be entitled to the same benefits and
security in this Indenture and any Indenture Supplement as each other such
Note.
2.12 APPLICATION OF PAYMENTS TO NOTES. In the case of each Note,
each payment of principal of, and Premium, if any, and interest on such Note,
shall be applied, first, to the payment of accrued but unpaid interest on
such Note (including any interest at the Late Rate on overdue principal,
Premium and (to the extent permitted by applicable law) interest) to the date
of such payment, second, the balance, if any, remaining thereafter to the
payment of the principal amount due and payable on such Note, and third, the
balance, if any, remaining thereafter, to the payment of Premium, if any,
then due and payable on such Note, provided that such Note shall not be
subject to prepayment or redemption by Nonaffiliated Partner Trustee except
as provided in Sections 6.1 and 8.3(e).
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2.13 INTENTIONALLY OMITTED.
2.14 LATE RATE. If Nonaffiliated Partner Trustee, any Beneficiary
or a Person designated by any of them elects or is required to redeem,
prepay, pay or purchase any Note (in whole or in part) under any provision of
this Indenture or any other Basic Document, and such redemption, prepayment
or purchase is not consummated on the date originally scheduled therefor
(unless, following General Partner's election to remove the Unit or Units
from the Lien of the Indenture pursuant to Section 5.16 of the Participation
Agreement, to exercise its ET Right pursuant to Section 9.1 of the
Partnership Agreement, or to exercise its Special P.O. Right pursuant to
Section 9.4 of the Partnership Agreement, Nonaffiliated Partner Trustee
provides written notice to Indenture Trustee and each Holder no later than
eight Business Days before such originally scheduled prepayment date to the
effect that such termination or purchase will not occur and accordingly it
will not be prepaying the Notes on such date), the Notes shall accrue
interest at the Late Rate from such originally scheduled date for prepayment
to the date of payment, payable on demand.
2.15 DEFINITION OF PREMIUM. As used herein "Premium" means as at any
date a payment thereof is due (the "payment date") in connection with payment
or prepayment in respect of any of the Notes the excess of (i) the present
value as at the payment of the Prepaid Cash Flows, discounted semiannually at
an annual rate which is equal to the Treasury Rate plus 0.50% over (ii) the
aggregate principal amount of such Notes then to be paid or prepaid. To the
extent that the Treasury Rate plus 0.50% at the time of determination of the
Premium is equal to or higher than the rate of interest then borne by such
Notes, the Premium shall be zero.
The following terms shall have the following meanings:
"PREPAID CASH FLOWS" -- for each date on which a payment of
principal or interest, or both, is scheduled to become due on the Notes,
an amount determined by subtracting (x) the amount of such payment
scheduled to become due on such date after giving effect to any
prepayment of principal that was originally scheduled to be paid on the
date as to which the determination is being made from (y) the amount of
such payment (exclusive of interest accrued to the date of such
prepayment) which would have become due on such date but for such
prepayment.
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"STATISTICAL RELEASE" -- the then most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Federal Reserve System and which
establishes yields on actively traded U.S. government securities adjusted
to constant maturities or, if such statistical release is not published
at the time of any determination hereunder, such other reasonably
comparable index which shall be designated by a Majority In Interest.
"TREASURY RATE" -- the yield to maturity of actually traded United
States Treasury obligations with a constant maturity (rounded to the
nearest month) corresponding to the remaining Weighted Average Life to
Maturity of the Prepaid Cash Flows as set forth on page 5 of the Telerate
or, if not available, on page "USD" of the Bloomberg Financial Markets
Screen (or, if not available, any other nationally recognized trading
screen reporting on-line intraday trading in United States government
securities) at 10:00 a.m. (New York City time) on the second Business Day
before the date fixed for prepayment, or in the event no such nationally
recognized trading screen reporting on-line intraday trading in United
States government securities is available, the arithmetic mean of the two
most recent yields under the heading "week ending" published in the
Statistical Release opposite the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the
Weighted Average Life to Maturity of the Prepaid Cash Flows. If no
maturity exactly corresponding to the remaining Weighted Average Life to
Maturity of the Prepaid Cash Flows shall appear therein, yields for the
two most closely corresponding published maturities shall be calculated
pursuant to the foregoing sentence and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis
(rounding to the nearest month). If such rates shall not have been so
published, the Treasury Rate in respect of such determination date shall
be calculated pursuant to the next preceding sentence on the basis of the
arithmetic mean of the arithmetic means of the secondary market ask
rates, as of approximately 3:30 p.m. (New York City time) on the last
Business Days of each of the two weeks preceding the payment date, for
the actively traded U.S. Treasury security or securities with a maturity
or maturities most closely corresponding to the remaining Weighted
Average Life to Maturity of the Prepaid Cash Flows as at such payment or
prepayment date, as reported by three primary United States
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government securities dealers in New York City of national standing
selected in good faith by Operator.
"WEIGHTED AVERAGE LIFE TO MATURITY" -- with respect to the Prepaid
Cash Flows, as at the payment or prepayment date for the determination of
the Treasury Rate, the number of years obtained by dividing the then
Remaining Dollar-years of such Prepaid Cash Flows by the principal amount
of Notes then being paid or prepaid. The term "REMAINING DOLLAR-YEARS"
of the Prepaid Cash Flows means the product obtained by (x) multiplying
(A) the principal portion of each Prepaid Cash Flow (including the
payment at final maturity), by (B) the number of years (calculated to
the nearest one-twelfth) between the time of determination and the date
of such Prepaid Cash Flow, and (y) totaling all the products obtained in
the computations described in clause (x).
2.16 SPECIAL RIGHTS OF HOLDERS. Notwithstanding any provision to the
contrary in this Agreement, the Indenture or the Notes relating to the manner
and place of payment, all amounts payable to a Holder with respect to any Notes
held by such Holder or a nominee for such Holder shall be paid by Indenture
Trustee to such Holder (without any presentment thereof and without any notation
of the payment being made thereon) by check, duly mailed, by first-class mail,
postage prepaid, or delivered to such Holder at the address for payments for
such Holder or, if a wire transfer to a bank account is designated in Schedule 1
to the Participation Agreement or in a written notice from such Holder to
Nonaffiliated Partner Trustee and Indenture Trustee, by wire transfer of
immediately available funds to the bank so designated for credit to the account
and marked for attention as so designated so long as such bank has facilities
for the receipt of a wire transfer, or in any other manner or to any other
address in the United States as may be designated by such Holder in a written
notice from such Holder to Nonaffiliated Partner Trustee and Indenture Trustee.
In the case of any wire transfer, Indenture Trustee will transfer funds from the
office of Indenture Trustee not later than 1:00 p.m. New York time on the date
any payment or prepayment of principal, Premium, if any, or interest on the
Notes is due if funds therefor have been received by Indenture Trustee in cash
or in solvent credits acceptable to it by 11:00 a.m., New York time, or if not
so received by such time, Indenture Trustee shall transfer such funds promptly
upon its receipt of such cash or solvent credits. Each Holder agrees that, if
such Holder shall sell or transfer any Notes, such Holder will notify Indenture
Trustee of the name and address of the transferee and such Holder will, before
the delivery
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of such Notes, make a notation on such Notes of the date to which interest
has been paid thereon and of the amount of any payments or prepayments made
on account of the principal thereof.
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE
ESTATE.
3.1 PAYMENT UPON DELIVERY OF UNITS. On the Commencement Date,
Indenture Trustee, on behalf of Nonaffiliated Partner Trustee, shall apply
the proceeds of the sale of the Notes to the financing of a portion of
Nonaffiliated Partner Trustee's capital contribution to Partnership on the
Commencement Date in accordance with the provisions of the Participation
Agreement.
3.2 PAYMENTS UPON EVENT OF LOSS, OBSOLESCENCE OR ET RIGHT OR
SPECIAL P.O. RIGHT; CERTAIN PREPAYMENTS.
(a) Except as otherwise provided in Section 3.5, if the
Notes are prepaid in whole or in part in accordance with Section 6.1(a),
6.1(b), 6.1(c), 8.3(e)(iii) or 8.3(e)(iv), Indenture Trustee will apply on
the Prepayment Date any amounts then held by it in the Indenture Estate with
respect to such Notes and received by it from or on behalf of Nonaffiliated
Partner Trustee, Guarantor or any other Person (other than in respect of
Excepted Property or Other Equipment, in the following order of priority:
FIRST, so much thereof as is required to pay the Prepayment Price
on the Outstanding Notes which are being prepaid in whole or in part
pursuant to Section 6.1(a), 6.1(b), 6.1(c), 8.3(e)(iii) or 8.3(e)(iv), as
the case may be, on the Prepayment Date shall be applied to the
prepayment (or purchase, in lieu of prepayment, of the Notes, if
applicable) of such Notes in accordance with the appropriate aforesaid
Section on the Prepayment Date for application in accordance with the
ordering set forth in Section 2.12;
SECOND, so much thereof as is required to pay all other accrued
and unpaid Secured Obligations;
THIRD, so much thereof as was received by Indenture Trustee with
respect to the amounts due to it pursuant to Section 9.5 shall be applied
to pay Indenture Trustee such amounts; and
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FOURTH, the balance, if any, thereof remaining shall be
distributed to Nonaffiliated Partner Trustee to be held or distributed in
accordance with the Trust Agreement.
3.3 APPLICATION OF PRIORITY DISTRIBUTIONS. Except as otherwise
provided in Section 3.5, each Priority Distribution received by Indenture
Trustee from or on behalf of Nonaffiliated Partner Trustee, Guarantor or any
other Person together with any other amount received by Indenture Trustee
with respect to interest on Priority Distributions not made on the relevant
Distribution Date shall be distributed by Indenture Trustee in the following
order of priority:
FIRST, so much of such aggregate amount as is required to pay in
full the principal and interest then due on all Outstanding Notes shall
be distributed to the Holders entitled thereto for application in
accordance with the ordering set forth in Section 2.12; and
SECOND, the balance, if any, of such aggregate amount remaining
thereafter shall be distributed to Nonaffiliated Partner Trustee for
distribution in accordance with the terms of the Trust Agreement.
3.4 APPLICATION OF CERTAIN AMOUNTS UPON EVENT OF LOSS. Except as
otherwise provided in Section 3.5, any amounts received directly by Indenture
Trustee from Nonaffiliated Partner Trustee or through Partnership, Service
Taker or Operator from any Government Authority or other Person in connection
with an Event of Loss, to the extent such amounts are not at the time to be
paid to or retained by Partnership pursuant to Section 11 or 12 of the O&M
Agreement or Section 5.14 or 5.15 of the Participation Agreement (other than
with respect to Excepted Property or Other Equipment, shall, except as
otherwise provided in the next sentence, be applied in accordance with
Section 3.2 in reduction of Partnership's obligations to distribute a
Supplemental Priority Distribution in an amount equal to Disposition Amount
and other amounts referred to or described in Section 5.12 of the
Participation Agreement and Section 6.1(c) of the Partnership Agreement and
the remainder, if any, shall, except as provided in the next sentence, be
distributed to Nonaffiliated Partner Trustee to be distributed in accordance
with the terms of the Trust Agreement. Any portion of any such amount
referred to in the preceding sentence that is not to be so paid or retained
by Partnership pursuant to the O&M Agreement and the Participation Agreement,
solely because a BJ Default or BJ Event of Default
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exists, shall be held by Indenture Trustee, and at such time as no BJ Default
or BJ Event of Default exists, such portion shall be paid to Partnership,
unless Indenture Trustee (as assignee from Nonaffiliated Partner Trustee of
certain rights with respect to the O&M Agreement) theretofore declares the
O&M Agreement to be in default or terminates the O&M Agreement pursuant to
Section 15 thereof, in which event such portion shall be distributed
forthwith upon such declaration or termination in accordance with Section 3.5.
3.5 AMOUNTS DURING INDENTURE EVENT OF DEFAULT. All distributions
and payments (except with respect to Excepted Property) received and amounts
held or realized by Indenture Trustee with respect to Nonaffiliated Partner
Trustee's Partnership Interest or Partnership's interest in any Unit subject
to the Lien of this Indenture while an Indenture Event of Default exists
(including any amounts thereafter realized by Indenture Trustee from the
exercise of any remedies pursuant to Section 8), as well as all
distributions, payments or amounts then held or thereafter received by
Indenture Trustee as part of the Indenture Estate while such Indenture Event
of Default exists, shall be distributed by Indenture Trustee in the following
order of priority:
FIRST, so much of such distributions, payments or amounts as is
required to pay Indenture Trustee all amounts then due it pursuant to
Section 9.5 shall be applied to pay Indenture Trustee such amounts;
SECOND, so much of such distributions, payments or amounts as is
required to pay the expenses (including, without limitation, all fees,
taxes, assessments, insurance and other proper charges)(i) of any sale,
taking or other proceeding, (ii) of or in connection with the use,
operation, storage, leasing, controlling or managing the Indenture Estate
and of all maintenance, insurance, repairs, replacements, alterations,
additions or improvements of any property included in the Indenture
Estate, (iii) of or in connection with realizing on any of the
collateral in the Indenture Estate, including, in the case of each of
clauses (i), (ii) and (iii) all reasonable attorneys' fees and expenses,
court costs and any other reasonable expenditures incurred or advances
made by Indenture Trustee or any Holder in the protection, exercise or
enforcement of any right, power or remedy or taking of any other action
permitted by this Indenture or by law upon such Indenture Event of
Default, all
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of the foregoing to the extent incurred in accordance with
Section 8.3(c);
THIRD, so much of such distributions, payments or amounts
remaining as is required to pay the principal then due and payable of all
of the Notes then Outstanding and accrued interest then due and payable
on all such Notes then Outstanding payable to the applicable Holders,
whether by declaration of acceleration pursuant to Section 8.2 or
otherwise, shall be applied to the payment of such principal and interest
due and payable for application in accordance with the ordering set forth
in Section 2.12; and in case such distributions, payments or amounts are
insufficient to pay in full the whole amount aforesaid, then to the
payment of such principal and interest, in accordance with the ordering
(except as to Premium) set forth in Section 2.12, without any preference,
priority or distinction of one such Note over another, ratably according
to the aggregate amount so payable for principal and interest, at the
date fixed by Indenture Trustee for the distribution of such
distributions, payments or amounts;
FOURTH, the balance, if any, of such distributions, payments or
amounts remaining thereafter shall be distributed to Nonaffiliated
Partner Trustee for distribution under the Trust Agreement;
except that, anything in this Section 3 to the contrary notwithstanding, after
Indenture Trustee has knowledge of an Indenture Event of Default (including,
without limitation, a BJ Event of Default), all amounts (other than with respect
to Excepted Property or Other Equipment that, but for the provisions of this
Section 3.5, would otherwise be distributable by Indenture Trustee to
Nonaffiliated Partner Trustee, shall be held by Indenture Trustee as part of the
Indenture Estate, and if (i) such amounts shall have been retained by Indenture
Trustee for more than 180 days, (ii) the unpaid principal amount of all Notes
have not been declared to be immediately due and payable and (iii) in the case
of an Indenture Event of Default arising solely out of a BJ Event of Default,
Indenture Trustee does not commence the exercise of any one or more of the
available remedies if any, referred to in Section 6.1(d), 11.1, 11.3 or 11.4 of
the Partnership Agreement, Section 5.22 of the Participation Agreement, Section
7.1 of the Services Agreement or Section 15.1 of the O&M Agreement (the choice
of which remedy or remedies to exercise to be made by Indenture Trustee in its
sole good faith discretion) to the extent such
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remedy or remedies are then available and may be exercised by Indenture
Trustee (the determination of which remedy or remedies, if any, are then
available and may be exercised by Indenture Trustee to be made by Indenture
Trustee in its sole good faith discretion), such amounts shall be distributed
to Nonaffiliated Partner Trustee in accordance with the other applicable
provisions of this Section 3.
3.6 AMOUNTS FOR WHICH APPLICATION IS PROVIDED IN OTHER BASIC
DOCUMENTS. Except as otherwise provided in this Indenture, any distribution
or payment received by Indenture Trustee for which provision as to the
application thereof is made in another Basic Document shall be distributed to
the Person for whose benefit such distributions or payments were made in
accordance with the terms of such Basic Document.
3.7 AMOUNTS FOR WHICH NO APPLICATION IS OTHERWISE PROVIDED. Except
as otherwise provided in Section 3.5 or 3.6, any distribution or payment
received by Indenture Trustee for which no provision as to the application
thereof is made elsewhere in this Indenture or in another Basic Document
shall be distributed in accordance with Section 3.5, except that any
distribution or payment received and amounts realized by Indenture Trustee
with respect to Nonaffiliated Partner Trustee's interest in Partnership or
the Units to the extent received or realized at any time after the conditions
set forth in Section 10 for the satisfaction and discharge of this Indenture
are satisfied, as well as any other amounts remaining as part of the
Indenture Estate after such satisfaction, shall be distributed by Indenture
Trustee to Nonaffiliated Partner Trustee for distribution under the Trust
Agreement.
3.8 EXCEPTED PROPERTY. Indenture Trustee shall deliver any
Excepted Property received by it to whomsoever is lawfully entitled to the
same.
3.9 NOTICE OF NONPAYMENT. By 2:00 p.m., New York time, on the
Distribution Date of any Priority Distribution, Indenture Trustee shall
notify the Holders, Nonaffiliated Partner Trustee, Beneficiaries and General
Partner, by telephone, which notice shall be confirmed in writing by
facsimile transmission, if Indenture Trustee has not received such Priority
Distribution; but the failure of Indenture Trustee so to notify such parties
shall not affect the obligations of Nonaffiliated Partner Trustee hereunder
or under the Notes or of Partnership under the Partnership Agreement or the
Participation Agreement or give rise to any
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liability of Indenture Trustee to such parties or any other Person for any
such failure.
SECTION 4. COVENANTS OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP.
4.1 Nonaffiliated Partner Trustee hereby covenants and agrees that:
(a) it will, subject to Section 2.9, pay or cause to be paid
when due all amounts of principal of, Premium, if any, and interest on the
Notes and all other amounts due hereunder (in any case, without duplication
of amounts theretofore paid to Indenture Trustee in respect thereof);
(b) if any responsible officer of Nonaffiliated Partner
Trustee has actual knowledge of an Indenture Event of Default or Indenture
Default or an Event of Loss, Nonaffiliated Partner Trustee will give prompt
written notice thereof to Indenture Trustee and Operator;
(c) it will not, in its capacity as Nonaffiliated Partner
Trustee, engage in any business or other activity (including the incurrence
of indebtedness for money borrowed), except as contemplated hereby or by the
other Basic Documents; and
(d) it will not, except with respect to Excepted Property or
except as expressly permitted hereunder, declare a default, or exercise any
remedies under, or terminate, modify or accept a surrender of, or offer or
agree to any termination, modification or surrender of, the Services
Agreement, the O&M Agreement or the Partnership Agreement.
4.2 Partnership hereby covenants and agrees that if any responsible
officer of General Partner or Affiliated Partner has actual knowledge of an
Indenture Event of Default or Indenture Default or an Event of Loss,
Partnership will give prompt written notice thereof to Indenture Trustee and
Operator.
SECTION 5. DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE
INDENTURE ESTATE DURING CONTINUATION OF PARTNERSHIP.
5.1 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN
THE INDENTURE ESTATE DURING CONTINUATION OF PARTNERSHIP. So long as
Partnership is in existence and the
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Partnership Agreement, the O&M Agreement and the Services Agreement are in
effect:
(a) MODIFICATIONS. Operator has the obligation, or the
right, to make certain Modifications to the Units. Any Optional Modification
that is a Non-Severable Modification and any Required Modification shall
become subject to the Lien of this Indenture and the relevant Indenture
Supplement. Any Optional Modifications that are Severable Modifications
shall not become subject to the Lien of this Indenture. Indenture Trustee
shall promptly execute an appropriate written instrument or instruments to
confirm the absence of a security interest in any Optional Modification that
is a Severable Modification; provided that Indenture Trustee receives a
written request from Partnership therefor addressed to Indenture Trustee and
Nonaffiliated Partner Trustee certifying that the Modifications are Severable
Modifications which are not Required Modifications.
(b) SUBSTITUTION OF UNITS. Upon the occurrence of (y) an
Event of Loss, or (z) an optional substitution of a Unit pursuant to Section
5.11 of the Participation Agreement, Section 7.2(d) of the Partnership
Agreement and Section 8.4 of the O&M Agreement, Partnership and Operator may
substitute a replacement for such Unit, upon satisfaction of the conditions
provided therefor in Section 5.11 or 5.12, as the case may be, of the
Participation Agreement. Any Unit substituted as permitted under Section 5.11
or 5.12 of the Participation Agreement shall become subject to the Lien of
this Indenture. Nonaffiliated Partner Trustee and Indenture Trustee shall
execute, concurrently with any such substitution pursuant to said Section
5.11 or 5.12, an Indenture Supplement substantially in the form of EXHIBIT B
with respect to any such Unit substituted in accordance with Section 5.11 or
5.12 of the Participation Agreement. Upon satisfaction of the conditions
contained herein and in the Participation Agreement, Indenture Trustee shall
execute and deliver to Operator, Partnership and Nonaffiliated Partner
Trustee an instrument releasing its Lien in and to such replaced Unit and
shall execute for recording in public offices, at the expense of Partnership,
such instruments in writing as Nonaffiliated Partner Trustee or Operator
shall reasonably request and as shall be reasonably acceptable to Indenture
Trustee in order to make clear upon public records that such Lien with
respect to such replaced Unit has been released under the laws of the
applicable jurisdiction.
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5.2 POSSESSION OF UNITS. So long as no BJ Event of Default exists,
Partnership shall be permitted to remain in full possession, enjoyment and
control of the Units and to manage, operate and use the same and each part
thereof with the rights and franchises appertaining thereto, including,
without limitation, the right to grant to Operator and Service Taker and
their respective permitted successors and assigns possession, enjoyment and
control of the Units; provided that the possession, enjoyment, control and
use thereof shall at all times be subject, insofar as Partnership is
concerned, to the observance and performance of the terms of this Indenture.
Without limiting the generality of the foregoing, it is expressly understood
and agreed that providing Services to Service Taker and the use and
possession of the Units by Operator under and subject to the Services
Agreement and the O&M Agreement, respectively, shall not constitute a
violation of this Section 5.2.
5.3 RELEASE OF UNITS. So long as no Indenture Default or Indenture
Event of Default exists, Indenture Trustee shall execute a release in respect
of any Unit in the following instances:
(a) in the case of a Reduction Election with respect to a
Unit or Units pursuant to Section 5.16 of the Participation Agreement and
Section 7.2(e) of the Partnership Agreement, upon receipt by Indenture
Trustee of (i) written notice of such Reduction Election pursuant to Section
5.16 of the Participation Agreement and (ii) all amounts payable to it
pursuant to Section 6.1(b) in connection with such Reduction Election;
(b) in the case of the exercise by General Partner of its ET
Right pursuant to Section 9.1 of the Partnership Agreement or its Special
P.O. Right pursuant to Section 9.4 of the Partnership Agreement, upon receipt
by Indenture Trustee of (i) written notice of such exercise pursuant to
Section 9.1 or 9.4 of the Partnership Agreement and (ii) all amounts payable
to it pursuant to Section 6.1(c) in connection with such exercise of the ET
Right or the Special P.O. Right;
(c) when designated by Partnership for a cash settlement
after the occurrence of an Event of Loss pursuant to Section 5.12 of the
Participation Agreement, upon receipt by Indenture Trustee of (i) written
notice thereof pursuant to Section 5.12 of the Participation Agreement and
(ii) all amounts payable to it pursuant to Section 6.1(a) in connection with
such Event of Loss; and
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(d) in the case of a Unit to be replaced in connection with
an optional substitution (the "Replaced Unit") of a Unit pursuant to Section
5.11 of the Participation Agreement and Section 7.2(d) of the Partnership
Agreement or Section 5.12 of the Participation Agreement and Section 7.2(c)
of the Partnership Agreement, as the case may be, upon the compliance with
the terms of such Section 5.11 or 5.12, as the case may be, of the
Participation Agreement and the attachment of the Lien of the Indenture to
the Unit being delivered to Partnership in substitution for the Replaced Unit.
Subject to the succeeding sentence, each such release shall be
executed only upon receipt by Indenture Trustee of the applicable amount
described in this Section 5.3 and the written request of General Partner
accompanied by an Officer's Certificate of General Partner setting forth the
basis for such request and stating that General Partner has complied with the
applicable provisions of the Participation Agreement, together with such
additional evidence of such compliance as Indenture Trustee may reasonably
request in writing. Upon written request of Nonaffiliated Partner Trustee,
in the case of Units returned to Nonaffiliated Partner Trustee, pursuant to
Section 5.17(b) of the Participation Agreement in connection with a Reduction
Election pursuant to Section 5.16 thereof, a release shall be executed upon
receipt by Indenture Trustee of the amount described in Section 5.3(a).
5.4 RELEASE OF UNITS - CONSENT OF HOLDERS. Partnership may sell or
otherwise dispose of any Unit then subject to the security interest of this
Indenture and Indenture Trustee shall release the same from the security
interest hereof, to the extent and on the terms, and upon compliance with,
the conditions provided for in any written consent given thereto at any time
or from time to time by all Holders. The provisions of this Section 5.4 are
in addition to the provisions of Section 5.3.
5.5 PROTECTION OF PURCHASER. No purchaser in good faith of
property purporting to be released hereunder shall be bound to ascertain the
authority of Indenture Trustee to execute the release, or to inquire as to
any facts required by the provisions hereof for the exercise of such
authority; nor shall any purchaser in good faith of any Unit be under an
obligation to ascertain or inquire into the conditions upon which any such
sale is hereby authorized.
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SECTION 6. PREPAYMENT OF NOTES.
6.1 PREPAYMENT OF NOTES UPON EVENT OF LOSS, OBSOLESCENCE, ET DATE OR
SPECIAL P.O. DATE.
(a) If an Event of Loss occurs with respect to a Unit and
such Unit is not replaced pursuant to Section 5.12 of the Participation
Agreement, the principal on each Outstanding Note shall be prepaid in part,
together with interest on the principal so prepaid, at a Prepayment Price
equal to the sum of (1) as to principal thereof, an amount equal to the
product obtained by multiplying the aggregate Current Principal Amount of
each Outstanding Note as of the Prepayment Date (after deducting therefrom
the related scheduled principal payment, if any, due and paid to Indenture
Trustee on the Prepayment Date) by a fraction, the numerator of which shall
be the Equipment Value of such Unit and the denominator of which shall be the
Equipment Value of the Units then subject to the Lien of this Indenture
immediately prior to such Prepayment Date, plus (2) as to interest, the
aggregate amount of interest accrued and unpaid in respect of the principal
amount to be prepaid pursuant to clause (1) above to but not including the
Prepayment Date after giving effect to the application of any Priority
Distribution or Supplemental Priority Distribution distributable in
accordance with Section 6.1(b) or 6.1(c) of the Partnership Agreement
received by Indenture Trustee on or prior to the date of such prepayment.
Each prepayment made pursuant to subclause (1) of this clause shall be (A)
applied to the prepayment of such Notes being prepaid so that each of the
remaining installments of principal of each such Note shall be reduced in the
proportion that the principal amount of the prepayment bears to the unpaid
principal amount of such Notes immediately before the prepayment and (B)
made ratably over the Notes, without preference, priority or distinction of
any one such Note over any other. The Prepayment Date for Notes to be
prepaid, in whole or in part, pursuant to this Section 6.1(a) shall be the
Settlement Date related to the Event of Loss giving rise to the prepayment.
(b) At any time on a Payment Date occurring after the fifth
anniversary of the Commencement Date, if General Partner determines that any
Units then subject to the Lien of this Indenture are obsolete or surplus to the
needs of Partnership in accordance with Section 5.16 of the Participation
Agreement and either (y) Nonaffiliated Partner Trustee has given notice to
Indenture Trustee pursuant to Section 5.18 of the Participation Agreement of its
election to retain such Units and to prepay the
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Notes on the Reduction Date as provided below, or (z) Nonaffiliated Partner
Trustee has not given such notice and Partnership has not withdrawn its
notice as provided in Section 5.16 of the Participation Agreement, principal
on each Outstanding Note shall be prepaid in part, together with interest on
the principal so prepaid at a Prepayment Price equal to the sum of (1) as to
principal thereof, an amount equal to the product obtained by multiplying the
Current Principal Amount of each Outstanding Note as of the Prepayment Date
(after deducting therefrom the related scheduled principal payment, if any,
due and paid to Indenture Trustee on the Prepayment Date) by a fraction, the
numerator of which shall be the Equipment Value of such Unit or Units and the
denominator of which shall be the Equipment Value of the Units then subject
to the Lien of this Indenture immediately before such Prepayment Date, plus
(2) as to interest, the aggregate amount of interest accrued and unpaid in
respect of the principal amount to be prepaid pursuant to clause (1) above
to, but not including, the Prepayment Date after giving effect to the
application of any Priority Distribution paid to Indenture Trustee on or
before the date of such prepayment, plus (3) the Premium. Each prepayment
made pursuant to subclause (1) of this clause (b) shall be (A) applied to the
prepayment of such Notes being prepaid so that each of the remaining
installments of principal of each such Note shall be reduced in the
proportion that the principal amount of the prepayment bears to the unpaid
principal amount of such Notes in the aggregate immediately prior to the
prepayment and (B) made ratably over the Notes, without preference, priority
or distinction of any one such Note over any other. The Prepayment Date for
Notes to be prepaid pursuant to this Section 6.1(b) shall be the Payment Date
that occurs on the Reduction Date.
(c) Upon (i) the election of General Partner or its designee to
exercise its fixed price purchase option pursuant to Section 9.1 or 9.4 of the
Partnership Agreement or (ii) the election of the General Partner to prepay the
Outstanding Notes on the ET Date or the Special P.O. Date, as the case may be,
notwithstanding that the General Partner or its designee has not elected to
exercise the ET Right, the Outstanding Notes shall be prepaid at a Prepayment
Price equal to the sum of (1) Current Principal Amount thereof, plus (2) accrued
but unpaid interest thereon to, but not including, the applicable Prepayment
Date, plus (3) if such fixed price purchase option is exercised on the Special
P.O. Date (but not otherwise) the Premium, plus (4) any other accrued and unpaid
Secured Obligations, if any. The Prepayment Date for Notes to be prepaid
pursuant to this Section 6.1(c) shall be the Special P.O. Date or the ET Date,
respectively.
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(d) Upon the existence of the conditions described in
Section 8.3(e)(iii) and the request of Nonaffiliated Partner Trustee or
Beneficiaries and delivery of notice, all pursuant to Section 8.3(e)(iii),
each Outstanding Note shall be purchased on the date specified in the notice
at a Prepayment Price equal to the sum of (1) the Current Principal Amount
thereof, plus (2) accrued but unpaid interest thereon to, but not including,
the applicable Prepayment Date.
(e) Upon the existence of the conditions described in
Section 8.3(iv) and the request of Nonaffiliated Partner Trustee or
Beneficiaries and delivery of notice, all pursuant to Section 8.3(e)(iv),
each Outstanding Note shall be purchased at a Prepayment Price equal to the
sum of (1) the Current Principal Amount thereof, plus (2) accrued but
unpaid interest thereon to, but not including, the applicable Prepayment
Date, plus (3) the Premium.
6.2 NOTICE OF PREPAYMENT TO HOLDERS. Notice of prepayment,
redemption or purchase with respect to any Notes contemplated by Section 6.1
shall be given by Indenture Trustee, in the manner provided in Section 13.1,
not less than five nor more than ten Business Days before the applicable
Prepayment Date, to each Holder of such Note to be prepaid or purchased, at
such Holder's address appearing in the Register.
All notices of prepayment shall state:
(1) the Prepayment Date;
(2) whether the Notes are to be prepaid in whole or in part;
(3) the Section and clause of this Indenture pursuant to which
the prepayment is being made;
(4) that, with respect to prepayments in whole of the Notes, on
the Prepayment Date, the Prepayment Price will become due and payable
with respect to the Notes, and that, if any of the Notes are then
Outstanding, interest on such Notes shall cease to accrue on and after
such Prepayment Date;
(5) that, with respect to prepayments in part of Notes on the
Prepayment Date, the Prepayment Price will become due and payable on such
Notes, and that interest with respect to that portion of the Prepayment
Price attributable to the
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principal amount of such Notes shall cease to accrue on and after the
applicable Prepayment Date; and
(6) the Prepayment Price, including in reasonable detail the
calculation of the estimated Premium, if any, to be paid in connection
therewith.
6.3 DEPOSIT OF PREPAYMENT PRICE. On or before the Prepayment Date,
Nonaffiliated Partner Trustee (or any Person on behalf of Nonaffiliated
Partner Trustee) shall, to the extent an amount equal to the Prepayment Price
with respect to the Notes to be prepaid, redeemed or purchased on the
Prepayment Date shall not then be held in the Indenture Estate, deposit or
cause to be deposited with Indenture Trustee by 11:00 a.m. (New York time) on
the Prepayment Date in immediately available funds the Prepayment Price with
respect to the Notes to be prepaid or purchased.
6.4 NOTES PAYABLE ON PREPAYMENT DATE. If notice of prepayment,
redemption or purchase is given in accordance with Section 6.2, the Notes or
portions thereof shall, on the Prepayment Date, become due and payable at the
principal corporate trust office of Indenture Trustee, and from and after the
related Prepayment Date (unless there is a default in the payment of the
Prepayment Price), all Notes then Outstanding shall cease to bear interest as
to any portion the principal of which is prepaid.
If any Note called in whole or in part for prepayment or purchase is
not so paid, the principal amount thereof shall, until paid, continue to bear
interest from the applicable Prepayment Date at the Late Rate as of such
Prepayment Date through the date upon which such Note or such portion is paid.
SECTION 7. NONAFFILIATED PARTNER TRUSTEE AND INDENTURE TRUSTEE.
7.1 PREPAYMENT OF MONEYS FOR NOTE PAYMENTS HELD BY INDENTURE
TRUSTEE. Any money held by Indenture Trustee in trust for any payment of the
principal of, Premium, if any, or interest on any Note (but not any money
constituting Excepted Property or relating to Other Equipment and not any
moneys representing the balance, if any, after giving effect to applications
pursuant to clauses "first" through "third", of Section 3.5, which balance,
if any, is to be distributed upon the terms and conditions provided in clause
"fourth" of Section 3.5) and remaining unclaimed for more than two years and
eleven months (or such lesser time as Indenture Trustee is satisfied, after
60 days written notice from Nonaffiliated Partner Trustee or General Partner
on behalf of
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Partnership, is one month before the escheat period provided under applicable
law) after the due date for such payment, shall be paid to Nonaffiliated
Partner Trustee; and the Holders entitled to payment thereon shall
thereafter, as unsecured general creditors, look only to Nonaffiliated
Partner Trustee for payment thereof, and all liability of Indenture Trustee
with respect to such trust money shall thereupon cease, except that Indenture
Trustee, before being required to make any such repayment, shall, at the
written direction of Nonaffiliated Partner Trustee with a copy to General
Partner on behalf of Partnership, cause to be mailed to each such Holder
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of mailing, any
unclaimed balance of such money then remaining will be repaid to
Nonaffiliated Partner Trustee as provided herein.
7.2 NO REPRESENTATIONS OR WARRANTIES AS TO UNITS OR DOCUMENTS.
NEITHER NONAFFILIATED PARTNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR OTHERWISE
NOR INDENTURE TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION,
DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE UNITS OR THE
OTHER EQUIPMENT OR AS TO THEIR TITLE THERETO, OR ANY OTHER REPRESENTATION OR
WARRANTY WITH RESPECT TO THE UNITS OR THE OTHER EQUIPMENT WHATSOEVER OR ANY
REPRESENTATION OR WARRANTY AS TO THE VALIDITY OR ENFORCEABILITY OF ANY BASIC
DOCUMENT, except that (i) First Security makes the representations and
warranties contained in Sections 3.1(h) and 3.1(k) of the Participation
Agreement and Nonaffiliated Partner Trustee hereby represents and warrants
that on the Commencement Date Nonaffiliated Partner Trustee received whatever
right, title and interest was conveyed to it by Partnership and First
Security represents, warrants and covenants that such right, title and
interest and the Units are on the Commencement Date, and thereafter shall be,
free of Nonaffiliated Partner Trustee Liens attributable to First Security
and (ii) ITC represents and warrants that it has not breached its covenant
contained in Section 5.9 of the Participation Agreement.
SECTION 8. DEFAULTS AND REMEDIES.
8.1 INDENTURE EVENTS OF DEFAULT. The following events shall
constitute "Indenture Events of Default" under this Indenture (whether any
such event is voluntary or involuntary or comes about or is effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
government body):
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(a) default in the payment of any installment of principal,
interest or Premium, if any, in respect of any Note when and as the same
shall become due and payable (whether on the due date thereof, a date fixed
for prepayment, by acceleration or otherwise), and which is not thereafter
paid within five Business Days after the same becomes due and payable;
(b) the existence of a BJ Event of Default;
(c) default in the due observance or performance of any
other covenant or agreement to be observed or performed by Nonaffiliated
Partner Trustee (in its individual capacity or as Nonaffiliated Partner
Trustee) under the Notes or hereunder or to be observed or performed by
Nonaffiliated Partner Trustee (in its individual capacity or as Nonaffiliated
Partner Trustee) or any Beneficiary for the benefit of any Holder under the
Participation Agreement or the Trust Agreement, and any such default
continues unremedied for 30 days after Nonaffiliated Partner Trustee and
Beneficiaries receive notice thereof from Indenture Trustee specifying the
default and demanding that the same be remedied; except that, if such failure
is capable of being remedied and such remedy does not involve the payment of
money alone, no such failure shall constitute an Indenture Event of Default
hereunder while Nonaffiliated Partner Trustee (in its individual capacity or
as Nonaffiliated Partner Trustee)or any Beneficiary is diligently proceeding
to remedy such failure, but in no event shall such failure continue
unremedied for a period of the lesser of 90 days from the date of such notice
and the number of days remaining in the Transaction Term;
(d) any representation or warranty made by Nonaffiliated
Partner Trustee (in its individual capacity or as Nonaffiliated Partner
Trustee) herein, or by Nonaffiliated Partner Trustee or any Beneficiary in
the Participation Agreement or in any certificate or other statement
furnished by Nonaffiliated Partner Trustee (in its individual capacity or as
Nonaffiliated Partner Trustee) or any Beneficiary to Indenture Trustee or any
Holder in connection with the transactions contemplated by the Participation
Agreement is incorrect in any material respect as of the date of the issuance
or making thereof;
(e) Nonaffiliated Partner Trustee, the Trust Estate or any
Beneficiary becomes insolvent or bankrupt or generally fails to pay, or admits
in writing its inability to pay, its debts as they come due, or makes a general
assignment for the benefit of creditors, or applies for, consents to or
acquiesces in the
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appointment of a trustee, custodian or receiver or other similar official for
Nonaffiliated Partner Trustee, Trust Estate or Beneficiary;
(f) a trustee, custodian or receiver or other similar
official is appointed for Nonaffiliated Partner Trustee, the Trust Estate or
any Beneficiary and is not discharged within 60 days after such appointment;
(g) any bankruptcy, reorganization, arrangement, insolvency
or liquidation case or proceeding, or other case or proceeding for relief
under any bankruptcy law or similar law for the relief of debtors, is
instituted by or against Nonaffiliated Partner Trustee, the Trust Estate or
any Beneficiary and, if instituted against Nonaffiliated Partner Trustee, the
Trust Estate or any Beneficiary is allowed against Nonaffiliated Partner
Trustee or any Beneficiary or is consented to or is not dismissed within 60
days after such institution.
8.2 ACCELERATION; RESCISSION AND ANNULMENT; LIMITATIONS. If an
Indenture Event of Default exists, Indenture Trustee by written notice to
Nonaffiliated Partner Trustee, Partnership and each Beneficiary, may, and upon
written request of a Majority In Interest of Holders shall, declare the
principal of all the Notes to be due and payable; except that the principal of
all Notes, together with accrued interest thereon from the date in respect of
which interest was last paid hereunder to the date payment of such principal has
been made, and all other accrued and unpaid Secured Obligations will
automatically become due and payable without any action of Indenture Trustee or
the Holders in the case of an Indenture Event of Default under Section 8.1(e),
(f) or (g), unless such Indenture Event of Default with respect to a Beneficiary
is remedied or the defaulting Beneficiary transfers its Beneficial Interest
pursuant to Section 8.3(e)(i)(4). Upon such declaration, the principal of all
Notes, together with accrued interest thereon from the date in respect of which
interest was last paid hereunder to the date payment of such principal has been
made and all other accrued and unpaid Secured Obligations shall be immediately
due and payable as a result of such declaration or automatic acceleration. At
any time after such declaration or automatic acceleration, as the case may be,
and before the sale or disposition of the Indenture Estate, a Majority In
Interest of Holders, by written notice to Indenture Trustee, Nonaffiliated
Partner Trustee, Partnership and each Beneficiary, may rescind such a
declaration or automatic acceleration, as the case may be, and thereby annul its
consequences if (a) an amount sufficient to pay all principal of
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and interest (including interest at the Late Rate on overdue payments) on
such Notes, to the extent each such amount is due or past due without regard
to the acceleration hereof, if any, in respect of the Outstanding Notes and
all other sums then due and payable to Indenture Trustee has been deposited
with Indenture Trustee, (b) the rescission would not conflict with any
judgment or decree and (c) all existing Indenture Defaults and Indenture
Events of Default under this Indenture are cured or waived except nonpayment
of principal of, or interest on, the Notes which have become due solely
because of such acceleration. No such rescission shall affect any subsequent
default or impair any right consequent thereon.
8.3 OTHER REMEDIES AVAILABLE TO INDENTURE TRUSTEE.
(a) If an Indenture Event of Default exists, then and in
every such case Indenture Trustee, as trustee of an express trust and as
assignee hereunder of Nonaffiliated Partner Trustee's Partnership Interest or
as holder of a security interest in the Units or otherwise, may, and when
required pursuant to Section 9 shall, exercise (subject to the following
sentence and Sections 8.3(e) and 8.3(f)), any or all of the rights and powers
and pursue any and all of the remedies accorded to Nonaffiliated Partner
Trustee under the Partnership Agreement and the Participation Agreement and
to Partnership and Nonaffiliated Partner Trustee under the O&M Agreement, the
Services Agreement and this Section 8, 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 Nonaffiliated Partner
Trustee, Partnership, any Partner, Operator, Service Taker and Beneficiaries
and all Persons claiming under any of them wholly or partly therefrom.
Notwithstanding any other provision of this Indenture or any other of the
Basic Documents to the contrary, Indenture Trustee shall not be entitled
pursuant to Section 8.3(b) or otherwise to sell any of the Partnership
Indenture Estate or exercise other remedies against the Partnership Indenture
Estate or to exercise BJ Remedies (as defined below) until such time, if any,
as a BJ Event of Default exists. Notwithstanding any other provision of this
Indenture or any other of the Basic Documents, Indenture Trustee shall not be
entitled to exercise any remedy hereunder as a result of an Indenture Event
of Default that arises solely by reason of one or more events or
circumstances that constitute a BJ Event of Default unless Indenture Trustee
as security assignee of Nonaffiliated Partner Trustee declares the O&M
Agreement to be in default and simultaneously, to the extent it is then
entitled to do so hereunder and under the Partnership
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Agreement, O&M Agreement and Participation Agreement and is not then stayed
or otherwise prevented from doing so by operation of law, exercises one or
more of the rights or remedies (each right or remedy, a "BJ Remedy") in
Section 6.1(d), 11.1, 11.3 or 11.4 of the Partnership Agreement, Section 15.1
of the O&M Agreement involving a termination of the O&M Agreement or any
other remedy in Section 15.1 of the O&M Agreement or Section 5.22 of the
Participation Agreement; except, that if Indenture Trustee is stayed or
otherwise prevented by operation of law from exercising such BJ Remedies, it
shall in any event refrain from so foreclosing or otherwise exercising BJ
Remedies hereunder (i) for 180 days after the commencement of such stay or
other circumstances preventing the exercise of BJ Remedies or (ii) if
Guarantor or an Affiliate of Guarantor with court approval assumes (and is
performing the obligations of each Bankrupt BJ Entity under) the Basic
Documents to which each Bankrupt BJ Entity is a party in accordance with
Section 365 of the Bankruptcy Code and, if an Affiliate of Guarantor so
assumes, Guarantor remains liable for all its obligations under the Guaranty
to the same extent as if such assumption had not occurred.
(b) Subject to Sections 8.3(a), 8.3(e) and 8.3(f), if an
Indenture Event of Default exists, Indenture Trustee may, if at the time such
action is lawful and 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 action by registered mail to
Nonaffiliated Partner Trustee, Partnership and each Beneficiary once at least 15
days before the date of such action, and any other notice required by law, sell
and dispose of the Indenture Estate, or any part thereof, or interest therein,
at a private sale or sales or a public auction to the highest bidder, in each
case, in one lot as an entirety or in separate lots, and either for cash or on
credit and on such terms as Indenture Trustee may determine, and at any place
(whether or not it is the location of the Indenture Estate or any part thereof)
and time designated in the notice above referred to. Notwithstanding any
provision herein or in any other Basic Document to the contrary, Indenture
Trustee shall not sell any of the Partnership Indenture Estate or exercise other
remedies against the Partnership Indenture Estate or exercise BJ Remedies unless
a BJ Event of Default exists. Notwithstanding any provision herein to the
contrary or in any other Basic Document, Indenture Trustee shall not sell any of
the Indenture Estate or exercise other remedies against the Indenture Estate
seeking to deprive Beneficiaries of their interest therein as a result of an
Indenture
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Event of Default that arises solely by reason of one or more events or
circumstances that constitute a BJ Event of Default unless a declaration of
acceleration has been made pursuant to Section 8.2, Indenture Trustee as
security assignee of Nonaffiliated Partner Trustee declares the O&M Agreement
to be in default and Indenture Trustee is simultaneously exercising, to the
extent it is then entitled to do so hereunder and under the Partnership
Agreement, the Participation Agreement and the O&M Agreement and is not then
stayed or otherwise prevented from doing so by operation of law, one or more
BJ Remedies; and no private sale may be made to BJ USA or any of its
Affiliates; except, that if Indenture Trustee is so stayed or otherwise
prevented by operation of law from exercising such BJ Remedies, it shall in
any event refrain from so foreclosing or otherwise exercising remedies
hereunder (i) for 180 days after the commencement of such stay or other
circumstances preventing the exercise of BJ Remedies or (ii) if Guarantor or
an Affiliate of Guarantor with court approval assumes (and is performing the
obligations of each Bankrupt BJ Entity under) the Basic Documents to which
each Bankrupt BJ Entity is a party in accordance with Section 365 of the
Bankruptcy Code and, if an Affiliate of Guarantor so assumes, Guarantor
remains liable for all its obligations under the Guaranty as if such
assumption had not occurred. Any such 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
Indenture Trustee and any Holder may bid and become the purchaser at any such
sale. Indenture Trustee may exercise such right without possession or
production of the Notes or proof of ownership thereof, and as representative
of Holders may exercise such right without notice to Holders or including
Holders as parties to any suit or proceeding relating to foreclosure of any
property in the Indenture Estate. Nonaffiliated Partner Trustee and
Partnership each hereby irrevocably constitutes Indenture Trustee the true
and lawful attorney-in-fact of Nonaffiliated Partner Trustee (in the name of
Nonaffiliated Partner Trustee or otherwise) and Partnership (in the name of
Partnership or otherwise), as the case may be, for the purpose of
effectuating any sale, assignment, transfer or delivery upon enforcement of
the Lien created under 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 Indenture Trustee may consider necessary
or appropriate, with full power of substitution, Nonaffiliated Partner
Trustee and Partnership each hereby ratifying and confirming all that such
attorney or any substitute shall lawfully do by virtue hereof. Nevertheless,
if so requested by Indenture Trustee or any purchaser, Nonaffiliated Partner
Trustee
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and Partnership each shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to 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 Sections 8.3(a), 8.3(e) and 8.3(f), if an
Indenture Event of Default exists, Nonaffiliated Partner Trustee or Partnership,
or both, shall, at the request of Indenture Trustee upon enforcement of the Lien
created under this Indenture, promptly execute and deliver to Indenture Trustee
such instruments of title or other documents as Indenture Trustee may deem
necessary or advisable to enable Indenture Trustee or an agent or representative
designated by Indenture Trustee, at such time and place or places as Indenture
Trustee may specify, to obtain possession of all or any part of the Indenture
Estate. If Nonaffiliated Partner Trustee or Partnership for any reason fails to
execute and deliver such instruments and documents after such request by
Indenture Trustee, Indenture Trustee shall be entitled to a judgment for
specific performance of the covenants contained in the foregoing sentence,
conferring upon Indenture Trustee the right to immediate possession and
requiring Nonaffiliated Partner Trustee or Partnership, as the case may be, to
execute and deliver such instruments and documents to Indenture Trustee.
Subject to Sections 8.3(a), 8.3(e) and 8.3(f), Indenture Trustee shall also be
entitled to pursue all or any part of the Indenture Estate wherever it may be
found and may enter any of the premises of Nonaffiliated Partner Trustee or
Partnership or any other Person wherever the Indenture Estate may be or be
supposed to be and search for the Indenture Estate and take possession of any
item of the Indenture Estate pursuant to this Section 8.3(c). Subject to
Sections 8.3(a), 8.3(e) and 8.3(f), 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 and
of the Indenture Estate, as it may deem proper. In each such case, Indenture
Trustee shall have the right to use, operate, store, lease, control or manage
the Indenture Estate and to exercise all rights and powers of Nonaffiliated
Partner Trustee or Partnership relating to the Indenture Estate as Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, leasing, control or
management of the Indenture Estate or any part thereof; and Indenture Trustee
shall be entitled to collect and receive directly all tolls, rents, payments,
distributions (including Priority Distributions, Supplemental Priority
Distributions and Special
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Distributions other than Excepted Property), issues, profits, products,
revenues and other income of the Indenture Estate and every part thereof,
without prejudice, however, to the right of Indenture Trustee under any
provision of this Indenture to collect and receive cash held by, or required
to be deposited with, Indenture Trustee hereunder. In accordance with the
terms of this Section 8.3(c), such tolls, rents, payments, distributions
(including Priority Distributions, Supplemental Priority Distributions and
Special Distributions other than Excepted Property), issues, profits,
products, revenues and other income shall be applied to pay the expenses of
using, operating, storing, leasing, controlling or managing the Indenture
Estate, and of all maintenance, insurance, repairs, replacements,
alterations, additions and improvements, and to make all payments which
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 Nonaffiliated Partner Trustee and Partnership) and all other payments
which Indenture Trustee may be required or authorized to make under any
provision of this Indenture, including this Section 8.3(c), as well as just
and reasonable compensation for the services of Indenture Trustee, and of all
persons properly engaged and employed by Indenture Trustee.
If a BJ Event of Default exists and Indenture Trustee obtains
possession of or title to the Units, Indenture Trustee shall not be obligated
to use or operate the Units or cause the Units 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 the Units by any other Person.
(d) Subject to Sections 8.3(a), 8.3(e) and 8.3(f), Indenture
Trustee may proceed to protect and enforce this Indenture and the Notes by
suit or suits or proceedings in equity, at law or in bankruptcy, and whether
for the specific performance of any covenant or agreement herein contained or
in execution or aid of any power herein granted, or for foreclosure
hereunder, or for the appointment of a receiver or receivers for the
Indenture Estate or any part thereof, or for the recovery of judgment for the
indebtedness secured by the Lien created under this Indenture or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
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(e) (i) (1) If Partnership fails to distribute any
Priority Distribution distributable under the Partnership Agreement at least ten
Business Days after the Distribution Date therefor, Nonaffiliated Partner
Trustee or any Beneficiary, without the consent of Indenture Trustee or any
Holder but subject to Section 8.3(e)(i)(5), may, within the time period
specified in clause (4) below, pay to Indenture Trustee for application in
accordance with Section 3.3, a sum equal to the amount of all (but not less than
all) principal and interest (other than by acceleration) then due and payable on
the Outstanding Notes, together with any interest on account of such Priority
Distribution not being made on the Distribution Date as provided in
Section 4.4(b) of the Partnership Agreement.
(2) If Partnership or General Partner defaults in the
payment or performance of any obligation hereunder or under the Partnership
Agreement (other than the obligation to make Priority Distributions) or the
Participation Agreement, Guarantor defaults in the payment or performance of any
obligation under the Guaranty or the Participation Agreement, BJ USA defaults in
the payment or performance of any obligation under the Participation Agreement,
Service Taker defaults in the payment or performance of any obligation under the
Services Agreement or the Participation Agreement or Operator defaults in the
payment or performance of any obligation under the O&M Agreement or the
Participation Agreement and such default constitutes a BJ Default and can be
cured, Nonaffiliated Partner Trustee or any Beneficiary, without the consent of
Indenture Trustee or any Holder, may, within the period specified in clause (4)
below, pay or perform such obligation on behalf of Partnership, General Partner,
Guarantor, BJ USA, Service Taker or Operator or otherwise perform such
obligations on behalf of Partnership, General Partner, Guarantor, BJ USA,
Service Taker or Operator, without the necessity of giving any notice to
Partnership, General Partner, Guarantor, BJ USA, Service Taker or Operator, it
being understood and agreed that nothing herein contained shall be deemed or
construed to prohibit Nonaffiliated Partner Trustee or any Beneficiary from
exercising any such rights of Partnership before any such notice from Indenture
Trustee.
(3) Solely for the purpose of determining whether there
exists an Indenture Event of Default, (i) any payment by Nonaffiliated Partner
Trustee or any Beneficiary pursuant to, and in compliance with, Section
8.3(e)(i)(1) shall, for the purposes of this Indenture, be deemed to remedy any
default by Partnership in making Priority Distributions theretofore
distributable and to remedy any default by Nonaffiliated Partner Trustee in the
payment of any amount due and payable under the Notes, in each case only if such
payment pursuant to Section 8.3(e)(i)(1) is in an amount sufficient to remedy
such default, and (ii) any payment or performance by Nonaffiliated Partner
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Trustee or any Beneficiary of any obligation of Partnership, General Partner,
Guarantor, BJ USA, Service Taker or Operator under the Partnership Agreement,
Participation Agreement, Guaranty, Services Agreement or O&M Agreement pursuant
to, and in compliance with, Section 8.3(e)(i)(2) shall, for the purposes of this
Indenture, be deemed to remedy any default by Partnership, General Partner,
Guarantor, BJ USA, Service Taker or Operator in the performance in full of such
obligation and to remedy any related default by Nonaffiliated Partner Trustee
under this Indenture.
(4) While an Indenture Event of Default arising
solely from a BJ Event of Default or an Indenture Event of Default with
respect to a Beneficiary under Section 8.1(c), 8.1(d), 8.1(e), 8.1(f) or
8.1(g) exists, (x) Indenture Trustee shall give Partnership, Nonaffiliated
Partner Trustee and each Beneficiary at least 15 Business Days' prior written
notice of its intention to exercise any rights as assignee of Nonaffiliated
Partner Trustee's or Partnership's rights under the Guaranty, Partnership
Agreement, Participation Agreement, Services Agreement or O&M Agreement (such
15 Business Days' prior written notice to be given without regard to how long
a BJ Event of Default or an Indenture Event of Default with respect to a
Beneficiary under Section 8.1(c), 8.1(d), 8.1(e), 8.1(f) or 8.1(g) which has
given rise to such intent to so exercise rights under the Guaranty,
Partnership Agreement, Participation Agreement, Services Agreement or O&M
Agreement exists) or declare the Notes to be so due and payable for purposes
of this Section 8.3(e), (y) if an Indenture Default with respect to a
Beneficiary under Section 8.1(e), 8.1(f) or 8.1(g) exists (such Indenture
Event of Default, a "Beneficiary Bankruptcy" and such Beneficiary, a
"Bankrupt Beneficiary"), Nonaffiliated Partner Trustee or any other
Beneficiary may give Indenture Trustee written notice within 15 days of such
Beneficiary Bankruptcy of the intention of Nonaffiliated Partner Trustee or
such Beneficiary to remedy any default by Bankrupt Beneficiary or to acquire
or cause to be acquired all of Bankrupt Beneficiary's Beneficial Interest and
of the actions it intends to take to accomplish the same, and (z) during such
15-Business Day period or, if the notice required by clause (y) above was
given, during the 90-day period after the occurrence of such Beneficiary
Bankruptcy, Indenture Trustee shall not exercise any rights as assignee of
Nonaffiliated Partner Trustee's or Partnership's rights under the Guaranty,
Partnership Agreement, Participation Agreement, Services Agreement or O&M
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Agreement as a result of such Indenture Event of Default and neither
Indenture Trustee nor the Holders shall declare the Notes to be due and
payable pursuant to Section 8.2 as a result of such Indenture Event of
Default or exercise any remedies under Section 8 as a result of such
Indenture Event of Default; except that if within such 15-Business Day period
or 90-day period, as the case may be, Nonaffiliated Partner Trustee or any
non-defaulting Beneficiary remedies any default by Partnership, General
Partner, Guarantor, BJ USA, Service Taker or Operator as provided in clauses
(1) and (2) of this Section 8.3(e) or remedies any default by any
Beneficiary or such defaulting Beneficiary transfers all of its Beneficial
Interest pursuant to Section 6.1 of the Participation Agreement, Indenture
Trustee shall not exercise any rights as assignee of Nonaffiliated Partner
Trustee's or Partnership's rights under the Partnership Agreement,
Participation Agreement, Guaranty, Services Agreement or O&M
Agreement as a result of such Indenture Event of Default and neither
Indenture Trustee nor the Holders shall declare the Notes to be due and
payable pursuant to Section 8.2 as a result of such Indenture Event of
Default or exercise any remedies under Section 8 as a result of such
Indenture Event of Default.
(5) Section 8.3(e)(i)(1) shall not apply to any default
in making any Priority Distribution under the Partnership Agreement, if default
in making two consecutive Priority Distributions, or in making a total of five
Priority Distributions, are cured by Nonaffiliated Partner Trustee or any
Beneficiary pursuant to Section 8.3(e)(i)(1). Section 8.3(e)(i)(2) shall not
apply to any default by Partnership or General Partner in the payment or
performance of any obligation hereunder or under the Partnership Agreement
(other than the obligation to make Priority Distributions) or the Participation
Agreement, by Guarantor in the payment or performance of any obligation under
the Guaranty or the Participation Agreement, by BJ USA in the payment or
performance of any obligation under the Participation Agreement, by Service
Taker in the payment or performance of any obligation under the Services
Agreement or the Participation Agreement or by Operator in the payment or
performance of any obligation under the O&M Agreement or the Partnership
Agreement, if such defaults are cured by Nonaffiliated Partner Trustee or a
Beneficiary pursuant to Section 8.3(e)(i)(2) by the expenditure of $2,500,000 or
more in the aggregate.
(6) Upon the exercise of any cure right under this
Section 8.3(e)(i), neither Nonaffiliated Partner Trustee nor any Beneficiary
shall retain any Lien on any part of the Indenture
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Estate on account of any payment made or the costs and expenses incurred in
connection therewith nor shall any claim of Nonaffiliated Partner Trustee or
any Beneficiary against Partnership, General Partner, Guarantor, Operator or
any other Person for the repayment thereof impair the prior right and
security interest of Indenture Trustee in and to the Indenture Estate.
(ii) Upon the exercise of any cure right under Section
8.3(e)(i), Nonaffiliated Partner Trustee or Beneficiaries, as the case may be,
shall be subrogated to the rights of Holders (1) to receive from Indenture
Trustee the Priority Distribution, Supplemental Priority Distribution or other
amount with respect to which Nonaffiliated Partner Trustee or any Beneficiary
effected such cure (including interest on account of such Priority Distribution
or Supplemental Distribution not being distributed on the Distribution Date
therefor or interest on account of such other amount being overdue) and (2) with
respect to which Nonaffiliated Partner Trustee or any Beneficiary otherwise
effected such cure, and if Indenture Trustee thereafter receives such Priority
Distribution, Supplemental Priority Distribution or other amount and no other
Indenture Event of Default exists, then, notwithstanding the requirements of
Section 3.3, Indenture Trustee forthwith shall remit such Priority Distribution,
Supplemental Priority Distribution or other amount to Nonaffiliated Partner
Trustee or such Beneficiary, as the case may be, in reimbursement for the funds
so advanced by any of them; except that, if the principal of and interest on any
Notes have become due and payable pursuant to Section 8.2, such Priority
Distribution or Supplemental Distribution shall be distributed by Indenture
Trustee in accordance with Section 3.5. Neither Nonaffiliated Partner Trustee
nor any Beneficiary shall attempt to recover any such Priority Distribution,
Supplemental Priority Distribution or other amount paid by it on behalf of
General Partner, Partnership, Operator, Service Taker, BJ USA or Guarantor
pursuant to this Section 8.3(e)(ii) except by demanding of Partnership, General
Partner, Operator, Service Taker, BJ USA or Guarantor payment of such amount or
by proceeding by appropriate court action or actions, either at law or at
equity, to enforce performance by Partnership, General Partner, Operator,
Service Taker, BJ USA or Guarantor of the applicable covenants or recover
damages for the breach thereof. Further, upon the exercise of any cure right
under Section 8.3(e)(i)(4) with respect to a defaulting Beneficiary,
Nonaffiliated Partner Trustee or such Beneficiary effecting such remedy or
acquiring the defaulting Beneficiary's Beneficial Interest, as the case may be,
shall be subrogated to the rights of
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defaulting Beneficiary to receive distributions, payments and other amounts
payable to defaulting Beneficiary under the Basic Documents.
(iii) If (1) the Notes are accelerated pursuant to Section 8.2,
or (2) the Notes are automatically accelerated as provided for in Section 8.2,
or (3) one or more BJ Event(s) of Default exists for a period of 180 days or
more (and no Indenture Event of Default that does not arise solely from a BJ
Event of Default exists) and the Notes are not accelerated by Indenture Trustee
or the Holders during such period, Nonaffiliated Partner Trustee or a
Beneficiary may give notice to Indenture Trustee of Nonaffiliated Partner
Trustee's or a Beneficiary's intention to purchase, or cause to be purchased by
another Person designated by Nonaffiliated Partner Trustee (or prepay in lieu of
purchase), all of the Notes in accordance with this Section 8.3(e)(iii), which,
if a prepayment, shall be pursuant to Section 6.1(d). Concurrently with such
notice, Nonaffiliated Partner Trustee or Beneficiary will deposit with Indenture
Trustee, whether or not an Indenture Event of Default then exists, an amount
sufficient to pay the Prepayment Price equal to the aggregate unpaid principal
amount of all unpaid Notes then Outstanding, but without Premium, together with
(A) accrued but unpaid interest thereon to the date of such receipt (as well as
any interest on overdue principal and, to the extent permitted by applicable
law, overdue interest calculated as provided in Section 4.4(b) of the
Partnership Agreement) and (B) all amounts then due and payable to Indenture
Trustee pursuant to Section 9.5(a)(i), which funds shall be held by Indenture
Trustee as provided in Section 9.3. Upon the receipt of such funds, Indenture
Trustee will terminate any proceedings then in progress. In the event of a
purchase by a Beneficiary or Nonaffiliated Partner Trustee (or a designee) of
the Notes pursuant to this Section 8.3(e)(iii) and upon payment to Indenture
Trustee of the Prepayment Price calculated pursuant to this Section 8.3(e)(iii),
each Holder will be deemed to sell, assign, transfer and convey to such
Beneficiary or Nonaffiliated Partner Trustee or its designee (without recourse
or warranty of any kind except as to title to the Notes being conveyed free and
clear of Liens attributable to such Holder) all of the right, title and interest
of such Holder in and to the Indenture Estate, this Indenture and all Notes held
by such Holder. The Registrar shall register the transfer of ownership of the
Notes into the name of Nonaffiliated Partner Trustee or its designee.
(iv) If a BJ Event of Default exists and before (1) acceleration
of the Notes and (2) the expiration of the 180-day
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period referred to in Section 8.3(e)(iii) (and no Indenture Event of Default
that does not arise solely from a BJ Event of Default exists), Nonaffiliated
Partner Trustee or any Beneficiary may give notice to Indenture Trustee of
Nonaffiliated Partner Trustee's or Beneficiary's intention to purchase, or
cause to be purchased by another Person designated by Nonaffiliated Partner
Trustee (or prepay in lieu of purchase), all of the Notes in accordance with
this Section 8.3(e)(iv), which, if a prepayment, shall be pursuant to Section
6.1(e). Concurrently with such notice, Nonaffiliated Partner Trustee or
Beneficiary will deposit with Indenture Trustee, whether or not an Indenture
Event of Default then exists, an amount sufficient to pay the Prepayment
Price equal to the aggregate unpaid principal amount of all unpaid Notes then
Outstanding, together with (A) accrued but unpaid interest thereon to the
date of such receipt (as well as any interest on overdue principal and, to
the extent permitted by applicable law, overdue interest calculated as
provided in Section 4.4(b) of the Partnership Agreement), (B) the Premium, if
any, as of the date of deposit and (C) all amounts then due and payable to
Indenture Trustee pursuant to Section 9.5(a)(i), which funds shall be held by
Indenture Trustee as provided in Section 9.3. Upon the receipt of such
funds, Indenture Trustee will terminate any proceedings then in progress. In
the event of a purchase by any Beneficiary or Nonaffiliated Partner Trustee
of Notes pursuant to this Section 8.3(e)(iv) and upon payment to Indenture
Trustee of the Prepayment Price calculated pursuant to this Section
8.3(e)(iv), each Holder will be deemed to sell, assign, transfer and convey
to Beneficiary or Nonaffiliated Partner Trustee or its designee (without
recourse or warranty of any kind except as to title to the Notes being
conveyed free and clear of Liens attributable to such Holder) all of the
right, title and interest of such Holder in and to the Indenture Estate, this
Indenture and all Notes held by such Holder. The Registrar shall register
the transfer of ownership of the Notes into the name of Nonaffiliated Partner
Trustee or its designee.
(f) Notwithstanding any provision of this Indenture or any
other Basic Document to the contrary, as long as no BJ Event of Default exists,
neither Indenture Trustee nor Nonaffiliated Partner Trustee shall take any
action contrary to, or disturb, Service Taker's rights under the Services
Agreement, Operator's rights under the O&M Agreement or the rights of General
Partner and Affiliated Partner under the Partnership Agreement.
(g) Each and every right, power and remedy herein given to
Indenture Trustee specifically or otherwise in this Indenture shall be
cumulative and shall be in addition to every
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other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, each and every right, power and
remedy whether specifically herein given or otherwise existing may, subject
to the limitations set forth herein, be exercised from time to time and as
often in such order as may be deemed expedient by 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 same time or
thereafter any other right, power or remedy. No delay or omission by
Indenture Trustee or any Holder in the exercise of any right, remedy or power
or in pursuing any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of Nonaffiliated Partner
Trustee, Partnership, General Partner, Guarantor, Operator or Service Taker
or to be an acquiescence therein. The giving, taking or enforcement of any
other additional security, collateral or guaranty for the payment and
performance of Secured Obligations shall not operate to impair, affect, waive
or prejudice the Lien of this Indenture or any rights, powers or remedies
hereunder. Neither Indenture Trustee nor any Holder shall be required to
look to any additional security, collateral or guaranty, or exhaust any
remedies with respect thereto, before exercising remedies hereunder or under
the Partnership Agreement, Participation Agreement, the Services Agreement,
the Guaranty, or the O&M Agreement in accordance with the terms hereof or
thereof.
8.4 WAIVER OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP. To the
extent now or at any time hereafter enforceable under applicable law,
Nonaffiliated Partner Trustee and Partnership each covenants that it will not
(i) at any time insist upon or plead, or in any manner whatsoever claim or take
any benefit or advantage of, any stay or extension law now or at any time
hereafter in force, nor claim, take or insist upon any benefit or advantage of
or from any law now or hereafter in force providing for the valuation or
appraisal of the Indenture Estate or any part thereof before any sale or sales
thereof to be made pursuant hereto, or to the decree, judgment or order of any
court of competent jurisdiction; nor (ii) after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and to
the extent now or at any time hereafter enforceable under applicable law hereby
expressly waives for itself and on behalf of each and every Person, except
decree or judgment creditors of Nonaffiliated Partner Trustee acquiring any
interest in or title to the Indenture Estate or any part thereof subsequent to
the date of this Indenture, all benefit and advantage of any
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such law or laws, and covenants that it will not invoke or utilize any such
law or laws or otherwise hinder, delay or impede the execution of any power
herein granted and delegated to Indenture Trustee, but will suffer and permit
the execution of every such power as though no such law or laws had been made
or enacted. Nothing in this Section 8.4 shall be deemed to be a waiver by
Nonaffiliated Partner Trustee or Partnership of its rights under the
exception to Section 8.3(a) and under Section 8.3(e).
8.5 WAIVER OF EXISTING DEFAULTS. A Majority In Interest by notice to
Indenture Trustee may waive on behalf of the Holders an existing Indenture
Default or Indenture Event of Default and its consequences except (a) an
Indenture Default or Indenture Event of Default in the payment of the principal
of, Premium, if any, or interest on, any Note or (b) in respect of a covenant or
provision hereof which pursuant to Section 11.3 cannot be amended or modified
without the consent of the Holder affected.
8.6 CONTROL BY HOLDERS. A Majority In Interest may direct the time,
method and place of conducting any proceeding for any remedy available to
Indenture Trustee or exercising any trust or power conferred on it by this
Indenture. However, Indenture Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that is unduly prejudicial to the rights
of the Holders so affected, or that would subject Indenture Trustee to personal
liability.
8.7 LIMITATION ON SUITS BY HOLDERS. A Holder may pursue a remedy
under this Indenture or under a Note only if:
(a) the Holder gives to Indenture Trustee written notice of a
continuing Indenture Event of Default under this Indenture;
(b) a Majority In Interest make a written request to Indenture
Trustee to pursue the remedy;
(c) such Holder or Holders offer to Indenture Trustee indemnity
satisfactory to Indenture Trustee against any loss, liability or expense to be,
or which may be, incurred by Indenture Trustee in pursuing the remedy;
(d) Indenture Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
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(e) during such 60-day period, a Majority In Interest does not
give Indenture Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
8.8 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
principal of, Premium, if any, and interest on a Note on or after the respective
due dates expressed in such Note shall not be impaired or affected without the
consent of such Holder.
8.9 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM. Indenture Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of Indenture Trustee and of the Holders
allowed in any judicial proceedings relating to Partnership, Guarantor, Service
Taker, Operator or Nonaffiliated Partner Trustee, their respective creditors, or
their property.
SECTION 9. INDENTURE TRUSTEE.
9.1 RIGHTS AND DUTIES OF INDENTURE TRUSTEE.
(a) Indenture Trustee accepts the trusts hereby created and
applicable to it and agrees to perform its duties with respect to the same but
only upon the terms of this Indenture, and agrees to receive and disburse all
moneys constituting part of the Indenture Estate in accordance herewith and
applicable law.
(b) Before Indenture Trustee acts or refrains from acting, it
may consult with counsel or require an Officer's Certificate or an opinion of
counsel from General Partner, Partnership or Nonaffiliated Partner Trustee after
which it will take such action or refrain from acting as it deems appropriate.
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith and in accordance herewith in reliance on a resolution of the
Board of Directors of General Partner, the written advice of counsel acceptable
to Nonaffiliated Partner Trustee and Indenture Trustee, Officer's Certificates
or opinions of counsel provided by General Partner, Partnership or Nonaffiliated
Partner Trustee.
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(c) Indenture Trustee may act through agents appointed with due
care and shall be responsible for the misconduct or negligence of any such
agent; except that Indenture Trustee shall not be responsible for the misconduct
or negligence of any agent appointed at the request of the Holders.
(d) Indenture Trustee shall not be liable for any action it
takes or omits to take which it in good faith believes to be authorized or
within its rights or powers.
(e) Indenture Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense.
(f) Subject to Section 9.3, Indenture Trustee shall not be
liable for interest on any money received by it except as Indenture Trustee may
otherwise agree in writing with General Partner, Partnership or Nonaffiliated
Partner Trustee. Money held in trust by Indenture Trustee need not be
segregated from other funds except to the extent required by law.
(g) Notwithstanding any other provision of this Section 9,
whether or not an Indenture Event of Default under this Indenture exists,
Indenture Trustee shall exercise its rights and powers under this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(h) Except during the existence of an Indenture Event of
Default:
(i) Indenture Trustee need perform only those duties that are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against Indenture Trustee.
(ii) In the absence of bad faith on its part, Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to Indenture Trustee and conforming to the
requirements of this Indenture. However, Indenture Trustee shall examine
the certificates and opinions to determine whether or not they
substantially conform to the requirements of this Indenture.
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(i) Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) This Section 9.1(i) does not limit the effect of Section
9.1(h).
(ii) Indenture Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or officers, unless
it shall be proved that Indenture Trustee was negligent in ascertaining
the pertinent facts.
(iii) Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with the
direction received by it pursuant to Section 8.6.
(j) Every provision of this Indenture that in any way relates
to Indenture Trustee is subject to Sections 9.1(g), 9.1(h) and 9.1(i).
9.2 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise have business relationships with Nonaffiliated Partner Trustee,
any Beneficiary, BJ USA or an Affiliate of any thereof with the same rights it
would have if it were not Indenture Trustee. Any agent may do the same with
like rights.
9.3 FUNDS MAY BE HELD BY INDENTURE TRUSTEE; INVESTMENTS. Any moneys
(including for the purpose of this Section 9.3 any cash deposited with Indenture
Trustee or Permitted Investments purchased by the use of such cash pursuant to
this Section 9.3 or any cash constituting the proceeds of the maturity, sale or
other disposition of any Permitted Investment) held by Indenture Trustee
hereunder as part of the Indenture Estate, until paid out by Indenture Trustee
as herein provided, (a) subject to clause (b) below, may be carried by
Indenture Trustee on deposit with itself or on deposit to its account with any
bank, trust company or national banking association incorporated or doing
business under the laws of the United States of America or one of the States
thereof having combined capital and surplus and retained earnings of at least
$1,000,000,000 and having a rating assigned to the long-term unsecured debt of
such institutions by Standard & Poor's Corporation and Moody's Investors
Service, Inc. at least equal to AA and AA2, respectively, and Indenture Trustee
shall not have any
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liability for interest upon any such moneys except as otherwise agreed in
writing with Nonaffiliated Partner Trustee, General Partner or Partnership;
provided, that Indenture Trustee shall not seek indemnity or reimbursement
from any Holder as a result of liability for interest, or (b) at any time
and from time to time at the request of General Partner acting as the agent
of Nonaffiliated Partner Trustee solely for purposes of this Section 9.3,
shall be invested and reinvested in Permitted Investments as specified in
such request (if such investments are reasonably available for purchase); and
such Permitted Investments shall be held by Indenture Trustee in trust as
part of the Indenture Estate until so sold; except that General Partner, as
agent of Nonaffiliated Partner Trustee solely for purposes of this Section
9.3, shall upon demand pay to Indenture Trustee the amount of any loss
realized upon maturity, sale or other disposition of any such Permitted
Investment. Any net income, profit, interest, dividend or gain realized upon
maturity, sale or other disposition of any Permitted Investment shall be held
as part of the Indenture Estate and shall be applied by Indenture Trustee at
the same time, on the same conditions and in the same manner as the amounts
in respect of which such income, profit, interest, dividend or gain was
realized are required to be distributed in accordance with the provisions
hereof. Indenture Trustee shall not be responsible for any losses on any
investments or sales of Permitted Investments made pursuant to the procedure
specified in this Section 9.3.
9.4 NOTICE OF DEFAULTS.
(a) If an Indenture Event of Default under this Indenture
exists and if it is actually known to Indenture Trustee, Indenture Trustee shall
promptly send written notice thereof to General Partner (on behalf of
Partnership), Nonaffiliated Partner Trustee, Beneficiaries and the Holders
(except Indenture Trustee shall not be obligated to provide such notice to any
such Person if such Person had informed Indenture Trustee of such Indenture
Event of Default). In addition, if an Indenture Default under this Indenture
exists and if a responsible officer of Indenture Trustee has actual knowledge
thereof, Indenture Trustee shall promptly send written notice thereof to General
Partner (on behalf of Partnership), Nonaffiliated Partner Trustee, Beneficiaries
and the Holders. Subject to Sections 9.4(c) and 9.5, Indenture Trustee shall
take or refrain from taking such action, not inconsistent with the provisions of
the Basic Documents, with respect thereto as the Majority in Interest shall
direct by written instruction to Indenture Trustee. If Indenture Trustee gives
the Holders written notice of any event and does not receive written instruction
as
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above provided within 20 days after mailing notice of such event to the
Holders, Indenture Trustee may, subject to the Basic Documents, take or
refrain from taking such action, but shall be under no duty to, or shall have
no liability for a failure or refusal to, take or refrain from taking any
action with respect thereto as it determines to be advisable in the best
interests of the Holders.
(b) Notice pursuant to this Section 9.4 shall be transmitted in
the manner provided in Section 13.1 to all Holders, as the names and addresses
of such Holders appear upon the Register.
(c) Subject to the terms of, and except as otherwise provided in
Sections 8, 9.5 and 11, upon the written instructions at any time and from time
to time of a Majority in Interest of the Holders (or of Holders holding at least
66 2/3% of the Outstanding Notes in the case of an action to be taken pursuant
to that Section 11.3), Indenture Trustee shall take such of the following
actions as may be specified in such instructions: (i) exercise such election
or option, or make such decision or determination, or give such notice, consent,
waiver or approval or exercise such right, remedy or power to take such other
action hereunder or in respect of any part or all of the Indenture Estate as
specified in such instructions; (ii) take such action with respect to, or to
preserve or protect, the Indenture Estate (including the discharge of Liens) as
specified in such instruction and as are consistent with this Indenture and the
other Basic Documents; and (iii) take such other action in respect of the
subject matter of this Indenture as is consistent with the terms hereof and of
the Basic Documents.
9.5 COMPENSATION.
(a) Nonaffiliated Partner Trustee shall pay to Indenture
Trustee, from time to time, on demand, the following amounts:(i) reasonable
compensation for Indenture Trustee's services, which compensation shall not be
limited by any law on compensation of a trustee of an express trust,
(ii) reimbursement for all reasonable out-of-pocket expenses incurred by
Indenture Trustee in connection with the performance of its duties under this
Indenture (including the reasonable compensation and expenses of Indenture
Trustee's counsel in accordance with Section 9.1(b) and any agent appointed in
accordance with Section 9.1(c)) and (iii) any expense, loss or liability
incurred by it arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder except (1) such expenses or
loss or liability
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resulting from the negligence or wilful misconduct of Indenture Trustee or
the inaccuracy of any representation or warranty of Indenture Trustee in its
individual capacity in Section 3.3 of the Participation Agreement, (2) as
otherwise provided in Section 9.9 and (3) as excluded by Sections 7.1 and
7.2 of the Participation Agreement from BJ USA's indemnities under said
Sections; except that, so long as the Partnership Agreement is in effect,
Indenture Trustee shall not make any claim against Nonaffiliated Partner
Trustee under this Section 9.5 for any claim or expense for which BJ USA is
liable, or for which Nonaffiliated Partner Trustee is indemnified against by
BJ USA, under the Participation Agreement without first making demand on BJ
USA for payment of such claim or expense. Indenture Trustee shall notify
Nonaffiliated Partner Trustee and BJ USA promptly of any claim or expense for
which it may seek indemnity.
(b) To secure the payment obligations of Nonaffiliated Partner
Trustee pursuant to this Section 9.5, Indenture Trustee shall have a Lien prior
to that of the Holders on all money or property held or collected from
Partnership or Nonaffiliated Partner Trustee by Indenture Trustee, except that
held in trust to pay the principal of, Premium, if any, and interest on, the
Notes.
9.6 REPLACEMENT OF INDENTURE TRUSTEE.
(a) The resignation or removal of 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 9.6.
(b) Indenture Trustee may resign by giving at least 30 days'
prior written notice to General Partner (on behalf of Partnership),
Nonaffiliated Partner Trustee, Beneficiaries and the Holders. A Majority In
Interest may remove Indenture Trustee, and also may appoint a successor
Indenture Trustee, by giving at least 30 days' prior written notice to Indenture
Trustee, Nonaffiliated Partner Trustee, Beneficiaries and General Partner (on
behalf of Partnership). Nonaffiliated Partner Trustee (whether or not acting
pursuant to instructions from Beneficiaries) may remove Indenture Trustee if:
(i) Indenture Trustee fails to comply, with Section 9.8;
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(ii) Indenture Trustee is adjudged a bankrupt or an insolvent;
(iii) a receiver or public officer takes charge of Indenture
Trustee or its property; or
(iv) Indenture Trustee becomes incapable of acting.
(c) If (i) Indenture Trustee resigns or is removed, (ii) the
Holders have removed Indenture Trustee pursuant to the second sentence of
Section 9.6(b) and have not appointed a successor within 30 days or (iii) a
vacancy otherwise exists in the office of Indenture Trustee for any reason, then
Nonaffiliated Partner Trustee may, subject to prior action being taken pursuant
to Section 9.6(d), promptly appoint a successor Indenture Trustee.
(d) If a successor Indenture Trustee does not take office
within 30 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, General Partner (on behalf of Partnership),
Beneficiaries or a Majority In Interest may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(e) If Indenture Trustee fails to comply with Section 9.8, any
Holder may petition any court of competent jurisdiction for the removal of such
Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to General
Partner (on behalf of Partnership), to Beneficiaries and to Nonaffiliated
Partner Trustee. Thereupon, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
for which the successor Indenture Trustee is to be acting under this Indenture.
The retiring Indenture Trustee shall promptly transfer all property and all
books and records relating to the administration of the Indenture Estate held by
it as Indenture Trustee to the successor Indenture Trustee subject to the Lien
provided for in Section 9.5(b). Nonaffiliated Partner Trustee shall give notice
of each appointment of a successor Indenture Trustee by mailing written notice
of such event by first-class mail to Holders.
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9.7 SUCCESSOR INDENTURE TRUSTEE BY MERGER, ETC. If Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business assets to, another corporation, the
successor corporation, without any further act, shall be the successor Indenture
Trustee.
9.8 ELIGIBILITY; DISQUALIFICATION. Indenture Trustee shall at all
times (including after giving effect to any of the events described in Section
9.7) have a combined capital and surplus of at least $100,000,000 and shall be
subject to supervision or examination by Federal or state authority. If
Indenture Trustee publishes reports of condition at least annually, pursuant to
law or to the requirements of Federal or state supervising or examining
authority, then for the purposes of this Section 9.8, the combined capital and
surplus of Indenture Trustee shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published.
If at any time Indenture Trustee ceases to be eligible in
accordance with this Section 9.8, Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 9.6.
9.9 TRUSTEE'S LIENS. Indenture Trustee in its individual capacity
agrees that it will at its own cost and expense promptly take such action as may
be necessary to comply with the provisions of Section 5.9 of the Participation
Agreement.
9.10 WITHHOLDING TAXES; INFORMATION REPORTING. Indenture Trustee shall
exclude and withhold from each distribution of principal, Premium, if any, and
interest and other amounts due hereunder or under the Notes any and all
withholding taxes applicable thereto as required by law (provided, however, no
such exclusion or withholding shall be made from such distribution if Indenture
Trustee shall have received a duly exercised and properly completed U.S.
Internal Revenue Service Form W-9 or 1001 or any substitute Form which may be
applicable). Indenture Trustee agrees (a) to act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect of the Notes, to withhold such amounts and timely pay the same to the
appropriate authority in the name of and on behalf of the Holders, (b) that it
will file any necessary withholding tax returns or statements when due and (c)
that, as promptly as possible after the payment of such amounts, it will deliver
to each Holder appropriate documentation showing the payment of such
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amounts, together with such additional documentary, evidence as such Holders
may reasonably request from time to time. Indenture Trustee agrees to file
any other information reports relating to withholding taxes as it may be
required to file under United States law.
9.11 CO-TRUSTEE. At any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Indenture Estate may
at the time be located, Indenture Trustee shall have the power, subject to
receipt of the prior written approval of Nonaffiliated Partner Trustee as long
as no Indenture Event of Default exists, and shall execute and deliver all
instruments necessary, to appoint one or more Persons to act as co-trustee, or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Indenture Estate, and to vest in such Person or Persons in such capacity, such
interest in the Indenture Estate or any part thereof, and such rights, powers,
duties, trusts or obligations as Indenture Trustee may consider necessary or
desirable.
SECTION 10. SATISFACTION AND DISCHARGE; TERMINATION
OF OBLIGATIONS.
10.1 SATISFACTION AND DISCHARGE OF AGREEMENT; TERMINATION OF
OBLIGATIONS. Subject to Section 10.2, this Indenture shall cease to be of
further force or effect, and Nonaffiliated Partner Trustee and Indenture Trustee
shall, except as herein provided, be deemed to have been discharged from their
respective obligations with respect to the Notes (and Indenture Trustee, on
demand and at the reasonable expense of Nonaffiliated Partner Trustee, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture in respect of the Notes upon delivery of satisfactory evidence that
all Notes theretofore authenticated have been fully paid or discharged), when
all accrued and unpaid Secured Obligations has been fully paid or there shall
have been deposited with Indenture Trustee in trust for the purpose of paying
and discharging such accrued and unpaid Secured Obligations, an amount in cash
sufficient without reinvestment thereof to discharge such accrued and unpaid
Secured Obligations, including the principal of, and Premium, if any, and
interest on the Notes to the date of such deposit (in the case of Notes which
have become due and payable), or to the maturity thereof, as the case may be.
10.2 SURVIVAL OF CERTAIN OBLIGATIONS. Notwithstanding Section 10.1,
the obligations of Nonaffiliated Partner Trustee and Indenture Trustee contained
in Sections 2.1 through 2.8, 7.1, 9.9,
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9.10, 10.3 and 10.4 and the rights, duties, immunities and privileges
hereunder of Indenture Trustee shall survive the discharge of this Indenture.
10.3 MONEYS TO BE HELD IN TRUST. All moneys deposited with Indenture
Trustee pursuant to Section 10.1 shall be held in trust and applied by it, in
accordance with the Notes and this Indenture, to the payment to the Holders,
Indenture Trustee or any other Person entitled thereto, as applicable, of all
sums due and to become due thereon for principal, Premium, if any, and interest
and all other Secured Obligations, if any.
10.4 MONEYS TO BE RETURNED TO NONAFFILIATED PARTNER TRUSTEE. Indenture
Trustee shall promptly pay or return to Nonaffiliated Partner Trustee upon
request of Nonaffiliated Partner Trustee any money held by it at any time that
is not required for the payment of the amounts described above in Section 10.3
for which money has been deposited pursuant to Section 10.1.
SECTION 11. AMENDMENTS AND WAIVERS.
11.1 AMENDMENTS TO THIS INDENTURE WITHOUT CONSENT OF HOLDERS.
Nonaffiliated Partner Trustee, Partnership and Indenture Trustee may enter into
one or more written agreements supplemental hereto without the consent of any
Holder for any of the following purposes:
(a) to cure any defect or inconsistency herein or in the Notes,
to make any change not inconsistent with the provisions hereof or to cure any
ambiguity or correct any mistake, provided that such change does not adversely
affect the interests of any Holder;
(b) to evidence the succession of another party as
Nonaffiliated Partner Trustee in accordance with the terms of the Trust
Agreement or to evidence (in accordance with Section 9) the succession of a new
Indenture Trustee hereunder, the removal of Indenture Trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees to Indenture Trustee or Nonaffiliated Partner Trustee;
(c) to subject to the Lien of this Indenture additional
property hereafter acquired by Nonaffiliated Partner Trustee or Partnership and
intended to be subjected to the Lien of this Indenture;
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(d) 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 Indenture Trustee any property subject or required to be subject to
the Lien of this Indenture;
(e) to add to the covenants of Nonaffiliated Partner Trustee or
Partnership for the benefit of Holders, or to surrender any rights or power
herein conferred upon Nonaffiliated Partner Trustee, Partnership, Beneficiaries
or General Partner;
(f) to add to the rights of Holders;
(g) to include on the Notes any legend required by law; or
(h) to permit the qualification of this Indenture under the
Trust Indenture Act of 1939, as amended, or any similar federal statute
hereafter in effect, except that nothing herein contained shall permit or
authorize the inclusion of the provisions referred to in Section 316(a)(2) of
said Trust Indenture Act of 1939 or any corresponding provision in any similar
federal statute hereafter in effect.
11.2 SUPPLEMENTS TO PARTNERSHIP AGREEMENT, GUARANTY, SERVICES AGREEMENT
AND O&M AGREEMENT WITHOUT HOLDER CONSENT. Indenture Trustee, from time to time
and at any time, subject to the restrictions contained in this Indenture, may,
without the consent of Holders, consent to any amendment of or supplement to the
Partnership Agreement, the Guaranty, the Services Agreement or the O&M Agreement
for any one of the following purposes:
(a) to adjust the Priority Distributions, Disposition Values,
and Disposition Amounts pursuant to Section 2.7 of the Participation Agreement,
subject to all of the conditions set forth therein, if, on or before the
effective date of any adjustment pursuant to the provisions of this
Section 11.2(b), Indenture Trustee shall have received an Officer's Certificate
of General Partner (on behalf of Partnership), addressed to Holders and
Indenture Trustee and to the effect that, after giving effect to such
adjustment, the amount of Priority Distributions distributable on each Payment
Date under the Partnership Agreement equals or exceeds the amount payable on
such date for principal and accrued interest on all the Notes, and the amounts
of Disposition Amount payable on any date under the Partnership Agreement or
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Participation Agreement equals or exceeds the unpaid principal amount of all the
Notes and accrued interest.
(b) if requested by Nonaffiliated Partner Trustee, to agree to
any other amendment made to the Partnership Agreement, the Services Agreement,
the O&M Agreement or the Guaranty solely with respect to matters that
constitute, or relate to, Excepted Property, Other Equipment or any other
Property not subject to the Lien of this Indenture.
11.3 AMENDMENTS WITH CONSENT OF HOLDERS.
(a) With the written consent of Holders of not less than
66-2/3% of the unpaid principal balance of the Notes, (x) Nonaffiliated Partner
Trustee and Partnership may take any action prohibited, or omit the taking of
any action required, by any of the provisions of this Indenture or any agreement
supplemental hereto, (y) Nonaffiliated Partner Trustee, Partnership and
Indenture Trustee may enter into such written supplemental agreements to add any
provisions to or to change or eliminate any provisions of this Indenture or of
any such supplemental agreements, or to modify the rights of Holders, or (z)
Nonaffiliated Partner Trustee and Partnership may enter into such written
supplemental agreements to add any provisions to or to change or eliminate any
provisions of the Partnership Agreement, the Services Agreement, the O&M
Agreement or the Guaranty or of any supplemental agreements thereto, or to
modify the obligations of Nonaffiliated Partner Trustee, Partnership, General
Partner, Affiliated Partner, Operator, Service Taker or Guarantor thereunder;
provided, however, that, without the consent of each Holder affected thereby, an
amendment under this Section 11.3 may not:
(i) reduce any amount payable with respect to, principal,
Premium, if any, or interest on, any Note held by such Holder;
(ii) change the date on which any principal of, Premium, if any,
or interest on any Note held by such Holder, is due or payable or
otherwise affect the terms of payment of any Note or change to a location
outside the United States the place of payment where, or the coin or
currency in which, any payment hereunder is payable;
(iii) reduce the amount of any capital contribution to be
contributed or any Priority Distribution, Supplemental
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Priority Distribution or Special Distribution to be distributed under the
Partnership Agreement so that the same is less than the scheduled payment
of principal of, Premium, if any, and interest on any Notes held by such
Holder intended to be made by Nonaffiliated Partner Trustee from such
distributions;
(iv) create any Lien on the Indenture Estate except such as are
permitted by this Indenture, or deprive any Holders of the benefit of the
Lien on the Indenture Estate created by this Indenture;
(v) reduce the percentage in principal amount of the
Outstanding Notes, the consent of whose Holders is required for any such
supplemental agreement, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or of
defaults hereunder or their consequences) provided for in this Indenture;
or
(vi) make any change in Sections 8.5 through 8.8 or this Section
11.3(a).
(b) Promptly after the execution by Nonaffiliated Partner
Trustee and Indenture Trustee of any supplemental agreement or other amendment
pursuant to Section 11.1, 11.2 or this 11.3, Indenture Trustee shall transmit by
first-class mail a notice, setting forth in general terms the substance of such
supplemental agreement or other amendment, together with a conformed copy
thereof, to all Holders, as the names and addresses of such Holders appear on
the Register. Any failure of Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental agreement.
11.4 NOTATION ON OR EXCHANGE OF NOTES. Indenture Trustee may place an
appropriate notation about an amendment or waiver on any Note thereafter
executed. Indenture Trustee in exchange for any Notes may execute new Notes
that reflect the amendment or waiver.
11.5 INDENTURE TRUSTEE PROTECTED. Indenture Trustee need not sign any
supplemental agreement or other amendment pursuant to Section 11.2 or 11.3 that
adversely affects its rights.
11.6 OPINION OF COUNSEL CONCLUSIVE AS TO SUPPLEMENTS. Indenture
Trustee may receive an opinion of counsel selected by it
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(which may be independent counsel for General Partner, Partnership or
Nonaffiliated Partner Trustee) as conclusive evidence that any waiver,
consent or supplemental agreement or other amendment executed pursuant to
this Section 11 complies with the requirements of this Section 11.
SECTION 12. ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS.
12.1 ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS. Upon any of:
(a) a Reduction Election with respect to any Unit pursuant to
Section 5.16 of the Participation Agreement and Section 7.2(e) of the
Partnership Agreement on a Reduction Date, and upon payment to Indenture Trustee
on a Prepayment Date of an amount equal to the Prepayment Price of the required
portion of the Outstanding Notes determined pursuant to Section 6.1(b);
(b) the purchase by General Partner or its designee of the
Partnership Interest of Nonaffiliated Partner Trustee pursuant to Section 9.1 or
9.4 of the Partnership Agreement on the ET Date or the Special P.O. Date,
respectively, and upon payment to Indenture Trustee on such date of an amount
equal to the Prepayment Price of the required portion of the Outstanding Notes
determined pursuant to Section 6.1(c);
(c) the exercise by Partnership of its right to remove the Lien
of this Indenture with respect to a Unit on the relevant date, following an
Event of Loss suffered by such Unit under circumstances where Partnership does
not exercise its option to substitute replacement equipment therefor pursuant to
Section 5.12 of the Participation Agreement and Section 7.2(c) of the
Partnership Agreement, and upon payment to Indenture Trustee of an amount equal
to the Prepayment Price as at the Prepayment Date of the required portion of the
Outstanding Notes determined pursuant to Section 6.1(a);
(d) the exercise of Partnership's right to remove the Lien of
this Indenture with respect to any Unit to be replaced in connection with a
substitution pursuant to Section 5.11 of the Participation Agreement and Section
7.2(d) of the Partnership Agreement or Section 5.12 of the Participation
Agreement and Section 7.2(c) of the Partnership Agreement, and upon compliance
with the terms of such Section 5.11 or 5.12, as the case may be, of the
Participation Agreement and the attachment of the Lien of the
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Indenture to the Unit being delivered to Nonaffiliated Partner Trustee in
substitution for the Unit being replaced;
(e) satisfaction, discharge, defeasance and termination of the
obligations under this Indenture in accordance with Section 10.1;
then Indenture Trustee shall, without recourse or warranty (except as to the
absence of Liens of Persons claiming by, through or under Indenture Trustee)
transfer all of Indenture Trustee's right, title and interest in and to such
Units to the Person contemplated by the relevant provisions of the Partnership
Agreement and Participation Agreement, and Indenture Trustee shall execute such
instruments as may reasonably be requested by General Partner, Nonaffiliated
Partner Trustee or any Beneficiary to evidence such termination.
SECTION 13. MISCELLANEOUS.
13.1 NOTICES. Unless otherwise expressly specified or permitted by the
terms hereof, all communication and notices provided for herein shall be in
writing, and any such notice shall become effective when received (and notices
given pursuant to clause (b) below shall be deemed received three days after
being deposited in the mail). Any written notice shall be by (a) personal
delivery thereof, including, without limitation, by overnight mail and courier
service, (b) United States mail, certified, postage prepaid, return receipt
requested or (c) facsimile transmission, in each case effective upon receipt (in
the case of clause (c) as evidenced by the sender's receipt of electronic
confirmation of the addressee's receipt), and 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 BJ USA:
BJ Services Company U.S.A.
5500 Northwest Central Drive
Houston, TX 77092
Attention: Mr. Taylor M. Whichard III
Facsimile: 713/895-5420
Confirmation No.: 713/895-5847
If to Nonaffiliated Partner Trustee:
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First Security Trust Company of Nevada
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: 801/246-5053
Confirmation No.: 801/246-5630
If to any Beneficiary:
To such Beneficiary at its address set forth on Schedule 1 to the
Participation Agreement
If to Indenture Trustee:
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, MA 02111
Attention: Corporate Trust Department
Facsimile: 617/662-1727
Confirmation No.: 617/662-1462
If to any Holder:
To such Holder at its address set forth in the Register.
13.2 GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE IN ALL
RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK FOR
CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, EXCEPT TO THE EXTENT THAT
MATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE LIEN GRANTED BY THE BASIC DOCUMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
13.3 NO RECOURSE AGAINST OTHERS. No director, officer, employee,
stockholder or Affiliate, as such, of Guarantor, General Partner, Service Taker,
BJ USA, Operator, Nonaffiliated Partner Trustee or any Beneficiary, as the case
may be, shall have any liability for any obligations of Guarantor, General
Partner, Service Taker, BJ USA, Operator, Nonaffiliated Partner Trustee or any
Beneficiary, as the case may be, under this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Holder
by accepting a Note waives and
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releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
13.4 EXECUTION IN COUNTERPARTS. This Indenture may be executed in any
number of counterparts, and the parties hereto on separate signature pages, each
executed counterpart constituting an original but altogether only one Indenture.
13.5 INDENTURE FOR BENEFIT OF NONAFFILIATED PARTNER TRUSTEE, INDENTURE
TRUSTEE, BENEFICIARIES AND HOLDERS. Nothing in this Indenture or the Notes,
whether express or implied, shall be construed to give to any Person other than
Nonaffiliated Partner Trustee, Indenture Trustee, Partnership, Beneficiaries and
the Holders any legal or equitable right, remedy or claim under or in respect of
this Indenture, other than General Partner to the extent expressly provided
herein.
13.6 SEVERABILITY. Whenever possible, each provision of this Indenture
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Indenture shall be prohibited by or
invalid under the laws of any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Indenture as to such jurisdiction or in any other
jurisdiction.
13.7 NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No terms or
provisions of this Indenture or the Notes may be waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the waiver, discharge or termination is
sought; and any waiver of the terms hereof or of any Note shall be effective
only in the specific instance and for the specific purpose given.
13.8 SUCCESSORS AND ASSIGNS. This Indenture shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of, and shall be enforceable by, the parties hereto and their
respective successors and assigns as permitted by and in accordance with the
terms hereof and the Basic Documents. Except as expressly provided herein or in
the other Basic Documents, no party hereto may assign its interests herein
without the consent of the other party hereto. Any request, notice, direction,
consent, waiver or other instrument or action by any Holder shall bind the
successors and assigns of such Holder.
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13.9 HEADINGS AND TABLE OF CONTENTS. The headings of the Sections of
this Indenture and the Table of Contents are inserted for the purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
13.10 NO LEGAL TITLE TO INDENTURE ESTATE IN HOLDERS. No Holder shall
have legal title to any part of the Indenture Estate. No transfer, by operation
of law or otherwise, of any Note or other right, title and interest of any
Holder in and to the Indenture Estate or the trusts hereunder shall operate to
terminate this Indenture or the trusts hereunder or entitle any successor or
transferee of such Holder to an accounting or the transfer to it of legal title
to any part of the Indenture Estate.
13.11 CAPACITY IN WHICH ACTING. Nonaffiliated Partner Trustee acts
hereunder solely as trustee herein and in the Trust Agreement provided and not
in its individual capacity, except as otherwise expressly provided herein, in
the Trust Agreement and in the Participation Agreement.
13.12 DIRECTLY OR INDIRECTLY. Where any provision in this Indenture
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
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IN WITNESS WHEREOF, Nonaffiliated Partner Trustee, Partnership and
Indenture Trustee have caused this INDENTURE to be duly executed and delivered
as of the date first above written.
FIRST SECURITY TRUST COMPANY OF
NEVADA, not in its individual capacity
except as expressly provided herein, but
solely as Nonaffiliated Partner Trustee
By: /s/ DeAnn Madsen
Name: DeAnn Madsen
Title: Trust Officer
S-1
BJ SERVICES EQUIPMENT II, L.P.
By: BJ Services Company, U.S.A.,
its General Partner
By: /s/ T. M. Whichard
T. M. Whichard, Treasurer
S-2
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee
By: /s/ Donald E. Smith
Name: Donald E. Smith
Title: Vice President
S-3
EXHIBIT A
TO
INDENTURE
FORM OF NON-RECOURSE NOTES
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY
NOT BE OFFERED OR SOLD UNLESS IT IS REGISTERED UNDER APPLICABLE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN
RESTRICTIONS IN SECTION 6.2 OF THE PARTICIPATION AGREEMENT.
ADDITIONALLY, THE HOLDER OF THIS NOTE IS OBLIGATED TO KEEP CERTAIN
INFORMATION CONFIDENTIAL IN ACCORDANCE WITH SECTION 9.14 OF THE
PARTICIPATION AGREEMENT.
No. $
---------- -----------
Maturity Date: March 17, 2012
SECURED NOTE --
----------
(BJ SERVICES TRUST NO. 1999-1)
First Security Trust Company of Nevada,
a Nevada banking corporation,
not in its individual capacity
but solely as Nonaffiliated
Partner Trustee under the
Trust Agreement
dated as of December 15, 1999
FIRST SECURITY TRUST COMPANY OF NEVADA, not in its individual capacity,
but solely as Nonaffiliated Partner Trustee (the "Nonaffiliated Partner
Trustee") under that certain Trust Agreement dated as of December 15, 1999,
between Nonaffiliated Partner Trustee and the institutions referred to therein
as the "Beneficiaries" (herein as such Trust Agreement may be amended or
supplemented from time to time called the "Trust Agreement"), for value
received, hereby promises to pay to __________________ or registered assigns the
principal sum of _____________________ DOLLARS, or if less, the aggregate unpaid
principal amount hereof, in installments on each Payment Date as set forth
herein with the
final installments due and payable on the Maturity Date specified above and
to pay interest on the principal amount remaining unpaid from time to time at
the rate of, as applicable, 8.09% per annum (computed on the basis of a
360-day year of twelve consecutive 30-day months), from _____________, 1999
or from the most recent Payment Date (as defined in the Indenture referred to
below) on which interest has been paid or duly provided for, semi-annually,
on September 17 and March 17 in each year, commencing March 17, 2000, until
the date on which the principal hereof is paid or made available for payment
in full; provided that if the Partnership does not elect to prepay this Note
on the ET Date, interest shall accrue at the New Debt Rate from the ET Date
until the sooner of the date on which the principal hereof is paid or made
available for payment in full or the Maturity Date; and to pay interest at
the Late Rate (as defined in the Indenture referred to below) on any overdue
principal, Premium (as defined in the Indenture referred to below), if any,
and (to the extent permitted by applicable law) overdue interest from the due
date thereof until paid, payable on demand, all pursuant to the terms of the
Indenture referred to below. All amounts payable by Nonaffiliated Partner
Trustee hereunder and under the Trust Indenture and Security Agreement dated
as of December 15, 1999, as amended or supplemented (herein called the
"Indenture", defined terms used herein and not otherwise defined herein being
used herein with the same meanings as in the Indenture), among Nonaffiliated
Partner Trustee, BJ Services Equipment II, L.P. ("Partnership") and State
Street Bank and Trust Company, as Indenture Trustee thereunder, shall be made
only from the income and proceeds of the Indenture Estate. Each Holder, by
its acceptance of this Note, agrees that (a) it will look solely to the
income and proceeds of the Indenture Estate (never to include Excepted
Property or Other Equipment) for payment of such amounts, to the extent
available for distribution to the Holder hereof as provided in the Indenture
and (b) none of Beneficiaries, Nonaffiliated Partner Trustee nor Indenture
Trustee is or shall be personally liable to the Holder hereof for any amount
payable hereunder or under the Indenture, except, in the case of
Nonaffiliated Partner Trustee and Indenture Trustee, as provided in the
Indenture.
The principal of, Premium, if any, and interest on this Note shall be
payable in immediately available funds at the principal corporate trust office
of Indenture Trustee, or as otherwise directed in the manner provided in the
Indenture. Notwithstanding the foregoing or any provision herein to the
contrary, as directed
A-2
in Section 2.8 of the Indenture, Indenture Trustee will pay, or cause to be
paid all amounts payable by Nonaffiliated Partner Trustee hereunder in United
States Dollars to the Holder of this Note or a nominee therefor either (i) by
transferring by wire in immediately available funds to an account maintained
by such Holder with an institution in the United States the amount to be
distributed to such Holder or (ii) by mailing a check to such Holder at such
address as such Holder shall have specified, in any case without any
presentment or surrender of this Note, except that the Holder shall surrender
this Note to Indenture Trustee upon payment in full of the principal amount
of and interest on this Note and such other sums payable to such Holder under
the Indenture or under this Note.
This Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose unless authenticated by Indenture Trustee by
an authorized officer or signatory of Indenture Trustee, in each case as
specified in Section 2.2 of the Indenture.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of Nonaffiliated Partner Trustee, Partnership, Indenture
Trustee and the Holders, and the other terms upon which the Notes are, and are
to be, executed and delivered, as well as for a statement of the terms and
conditions of the trust created by the Indenture, to all of which terms and
conditions in the Indenture each Holder agrees by its acceptance of this Note.
Subject to the next paragraph hereof, on each Payment Date, the
registered Holder hereof will be entitled to receive a payment of principal
equal to the amount for such Payment Date set forth in the Schedule attached
hereto.
As more fully provided in the Indenture, the Notes are subject to
prepayment in whole or in part, or purchase, under the circumstances and in the
amounts, including Premium, if any, set forth in the Indenture. Except as
provided in the Indenture, the Notes may not be prepaid before maturity.
A-3
If an Indenture Event of Default exists, the unpaid principal amount of
the Notes may, subject to the terms of the Indenture, be declared due and
payable in the manner and with the effect provided in the Indenture. If, and
only if, such an Indenture Event of Default is caused by a BJ Event of Default,
Indenture Trustee may declare the Services Agreement and the O&M Agreement to be
in default, and may, subject to the limitations set forth in Section 8 of the
Indenture and Excepted Property, to the exclusion of Nonaffiliated Partner
Trustee, exercise one or more of the remedies of Nonaffiliated Partner Trustee
provided in the Partnership Agreement, the Participation Agreement, the Services
Agreement and the O&M Agreement.
The right of the Holder of this Note to institute action for any remedy
under the Indenture, including the enforcement of payment of any amount due
hereon, is subject to certain restrictions specified in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, this Note is transferable, and upon surrender of this Note for
registration of transfer at the principal corporate trust office of Indenture
Trustee, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to Indenture Trustee duly executed by, the Holder of this Note
or his attorney duly authorized in writing, one or more new Notes of the same
maturity and type and of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
The Notes are issuable only as registered Notes.
No service charge shall be made for any such registration of transfer or
exchange, but Indenture Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Before due presentment for registration of transfer of this Note,
Nonaffiliated Partner Trustee, Indenture Trustee and Partnership may redeem and
treat the Person in whose name this Note is registered as the absolute owner
hereof for the purpose of receiving payment of the principal of and interest on
this Note and for all other purposes whatsoever whether or not this Note be
overdue, and neither Nonaffiliated Partner Trustee, Indenture
A-4
Trustee nor Partnership shall be affected by notice to the contrary.
The terms and provisions of the Indenture and the rights and obligations
of Nonaffiliated Partner Trustee and the rights of the Holders may be changed
and modified to the extent permitted by the Indenture.
THE INDENTURE AND THIS NOTE SHALL BE IN ALL RESPECTS GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK FOR CONTRACTS ENTERED INTO AND
TO BE PERFORMED WITHIN NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, EXCEPT TO THE EXTENT THAT MATTERS RELATING TO PERFECTION AND
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE LIEN GRANTED BY THE BASIC
DOCUMENTS ARE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE UNIFORM
COMMERCIAL CODE OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER MAKES ONE OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 3.5(e) OF THE PARTICIPATION
AGREEMENT.
A-5
IN WITNESS WHEREOF, Nonaffiliated Partner Trustee has caused this NOTE to
be duly executed.
_____________________________, not in
its individual capacity but solely as
Nonaffiliated Partner Trustee
By:
Name:
Title:
Attest:
By:
Name:
Title:
Issue Date:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
_________________________,
Indenture Trustee
By:
Authorized officer or
signatory
SCHEDULE TO NOTE
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF NOTE TO BE PAID OF NOTE REMAINING
PAYMENT DATE ON PAYMENT DATE TO BE PAID
EXHIBIT B
TO
INDENTURE
INDENTURE SUPPLEMENT NO. __ dated as of _________, ____, between First
Security Trust Company of Nevada, a Nevada banking corporation, not in its
individual capacity, but solely as Nonaffiliated Partner Trustee ("Nonaffiliated
Partner Trustee") under the Trust Agreement dated as of December 15, 1999
between Beneficiaries named therein and First Security Trust Company of Nevada,
BJ Services Equipment, L.P., a Delaware Limited Partnership ("Partnership"), and
State Street Bank and Trust Company, a Massachusetts trust company, as Indenture
Trustee (the "Indenture Trustee") under the Trust Indenture and Security
Agreement dated as of December 15, 1999(together with all amendments and
supplements heretofore entered into, the "Indenture"), among Nonaffiliated
Partner Trustee, Partnership and Indenture Trustee. Unless otherwise defined
herein, capitalized terms used herein shall have the meanings specified in the
Participation Agreement.
R E C I T A L S:
A. The Indenture provides for the execution and delivery of Indenture
Supplements thereto substantially in the form hereof which shall particularly
describe the Units, by having attached thereto a copy of the applicable
Partnership Agreement Supplement and O&M Agreement Supplement and shall
specifically submit such Units to the Lien of the Indenture and this Indenture
Supplement.
B. The Indenture relates to the Units described in the copy of the
Partnership Agreement Supplement and O&M Agreement Supplement of even date
herewith attached hereto as Exhibits A and B, respectively, and made a part
hereof.
NOW, THEREFORE, in order further to secure the prompt payment of the
principal of, Premium, if any, and interest on the Notes from time to time
Outstanding in accordance with the terms thereof under the Indenture (including
those Outstanding under this Indenture Supplement) and to secure the payment,
performance and observance by Nonaffiliated Partner Trustee and Partnership of
all the agreements, covenants and provisions for the benefit of the Holders and
Indenture Trustee contained in the Indenture and in the Basic Documents to which
Partnership or Nonaffiliated Partner Trustee is, respectively, a party
(collectively, the "Secured Obligations") and for the uses and purposes and
subject to the terms and provisions of the Indenture and this Indenture
Supplement,
(i) Nonaffiliated Partner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, pledged and confirmed, and does hereby
grant, bargain, sell, assign, transfer, convey, pledge, and confirm, unto
Indenture Trustee, its successors and assigns, for the security and
benefit of the Indenture Trustee, for itself, and for the Holders from
time to time a security interest in and lien on, all estate, right, title
and interest of Nonaffiliated Partner Trustee in, to and under (A) the
Partnership Agreement and Nonaffiliated Partner Trustee's Partnership
Interest under the Partnership Agreement (including all instruments or
certificates owned or held by or established in favor of Nonaffiliated
Partner Trustee with respect to such Partnership Interest) and all
rights, authority, powers and privileges of Nonaffiliated Partner Trustee
as a holder of such Partnership Interest and all payments and
distributions thereunder of whatever kind or character and whether in
cash or other property, at any time made or distributable to
Nonaffiliated Partner Trustee thereunder or in respect thereof, whether
due or to become due and whether representing profits, distributions,
repayments of capital contributions or otherwise (including all amounts
of Priority Distributions, Supplemental Priority Distributions, Special
Distributions, Disposition Amount, ET Amount and Special P.O. Amount and
payments of any kind required to be made to Nonaffiliated Partner Trustee
thereunder), including, without limitation, the immediate and continuing
right of Nonaffiliated Partner Trustee to receive and collect all
distributions and any other payments or other amounts and the right of
Nonaffiliated Partner Trustee to exercise any election or option or to
make any decision or determination or to give or receive any notice,
consent, waiver or approval or to consent to any amendment, modification
or waiver or to make any claims or demands under or to take any other
action provided under or in respect of the Partnership Agreement, the
Services Agreement or the O&M Agreement or to accept surrender of any
Unit or Units, including all the rights and powers and remedies of
Nonaffiliated Partner Trustee to the exclusion of General Partner and any
other Partner, to declare the O&M Agreement and the Services Agreement to
be in default, to terminate such agreements and exercise all rights and
remedies thereunder and under the Partnership Agreement, including,
without limitation, the commencement, conduct and consummation of legal,
administrative and other proceedings as permitted thereunder or by law
and the liquidation of Partnership and
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all rights and powers of Nonaffiliated Partner Trustee to the exclusion
of General Partner and any other Partner following a BJ Event of Default
to amend, modify or waive such agreements and to exercise the other
rights contained in Section 7 of the Partnership Agreement; and (B) all
other rights, remedies and other property described in Section 1.1(i) of
the Indenture; and
(ii) Partnership has granted, bargained, sold, assigned,
transferred, conveyed, pledged and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, pledge, and confirm, unto
Indenture Trustee, its successors and assigns, for the security and
benefit of the Indenture Trustee, for itself, and for the Holders from
time to time a security interest in and lien on, all estate, right, title
and interest of Partnership in, to and under (i) the Units and all
replacements thereof and substitutions therefor in which Partnership
shall from time to time acquire an interest under the Contribution
Agreements and the Partnership Agreement as more particularly described
in the copy of the Partnership Agreement Supplement and O&M Agreement
Supplement attached hereto as Exhibits A and B, respectively, and (ii)
all other rights, remedies and other property described in
Section 1.1(ii) of the Indenture.
BUT SUBJECT, HOWEVER, TO THE EXCLUSIONS AND LIMITATIONS SET FORTH IN THE
INDENTURE, SUCH EXCLUSIONS INCLUDING, any and all Excepted Property now existing
or hereafter arising. It is further expressly agreed and stipulated that the
foregoing grant shall not include any Other Equipment, including any Replacement
Items.
TO HAVE AND TO HOLD all and singular the aforesaid property unto
Indenture Trustee, its successors and assigns, in trust for the benefit and
security of the Holders from time to time, without any preference, priority or
distinction of any one Note over any other Note under the Indenture, and for the
benefit and security of Indenture Trustee and for the uses and purposes and
subject to the terms and provisions set forth in the Indenture.
It is the intention of the parties hereto that all Notes issued and
Outstanding under the Indenture rank on a parity with each other Note and that,
as to each other Note, they be secured equally and ratably by the collateral
described herein and in other Indenture Supplements, without preference,
priority or distinction
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of any one thereof over any other by reason of difference in time of issuance
or otherwise.
The Notes issued under this Indenture Supplement shall be designated as
Secured Notes. The Notes shall be substantially in the form set forth in Exhibit
A to the Indenture. The Notes issued under this Indenture Supplement shall be
dated the date of issuance thereof and shall bear interest at a rate of % per
annum. The principal of each Note shall be payable as indicated in Exhibit C
hereto.
This Supplement shall be construed as supplemental to the Indenture and
shall form a part of it, and this Indenture Supplement is hereby incorporated by
reference therein and the Indenture is hereby ratified, approved and confirmed.
This Supplement may be executed by Nonaffiliated Partner Trustee and
Indenture 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, Nonaffiliated Partner Trustee and Partnership hereby
acknowledge that the Units referred to in the aforesaid Partnership Agreement
Supplement and O&M Agreement Supplement attached hereto and made a part hereof
have been delivered to Partnership and are included in the property of
Partnership covered by all the applicable terms and conditions of the
Partnership Agreement, subject to the pledge or mortgage thereof under the
Indenture.
THIS INDENTURE SUPPLEMENT AND THE NOTES SHALL BE IN ALL RESPECTS GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE FOR CONTRACTS ENTERED INTO AND TO BE
PERFORMED WITHIN NEW YORK, EXCEPT TO THE EXTENT THAT MATTERS RELATING TO
PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY
INTERESTS GRANTED BY THE BASIC DOCUMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
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IN WITNESS WHEREOF Nonaffiliated Partner Trustee, Partnership and
Indenture Trustee have caused this INDENTURE SUPPLEMENT NO. ___ to be duly
executed by their respective officers thereunto duly authorized, as of the day
and year first above written.
,
not in its individual capacity but
solely as Nonaffiliated Partner
Trustee
By:
Name:
Title:
S-1
BJ SERVICES EQUIPMENT II, L.P.
By: BJ Services Company, U.S.A.,
its General Partner
By: /s/ T. M. Whichard
T. M. Whichard, Treasurer
S-2
,
as Indenture Trustee
By:
Name:
Title:
S-3
EXHIBIT A
TO
INDENTURE SUPPLEMENT NO.
UNITS
[Attach Copy of Appropriate Partnership Agreement Supplement]
EXHIBIT B
TO
INDENTURE SUPPLEMENT NO.
UNITS
[Attach Copy of Appropriate O&M Agreement Supplement]
EXHIBIT C
TO
INDENTURE SUPPLEMENT NO.
SECURED NOTES
Date of Issuance:
Final Maturity:
Aggregate Principal $___________________
Amount:
Payment Dates for
Interest:
Interest Rate:
APPENDIX A
TO
PARTICIPATION AGREEMENT
PARTNERSHIP AGREEMENT
GUARANTY
TAX INDEMNITY AGREEMENT
TRUST AGREEMENT
INDENTURE
SERVICES AGREEMENT
O&M AGREEMENT
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all purposes of
the Basic Documents referred to below, unless otherwise defined in a Basic
Document or the context thereof otherwise requires. Such meanings shall be
equally applicable to both the singular and the plural forms of the terms herein
defined. In case of any conflict between the provisions hereof and the
provisions of the main body of any Basic Document, the provisions of the main
body of such Basic Document shall control the construction of such Basic
Document.
Unless the context otherwise requires, (i) references to agreements shall
be deemed to mean and include such agreements as amended, supplemented and
otherwise modified from time to time, (ii) references to parties to agreements
shall be deemed to include the permitted successors and assigns of such parties,
(iii) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to the Basic Document as a whole in which such words are used and
not to any particular Section, Subsection or other subdivision of such Basic
Document and (iv) all references in a Basic Document to Sections, Exhibits,
Schedules and Appendices refer to Sections, Exhibits, Schedules and Appendices
of such Basic Document unless otherwise indicated. The term "including" shall
mean "including, without limitation," unless otherwise expressly stated.
DEFINED TERMS
"ADDITIONAL SERVICE PAYMENTS" -- as defined in Section 3.4 of the
Services Agreement.
"ADDITIONAL SERVICES" -- as defined in Section 2.1 of the Services
Agreement.
"ADJUSTED CAPITAL ACCOUNT" -- the Capital Account maintained for each
Partner as of the end of each taxable year of Partnership, (a) INCREASED by
any amounts that such Partner is obligated to restore under the standards set
by Treasury Regulation Section 1.704- 1(b)(2)(ii)(c)(or is deemed obligated
to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5))
and (b) DECREASED by (i) the amount of all losses and deductions that, as of
the end of such taxable year, are reasonably expected to be allocated to such
Partner in subsequent years under Sections 704(e)(2) and 706(d) of the Code
and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all
distributions that, as of the end of such taxable year, are reasonably
expected to be made to such Partner in subsequent years in accordance with
the Partnership Agreement to the extent they exceed offsetting increases to
such Partner's Capital Account that are reasonably expected to occur during
(or before) the year in which such distributions are reasonably expected to
be made (other than increases as a result of a minimum gain chargeback
pursuant to Section 5.2(c)(i) of the Partnership Agreement). The foregoing
definition of Adjusted Capital Account is intended to comply with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"ADJUSTMENT AMOUNT" -- with respect to a Determination Date, Settlement
Date, Reduction Date, Default Payment Date, the ET Date, or the Special P.O.
Date, either (1) all amounts of Priority Distributions allocated pursuant to the
Partnership Agreement to any period prior to and including such date which are
unpaid as of such date (which is shown as a positive number and which shall
represent a payment obligation of the Partnership to the Nonaffiliated Partner
Trustee in addition to the payment of Disposition Value, ET Price or Special
P.O. Price on such date, as the case may be), or (2) the amounts of Priority
Distributions paid prior to such date and allocated pursuant to the Partnership
Agreement to periods after such date (which is shown as a negative number and
which shall represent a credit against the Partnership's payment obligation to
Nonaffiliated Partner Trustee in respect of Disposition Value, ET Price or
Special P.O. Price, as the case may be). If the difference as so calculated is
a negative number and
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is not otherwise netted against Disposition Value as provided in the
definition of Disposition Amount, such difference shall be netted against the
amount of ET Price, Special P.O. Price or Fair Market Value payable therewith.
"AFFILIATE" of 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 term "CONTROLLED" shall have a meaning correlative to the
foregoing.
"AFFILIATED PARTNER" -- as defined in the caption of the Participation
Agreement.
"AFTER-TAX BASIS" -- (i) in the case of any amount being paid to any Tax
Indemnitee or Indemnified Person, an amount which, after deduction of all Taxes
imposed upon such Tax Indemnitee or Indemnified Person that would not have been
imposed but for the receipt or accrual of such amount (or the receipt or accrual
of amounts paid by reason of a "gross-up" provision), is equal to the amount
required to be paid under the applicable Basic Document and (ii) in the case of
any amount being paid by any Tax Indemnitee, an amount which, after deduction of
all Taxes saved by such Tax Indemnitee that would not have been saved but for
the payment or accrual of the obligation to pay such amount (or the payment or
accrual of the obligation to pay amounts by reason of a "gross-up" provision) is
equal to the amount to be paid under the applicable Basic Document. All
computations for the purposes hereof shall be based on the highest applicable
tax rates in effect in the applicable jurisdiction on the date payment is made
or accrued, as the case may be.
"AGREED VALUE" -- of any Contributed Property -- the fair market value of
such property or other consideration at the time of contribution as determined
by General Partner using such reasonable method of valuation as it may adopt;
except that if any Limited Partner disputes the fair market value of any
Contributed Property as so determined by General Partner, the fair market value
of such Contributed Property shall be determined by a Contributed Property
Appraisal.
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"APPLICABLE PERCENTAGE" -- for any Unit at any time, the percentage
calculated by dividing the Equipment Value for such Unit by the aggregate amount
of the Equipment Value of all Units.
"APPRAISAL" -- the report of Arthur Andersen containing the opinions
described in Section 4.2(a) of the Participation Agreement, and otherwise in
form and substance reasonably satisfactory to Beneficiaries.
"ASSIGNED AGREEMENTS" -- the Partnership Agreement, the Contribution
Agreements and the Guaranty.
"ATTORNEY-IN-FACT" -- as defined in Section 2.3(b) of the Partnership
Agreement.
"AVAILABLE CASH" -- as defined in Section 6.1(e) of the Partnership
Agreement.
"BANKRUPTCY" -- an event described in clause (g) or clause (h) of the
definition of "BJ Event of Default."
"BANKRUPT BENEFICIARY" -- as defined in Section 8.3(e)(i)(4) of the
Indenture.
"BANKRUPT BJ ENTITY" -- (a) Service Taker, if a Services Event of Default
described in Section 6.1(d) or 6.1(e) of the Services Agreement exists,
(b) Operator, if an O&M Event of Default described in Section 14.1(d) or (e) of
the O&M Agreement exists, (c) Partnership, if a BJ Event of Default described in
clause (g) or (h) of the definition thereof exists with respect to Partnership,
(d) Affiliated Partner, if a BJ Event of Default described in clause (g) or (h)
of the definition thereof exists with respect to Affiliated Partner, (e) General
Partner, if a BJ Event of Default described in clause (g) or (h) of the
definition thereof exists with respect to General Partner, and (f) BJ USA if a
BJ Event of Default described in clause (g) or (h) of the definition thereof
exists with respect to BJ USA.
"BANKRUPTCY CODE" -- the United States Bankruptcy Reform Act of 1978, as
amended from time to time, 11 U.S.C. Section 101, et seq.
"BASE SERVICES" -- as defined in Section 2.1 of the Services
Agreement.
"BASE TERM" -- the period from March 15, 2000 to the Base Term Expiration
Date.
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"BASE TERM EXPIRATION DATE" -- means the Transaction Term Expiration
Date.
"BASIC DOCUMENTS" -- the Participation Agreement, the Contribution
Agreements, the Trust Agreement, the Notes, the Partnership Agreement (including
each Partnership Agreement Supplement), the O&M Agreement (including each O&M
Agreement Supplement), the Services Agreement, the Guaranty, the Indenture
(including each Indenture Supplement) and each Tax Indemnity Agreement.
"BENEFICIAL INTEREST" -- the interest of a Beneficiary under the Trust
Agreement.
"BENEFICIARIES' AGREEMENTS" -- the Basic Documents to which the
Beneficiaries are or will be a party.
"BENEFICIARIES' CERTIFICATE" -- as defined in Section 2.4(a) of the
Participation Agreement.
"BENEFICIARY" -- each Person listed as a Beneficiary in Schedule 1 to the
Participation Agreement and each Person that becomes a Beneficiary pursuant to
Section 6.1 of the Participation Agreement.
"BENEFICIARY BANKRUPTCY" -- as defined in Section 8.3(e)(i)(4) of the
Indenture.
"BJ CREDIT AGREEMENT" -- the Amended and Restated Credit Agreement dated
as of August 7, 1996, among BJ Services Company, BJ Services Company, U.S.A.,
BJ Service International, Inc., BJ Services Company Middle East, Nowsco Well
Service Ltd. and the other Subsidiary Borrowers from time to time parties
thereto, Bank of America National Trust and Savings Association, individually,
as U.S. Agent, as Letter of Credit Issuing Bank and as Swing Loan Bank, Bank of
America Canada, individually and as Canadian Agent, The Chase Manhattan Bank,
individually and as Senior Co-Agent, Bank of Montreal, Royal Bank of Canada,
Toronto-Dominion (Texas), Inc., Credit Lyonnais New York Branch and Wells Fargo
Bank (Texas), National Association, each individually and as Co-Agent, and the
other financial institutions from time to time parties thereto as amended from
time to time.
"BJ DEFAULT" -- an event which with notice or the lapse of time or both
would become a BJ Event of Default.
-5-
"BJ ENTITY" -- means BJ Services Company or any wholly owned direct or
indirect Subsidiary thereof.
"BJ EVENT OF DEFAULT" -- any one or more of the following if continuing
at the time of determination:
(a) a Services Event of Default under Section 6.1(b), (c), (d),
(e) or (f) of the Services Agreement;
(b) an O&M Event of Default under Section 14.1(b), (c), (d),
(e) or (f) of the O&M Agreement;
(c) a Guarantor Event of Default;
(d) General Partner or Affiliated Partner fails to make any
capital contribution under the Partnership Agreement or pay any other
amount under Sections 5.12, 5.16, 5.17, 5.18 or 5.22 of the Participation
Agreement or Partnership fails to make and/or General Partner fails to
cause Partnership to make any Priority Distribution, Supplemental
Priority Distribution or Special Distribution, in each case, within 5
Business Days after the same becomes payable or distributable;
(e) Partnership, General Partner, Affiliated Partner or BJ USA
fails to make any payment or distribution (other than as described in
clause (d) above) under any Basic Document, other than the O&M Agreement
and the Services Agreement (except that any failure to pay or distribute
to Nonaffiliated Partner Trustee (in its individual or trust capacity) or
any Beneficiary when due or distributable any amount constituting
Excepted Property shall not constitute a BJ Event of Default before the
discharge of the Lien of the Indenture in accordance with the terms
thereof) after the same becomes due or distributable and such failure
continues unremedied for 30 days after receipt by Partnership, General
Partner, Affiliated Partner or BJ USA, as the case may be, of written
notice of such failure from Nonaffiliated Partner Trustee, any
Beneficiary, Indenture Trustee or any Holder;
(f) any representation made by Partnership, General Partner,
Affiliated Partner or BJ USA in any Basic Document, other than the O&M
Agreement and the Services Agreement, or in any other document or
certificate furnished by Partnership, General Partner, Affiliated Partner
or BJ USA (or a Responsible Officer of Partnership, General Partner,
Affiliated Partner or BJ USA) pursuant to the Basic Documents,
-6-
other than the O&M Agreement and the Services Agreement, was untrue or
incorrect in any material respect as of the date of making thereof;
(g) Partnership, General Partner, Affiliated Partner or BJ USA
(i) commences a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect, or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or (ii) consents 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) generally fails to pay, or
admits in writing its inability to pay, its debts as they come due, or
(iv) makes a general assignment for the benefit of creditors, or
(v) takes any corporate action to authorize or in furtherance of any of
the foregoing;
(h) an involuntary case or other proceeding is commenced
against Partnership, General Partner, Affiliated Partner or BJ USA
seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect, or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding
remains undismissed and unstayed for a period of 60 days;
(i) any Event of Dissolution under Section 11 of the
Partnership Agreement; or
(j) Partnership, General Partner, Affiliated Partner or BJ USA
fails to observe or perform any of its covenants or agreements (other
than those described in the foregoing clauses of this definition) to be
observed or performed by it under any Basic Document, other than the O&M
Agreement and the Services Agreement, and the failure continues
unremedied for 30 days after notice from Nonaffiliated Partner Trustee,
any Beneficiary, Indenture Trustee or any Holder to Partnership, General
Partner, Affiliated Partner or BJ USA, as the case may be, specifying the
failure and demanding the same to be remedied; except that, if the
failure is capable of being remedied and the remedy does not involve the
payment of money
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alone, no such failure shall constitute a BJ Event of Default so long
as Partnership, General Partner, Affiliated Partner or BJ USA, as the
case may be, is diligently proceeding to remedy the failure, but in no
event shall the failure continue unremedied for a period in excess of
the lesser of (i) 120 days from the notice referred to above and (ii)
the remaining number of days in the Transaction Term or until the
Maturity Date, as the case may be; provided, however, that
notwithstanding anything to the contrary contained herein (including,
without limitation, in this definition of BJ Event of Default) or in
any of the Basic Documents, none of the foregoing events or
circumstances shall constitute a BJ Event of Default to the extent the
same arise from, or with respect to or relate solely to any Other
Equipment or Replacement Items.
"BJ REMEDY" -- as defined in Section 8.3(a) of the Indenture.
"BJ SERVICES COMPANY" -- BJ Services Company, a Delaware corporation, and
the parent corporation of BJ USA.
"BJ USA" -- as defined in the caption of the Participation Agreement.
"BJ USA AGREEMENTS" -- the Basic Documents to which BJ USA is or will be
a party.
"BOOKS AND RECORDS" -- books and records of account in which are entered
all matters relating to Partnership, including all income, expenditures, assets
and liabilities thereof.
"BUSINESS DAY" -- 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 San Francisco, California, New York, New York,
Houston, Texas, the city and state (if different from the foregoing) in which
the principal corporate trust office of Nonaffiliated Partner Trustee is
located, or, until the Lien of the Indenture is discharged, the city and state
(if different from the foregoing) in which the principal corporate trust office
of Indenture Trustee is located.
"CAPITAL ACCOUNT" -- the capital account established and maintained for
each Partner as provided in Section 5.1 of the Partnership Agreement.
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"CAPITAL CONTRIBUTION" -- the Net Agreed Value of Contributed Property
that a Partner contributes to the Partnership pursuant to Section 4.1, 4.2, 4.3,
6.1, 7.5 or 9.1 of the Partnership Agreement.
"CARRYING VALUE" -- with respect to any Property, the Agreed Value of
such Property reduced (but not below zero) by all depreciation, amortization
and cost recovery deductions charged to the Capital Accounts. The Carrying
Value of any Property shall be adjusted from time to time in accordance with
Section 5.1(d) of the Partnership Agreement and to reflect changes, additions
or other adjustments to the Carrying Value for dispositions and acquisitions
of Properties, as deemed appropriate by the Partners.
"CLAIMS" -- as defined in Section 7.2(a) of the Participation Agreement.
"CLEANUP" -- all actions required to: (1) cleanup, remove, treat or
remediate Hazardous Substances in the indoor or outdoor environment; (2)
prevent the Release of Hazardous Substances so that they do not migrate,
endanger or threaten to endanger public health or welfare of the indoor or
outdoor environment; (3) perform pre-remedial studies and investigations and
post-remedial monitoring and care; or (4) respond to any government requests
for information or documents in any way relating to cleanup, removal,
treatment or remediation or potential cleanup, removal, treatment or
remediation of Hazardous Substances in the indoor or outdoor environment.
"CLOSING" -- as defined in Section 2.4(a) of the Participation Agreement.
"CODE" -- the Internal Revenue Code of 1986, as amended from time to
time, or any successor law.
"COMMENCEMENT DATE" -- as defined in Section 2.4(a) of the Participation
Agreement as the same may be postponed pursuant to Section 2.8 thereof.
"COMMITMENT" -- with respect to a Beneficiary, its obligation to make an
investment in Nonaffiliated Partner pursuant to Section 2.2(a) of the
Participation Agreement.
"COMPETITOR" -- any Person who is engaged, or an Affiliate of a Person
who is engaged, or any Person who has an interest in a partnership, joint
venture, corporation, trust, limited liability
-9-
company, association, or unincorporated organization that is engaged in
providing maintenance or stimulation services for oil and natural gas wells;
EXCEPT that in no event shall any Note Purchaser or any bank, bank holding
company, savings and loan association, fraternal benefit society, pension,
retirement or profit sharing trust or fund, insurance company, securities
broker or securities dealer or any leasing company or other financial
institution or any Affiliate of any of the foregoing, be (i) deemed a
Competitor or (ii) restricted from any purchase of or holding an ownership
interest in any security of a Competitor for passive investment purposes.
"CONFIRMATION" -- as defined in Section 2.4(c) of the Participation
Agreement.
"CONSOLIDATED STOCKHOLDERS' EQUITY" -- the par or stated value of the
stock of the Guarantor and its Subsidiaries plus paid-in capital plus retained
earnings, all as shown on the consolidated balance sheet of Guarantor and its
Subsidiaries prepared in accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" -- at any time, any Subsidiary the accounts of
which, in accordance with GAAP, would be consolidated with those of Guarantor in
its consolidated financial statements if such statements were prepared as of
such date.
"CONTRIBUTED PROPERTY" -- each item of Property, in such form as may be
permitted by the Delaware Act, contributed to Partnership.
"CONTRIBUTED PROPERTY APPRAISAL" -- with respect to any Contributed
Property, the determination of fair market value by an appraiser selected by the
Partners, or, if the Partners cannot agree upon an appraiser, then the General
Partner and the Affiliated Partner shall together appoint one appraiser and the
Nonaffiliated Partner shall appoint one appraiser, and such appraisers shall
select a single appraiser, which appraiser shall determine the fair market value
of such Contributed Property; except that the Agreed Value of any property
deemed contributed to the Partnership for federal income tax purposes upon
termination and reconstitution thereof pursuant to Section 708 of the Code shall
be determined in accordance with Section 5.1(d) of the Partnership Agreement.
"CONTRIBUTION AGREEMENT" -- the Contribution and Conveyance Agreement
dated as of December 15, 1999, and each other
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Contribution and Conveyance Agreement dated the date that any Replacement
Unit or any other Unit or Replacement Item becomes property of Partnership
pursuant to the Partnership Agreement (and, except as to Other Equipment or
Replacement Items, becomes subject to the Lien of the Indenture, if the
Indenture is in effect), from BJ USA or Affiliated Partner to Partnership
covering the Units and Other Equipment delivered to Partnership before, and
owned by Partnership on, the Commencement Date or such Replacement Unit or
any other Unit and Other Equipment, as the case may be, substantially in the
form of EXHIBIT C to the Participation Agreement.
"CO-REGISTRAR" -- as defined in Section 2.3 of the Indenture.
"CURRENT PRINCIPAL AMOUNT" -- with respect to a Note as of any relevant
date, the original principal amount of such Note reduced by the amount of
principal paid with respect to such Note on or before such date.
"CUSTOMERS" -- as defined in Recital A of the Participation Agreement.
"DEBT" -- the indebtedness evidenced by the Notes.
"DEBT RATE" -- with respect to any Note, a rate of interest equal to
8.09% per annum (computed on the basis of a year of 360 days consisting of
twelve 30-day months).
"DEFAULT PAYMENT DATE" -- as defined in Section 5.22 of the
Participation Agreement.
"DELAWARE ACT" -- the Delaware Revised Uniform Limited Partnership Act,
6. Del. C. 1953, Section 17-101 ET SEQ., as amended from time to time, and any
successor thereto.
"DETERMINATION DATE" -- each of the dates set forth on SCHEDULE 5 to the
Participation Agreement.
"DISCOUNT RATE" -- a per annum rate equal to the Debt Rate.
"DISPOSITION AMOUNT" -- for any Unit as of any Determination Date, a
Settlement Date, Reduction Date, Default Payment Date, the ET Date, or the
Special P.O. Date the sum of (1) the amount (which may be a positive or negative
number) of the Adjustment Amount for such Unit (determined by multiplying the
Adjustment Amount as at such date by the Applicable Percentage) as at such date,
plus
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(2) the amount of the Disposition Value as at such date. Anything contained
in the Trust Agreement or the Participation Agreement to the contrary
notwithstanding, the Disposition Amount for such Unit on the date of payment
thereof (both before and after any adjustment pursuant to Section 2.7 of the
Participation Agreement), under any circumstances and in any event, will be
an amount which will be at least sufficient to pay in full as of the date of
payment thereof, the portion of the unpaid principal of the Notes which is
related to such Unit, together with all unpaid interest accrued to the date
on which such amount is paid in accordance with the terms thereof.
"DISPOSITION VALUE" -- for any Unit as of any Determination Date, the
amount determined by multiplying the Equipment Value for such Unit by the
percentage set forth in SCHEDULE 5 to the Participation Agreement opposite the
Determination Date on which such Disposition Value is being determined.
"DISTRIBUTION" -- a Priority Distribution, a Supplemental Priority
Distribution or a Special Distribution.
"DISTRIBUTION DATE" -- each date listed on SCHEDULE 1 to the Partnership
Agreement.
"DISTRIBUTION PERIOD" -- the six-month period beginning on the day
following a Distribution Date and ending on the next succeeding Distribution
Date.
"ECONOMIC LIFE" -- as defined in Section 4.2(a)(iii) of the Participation
Agreement.
"ENVIRONMENTAL CLAIM" -- any claim, action, cause of action,
investigation or notice (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for investigatory
costs, Cleanup costs, government response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or Release into the indoor or outdoor
environment, of any Hazardous Substances at any location, whether or not owned
or operated by Partnership, BJ USA or Operator or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"ENVIRONMENTAL LAW" -- any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Government Authority
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regulating, relating to or imposing liability standards of conduct concerning
any Hazardous Substances or pollution or environmental protection, as now or
may at any time hereafter be in effect, including, without limitation, the
Clean Water Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Superfund Amendments and Reauthorization Act of 1986, the
Emergency Planning and Community Right to Know Act, the Resource Conservation
and Recovery Act, the Safe Drinking Water Act, and the Toxic Substances
Control Act, together, in each case, with each amendment, supplement or other
modification thereto, and the regulations promulgated thereunder and all
substitutions therefor.
"EQUIPMENT VALUE" -- (a) for any Unit owned by Partnership on the
Commencement Date, the amount for such Unit specified on the Appraisal as of the
Commencement Date and as set forth on Schedule 3 to the Participation Agreement,
(b) for any item of Other Equipment owned by the Partnership on the Commencement
Date, the amount for such item of Other Equipment set forth on Schedule 3 to the
Participation Agreement, and (c) for any Unit or item of Other Equipment
contributed to Partnership on any other date, the Fair Market Value of such Unit
or item of Other Equipment, as applicable, as certified by General Partner
pursuant to Section 5.13 of the Participation Agreement or as otherwise
determined in accordance with the definition of "Fair Market Value", in each
case, determined as of the date of contribution.
"ERISA" -- the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law.
"ERISA AFFILIATE" -- any corporation or trade or business that:
(a) is a member of the same controlled group of corporations
(within the meaning of section 414(b) of the Code) as BJ USA; or
(b) is under common control (within the meaning of section
414(c) of the Code) with BJ USA.
"ERISA PLAN" -- as defined in Section 3.4(i) of the Participation
Agreement.
"ET AMOUNT" -- the ET Price plus the Adjustment Amount (which may be a
positive or negative number) as of the ET Date.
"ET DATE" -- as set forth on Schedule 8 to the Participation Agreement.
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"ET PRICE" -- an amount equal to the product of the percentage set
forth for the ET Date on Schedule 8 to the Participation Agreement multiplied
by the Equipment Value of the Units then owned by Partnership.
"ET RIGHT" -- as defined in Section 9.1 of the Partnership Agreement.
"EVENT OF DISSOLUTION" -- as defined in Section 11.1 of the Partnership
Agreement.
"EVENT OF LOSS" -- as defined in Section 11.1 of the O&M Agreement.
"EXCEPTED PROPERTY" --
(a) any indemnity payable to Nonaffiliated Partner Trustee,
Indenture Trustee, any Beneficiary or their respective directors,
officers, employees, agents, successors, assigns (other than Indenture
Trustee as assignee) or affiliates pursuant to Section 7 of the
Participation Agreement;
(b) any proceeds of insurance payable to Nonaffiliated Partner
Trustee or any Beneficiary under insurance maintained by Nonaffiliated
Partner Trustee or any Beneficiary in addition to the insurance required
to be maintained by Operator pursuant to the terms of the O&M Agreement,,
any proceeds of insurance to the extent payable in respect of Other
Equipment and any proceeds of liability insurance policies carried for
the benefit of Nonaffiliated Partner Trustee or any Beneficiary by or
Operator pursuant to Section 12 of the O&M Agreement or by any other
Person;
(c) the Tax Indemnity Agreement and all payments or advances
required to be made thereunder by or to Guarantor;
(d) any rights against BJ USA, General Partner, Operator,
Service Taker, Partnership or Guarantor acquired by subrogation to the
rights of Indenture Trustee pursuant to cure of defaults of BJ USA,
General Partner, Operator, Service Taker, Partnership or Guarantor, and
any amounts payable by BJ USA, General Partner, Operator, Service Taker,
Partnership or Guarantor to reimburse Nonaffiliated Partner Trustee or
any Beneficiary for payments made by it in respect of their
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obligations under the Basic Documents, so long as such cures and
payments are made in accordance with the Indenture;
(e) any amounts payable to any Beneficiary by a transferee as
the purchase price for all or any portion of its interest permitted by
Section 6.1 of the Participation Agreement;
(f) all right, title and interest of Nonaffiliated Partner
Trustee or any Beneficiary in any collateral that has been released from
the security interest and assignment of the Indenture whether by
satisfaction of the obligations of Nonaffiliated Partner Trustee
hereunder and under the Notes or otherwise pursuant to terms of the
Indenture;
(g) any Taxes payable to Partnership or Nonaffiliated Partner
pursuant to the Participation Agreement;
(h) the rights of Nonaffiliated Partner Trustee, Indenture
Trustee and any Beneficiary to pursue legal remedies to compel payment by
BJ USA, General Partner, Operator, Service Taker or Partnership of any of
the amounts referred to in the foregoing clauses (i)through (g) or
enforce the agreements of BJ USA, General Partner, Operator, Service
Taker or Partnership related thereto, except that the rights referred to
in this clause (h) shall not be deemed to include the exercise of any
remedies in the Partnership Agreement, the Services Agreement, the O&M
Agreement or the Participation Agreement other than the right to proceed
by appropriate court action or actions, either at law or in equity, to
enforce performance by BJ USA, General Partner, Operator, Service Taker
or Partnership of the applicable covenants or to recover damages for the
breach thereof;
(i) the right to consent or withhold consent to any amendment,
modification or waiver of the Partnership Agreement, the O&M Agreement,
the Participation Agreement or the Services Agreement or any other
document solely in respect of Excepted Property;
(j) the right to consent or withhold consent to declaration by
Indenture Trustee of a BJ Event of Default solely in respect of Excepted
Property; and
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(k) any Form K-1 (or similar substitute form) required or
permitted to be given to Nonaffiliated Partner Trustee or Partnership.
"EXCESS AMOUNT" -- as defined in Section 2.9(c) of the Indenture.
"EXPENSES" -- as defined in Section 4.4(b) of the Partnership Agreement.
"EXPIRATION DATE" -- as defined in Section 2.8(b) of the Participation
Agreement.
"FAIR MARKET RENTAL VALUE" or "FAIR MARKET VALUE" -- with respect to all
Units and Other Equipment (or portions thereof for purposes of Section 5.13 of
the Participation Agreement) with respect to which a determination is being
made, the cash rent or cash price obtainable for such Units or Other Equipment
(or portions thereof for purposes of Section 5.13 of the Participation
Agreement) in an arm's-length lease or sale between an informed and willing
lessee or purchaser/user (including, without limitation, BJ USA and any lessee
or buyer in possession of the Units or Other Equipment which is the subject of
this transaction and including a purchaser/user in possession and other than a
dealer in used equipment of a type similar to the Units or Other Equipment)
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. Except for determinations for the purposes of Section 5.22 of the
Participation Agreement, Fair Market Rental Value and Fair Market Value shall be
determined upon the assumption that each Unit or item of Other Equipment is in
the condition and repair required under the O&M Agreement, free of any Liens
other than Nonaffiliated Partner Liens, and in service. For purposes of Section
5.22 of the Participation Agreement, determinations of Fair Market Rental Value
and Fair Market Value shall be determined upon the assumption that each Unit is
to be leased or sold on an "as-is, where-is" basis. If the parties are unable
to agree upon a Fair Market Rental Value or a Fair Market Value within 30 days
after receipt of General Partner's certification as to Fair Market Value
pursuant to Section 5.13 of the Participation Agreement or, unless Nonaffiliated
Partner otherwise consents, if Fair Market Rental Value or Fair Market Value is
to be determined for the purposes of Section 5.22 of the Participation
Agreement, such value shall be determined by the following appraisal procedure,
determinations under which shall be conclusively binding on all parties:
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(I) If the appraisal procedure is used for any purpose other than
Section 5.22 of the Participation Agreement, Nonaffiliated Partner Trustee,
within 10 days after the 30-day period after receipt of General Partner's
certification as to Fair Market Value pursuant to Section 5.13 of the
Participation Agreement, will provide BJ USA the names of appraisers that would
be satisfactory to Nonaffiliated Partner Trustee, and Nonaffiliated Partner
Trustee and BJ USA will consult with the intent of selecting a mutually
acceptable appraiser. If a mutually acceptable appraiser is selected, the Fair
Market Rental Value and/or the Fair Market Value, as the case may be, shall be
determined by such appraiser and set forth in a written appraisal that is in
compliance with the "Uniform Standards of Professional Appraisal Practice" of
the Appraisal Standards Board of the Appraisal Foundation. If BJ USA and
Nonaffiliated Partner Trustee are unable to agree upon a single appraiser within
10 days after Nonaffiliated Partner Trustee provides BJ USA with the names of
appraisers, either party can file with the American Arbitration Association to
provide a list of qualified and certified appraisers of recognized standing and
knowledgeable in equipment of the type then owned by the Partnership within 15
days of such filing. Within 10 days of receipt of such list, Nonaffiliated
Partner Trustee and BJ USA shall list in order of preference their respective
choices for appraisers and the appraiser that is most preferred by both
Nonaffiliated Partner Trustee and BJ USA (or, if two appraisers are preferred
equally by Nonaffiliated Partner Trustee and BJ USA, the appraiser that is most
preferred by both parties but chosen by Nonaffiliated Partner Trustee) shall
perform the appraisal and set forth Fair Market Rental Value or Fair Market
Value in a written appraisal that is in compliance with the "Uniform Standards
of Appraisal Practice" of the Appraisal Foundation. BJ USA shall bear the cost
of all appraisers.
(II) If the appraisal procedure is used for the purpose of Section 5.22
of the Participation Agreement, Nonaffiliated Partner Trustee shall select an
independent appraiser of recognized standing and knowledgeable in equipment of
the type then owned by the Partnership. Such appraisal shall be made within 15
days of appointment. BJ USA shall bear the cost of such appraisal.
Notwithstanding any of the foregoing, for the purposes of Section 5.22 of the
Participation Agreement, the Fair Market Rental Value or the Fair Market Value,
as the case may be, shall be zero with respect to any Unit if Nonaffiliated
Partner Trustee theretofore has not been able to recover possession of such Unit
in accordance with the terms of Section 15.1(b) of the O&M Agreement.
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"FINAL DETERMINATION" -- (i) a decision, judgment, decree or other
order by any court of competent jurisdiction, which decision, judgment,
decree or other order has become final (I.E., the earliest of when all
allowable appeals by either party to the action (or with respect to any
Beneficiary, only such appeals as are required by Section 7 of the Tax
Indemnity Agreement or Section 7 of the Participation Agreement) are
exhausted or the time for filing such appeal expires), (ii) a closing
agreement entered into under Section 7121 of the Code (or any successor
provision) or any other binding settlement agreement entered into in
connection with an administrative or judicial proceeding, in any case with
the consent of BJ USA (in the case of the Tax Indemnity Agreement, subject to
the conditions of Section 7(d)), or (iii) the expiration of the time for
instituting an initial suit with respect to a claimed deficiency or for
instituting a claim for refund or if such a claim was filed, the expiration
of the time for instituting suit with respect thereto.
"FIRST SECURITY" -- as defined in Section 3.1 of the Participation
Agreement.
"GAAP" -- generally accepted accounting principles, consistently
applied, as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession.
"GENERAL PARTNER" -- BJ USA, as general partner of Partnership.
"GOVERNMENT ACTIONS" -- all consents, approvals or authorizations of,
or filings, registrations or qualifications with, or the giving of notice or
taking of any other action with respect to, any Government Authority.
"GOVERNMENT AUTHORITY" -- any applicable Federal, state, county,
municipal or other United States Federal, state or local government, judicial
or regulatory authority, agency, board, body, commission, instrumentality,
court arbitrator, panel of arbitrators or quasi-government authority.
"GUARANTOR" -- as defined in the caption of the Participation
Agreement.
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"GUARANTOR AGREEMENT" -- the Basic Documents to which Guarantor is or
will be a party.
"GUARANTOR DEFAULT" -- an event which with notice or the lapse of time
or both would become a Guarantor Event of Default.
"GUARANTOR EVENT OF DEFAULT" -- the following events (whether any such
event is voluntary or involuntary or comes about or is effected by operation
of law or pursuant to or in compliance with any judgment, decree or order of
any court or of any order, rule or regulation of any administrative or
government body):
(a) Guarantor fails to make any payment under the Guaranty
when due (except that any failure to pay to Nonaffiliated Partner
Trustee (in its individual or trust capacity) or any Beneficiary when
due any amounts constituting Excepted Property shall not constitute a
Guarantor Event of Default before the discharge of the Lien of the
Indenture in accordance with the terms thereof);
(b) Guarantor fails to make any other payment under the
Basic Documents (except that any failure to pay any amount owed by
Guarantor under the Tax Indemnity Agreement or any failure of
Guarantor to pay to Nonaffiliated Partner Trustee (in its individual
or trust capacity) or any Beneficiary when due any amount constituting
Excepted Property shall not constitute a Guarantor Event of Default
before the discharge of the Lien of the Indenture in accordance with
the terms thereof) after the same becomes due and such failure
continues unremedied for 30 days after receipt by Guarantor of written
notice of such failure from Nonaffiliated Partner Trustee, any
Beneficiary, Indenture Trustee or any Holder;
(c) any representation made by Guarantor in any Basic
Document or in any other document or certificate furnished by
Guarantor (or a Responsible Officer of Guarantor) pursuant to the
Basic Documents (other than the representations set forth in the Tax
Indemnity Agreement) was untrue or incorrect in any material respect
as of the date of making thereof;
(d) Guarantor (i) commences a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial
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part of its property, or (ii) consents 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)
generally fails to pay, or admits in writing its inability to pay, its
debts as they come due, or (iv) makes a general assignment for the
benefit of creditors, or (v) takes any corporate action to authorize
or in furtherance of any of the foregoing;
(e) an involuntary case or other proceeding is commenced
against Guarantor seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding remains undismissed and
unstayed for a period of 60 days; or
(f) Guarantor fails to observe or perform any of its
covenants or agreements (other than those described in the foregoing
clauses of this definition) to be observed or performed by Guarantor
under the Guaranty or any other Basic Document (other than the Tax
Indemnity Agreement) and the failure continues unremedied for 30 days
after notice from Nonaffiliated Partner Trustee, any Beneficiary,
Indenture Trustee or any Holder to Guarantor, specifying the failure
and demanding the same to be remedied; except that, if the failure is
capable of being remedied and the remedy does not involve the payment
of money alone, no such failure shall constitute a Guarantor Event of
Default so long as Guarantor is diligently proceeding to remedy the
failure, but in no event shall the failure continue unremedied for a
period in excess of the lesser of (i) 120 days from the notice
referred to above and (ii) the remaining number of days in the
Transaction Term or until the Maturity Date, as the case may be;
provided, however, that none of the foregoing events shall constitute
a Guarantor Event of Default to the extent the same arise solely from
or with respect to any Other Equipment or Replacement Items.
"GUARANTY" -- the Guaranty dated as of December 15, 1999, from
Guarantor.
"HAZARDOUS SUBSTANCES" -- (i) petroleum product, petroleum, crude oil
or any fraction thereof, asbestos, radon, explosives,
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radioactive materials, hazardous wastes or substances (including
polychlorinated biphenyls), or toxic wastes or substances; (ii) any other
wastes, materials or pollutants defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste" or "toxic substances" as
defined under any applicable Environmental Laws; or (iii) any other
pollutants or contaminants which are regulated under any Environmental Law.
"HOLDERS" -- as the case may be, (I) each Note Purchaser, or if such
Note Purchaser transfers its interest in accordance with the Basic Documents,
the transferee of such Note Purchaser, or (ii) each Person to whom a
Refunding Note is issued.
"INCOME TAXES" -- as defined in Section 7.1(c)(i) of the Participation
Agreement.
"INDEMNIFIED PERSON" -- as defined in Section 7.2(b) of the
Participation Agreement.
"INDENTURE" or "TRUST INDENTURE" -- the Trust Indenture and Security
Agreement dated as of December 15, 1999 among Nonaffiliated Partner Trustee,
in the capacities described therein, Partnership and Indenture Trustee. Such
terms shall include each Indenture Supplement entered into pursuant to the
Indenture.
"INDENTURE DEFAULT" -- an Indenture Event of Default or an event which
with notice or the lapse of time or both would become an Indenture Event of
Default.
"INDENTURE ESTATE" -- as defined in the Granting Clause of the
Indenture.
"INDENTURE EVENT OF DEFAULT" -- as defined in Section 8.1 of the
Indenture.
"INDENTURE SUPPLEMENT" -- (i) an Indenture Supplement substantially in
the form of Exhibit B to the Indenture, among Nonaffiliated Partner Trustee,
in the capacities described therein, Partnership and Indenture Trustee, dated
the Commencement Date or the date that any Replacement Unit or any other Unit
is subjected to the Lien and security interest of the Indenture, and covering
the Units related to the Commencement Date or such Replacement Unit or such
other Unit, as the case may be, or (ii) any supplement or amendment entered
into from time to time among Nonaffiliated
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Partner Trustee, in the capacities described therein, Partnership and
Indenture Trustee.
"INDENTURE TRUSTEE" -- State Street Bank and Trust Company, a
Massachusetts trust company, as trustee under the Indenture.
"INDENTURE TRUSTEE AGREEMENTS" -- the Basic Documents to which ITC
and/or Indenture Trustee are or will be a party.
"INFLATION RATE" -- as defined in Section 4.2(a)(vi) of the
Participation Agreement.
"INITIAL CASH" -- cash contributed to Partnership by Nonaffiliated
Partner on the Commencement Date.
"INITIAL OPERATING PAYMENT" -- as defined in Section 3.2(a) of the O&M
Agreement.
"INITIAL OTHER EQUIPMENT" -- the Other Equipment described in the
Partnership Agreement Supplement and O&M Agreement Supplement on the
Commencement Date.
"INITIAL PARTNERSHIP AGREEMENT" -- the Agreement of Limited
Partnership of BJ Services Equipment II, L.P. dated as of December 10, 1999
between General Partner, as general partner thereof, and Organizational
Limited Partner, as limited partner thereof.
"INITIAL UNITS" -- the Units described in the Indenture Supplement,
Partnership Agreement Supplement and O&M Agreement Supplement on the
Commencement Date.
"INSURED AMOUNT LEVEL" -- an amount equal to 18.7% of the aggregate
Equipment Value of the Units owned by the Partnership on the ET Date.
"INSURED RISKS AND LOSSES" -- such risks and losses as are specified
in the O&M Agreement.
"INTERESTS" -- as defined in Section 3.5(d) of the Participation
Agreement.
"INTERIM TERM" -- the period from the Commencement Date until March
15, 2000.
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"INVESTMENT GRADE" -- as defined in Section 12.2 of the O&M Agreement.
"INVESTMENTS" -- with respect to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of
any other Person, or any direct or indirect loan, advance or capital
contribution by such Person to any other Person; including, without
limitation, any direct or indirect contribution by such Person of property to
a joint venture, partnership or other business entity in which such Person
retains an interest.
"ITC" -- as defined in Section 3.3 of the Participation Agreement.
"LATE RATE" -- with respect to the portion of any payment that would
be required to be distributed to the Holders pursuant to the Indenture or
otherwise under the Basic Documents, Nonaffiliated Partner (whether directly
or pursuant to the Indenture), Beneficiaries or Nonaffiliated Partner
Trustee, in its individual capacity, the rate per annum (calculated on the
basis of a 360-day year consisting of twelve 30-day months) equal to the
lesser of (a) 2% over the Debt Rate or the New Debt Rate, as applicable, and
(b) the maximum interest rate from time to time permitted by law.
"LIEN" -- any mortgage, pledge, security interest, lien, encumbrance,
lease, disposition of title or other charge of any kind on a Unit or any part
thereof.
"LIMITED PARTNERS" -- Affiliated Partner and Nonaffiliated Partner and
"Limited Partner" means any of the Limited Partners.
"LIQUIDATOR" -- the Person or committee approved pursuant to the
provisions of Sections 11.3(a) and (b) of the Partnership Agreement who
performs the functions described therein.
"MAJORITY IN INTEREST" -- as of a particular date of determination,
with respect to any action or decision of the Holders, the Holders of more
than 50% in aggregate principal unpaid amount of the Outstanding Notes, if
any.
"MATERIAL ADVERSE EFFECT" -- an adverse effect on the business,
properties, financial condition or results of operation of Partnership, BJ
USA, Affiliated Partner, Guarantor or Operator, taken as a whole, that would
materially jeopardize the ability of
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Partnership, BJ USA, Affiliated Partner, Guarantor or Operator to perform
their obligations set forth in the Basic Documents.
"MATURITY DATE" -- with respect to the Notes, the date specified as
the maturity therefor in the Indenture.
"MINIMUM SERVICES PAYMENT" -- as defined in Section 3.3 of the
Services Agreement.
"MODIFICATION" -- as defined in Section 9.2 of the O&M Agreement.
"MULTIEMPLOYER PLAN" -- any "multiemployer plan" (as defined in
section 3 of ERISA) in respect of which BJ USA or any ERISA Affiliate is an
"employer" (as defined in section 3 of ERISA).
"NET AGREED VALUE" -- (a) in the case of any Contributed Property, the
Agreed Value of such Contributed Property reduced by the total amount in the
aggregate of any and all liabilities either assumed by Partnership upon such
contribution or to which such Contributed Property is subject when
contributed, and (b) in the case of any Property distributed to a Partner,
Partnership's Carrying Value of such Property at the time such Property is
distributed, reduced by the total amount in the aggregate of any and all
indebtedness either assumed by such Partner upon such distribution or to
which such Property is subject at the time of distribution, in either case,
as determined under Section 752 of the Code.
"NET ECONOMIC RETURN" -- The applicable Beneficiary's initial (a)
anticipated net after-tax yield for each of the periods beginning with the
Commencement Date through the end of the Transaction Term and the
Commencement Date through the ET Date, reflected in the computations of
Priority Distributions, and ET Price set forth in SCHEDULES 4 and 8 to the
Participation Agreement and Schedules 2 (and each subschedule thereto) and 4
to the Trust Agreement, (b) anticipated aggregate after-tax cash flow
computed utilizing the multiple investment sinking fund method of analysis
and the same assumptions (including, without limitation, the Tax Assumptions)
as used by the applicable Beneficiary in making the computations of Priority
Distributions and ET Price set forth in SCHEDULES 4 and 8 to the
Participation Agreement and Schedules 2 (and each subschedule thereto) and 4
to the Trust Agreement and (c) the anticipated net after-tax book yield
through the Base Term.
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"NET EQUITY OF THE PARTNERSHIP" -- as of any date, the amount by which
the fair market value of the Property of Partnership as of such date, as
determined in the reasonable judgment of the General Partner using such
reasonable method of valuation as it may choose, exceeds the aggregate
liabilities of the Partnership as of such date, as determined in accordance
with GAAP.
"NET INCOME" -- for any Taxable Period, the excess, if any, of
Partnership's items of income and gain for such Taxable Period over
Partnership's items of loss and deduction for such Taxable Period. The items
included in the calculation of Net Income shall be determined in accordance
with Section 5.1(b) of the Partnership Agreement, but shall not include any
items specially allocated under Section 5.2(c) or Section 5.2(d) of the
Partnership Agreement.
"NET LOSS" -- for any Taxable Period, the excess, if any, of
Partnership's items of loss and deduction for such Taxable Period over
Partnership's items of income and gain for such Taxable Period. The items
included in the calculation of Net Loss shall be determined in accordance
with Section 5.1(b) of the Partnership Agreement, but shall not include any
items specially allocated under Section 5.2(c) or Section 5.2(d) of the
Partnership Agreement.
"NET SALES PROCEEDS" -- the proceeds realized from any sale of any one
or more of the Units or items of Other Equipment, less the expenses related
to such sale.
"NEW DEBT RATE" -- with respect to the Notes, a per annum rate of
interest (computed on the basis of a year of 360 days consisting of twelve
30-day months) determined by the Holders of 100% of the aggregate principal
amount of the outstanding Notes in their sole and absolute discretion.
"NONAFFILIATED PARTNER" -- as defined in the caption of the
Partnership Agreement.
"NONAFFILIATED PARTNER LIENS" -- any Lien on the Units or other
portions of the Trust Estate arising as a result of (i) claims against
Nonaffiliated Partner Trustee (in its individual capacity), Indenture Trustee
(in its individual capacity) or any Beneficiary, not related to the
transactions contemplated by the Basic Documents or which are not indemnified
against by BJ USA pursuant to the Participation Agreement or the Tax
Indemnity Agreement, or (ii) acts or omissions of Nonaffiliated Partner
Trustee (in its individual capacity), Indenture Trustee (in its
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individual capacity) or any Beneficiary, not related to the transactions
contemplated by the Basic Documents or in breach of any covenant or agreement
of such Person set forth in any of the Basic Documents or which are not
indemnified against by BJ USA pursuant to the Participation Agreement or the
Tax Indemnity Agreement, or (iii) taxes imposed against Nonaffiliated Partner
Trustee (in its individual capacity or as Nonaffiliated Partner Trustee),
Indenture Trustee (in its individual capacity) or any Beneficiary or the
Trust Estate which are not indemnified against by BJ USA pursuant to the
Participation Agreement or under the Tax Indemnity Agreement, or (iv) claims
against Nonaffiliated Partner, Indenture Trustee or any Beneficiary arising
out of the transfer (whether voluntary or involuntary) by Nonaffiliated
Partner Trustee, Indenture Trustee (without the consent of BJ USA and
Nonaffiliated Partner Trustee), or any Beneficiary (without the consent of BJ
USA and Indenture Trustee) of all or any portion of their respective
interests in Partnership, the Units, the Indenture Estate, the Trust Estate
or the Basic Documents, other than a transfer pursuant to Section 9 or 11 of
the Partnership Agreement, Section 5.12, 5.13, 5.16, 5.17, 5.18 or 5.22 of
the Participation Agreement, Section 7.1 of the Services Agreement or Section
15.1 of the O&M Agreement or in connection with or with respect to an
Indenture Event of Default.
"NONAFFILIATED PARTNER TRUSTEE" -- First Security Trust Company of
Nevada, a Nevada banking corporation, not in its individual capacity but
solely as Nonaffiliated Partner Trustee under the Trust Agreement.
"NONAFFILIATED PARTNER TRUSTEE INDENTURE ESTATE" -- as defined in
Section 1.1 of the Indenture.
"NONAFFILIATED PARTNER TRUSTEE AGREEMENTS" -- the Basic Documents to
which Nonaffiliated Partner Trustee, either in its individual capacity or as
Nonaffiliated Partner Trustee, is or will be a party.
"NONAFFILIATED PARTNER TRUSTEE'S NET ECONOMIC RETURN" -- the weighted
average of the aggregate Net Economic Return of all Beneficiaries.
"NONRECOURSE LIABILITY" -- as defined in Treasury Regulation Sections
1.704-2(b)(3) and 1.752-1(a)(2).
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"NONREPLACEMENT ELECTION" -- as defined in Section 7.2(c) of the
Partnership Agreement.
"NON-SEVERABLE MODIFICATION" -- any Modification that is not a
Required Modification or that is not readily removable without causing damage
to any Unit.
"NOTE PURCHASERS" -- the Note Purchasers named in the Participation
Agreement.
"NOTES" -- at any time (i) the secured notes of Nonaffiliated Partner
Trustee issued under and pursuant to the Participation Agreement and the
Indenture, including any Notes issued in exchange therefor or replacement
thereof pursuant to the Indenture, or (ii) any Refunding Notes, if any shall
be issued.
"NOTICE OF DELIVERY" -- as defined in Section 2.4(a) of the
Participation Agreement.
"NOTICES" -- all notices, communications or approvals that are
required or may be sent or given pursuant to the Basic Documents.
"O&M AGREEMENT" -- the Operating and Maintenance Agreement dated as of
December 15, 1999 between Partnership and Operator. Such term shall include
each O&M Agreement Supplement entered into pursuant to the O&M Agreement.
"O&M AGREEMENT SUPPLEMENT" -- (i) an O&M Agreement Supplement
substantially in the form of Exhibit A to the O&M Agreement, between
Partnership and Operator, dated the Commencement Date or the date that any
Replacement Unit or any other Unit or any Replacement Item or Other Equipment
is subjected to the O&M Agreement, and covering the Units or Other Equipment
related to the Commencement Date or such Replacement Unit or such other Unit
or such Replacement Items, as the case may be, or (ii) any supplement or
amendment entered into from time to time between Partnership and Operator.
"O&M DEFAULT" -- an event which with notice or the lapse of time or
both would become an O&M Event of Default.
"O&M EVENT OF DEFAULT" -- as defined in Section 14.1 of the O&M
Agreement.
"O&M/PARTNERSHIP EVENT OF DEFAULT" -- as defined in Section 14.2 of
the O&M Agreement.
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"OBLIGATIONS" -- as defined in Section 1 of the Guaranty.
"OBLIGOR" -- as defined in Section 1 of the Guaranty.
"OFFICER'S CERTIFICATE" -- a certificate signed (i) in the case of BJ
USA, General Partner, Service Taker, Operator, Affiliated Partner or
Guarantor, by a Responsible Officer, (ii) in the case of any other
corporation, by the President, any Vice President, any Assistant Vice
President, the Treasurer or an Assistant Treasurer, (iii) in the case of a
partnership, by the President, any Vice President, the Treasurer or an
Assistant Treasurer of a corporate general partner, and (iv) in the case of a
commercial bank or trust company, by the President, any Vice President, any
Trust Officer or any other 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.
"ONE-TIME SERVICES PAYMENT" -- as defined in Section 3.2 of the
Services Agreement.
"OPERATING CAPACITY" -- as defined in Section 2.1 of the Services
Agreement.
"OPERATING PAYMENT DATE" -- as defined in Section 3.2(a) of the O&M
Agreement.
"OPERATING PAYMENTS" -- as defined in Section 3.2(a) of the O&M
Agreement.
"OPERATOR" -- as defined in the caption of the Participation Agreement.
"OPTIONAL MODIFICATION" -- as defined in Section 9.2 of the O&M
Agreement.
"ORGANIZATIONAL LIMITED PARTNER" -- as defined in the caption of the
Partnership Agreement.
"OTHER AVAILABLE CASH" -- as defined in Section 6.1(e) of the
Partnership Agreement.
"OTHER EQUIPMENT" -- collectively the heavy duty truck tractors and
truck trailers, in each case with the equipment installed thereon on the
Commencement Date, each tractor or trailer, as the case may be, configured to
operate on a standalone basis or in
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conjunction with Other Equipment or Units and provide any of the Services, or
a combination thereof, and the other items of equipment, all as more
particularly described under the heading "Other Equipment" in Schedule 3 to
the Participation Agreement and in each Partnership Agreement Supplement,
Indenture Supplement and O&M Agreement Supplement and including expressly all
Replacement Items, together with any and all appliances, Parts, instruments,
accessories, furnishings, other equipment, accessions, additions,
improvements, substitutions and replacements from time to time incorporated
or installed in or on any item thereof (other than any Severable
Modifications that are not Required Modifications) and any and all
appliances, parts, instruments, accessories, furnishings and other equipment
(other than Units) title to which vests in, and which is the property of,
Partnership pursuant to the terms of the Partnership Agreement.
"OUTSTANDING" -- when used with respect to the Notes, as of any date
of determination, all Notes theretofore executed and delivered and
authenticated under the Indenture other than:
(a) Notes theretofore canceled by Indenture Trustee or
delivered to Indenture Trustee for cancellation pursuant to Section
2.7 of the Indenture or otherwise;
(b) Notes for whose payment (but only to the extent of such
payment) or prepayment money in the necessary amount has been
theretofore deposited with Indenture Trustee in trust for the Holders
with respect to such Notes; except that if such Notes are to be
redeemed or prepaid, notice of such redemption or prepayment has been
duly given pursuant to the Indenture or provision therefor
satisfactory to Indenture Trustee has been made; and
(c) Notes in exchange for or in lieu of which other Notes
have been authenticated, executed and delivered pursuant to the
Indenture;
except that in determining whether the Holders of the requisite aggregate
principal amount of Notes Outstanding have given any request, demand,
authorization, declaration, direction, notice, consent or waiver under the
Indenture, Notes owned by or pledged to BJ USA, Guarantor, Operator,
Affiliated Partner, Nonaffiliated Partner Trustee or any Beneficiary or any
Affiliate of any thereof shall be disregarded and deemed not to be
Outstanding, except that, in determining whether Indenture Trustee shall be
protected in relying upon any such request, demand, authorization,
declaration,
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direction, notice, consent or waiver, only Notes which Indenture Trustee
knows to be so owned or so pledged shall be disregarded, (unless all Notes
are so owned or pledged). The foregoing exception shall not negate the
prohibitions set forth in Section 5.3 of the Participation Agreement.
"PARTICIPANTS" -- the Note Purchasers and Beneficiaries.
"PARTICIPATING PARTY" -- as defined in the recitals of the Guaranty.
"PARTICIPATION AGREEMENT" -- the Participation Agreement, dated as of
December 15, 1999, among BJ USA, Partnership, Operator, Affiliated Partner,
Nonaffiliated Partner Trustee, in the capacities described therein,
Guarantor, Beneficiaries, Note Purchasers and Indenture Trustee, in the
capacities described therein.
"PARTNER TRANSFEREE" -- any Person or entity, other than a Partner, to
whom a Transferor Partner purports to Transfer its Partnership Interest.
"PARTNERS" -- General Partner, Affiliated Partner and Nonaffiliated
Partner, and "Partner" means any of the Partners.
"PARTNERSHIP" -- BJ Services Equipment II, L.P., a Delaware limited
partnership, which was established pursuant to the Initial Partnership
Agreement.
"PARTNERSHIP AGREEMENT" -- the Amended and Restated Agreement of
Limited Partnership of BJ Services Equipment II, L.P., dated as of December
15, 1999 among General Partner, Affiliated Partner, Organizational Limited
Partner and Nonaffiliated Partner Trustee, which amends and restates the
Initial Partnership Agreement. Such term shall include each Partnership
Agreement Supplement entered into pursuant to the Partnership Agreement.
"PARTNERSHIP AGREEMENT SUPPLEMENT" -- (i) a Partnership Agreement
Supplement, substantially in the form of Exhibit A to the Partnership
Agreement, dated the Commencement Date or the date that any Replacement Unit
is contributed to Partnership by General Partner or Affiliated Partner, among
General Partner, Affiliated Partner and Nonaffiliated Partner, covering the
Units owned by Partnership on the Commencement Date or related to such
Replacement Unit, or (ii) any supplement or amendment entered into from time
to
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time among General Partner, Affiliated Partner and Nonaffiliated Partner.
"PARTNERSHIP INDENTURE ESTATE" -- is defined in Section 1.1(ii) of the
Granting Clause of the Indenture.
"PARTNERSHIP INTEREST" -- a Partner's ownership interest in
Partnership and such Partner's rights and obligations under the Partnership
Agreement.
"PARTNERSHIP TAX RETURN" -- the Federal Partnership Information Return
(together with all schedules required to be attached thereto) filed as IRS
Form 1065, or any successor form.
"PARTS" -- as defined in Section 8.3 of the O&M Agreement.
"PAYMENT AMOUNT" -- with respect to the Notes, the total amount of the
payment of principal due and payable on each Payment Date, expressed as a
percentage and set forth in the appropriate Indenture Supplement. As to any
single Note, "PAYMENT AMOUNT" -- the portion of total Payment Amount set
forth therein in dollar or percentage terms.
"PAYMENT DATE" -- with respect to both payments of principal and
interest for Notes, each March 15 and September 15, beginning on the first
such date to occur after the initial issuance of Notes.
"PAYMENT MONTH" -- as defined in Section 3.3 of the Services Agreement
or Section 3.2(a) of the O&M Agreement.
"PAYMENTS" -- (i) in the O&M Agreement, the Operating Payments made by
Service Taker to Operator and (ii) in the Services Agreement, Minimum Service
Payments and Additional Service Payments.
"PBGC" -- as defined in Section 3.2(t)(ii)(C) of the Participation
Agreement.
"PENSION PLAN" -- at any time, any "employee pension benefit plan" (as
defined in Section 3 of ERISA) maintained at such time by BJ USA or any ERISA
Affiliate for employees of BJ USA or such ERISA Affiliate, excluding any
Multiemployer Plan.
"PERMITTED INVESTMENTS" -- (i) direct obligations of the United States
of America and agencies thereof for which the full faith and
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credit of the United States is pledged, (ii) obligations fully guaranteed by
the United States of America, (iii) certificates of deposit issued by, or
bankers' acceptances of, or time deposits with, any bank, trust company or
national banking association (which may be Indenture Trustee) incorporated or
doing business under the laws of the United States of America or one of the
States thereof having combined capital and surplus and retained earnings of
at least $1,000,000,000 and having a rating assigned to the long-term
unsecured debt of such institutions by Standard & Poor's Corporation and
Moody's Investors Service, Inc. at least equal to AA and AA2, respectively,
and (iv) commercial paper of companies, banks, trust companies or national
banking associations (in each case excluding BJ USA and its Affiliates)
incorporated or doing business under the laws of the United States of America
or one of the States thereof and in each case having a rating assigned to
such commercial paper by Standard & Poor's Corporation or Moody's Investors
Service, Inc. (or, if neither such organization shall rate such commercial
paper at any time, by any nationally recognized rating organization in the
United States of America) equal to the highest rating assigned by such
organization; except that if all of the above investments are unavailable,
the entire amount to be invested may be used to purchase Federal Funds from
an entity described in clause (iii) above and no investment shall be eligible
as a "Permitted Investment" unless the final maturity or date of return of
such investment is 90 days or less from the date of purchase thereof.
"PERMITTED LIENS" -- with respect to any Unit: (i) the interests of
Partnership under the Amended and Restated Partnership Agreement; (ii) the
interest of Operator under the O&M Agreement and the interest of Service
Taker under the Services Agreement; (iii) any Liens thereon for taxes,
assessments, levies, fees and other government and similar charges not due
and payable or the amount or validity of which is being contested in good
faith by appropriate proceedings so long as (a) there exists no material risk
of sale, forfeiture or loss of, or loss or interference with use or
possession of, or diminution of value, utility or useful life of, any Unit or
any interest therein, or any risk of interference with the payment of
Priority Distributions, Supplemental Priority Distributions, Special
Distributions or any other amounts payable under the Basic Documents, (b)
such contest would not result in, or increase the risk of, the imposition of
any criminal liability on any Indemnified Person, (c) such contest would not
materially and adversely affect the rights, titles and interests of
Nonaffiliated Partner Trustee, Partnership or Indenture Trustee in or to any
Unit or any interest therein, and
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(d) appropriate reserves with respect thereto are maintained in accordance
with GAAP; (iv) any Liens of mechanics, suppliers, vendors, materialmen,
laborers, employees, repairmen and other like Liens arising in the ordinary
course of Partnership's business securing obligations which are not due and
payable or the amount or validity of which is being contested in good faith
by appropriate proceedings so long as (a) there exists no material risk of
sale, forfeiture or loss of, or loss or interference with use or possession
of, or diminution of value, utility or useful life of, any Unit or any
interest therein, or interference with the payment of Priority Distributions,
Supplemental Priority Distributions, Special Distributions or any other
amounts payable under the Basic Documents, (b) such contest would not result
in, or increase the risk of, the imposition of any criminal liability on any
Indemnified Person, (c) such contest would not materially and adversely
affect the rights, titles and interests of Nonaffiliated Partner Trustee,
Partnership or Indenture Trustee in or to any Unit or any interest therein,
and (d) appropriate reserves with respect thereto are maintained in
accordance with GAAP; (v) the Lien of the Indenture, and the respective
rights of the Holders, Indenture Trustee, Beneficiaries, Partnership and
Nonaffiliated Partner Trustee under the Basic Documents; (vi) Liens arising
out of any judgment or award against Partnership with respect to which an
appeal or proceeding for review is being taken in good faith and with respect
to which there shall have been secured a stay of execution pending such
appeal or proceeding for review so long as (a) there exists no material risk
of sale, forfeiture or loss of, or loss or interference with the use or
possession of, or diminution of value, utility or useful life of, any Unit or
any interest therein, or any risk of interference with the payment of
Priority Distributions, Supplemental Priority Distributions, Special
Distributions or any other amounts payable under the Basic Documents, (b)
such contest would not result in, or increase the risk of, the imposition of
any criminal liability on any Indemnified Person, (c) such contest would not
materially and adversely affect the rights, titles and interests of
Partnership, Nonaffiliated Partner Trustee or Indenture Trustee in or to any
Unit or any interest therein, and (d) appropriate reserves with respect
thereto are maintained in accordance with GAAP; and (vii) salvage rights of
insurers under insurance policies maintained by Operator pursuant to Section
12 of the O&M Agreement.
"PERSON" -- an individual, partnership, joint venture, corporation,
trust, limited liability company, association or unincorporated organization,
and a government or agency or political subdivision thereof.
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"PREMIUM" -- as defined in Section 2.15 of the Indenture.
"PREPAYMENT DATE" -- the date on which the Notes are to be prepaid or
redeemed (or purchased in lieu of prepayment or redemption, as applicable)
pursuant to Section 6.1, 8.3(e)(iii) or 8.3(e)(iv) of the Indenture, which
date, unless otherwise stated in the Indenture, shall be a Payment Date.
"PREPAYMENT PRICE" -- the price at which the Notes are to be prepaid
or redeemed (or purchased in lieu of prepayment or redemption, where
applicable), determined as of the applicable Prepayment Date, pursuant to
Section 6.1 or 8.3(e) of the Indenture, as the case may be.
"PRIORITY DISTRIBUTION" -- the amounts to be paid (but not allocated)
in accordance with Schedule 1 to the Partnership Agreement, Schedule 4 to the
Participation Agreement and Schedule 2 to the Trust Agreement, which under
any circumstances and in any event, will be an amount at least sufficient to
pay in full as of the date of payment thereof, the principal amount of and
interest on the Notes due on such date, including, without limitation,
interest on the Notes at the New Debt Rate from and after the ET Date.
"PROPERTY" -- all assets owned directly, indirectly or beneficially by
Partnership at any date of determination, including, without limitation, all
cash, all personal property, and any item thereof.
"PROPOSED REMOVED UNITS" -- as defined in Section 5.16 of the
Participation Agreement.
"REASONABLE BASIS" -- a "reasonable basis" determined in accordance
with the principles of ABA Formal Opinion No. 85-352, or in the case guidance
is provided by the Treasury Department under Section 6662(d)(2)(B)(ii) of the
Code which provides a different determination thereof, which is applicable
and which overrides ABA Formal Opinion No. 85-532, such different
determination shall be utilized.
"REBUILD" -- with respect to a Unit or item of Other Equipment,
replacement of all hoses (hydraulic, water or other), air lines, bearings,
rings, wiring and other normal wear components with new components and
refurbishment to the level necessary to bring the Unit to manufacturers'
specified operational performance standards for the Unit or item of Other
Equipment.
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"RECAPTURE INCOME" -- any gain recognized by Partnership (computed
without regard to any adjustment required by Section 734 or 743 of the Code)
upon the disposition of any Property of Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such Property.
"REDUCTION DATE" -- as defined in Section 5.16 of the Participation
Agreement or in Section 3.6 of the Services Agreement, as applicable.
"REDUCTION ELECTION" -- as defined in Section 5.16 of the
Participation Agreement.
"REFUNDED DEBT" -- as of the ET Date, the sum of (1) Current Principal
Amount of any Outstanding Notes issued under the Indenture, plus (2) accrued
but unpaid interest thereon, plus (3) any other accrued and unpaid Secured
Obligations.
"REFUNDING DEBT" -- Indebtedness incurred by Nonaffiliated Partner to
refinance the Refunded Debt on the ET Date as provided in Section 2.9 of the
Participation Agreement.
"REFUNDING NOTES" -- means any promissory note issued by Nonaffiliated
Partner evidencing Refunding Debt pursuant to Section 2.9 of the
Participation Agreement.
"REGISTER" -- as defined in Section 2.3 of the Indenture.
"REGISTRAR" -- as defined in Section 2.3 of the Indenture.
"REGULATORY CHANGE" -- any change after the date of the Indenture in
Federal, state or foreign law or regulations or the adoption or making after
such date of any interpretation, directive or request applying to a class of
financial institutions including any Holder of or under any Federal, state or
foreign law or regulation (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) by any court or
government or monetary authority charged with the interpretation or
administration thereof.
"REIMBURSED EXPENSE" -- as defined in Section 3.2(b) of the O&M
Agreement.
"RELEASE" -- any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, discharge, dispersal,
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leaching or migration into the indoor or outdoor environment (including,
without limitation, ambient air, surface water, groundwater and surface or
subsurface strata) or into or out of any property, including the movement of
Hazardous Substances through or in the air, soil, surface water, groundwater
or property.
"REMAINING PARTNERSHIP INTEREST" -- Nonaffiliated Partner Trustee's
Partnership Interest less the sum of (i) the aggregate Equipment Value of all
Units purchased from Partnership pursuant to Section 5.12(ii) of the
Participation Agreement, sold pursuant to Section 5.17 of the Participation
Agreement or retained pursuant to Section 5.18 of the Participation
Agreement, and (ii) the Equipment Value of all Other Equipment.
"REPLACED UNIT" -- as defined in Section 5.3 of the Indenture.
"REPLACEMENT ITEM" -- an item of equipment that meets the standards of
Section 5.11 or 5.12, as the case may be, of the Participation Agreement, is
subject to the Partnership Agreement and is operated and maintained under the
O&M Agreement and is not a Replacement Unit.
"REPLACEMENT PARTS" -- Parts replaced in accordance with Section 8.3
of the O&M Agreement.
"REPLACEMENT UNIT" -- an item of equipment that meets the standards
of Section 5.11 or 5.12, as the case may be, of the Participation Agreement,
is subject to the Partnership Agreement and the Lien of the Indenture and is
operated and maintained under the O&M Agreement.
"REQUIRED MODIFICATION" -- as defined in Section 9.1 of the O&M
Agreement.
"RESIDUAL VALUE INSURANCE" -- an insurance policy providing for the
payment to the Partnership of any excess, as of the Transaction Term
Expiration Date, of the Insured Amount Level over the aggregate value of all
Units (including Replacement Units) but excluding the Other Equipment owned
by the Partnership on such date.
"RESPONSIBLE OFFICER" -- with respect to BJ USA, Affiliated Partner,
Operator or Guarantor, the President, the Treasurer, the Chief Executive
Officer, the Chief Financial Officer, the Chief Accounting Officer or the
General Counsel.
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"SECURED OBLIGATIONS" -- as defined in the Granting Clause of the
Indenture.
"SECURITIES ACT" -- the Securities Act of 1933, as amended, or any
successor law.
"SENIOR FINANCIAL OFFICER" -- with respect to BJ USA, the Chief
Financial Officer, the Chief Accounting officer or the Treasurer.
"SERVICE PAYMENT" -- all Minimum Service Payments and Additional
Service Payments.
"SERVICE TAKER" -- BJ USA, as Service Taker under the Services
Agreement.
"SERVICES" -- as defined in Section 2.1 of the Services Agreement.
"SERVICES AGREEMENT" -- the Services Agreement dated as of December
15, 1999 between Service Taker and Partnership.
"SERVICES DEFAULT" -- a Services Event of Default or an event which
with notice or lapse of time or both would become a Services Event of Default.
"SERVICES EVENT OF DEFAULT" -- as defined in Section 6.1 of the
Services Agreement.
"SERVICES/PARTNERSHIP EVENT OF DEFAULT" -- as defined in Section 6.2
of the Services Agreement.
"SERVICES PAYMENT DATE" -- as defined in Section 3.3 of the Services
Agreement.
"SETTLEMENT DATE" -- as defined in Section 5.12 of the Participation
Agreement.
"SEVERABLE MODIFICATION" -- any Modification other than a
Non-Severable Modification.
"SPECIAL DISTRIBUTION" -- as defined in Section 6.1(d) of the
Partnership Agreement.
"SPECIAL DISTRIBUTION DATE" -- as defined in Section 6.1(d) of the
Partnership Agreement.
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"SPECIAL P.O. AMOUNT" -- the Special P.O. Price plus the Adjustment
Amount (which may be a positive or negative number) as of the Special P.O.
Date, with respect to the Units.
"SPECIAL P.O. DATE" -- means March 15, 2006.
"SPECIAL P.O. PRICE" -- as defined in Section 9.4 of the Partnership
Agreement.
"SPECIAL P.O. RIGHT" -- as defined in Section 9.4 of the Partnership
Agreement.
"SUBSIDIARY" of any Person -- any Person of which more than 50% of the
voting stock or other equity interests (in case of Persons other than
corporations) is owned or controlled, directly or indirectly, by such Person,
or one or more Subsidiaries of the Person or a combination thereof. Unless
the context otherwise clearly requires, references in the Basic Documents to
a "Subsidiary" refer to a Subsidiary of Guarantor. "Subsidiaries" of
Guarantor shall include all Consolidated Subsidiaries (except to the extent
otherwise specifically provided in the Basic Documents).
"SUBSTITUTION ELECTION" -- as defined in Section 7.2(d) of the
Partnership Agreement.
"SUPPLEMENTAL CONTRIBUTIONS" -- as defined in Section 4.4(c) of the
Partnership Agreement.
"SUPPLEMENTAL PRIORITY DISTRIBUTIONS" -- as defined in Section 6.1(c)
of the Partnership Agreement.
"TAX ADJUSTMENT" -- as defined in Section 5.1(e) of the Partnership
Agreement.
"TAX ASSUMPTIONS" -- as defined in Section 1.1 of the Tax Indemnity
Agreement.
"TAX COUNSEL" -- Mayer, Brown & Platt or any other independent firm of
attorneys nationally recognized as being expert in tax matters selected by
Beneficiaries and reasonably acceptable to BJ USA.
"TAX INDEMNITEE" -- as defined in Section 7.1(a) of the Participation
Agreement.
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"TAX INDEMNITY AGREEMENT" -- each Tax Indemnity Agreement, dated as of
December 15, 1999, between BJ USA and each Beneficiary.
"TAX MATTERS PARTNER" -- the Partner designated as such from time to
time pursuant to Section 8.6 of the Partnership Agreement.
"TAXABLE PERIOD" -- a calendar year (or short period) for which a
Partnership Tax Return is required to be filed for the Partnership; except
that the Partnership's first Taxable Period shall begin on the Commencement
Date and shall end on December 31, 1999 (or any earlier date marking the end
of the period including the Commencement Date for which a Partnership Tax
Return is required to be filed for the Partnership).
"TAXES" -- as defined in Section 7.1(b) of the Participation Agreement.
"THIRD PARTY CLAIM" -- any claim, demand, action, cause of action,
judgment, assessment, compromise, settlement or decree, made by or in favor
of any party other than the Partnership or its partners in respect of any
personal injury or property damage.
"TOTAL EQUIPMENT VALUE" -- the Equipment Value with respect to the
Units only up to a maximum of $120,000,000.
"TRANSACTION COSTS" -- as defined in Section 2.6(a) of the
Participation Agreement.
"TRANSACTION TERM" -- unless earlier terminated, the Interim Term and
the Base Term.
"TRANSACTION TERM EXPIRATION DATE" -- as defined in Section 4.2(a)(ii)
of the Participation Agreement.
"TRANSFER" -- a sale, assignment, transfer, contribution, mortgage or
other encumbrance of a Partnership Interest, or a sufferance of any third
party to sell, assign, transfer, contribute, mortgage, charge or otherwise
encumber a Partnership Interest, or a contract to do or permit any of the
foregoing, whether voluntarily or by operation of law.
"TRANSFEREE" -- as defined in Section 6.1(a) of the Participation
Agreement.
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"TRANSFEROR PARTNER" -- any Partner desiring to Transfer its
Partnership Interest or any portion thereof pursuant to the provisions of
Section 10 of the Partnership Agreement.
"TREASURY REGULATIONS" -- proposed, temporary and final treasury
regulations promulgated under the Code as of the effective date hereof and
any successor provisions thereto.
"TRUST" -- BJ Services Trust No. 1999-1, as provided in Section 11.12
of the Trust Agreement.
"TRUST AGREEMENT" -- the Trust Agreement dated as of December 15, 1999
among Beneficiaries and First Security.
"TRUST ESTATE" -- as defined in Section 2.2 of the Trust Agreement.
"TRUST EXPENSES" -- as defined in Section 6.1 of the Trust Agreement.
"TRUST TAX MATTERS PARTNER" -- as defined in Section 12.7 of the Trust
Agreement.
"TRUSTEE" -- each of Nonaffiliated Partner Trustee or Indenture
Trustee and "TRUSTEES" -- Nonaffiliated Partner Trustee and Indenture
Trustee, collectively.
"TRUSTEE DOCUMENTS" -- as defined in Section 2.1 of the Trust
Agreement.
"U.C.C." -- the Uniform Commercial Code in effect in the applicable
jurisdiction.
"U.S." -- United States of America.
"UNANIMOUS CONSENT" -- as defined in Section 7.4 of the Partnership
Agreement.
"UNIT" -- one of the Units.
"UNITS" -- collectively the heavy duty truck tractors and truck
trailers, in each case with the equipment installed thereon on the
Commencement Date, each tractor or trailer, as the case may be, configured to
operate on a standalone basis or in conjunction with other Units or Other
Equipment and to provide any of the Services, or a combination thereof, and
the other items of equipment, all as
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more particularly described under the heading "Units" in Schedule 3 to the
Participation Agreement and each Partnership Agreement Supplement, Indenture
Supplement and O&M Agreement Supplement together with any Replacement Units
and all appliances, Parts, instruments, accessories, furnishings, other
equipment, accessions, additions, improvements, substitutions and
replacements from time to time incorporated or installed in or on any item
thereof (other than any Severable Modifications that are not Required
Modifications) and any and all appliances, parts, instruments, accessories,
furnishings and other equipment (other than Other Equipment) title to which
vests in, and which is the property of, Partnership pursuant to the terms of
the Partnership Agreement.
"UNREALIZED GAIN" attributable to any item of Property -- as of any
date of determination, the excess, if any, of (a) the fair market value of
such Property as of such date (as determined under Section 5.1(d) of the
Partnership Agreement) over (b) the Carrying Value of such Property as of
such date (before any adjustment to be made pursuant to Section 5.1(d) of the
Partnership Agreement as of such date).
"UNREALIZED LOSS" attributable to any item of Property -- as of any
date of determination, the excess, if any, of (a) the Carrying Value of such
Property as of such date (before any adjustment to be made pursuant to
Section 5.1(d) of the Partnership Agreement as of such date) over (b) the
fair market value of such Property as of such date (as determined under
Section 5.1(d) of the Partnership Agreement).