\nSECTION PAGE<\/p>\n
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1<\/p>\n
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1<\/p>\n
1. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
\n 1.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . .2
\n 1.2 Excluded Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
\n 1.3 HABENDUM CLAUSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
\n 1.4 Attachment of Security Interest. . . . . . . . . . . . . . . . . . . . .8
\n 1.5 Effect of Assignment . . . . . . . . . . . . . . . . . . . . . . . . . .8
\n 1.6 Appointment of Indenture Trustee . . . . . . . . . . . . . . . . . . . .8
\n 1.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . .9
\n 1.8 Representations and Warranties . . . . . . . . . . . . . . . . . . . . .9<\/p>\n
2. THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
\n 2.1 Notes; Title, Dating and Terms . . . . . . . . . . . . . . . . . . . . 10
\n 2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . 10
\n 2.3 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
\n 2.4 Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . 11
\n 2.5 Indenture Trustee as Agent; Ownership of Notes . . . . . . . . . . . . 12
\n 2.6 Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . 13
\n 2.7 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
\n 2.8 Payment on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
\n 2.9 Payment from Indenture Estate Only; Nonrecourse Obligations;
\n Excess Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
\n 2.10 Execution and Delivery of Notes upon Original Issuance . . . . . . . . 16
\n 2.11 Security for and Parity of Notes . . . . . . . . . . . . . . . . . . . 16
\n 2.12 Application of Payments to Notes . . . . . . . . . . . . . . . . . . . 17
\n 2.13 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . 17
\n 2.14 Late Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
\n 2.15 Definition of Premium. . . . . . . . . . . . . . . . . . . . . . . . . 17
\n 2.16 Special Rights of Holders. . . . . . . . . . . . . . . . . . . . . . . 19<\/p>\n
3. RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE . . . 19
\n 3.1 Payment Upon Delivery of Units . . . . . . . . . . . . . . . . . . . . 19
\n 3.2 Payments Upon Event of Loss, Obsolescence or ET Right or
\n Special P.O. Right; Certain Prepayments. . . . . . . . . . . . . . . . 20
\n 3.3 Application of Priority Distributions. . . . . . . . . . . . . . . . . 20<\/p>\n
i<\/p>\n
SECTION PAGE<\/p>\n
3.4 Application of Certain Amounts Upon Event of Loss. . . . . . . . . . . 21
\n 3.5 Amounts During Indenture Event of Default. . . . . . . . . . . . . . . 21
\n 3.6 Amounts for Which Application is Provided in Other Basic
\n Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
\n 3.7 Amounts for Which No Application is Otherwise Provided . . . . . . . . 23
\n 3.8 Excepted Property. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
\n 3.9 Notice of Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . 23<\/p>\n
4. COVENANTS OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP . . . . . . . . . 24<\/p>\n
5. DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE
\n INDENTURE ESTATE DURING CONTINUATION OF PARTNERSHIP. . . . . . . . . . . . . 24
\n 5.1 Disposition, Substitution and Release of Property Included in
\n the Indenture Estate During Continuation of Partnership. . . . . . . . 24
\n 5.2 Possession of Units. . . . . . . . . . . . . . . . . . . . . . . . . . 25
\n 5.3 Release of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
\n 5.4 Release of Units – Consent of Holders. . . . . . . . . . . . . . . . . 27
\n 5.5 Protection of Purchaser. . . . . . . . . . . . . . . . . . . . . . . . 27<\/p>\n
6. PREPAYMENT OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
\n 6.1 Prepayment of Notes upon Event of Loss, Obsolescence, ET Date
\n or Special P.O. Date . . . . . . . . . . . . . . . . . . . . . . . . . 27
\n 6.2 Notice of Prepayment to Holders. . . . . . . . . . . . . . . . . . . . 29
\n 6.3 Deposit of Prepayment Price. . . . . . . . . . . . . . . . . . . . . . 30
\n 6.4 Notes Payable on Prepayment Date . . . . . . . . . . . . . . . . . . . 30<\/p>\n
7. NONAFFILIATED PARTNER TRUSTEE AND INDENTURE TRUSTEE. . . . . . . . . . . . . 30
\n 7.1 Prepayment of Moneys for Note Payments Held by Indenture
\n Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
\n 7.2 No Representations or Warranties as to Units or Documents. . . . . . . 31<\/p>\n
8. DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
\n 8.1 Indenture Events of Default. . . . . . . . . . . . . . . . . . . . . . 31
\n 8.2 Acceleration; Rescission and Annulment; Limitations. . . . . . . . . . 33
\n 8.3 Other Remedies Available to Indenture Trustee. . . . . . . . . . . . . 33
\n 8.4 Waiver of Nonaffiliated Partner Trustee and Partnership. . . . . . . . 43
\n 8.5 Waiver of Existing Defaults. . . . . . . . . . . . . . . . . . . . . . 44
\n 8.6 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 44
\n 8.7 Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . . . 44<\/p>\n
ii<\/p>\n
SECTION PAGE<\/p>\n
8.8 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . 44
\n 8.9 Indenture Trustee May File Proofs of Claim . . . . . . . . . . . . . . 45<\/p>\n
9. INDENTURE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
\n 9.1 Rights and Duties of Indenture Trustee . . . . . . . . . . . . . . . . 45
\n 9.2 Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . 46
\n 9.3 Funds May Be Held by Indenture Trustee; Investments. . . . . . . . . . 47
\n 9.4 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 47
\n 9.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
\n 9.6 Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . 49
\n 9.7 Successor Indenture Trustee by Merger, etc.. . . . . . . . . . . . . . 50
\n 9.8 Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . 50
\n 9.9 Trustee’s Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
\n 9.10 Withholding Taxes; Information Reporting . . . . . . . . . . . . . . . 51
\n 9.11 Co-Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51<\/p>\n
10. SATISFACTION AND DISCHARGE; TERMINATION OF OBLIGATIONS . . . . . . . . . . . 52
\n 10.1 Satisfaction and Discharge of Agreement; Termination of
\n Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
\n 10.2 Survival of Certain Obligations. . . . . . . . . . . . . . . . . . . . 52
\n 10.3 Moneys to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 52
\n 10.4 Moneys to Be Returned to Nonaffiliated Partner Trustee . . . . . . . . 52<\/p>\n
11. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
\n 11.1 Amendments to This Indenture Without Consent of Holders. . . . . . . . 52
\n 11.2 Supplements to Partnership Agreement, Guaranty, Services
\n Agreement and O&M Agreement Without Holder Consent . . . . . . . . . . 53
\n 11.3 Amendments With Consent of Holders . . . . . . . . . . . . . . . . . . 54
\n 11.4 Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . 55
\n 11.5 Indenture Trustee Protected. . . . . . . . . . . . . . . . . . . . . . 55
\n 11.6 Opinion of Counsel Conclusive as to
\n Supplements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55<\/p>\n
12. ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS. . . . . . . . . . . . . 56
\n 12.1 Actions to Be Taken upon Exercise of Certain Rights. . . . . . . . . . 56<\/p>\n
13. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
\n 13.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
\n 13.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58<\/p>\n
iii<\/p>\n
SECTION PAGE<\/p>\n
13.3 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . 58
\n 13.4 Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . 58
\n 13.5 Indenture for Benefit of Nonaffiliated Partner Trustee,
\n Indenture Trustee, Beneficiaries and Holders . . . . . . . . . . . . . 58
\n 13.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
\n 13.7 No Oral Modifications or Continuing Waivers. . . . . . . . . . . . . . 58
\n 13.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 59
\n 13.9 Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . 59
\n 13.10 No Legal Title to Indenture Estate in Holders. . . . . . . . . . . . . 59
\n 13.11 Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . 59
\n 13.12 Directly or Indirectly . . . . . . . . . . . . . . . . . . . . . . . . 59<\/p>\n
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-1
\n<\/table>\n
iv<\/p>\n
Attachments<\/p>\n
Exhibit A Note
\nExhibit B Indenture Supplement No. 1<\/p>\n
v<\/p>\n
TRUST INDENTURE AND SECURITY AGREEMENT dated as of December 15, 1999
\namong FIRST SECURITY TRUST COMPANY OF NEVADA, a Nevada banking corporation,
\nnot in its individual capacity except as otherwise expressly provided herein,
\nbut solely as Nonaffiliated Partner Trustee, BJ SERVICES EQUIPMENT II, L.P.,
\na Delaware Limited Partnership and STATE STREET BANK AND TRUST COMPANY, a
\nMassachusetts trust company, as Indenture Trustee hereunder.<\/p>\n
R E C I T A L S:<\/p>\n
A. Beneficiaries and First Security Trust Company of Nevada, a
\nNevada banking corporation, have entered into the Trust Agreement whereby,
\namong other things, (i) Nonaffiliated Partner Trustee has established a
\ncertain trust for the use and benefit of Beneficiaries, to be subject,
\nhowever, to the Lien of the Indenture created pursuant hereto and (ii)
\nNonaffiliated Partner Trustee has been authorized and directed to execute and
\ndeliver this Indenture.<\/p>\n
B. Before the Commencement Date, General Partner and
\nOrganizational Limited Partner formed Partnership pursuant to the Initial
\nPartnership Agreement, and General Partner contributed the Initial Units to
\nPartnership.<\/p>\n
C. Nonaffiliated Partner Trustee, Indenture Trustee and other
\nparties have entered into the Participation Agreement providing for the
\ncommitment of the Note Purchasers to purchase Notes in an aggregate amount
\nnot to exceed $90,000,000.<\/p>\n
D. Subject to the terms of the Participation Agreement,
\nNonaffiliated Partner Trustee on the Commencement Date will enter into the
\nPartnership Agreement (which amends and restates the Initial Partnership
\nAgreement) with General Partner, Affiliated Partner and Organizational
\nLimited Partner and will make a capital contribution to Partnership.<\/p>\n
E. The proceeds of the Notes are to be used by Nonaffiliated
\nPartner Trustee to finance a portion of the Nonaffiliated Partner Trustee’s
\ncapital contribution to Partnership on the Commencement Date.<\/p>\n
F. The parties desire by this Indenture, among other things, (i)
\nto provide for the issuance by Nonaffiliated Partner Trustee of the Notes in
\naccordance with this Indenture, (ii) to provide for the assignment, mortgage
\nand pledge by Nonaffiliated Partner Trustee to Indenture Trustee, as part of
\nthe Indenture Estate hereunder, among other things, of Nonaffiliated Partner
\nTrustee’s <\/p>\n
Partnership Interest and of certain of Nonaffiliated Partner Trustee’s right,
\ntitle and interest under certain Basic Documents and certain payments and
\nother amounts received hereunder or thereunder, and (iii) to provide for the
\nassignment, mortgage and pledge by Partnership to Indenture Trustee, as part
\nof the Indenture Estate hereunder, among other things, of all of
\nPartnership’s right title and interest in and to the Units (but not the Other
\nEquipment and certain of Partnership’s right, title and interest under
\ncertain Basic Documents and certain payments and other amounts received with
\nrespect thereto, all in accordance with the terms hereof, as security for,
\namong other things, the payment and performance of the Notes and
\nNonaffiliated Partner Trustee’s other obligations to Holders and to Indenture
\nTrustee, for the ratable benefit and security of Holders.<\/p>\n
G. The Holders (i) by entering into the Participation Agreement,
\nhave made it possible for Nonaffiliated Partner Trustee to make its capital
\ncontribution to Partnership and, accordingly, have conferred financial and
\nother benefits on Partnership and Partners and (ii) would not enter into the
\ntransactions contemplated by the Basic Documents without the grant by
\nPartnership and Nonaffiliated Partner Trustee of the Liens provided hereunder.<\/p>\n
H. All things necessary to make this Indenture the legal, valid
\nand binding obligation of Nonaffiliated Partner Trustee, Partnership and
\nIndenture Trustee, for the uses and purposes herein set forth, in accordance
\nwith its terms, have been done and performed and have happened.<\/p>\n
I. For all purposes of this Indenture, except as otherwise defined
\nherein or unless the context otherwise requires:<\/p>\n
(a) capitalized terms used herein shall have the meanings
\nassigned to them in APPENDIX A attached hereto and made a part hereof;<\/p>\n
(b) the words “herein”, “hereof” and “hereunder”, and other
\nwords of similar import, refer to this Indenture as a whole and not to any
\nparticular Section or other subdivision hereof; and<\/p>\n
(c) all references in this Indenture to Sections and
\nExhibits refer to Sections and Exhibits of this Indenture unless otherwise
\nindicated.<\/p>\n
-2-<\/p>\n
NOW, THEREFORE, in consideration of the premises and of the mutual
\ncovenants herein contained, the parties hereto hereby agree as follows:<\/p>\n
SECTION 1. SECURITY<\/p>\n
1.1 GRANT OF SECURITY INTEREST.<\/p>\n
To secure the prompt payment of the principal of, Premium, if any,
\nand interest on the Notes from time to time Outstanding in accordance with their
\nterms and to secure the payment, performance and observance by Nonaffiliated
\nPartner Trustee and Partnership of all the agreements, covenants and provisions
\nfor the benefit of the Holders and Indenture Trustee contained herein and in the
\nBasic Documents to which Partnership or Nonaffiliated Partner Trustee is,
\nrespectively, a party (collectively, the “Secured Obligations”) and for the uses
\nand purposes and subject to the terms and provisions hereof,<\/p>\n
(i) Nonaffiliated Partner Trustee does hereby grant, bargain,
\n sell, assign, transfer, convey, pledge and confirm, unto Indenture
\n Trustee, its successors and assigns, for the security and benefit of the
\n Indenture Trustee, for itself, and for the Holders from time to time a
\n security interest in and lien on, all estate, right, title and interest
\n of Nonaffiliated Partner Trustee in, to and under the following described
\n property, agreements, rights, interests and privileges, whether now owned
\n or hereafter acquired, arising or existing (which collectively,
\n including, without limitation, all property hereafter specifically
\n subjected to the Lien of this Indenture by Nonaffiliated Partner Trustee
\n by any instrument supplemental hereto, but excluding the Excepted
\n Property, are herein called the “Nonaffiliated Partner Trustee Indenture
\n Estate”):<\/p>\n
(A) the Partnership Agreement and Nonaffiliated Partner
\n Trustee’s Partnership Interest under the Partnership Agreement
\n (including all instruments or certificates owned or held by or
\n established in favor of Nonaffiliated Partner Trustee with respect
\n to such Partnership Interest) and all rights, authority, powers
\n and privileges of Nonaffiliated Partner Trustee as a holder of
\n such Partnership Interest and all payments and distributions
\n thereunder of whatever kind or character and whether in cash or
\n other property, at any time made or distributable to Nonaffiliated
\n Partner Trustee <\/p>\n
-3-<\/p>\n
thereunder or in respect thereof, whether due or to become due
\n and whether representing profits, distributions, repayment of
\n capital contributions or otherwise (including all amounts of
\n Priority Distributions, Supplemental Priority Distributions,
\n Special Distributions, Disposition Amount, ET Amount, Special
\n P.O. Amount and payments of any kind required to be made to
\n Nonaffiliated Partner Trustee thereunder), including, without
\n limitation, the immediate and continuing right of Nonaffiliated
\n Partner Trustee to receive and collect all distributions and
\n any other payments or other amounts and the right of
\n Nonaffiliated Partner Trustee to exercise any election or
\n option or to make any decision or determination or to give or
\n receive any notice, consent, waiver or approval or to consent to
\n any amendment, modification or waiver or to make any claims or
\n demands under or to take any other action provided under or in
\n respect of the Partnership Agreement, the Services Agreement or
\n the O&M Agreement or to accept surrender of any Unit or Units,
\n including all the rights and powers of Nonaffiliated Partner
\n Trustee to the exclusion of General Partner and any other
\n Partner, to declare the O&M Agreement and the Services Agreement
\n to be in default, to terminate such agreements and exercise all
\n rights and remedies thereunder and under the Partnership
\n Agreement, including, without limitation, the commencement,
\n conduct and consummation of legal, administrative and other
\n proceedings as permitted thereunder or by law, the liquidation of
\n Partnership, and all rights and powers of Nonaffiliated Partner
\n Trustee to the exclusion of General Partner and any other Partner
\n following a BJ Event of Default to amend, modify or waive such
\n agreements and to exercise the other rights contained in Section
\n 7 of the Partnership Agreement; <\/p>\n
(B) all rights, authority, powers and privileges of, and
\n all payments and distributions payable to, Nonaffiliated Partner
\n Trustee under Sections 5.11 through 5.18 and Section 5.22 of the
\n Participation Agreement;<\/p>\n
(C) without limiting the foregoing clause (A) or (B),
\n all rents, issues, profits, revenues and other income of the
\n property subjected or required to be subjected to the Lien of this
\n Indenture which relate to such Partnership Interest, including,
\n without limitation, <\/p>\n
-4-<\/p>\n
the immediate and continuing right to receive any of the
\n foregoing; <\/p>\n
(D) all moneys and securities now or hereafter paid or
\n deposited or required to be paid or deposited to or with Indenture
\n Trustee by or for the account of Nonaffiliated Partner Trustee
\n pursuant to any term of any Basic Document and held or required to
\n be held by Indenture Trustee hereunder that relate to Partnership,
\n the Units or to the Notes;<\/p>\n
(E) the Guaranty, including, without limitation, all
\n covenants and warranties in favor of Nonaffiliated Partner Trustee
\n and all other rights and remedies of Nonaffiliated Partner Trustee
\n thereunder, whether now owned or hereafter acquired; and<\/p>\n
(F) all proceeds of the foregoing (Nonaffiliated Partner
\n Trustee, concurrently, with the delivery hereof, having delivered
\n to Indenture Trustee originals of the executed Partnership
\n Agreement, O&M Agreement, Services Agreement, Guaranty and the
\n relevant Partnership Agreement Supplement and O&M Agreement
\n Supplement and executed counterparts of the Trust Agreement); and<\/p>\n
(ii) Partnership does hereby grant, bargain, sell, assign,
\n transfer, convey, pledge and confirm, unto Indenture Trustee, its
\n successors and assigns, for the security and benefit of the Indenture
\n Trustee, for itself, and for the Holders from time to time a security
\n interest in and lien on, all estate, right, title and interest of
\n Partnership in, to and under the following described property,
\n agreements, rights, interests and privileges, whether now owned or
\n hereafter acquired, arising or existing (which collectively, including,
\n without limitation, all property hereafter specifically subjected to the
\n Lien of this Indenture by Partnership by any instrument supplemental
\n hereto, but excluding the Excepted Property, are herein called the
\n “Partnership Indenture Estate” and together with the Nonaffiliated
\n Partner Trustee Indenture Estate herein called the “Indenture Estate”):<\/p>\n
(A) the Units and all replacements thereof and
\n substitutions therefor in which Partnership shall from time to
\n time acquire an interest under the Contribution Agreements and the
\n Partnership Agreement, as more <\/p>\n
-5-<\/p>\n
particularly described in the Indenture Supplement, Partnership
\n Agreement Supplement and O&M Agreement Supplement executed and
\n delivered with respect to such Units;<\/p>\n
(B) without limiting the foregoing clause(A), all rents,
\n issues, profits, revenues and other income of the property
\n subjected or required to be subjected to the Lien of this
\n Indenture which relate to the Contribution Agreements, the Units
\n or the Notes, including, without limitation, the immediate and
\n continuing right to receive any of the foregoing;<\/p>\n
(C) all insurance proceeds, sale proceeds or proceeds
\n arising out of a taking, condemnation, requisition or
\n appropriation by any government authority with respect to
\n Partnership, the Units or any Unit, including, without limitation,
\n the immediate and continuing right to receive any of the
\n foregoing;<\/p>\n
(D) all moneys and securities now or hereafter paid or
\n deposited or required to be paid or deposited to or with Indenture
\n Trustee by or for the account of Partnership pursuant to any term
\n of any Basic Document and held or required to be held by Indenture
\n Trustee hereunder that relate to the Units or to the Notes;<\/p>\n
(E) all Contribution Agreements, including, without
\n limitation, all covenants and warranties in favor of Partnership
\n and all other rights and remedies of Partnership thereunder,
\n whether now owned or hereafter acquired; and<\/p>\n
(F) all proceeds of the foregoing (Partnership,
\n concurrently, with the delivery hereof, having delivered to
\n Indenture Trustee originals of the executed Partnership Agreement,
\n O&M Agreement, Services Agreement, Contribution Agreements,
\n Guaranty and the relevant Partnership Agreement Supplement and O&M
\n Agreement Supplement and executed counterparts of the Trust
\n Agreement);<\/p>\n
excluding however, all Excepted Property. Such mortgage, charge, hypothec,
\nsecurity interest and assignment shall attach to the Partnership Agreement, the
\nO&M Agreement and the Services Agreement and the amounts due and to become due
\nthereunder upon the <\/p>\n
-6-<\/p>\n
execution and delivery of this Agreement, the Participation Agreement, the
\nPartnership Agreement, the O&M Agreement and the Services Agreement; such
\nsecurity interest shall attach to the Units specifically described in a
\nsupplement hereto upon the execution and delivery of such supplement. The
\nmortgage, charge, hypothec, security interest and assignment granted hereunder
\nshall in all events be subject to the terms and conditions of this Indenture
\nand the rights of Nonaffiliated Partner Trustee and Partnership, respectively
\nhereunder.<\/p>\n
There shall be excluded from the foregoing grant of security interest
\nand assignment all Excepted Property. It is further expressly agreed and
\nstipulated that the foregoing grant shall not include any Other Equipment,
\nincluding any Replacement Items.<\/p>\n
1.2 EXCLUDED RIGHTS.<\/p>\n
(a) Notwithstanding the foregoing assignment, Nonaffiliated
\nPartner Trustee and Partnership, respectively, shall have the right, not to the
\nexclusion of Indenture Trustee:<\/p>\n
(i) to receive from Partnership, General Partner,
\nAffiliated Partner, Service Taker and Operator, respectively, duplicate copies
\nof all notices, documents, reports and other information that Partnership,
\nGeneral Partner, Affiliated Partner, Service Taker and Operator are required or
\npermitted to give to Nonaffiliated Partner Trustee or Partnership under the
\nPartnership Agreement, the Services Agreement, the O&M Agreement, the
\nParticipation Agreement or any other Basic Document;<\/p>\n
(ii) to inspect the Units and Partnership’s, General
\nPartner’s, Affiliated Partner’s, Service Taker’s, and Operator’s respective
\nrecords with respect thereto and with respect to the Partnership Agreement, O&M
\nAgreement and the Services Agreement;<\/p>\n
(iii) to provide or carry insurance in addition to that
\nrequired to be carried by Operator pursuant to the O&M Agreement so long as
\nsuch additional insurance does not adversely affect Operator’s insurance or the
\ncost thereof or impair the collectibility of such insurance carried by
\nOperator; and<\/p>\n
(iv) in the case only of Nonaffiliated Partner Trustee,
\nsubject to the limitations of Section 8.3(e)(i)(5), to make advances to protect
\nor preserve the Units, and to pay, purchase, contest or compromise any
\ninsurance premium, encumbrance, charge, tax, lien or other sum that in the
\nreasonable judgment of <\/p>\n
-7-<\/p>\n
Nonaffiliated Partner Trustee appears to affect the Units to enable it to
\nexercise its rights under this Indenture.<\/p>\n
(b) If no Indenture Event of Default exists, Nonaffiliated
\nPartner Trustee and Partnership shall have the right:<\/p>\n
(i) jointly with and not to the exclusion of Indenture
\nTrustee, to consent or withhold consent to any amendment, modification or waiver
\nof any provision of the Partnership Agreement, Sections 5.11 through 5.18 and
\n5.22 of the Participation Agreement, any provision of the O&M Agreement, any
\nprovision of the Services Agreement to which Nonaffiliated Partner Trustee has
\nthe right to join or consent pursuant to Section 11.2 of the Services Agreement,
\nit being the intention of the parties that consent of Nonaffiliated Partner
\nTrustee and Indenture Trustee shall be required for any such amendment,
\nmodification or waiver;<\/p>\n
(ii) to the exclusion of Indenture Trustee, but jointly
\nwith Nonaffiliated Partner Trustee and Partnership, to adjust the Priority
\nDistributions, Disposition Values, Disposition Amount pursuant to and in
\naccordance with Section 2.7 of the Participation Agreement, and to amend the
\nPartnership Agreement to reflect any such adjustment, if such adjustment or
\namendment does not reduce the amounts payable under the Partnership Agreement on
\nany date below that necessary to pay in full, when due, the principal of,
\nPremium, if any, and the interest on the Notes due or to become due on such
\ndate; and<\/p>\n
(iii) to the exclusion of Indenture Trustee, but jointly
\nwith Nonaffiliated Partner Trustee and Partnership to determine the “Fair Market
\nValue” pursuant to Section 5.17 of the Participation Agreement.<\/p>\n
(c) During the continuance of an Indenture Event of Default and
\nuntil Indenture Trustee forecloses on the Indenture Estate, Nonaffiliated
\nPartner Trustee shall have the right, jointly with and not to the exclusion of
\nIndenture Trustee, to consent or withhold consent to any amendment, modification
\nor waiver of Sections 3.1, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15.1, 15.2, 15.3,
\n17, 19, 20, 22, 23.1 and 23.8 of the O&M Agreement, Sections 3.1, 4, 5, 6, 7.1,
\n7.2, 7.3, 9, 10, 12 and 13.1 of the Services Agreement, Sections 2.4, 3, 4, 6,
\n7, 9, 10, 11, 13.1, 13.2 and 13.5 of the Partnership Agreement and Sections 5.11
\nthrough 5.18 and 5.22 of the Participation Agreement, it being the intention of
\nthe parties that consent of both Nonaffiliated Partner Trustee and <\/p>\n
-8-<\/p>\n
Indenture Trustee shall be required for any such amendment, modification or
\nwaiver.<\/p>\n
(d) Subject to Section 1.2(b)(iii), Nonaffiliated Partner
\nTrustee and Indenture Trustee shall jointly determine the “Fair Market Value”
\npursuant to the Basic Documents.<\/p>\n
1.3 HABENDUM CLAUSE<\/p>\n
TO HAVE AND TO HOLD all and singular the property described in
\nSection 1.1 (exclusive of Excepted Property, Other Equipment and Replacement
\nItems) unto Indenture Trustee, its successors and assigns, in trust for the
\nbenefit and security of the Holders from time to time, without any preference,
\npriority or distinction of any one Note over any other Note under this
\nIndenture, and for the benefit and security of Indenture Trustee and for the
\nuses and purposes and subject to the terms and provisions set forth in this
\nIndenture.<\/p>\n
1.4 ATTACHMENT OF SECURITY INTEREST.<\/p>\n
This Indenture, as supplemented from time to time, is intended to and
\nshall create and grant to Indenture Trustee a security interest in each of the
\nUnits (but not the Other Equipment or Replacement Items or the Excepted
\nProperty), which security interest shall attach on the Commencement Date or
\nother date on which Partnership acquires an interest in such Units. The
\nsecurity interests created by this Indenture and the Indenture Supplements and
\ngranted to Indenture Trustee hereunder and thereunder in the Indenture Estate
\nother than the Units shall likewise attach on the Commencement Date.<\/p>\n
1.5 EFFECT OF ASSIGNMENT.<\/p>\n
Anything herein contained to the contrary notwithstanding, Nonaffiliated
\nPartner Trustee or Partnership, as the case may be, shall remain liable under
\neach of the Basic Documents to which it is a party to perform all of the
\nobligations assumed by it thereunder, all in accordance therewith and Indenture
\nTrustee and the Holders shall have no obligation or liability under any of the
\nBasic Documents to which Nonaffiliated Partner Trustee or Partnership, as the
\ncase may be, is a party by reason of or arising out of any assignment hereunder,
\nnor shall Indenture Trustee (except as to Indenture Trustee, if Indenture
\nTrustee becomes Nonaffiliated Partner Trustee under the Partnership Agreement)
\nor the Holders be required or obligated in any manner to perform or <\/p>\n
-9-<\/p>\n
fulfill any obligations of Nonaffiliated Partner Trustee or Partnership, as the
\ncase may be, under or pursuant to any of the Basic Documents to which
\nNonaffiliated Partner Trustee or Partnership, as the case may be, is a party
\nor, except as herein expressly provided, to make any payment, or to make any
\ninquiry as to the nature or sufficiency of any payment received by it, or
\npresent or file any claim, or take any action to collect or enforce the payment
\nof any amounts which may have been assigned to it or to which it may be
\nentitled at any time or times.<\/p>\n
1.6 APPOINTMENT OF INDENTURE TRUSTEE.<\/p>\n
Subject to the terms and conditions hereof, Nonaffiliated Partner Trustee
\nand Partnership do each hereby constitute Indenture Trustee the true and lawful
\nattorney of Nonaffiliated Partner Trustee or Partnership, as the case may be,
\nirrevocably, with full power (in the name of Nonaffiliated Partner Trustee or
\nPartnership, as the case may be, or otherwise) to ask, require, demand, receive,
\ncompound and give acquittance for any and all moneys and claims for moneys due
\nand to become due to Nonaffiliated Partner Trustee or Partnership, as the case
\nmay be, (other than with respect to the Excepted Property) under or arising out
\nof the Partnership Agreement, the Services Agreement or the O&M Agreement to
\nendorse any checks or other instruments or orders in connection therewith, to
\nfile any claims or take any action or institute any proceedings which Indenture
\nTrustee may deem to be necessary or advisable in the premises. Nonaffiliated
\nPartner Trustee and Partnership have agreed, in the Partnership Agreement, that
\nPartnership shall make all Priority Distributions, Supplemental Priority
\nDistributions and Special Distributions distributable to Nonaffiliated Partner
\nTrustee directly to Indenture Trustee in accordance with this Indenture (for so
\nlong as the Lien of this Indenture shall not have been discharged). Promptly on
\nreceipt thereof, Nonaffiliated Partner Trustee or Partnership, as the case may
\nbe, shall transfer to Indenture Trustee any and all moneys from time to time
\nreceived by it constituting part of the Indenture Estate, for distribution by
\nIndenture Trustee pursuant to this Indenture, except that Nonaffiliated Partner
\nTrustee shall accept for distribution pursuant to the Trust Agreement or
\nPartnership Agreement, as the case may be, any amounts distributed to it by
\nIndenture Trustee as expressly provided in this Indenture and any Excepted
\nProperty.<\/p>\n
1.7 FURTHER ASSURANCES.<\/p>\n
Nonaffiliated Partner Trustee and Partnership each agrees that, at any
\ntime and from time to time, upon the written request <\/p>\n
-10-<\/p>\n
of Indenture Trustee, Nonaffiliated Partner Trustee or Partnership, as the case
\nmay be, will, at General Partner’s expense as provided in the Participation
\nAgreement, promptly and duly execute, acknowledge and deliver or cause to be
\nduly executed, acknowledged and delivered to Indenture Trustee any and all such
\nfurther acts, deeds, conveyances, transfers and assurances as Indenture Trustee
\nmay reasonably request for the perfection or protection of the Lien being
\nherein provided for in the Indenture Estate, whether now owned or hereafter
\nacquired. All property described or referred to in Section 1.1 hereafter
\nacquired by Nonaffiliated Partner Trustee or Partnership, as the case may be,
\nshall, without further act, assignment or conveyance by Nonaffiliated Partner
\nTrustee, Partnership or Indenture Trustee, become subject to the Lien of this
\nIndenture as fully and completely as if originally described herein.<\/p>\n
1.8 REPRESENTATIONS AND WARRANTIES.<\/p>\n
Nonaffiliated Partner Trustee does hereby warrant and represent that it
\nhas the right, power and authority under the Trust Agreement and Partnership
\nAgreement, and Partnership does hereby warrant and represent that it has the
\nright, power and authority under the Partnership Agreement, to grant a Lien on,
\nand a security interest in, all property comprising the Indenture Estate and
\nthat it has not granted, bargained, sold, assigned, transferred, conveyed or
\npledged a security interest in or lien on, and hereby covenants that it will not
\ngrant, bargain, sell, assign, transfer, convey or pledge a security interest in,
\nor lien on, so long as this Indenture remains in effect, any of its right, title
\nor interest in the Indenture Estate to anyone other than Indenture Trustee.
\nNonaffiliated Partner Trustee will warrant and defend such security interest
\nagainst all Persons claiming by, through or under Nonaffiliated Partner Trustee.
\nPartnership will warrant and defend such security interest against all Persons
\nclaiming by, through or under Partnership.<\/p>\n
SECTION 2. THE NOTES.<\/p>\n
2.1 NOTES; TITLE, DATING AND TERMS.<\/p>\n
(a) The Notes shall be substantially in the form set forth in
\nEXHIBIT A or in the form or forms set forth in the Indenture Supplement. The
\nNotes shall be (i) dated the original date of issuance, (ii) issued in such
\nmaturities, aggregate principal amounts, subject to repayment or redemption in
\nthe aggregate and bear interest as the same are specified in Exhibit B <\/p>\n
-11-<\/p>\n
to the Indenture Supplement, and (iii) each subject to repayment or redemption
\nas specified herein and therein. Accrued interest on each Note shall be
\npayable on each Payment Date until the principal thereof is paid or made
\navailable for payment in full.<\/p>\n
(b) The Notes shall be issued in registered form only. The
\nNotes may not be prepaid or redeemed (or purchased in lieu of prepayment or
\nredemption), in whole or in part, except as provided in this Indenture.<\/p>\n
(c) All computations of interest accruing on any Note shall be
\nmade on the basis of a year of 360 days consisting of twelve 30-day months.<\/p>\n
(d) The aggregate outstanding principal amount of the Notes
\nshall not exceed at any time $90,000,000. The Notes shall have the same Payment
\nDates as to both principal and interest.<\/p>\n
(e) The principal of, Premium (as defined in Section 2.15), if
\nany, and interest on the Notes shall be payable in immediately available funds
\nat the principal corporate trust office of Indenture Trustee.<\/p>\n
(f) All payments in respect of the Notes shall be made in
\nUnited States dollars.<\/p>\n
2.2 EXECUTION AND AUTHENTICATION.<\/p>\n
(a) Notes shall be executed on behalf of Nonaffiliated Partner
\nTrustee by manual signature of the president, a senior vice president, a vice
\npresident, an assistant vice president, its treasurer, its secretary, an
\nassistant secretary, an assistant treasurer or other authorized officer of
\nNonaffiliated Partner Trustee.<\/p>\n
(b) Immediately after the execution of the Notes, Nonaffiliated
\nPartner Trustee shall deliver such Notes to Indenture Trustee for authentication
\nand, subject to the provisions of Section 2.10, Indenture Trustee shall
\nauthenticate the Notes by manual signature upon written orders of Nonaffiliated
\nPartner Trustee. Notes shall be authenticated on behalf of Indenture Trustee by
\nany authorized officer or signatory of Indenture Trustee.<\/p>\n
-12-<\/p>\n
(c) A Note shall not be valid or obligatory for any purpose
\nor entitled to any security or benefit hereunder until executed on behalf of
\nNonaffiliated Partner Trustee by the manual signature of the officer of
\nNonaffiliated Partner Trustee specified in Section 2.2(a) and until
\nauthenticated on behalf of Indenture Trustee by the manual signature of the
\nauthorized officer or signatory of Indenture Trustee specified in Section
\n2.2(b). Such signatures shall be conclusive evidence that such Note has been
\nduly executed, authenticated and issued under this Indenture and any
\nIndenture Supplement.<\/p>\n
(d) The authentication by Indenture Trustee of any Note
\nissued hereunder shall not be construed as a representation or warranty by
\nIndenture Trustee as to the validity or security of this Indenture or such
\nNote, and Indenture Trustee shall in no respect be liable or answerable for
\nthe use made of such Note or the proceeds thereof.<\/p>\n
2.3 REGISTER. Indenture Trustee shall maintain an office where the
\nNotes may be presented for registration of transfer or for exchange. At such
\noffice, the registrar (the “Registrar”) shall keep a register (the
\n“Register”) with respect to the Notes and their transfer and exchange. The
\nnames and addresses of Holders, the transfers of the Notes and the names and
\naddresses of the transferees of all Notes shall be registered in the
\nRegister. Indenture Trustee may appoint one or more co-registrars (the
\n“Co-Registrars”) for the Notes and Indenture Trustee may terminate the
\nappointment of any Co-Registrar at any time upon written notice. The term
\n“Registrar” includes any Co-Registrar.<\/p>\n
2.4 TRANSFER AND EXCHANGE. At the option of a Holder and subject
\nto Section 2.3 and Section 6.2 of the Participation Agreement, Notes may be
\npresented for exchange or surrendered for transfer for an equal aggregate
\nprincipal amount of other Notes, having the same date of original issue,
\nPayment Dates, Debt Rate and Maturity Date as the Notes so to be exchanged or
\ntransferred at the office of the Registrar. Whenever any Note or Notes are
\nso presented or surrendered, Nonaffiliated Partner Trustee shall execute and
\ndeliver to Indenture Trustee, and Indenture Trustee shall authenticate and
\ndeliver to the Holder, the replacement Note or Notes which such Holder or the
\ntransferee, as the case may be, is entitled to receive. Each replacement
\nNote shall bear a notation by Indenture Trustee of (a) the aggregate amounts
\nof principal of, and Premium, if any, on such replacement Note that were paid
\nto any Holder of the replaced Note at any time prior to the delivery of the
\nreplacement Note, and (b) the date to which <\/p>\n
-13-<\/p>\n
interest on such replacement Note had been paid to any Holder of the replaced
\nNote prior to the delivery of the replacement Note.<\/p>\n
Any Note issued in connection with an exchange or transfer of existing
\nNotes shall be in a principal amount not less than the lesser of (a) the
\nthen outstanding principal amount of the Note presented for exchange or
\ntransfer and (b) $1,000,000, subject to Section 6.2 of the Participation
\nAgreement.<\/p>\n
All Notes issued upon any registration of transfer or exchange of
\nNotes shall be the valid obligations of Nonaffiliated Partner Trustee,
\nevidencing the same obligations, and entitled to the same security and
\nbenefits under this Indenture, as the Notes surrendered upon such
\nregistration of transfer or exchange.<\/p>\n
Every Note presented or surrendered for registration of transfer or
\nexchange shall (if so required by Indenture Trustee or Nonaffiliated Partner
\nTrustee) be duly endorsed by, or be accompanied by a written instrument of
\ntransfer or exchange in form satisfactory to, Indenture Trustee and
\nNonaffiliated Partner Trustee, duly executed by the requesting Holder or such
\nHolder’s attorney duly authorized in writing.<\/p>\n
No service charge shall be made to a Holder for any registration of
\ntransfer or exchange of Notes, but the Registrar may require payment of a sum
\nsufficient to cover any tax or other governmental charge that may be imposed
\nin connection with any registration of transfer or exchange of Notes.<\/p>\n
The Registrar shall not be required (a) to register the transfer of
\nor to exchange any Note during a period beginning at the opening of business
\n10 days before the day of the scheduled prepayment (or purchase in lieu of
\nprepayment where applicable) of Notes pursuant to Section 6.1 or 8.3(e) and
\nending at the close of business on the scheduled date of prepayment (or
\npurchase) or (b) to register the transfer of or to exchange any Note called
\nfor prepayment (or purchase in lieu of prepayment where applicable) pursuant
\nto such Section 6.1 or 8.3(e).<\/p>\n
2.5 INDENTURE TRUSTEE AS AGENT; OWNERSHIP OF NOTES.<\/p>\n
(a) Indenture Trustee is hereby appointed the agent of
\nNonaffiliated Partner Trustee for the payment, registration, transfer and
\nexchange of Notes. Subject to the provisions of Section 2.8, Notes may be
\npresented for payment at, and notices or demands with respect to the Notes or
\nthis Indenture may be served <\/p>\n
-14-<\/p>\n
or made at, the principal corporate trust office of Indenture Trustee.
\nIndenture Trustee shall promptly notify Nonaffiliated Partner Trustee of any
\nsuch presentment, notice or demand; provided, however, that the failure of
\nIndenture Trustee to so notify Nonaffiliated Partner Trustee shall not affect
\nthe obligations of Nonaffiliated Partner Trustee hereunder or under the Notes
\nor, absent gross negligence or wilful misconduct, give rise to any liability
\nof Indenture Trustee to Nonaffiliated Partner Trustee or to any other Person
\nfor any such failure.<\/p>\n
(b) Ownership of the Notes shall be proved by the Register
\nkept by the Registrar. Prior to due presentment for registration of transfer
\nof any Note, Nonaffiliated Partner Trustee and Indenture Trustee shall deem
\nand treat the Person in whose name any Note is registered as the absolute
\nowner of such Note for the purpose of receiving payment of principal of,
\nPremium, if any, and interest on such Note and for all other purposes
\nwhatsoever, whether or not such Note is overdue, and neither Nonaffiliated
\nPartner Trustee nor Indenture Trustee shall be affected by notice to the
\ncontrary.<\/p>\n
2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If any Note is
\nmutilated, destroyed, lost or stolen, Nonaffiliated Partner Trustee shall,
\nupon the written request of the relevant Holder, issue and execute, and
\nIndenture Trustee shall authenticate and deliver to the relevant Holder in
\nreplacement thereof, a new Note of the same date of original issue and having
\nthe same Payment Dates, Debt Rate and Maturity Date, payable to the same
\nHolder in the same principal amount and dated the same date as the Note so
\nmutilated, destroyed, lost or stolen. If the Note being replaced has become
\nmutilated, such Note shall be surrendered to Indenture Trustee. If the Note
\nbeing replaced has been destroyed, lost or stolen, the relevant Holder shall
\nfurnish to Nonaffiliated Partner Trustee and Indenture Trustee (i) such
\nsecurity or indemnity as may be required by them to save Nonaffiliated
\nPartner Trustee and Indenture Trustee harmless and (ii) evidence
\nsatisfactory to Nonaffiliated Partner Trustee and Indenture Trustee of the
\ndestruction, loss or theft of such Note and of the ownership thereof. If the
\noriginal Holder or such other Person that is an institutional investor is the
\nowner of any such destroyed, lost or stolen Note, then the affidavit of the
\nPresident, any Vice President, Assistant Vice President, Treasurer or
\nSecretary of the original Holder or such other Person setting forth the fact
\nof destruction, loss or theft and of its ownership of the Note, at the time
\nthereof, shall be accepted as satisfactory evidence thereof, and no indemnity
\nshall be required as a condition to the execution <\/p>\n
-15-<\/p>\n
and delivery of a new Note other than the written agreement of such original
\nHolder or other Person reasonably satisfactory to Nonaffiliated Partner
\nTrustee and Indenture Trustee to indemnify (including for any costs and
\nexpenses, including reasonable attorneys’ fees) Nonaffiliated Partner Trustee
\nand Indenture Trustee for any claims or actions against them resulting from
\nthe issuance of such new Note or the reappearance of the old Note. Each Note
\nissued pursuant to this Section 2.6 shall bear a notation by Indenture
\nTrustee of (a) the aggregate amounts of principal of, and Premium, if any,
\non, such mutilated, destroyed, lost or stolen Note that were paid to any
\nHolder thereof at any time before the delivery of such new Note and (b) the
\ndate to which interest on such mutilated, destroyed, lost or stolen Note had
\nbeen paid to any Holder thereof at or prior to the time of such delivery.<\/p>\n
2.7 CANCELLATION. All Notes surrendered for the purpose of
\npayment, redemption, transfer or exchange shall be delivered to Indenture
\nTrustee for cancellation or, if surrendered to Indenture Trustee, shall be
\ncanceled by it, and no Notes shall be issued in lieu thereof except as
\nexpressly required or permitted by this Indenture. Indenture Trustee shall
\ndeliver a certificate to Nonaffiliated Partner Trustee specifying any
\ncancellation of Notes that has been made. All such canceled Notes shall be
\nheld by Indenture Trustee until this Indenture is discharged, at which time
\nIndenture Trustee shall either deliver such canceled Notes in a manner
\nnecessary to effect the discharge and release of this Indenture or, if no
\nsuch delivery is necessary, such Notes shall be delivered to or disposed of
\nas directed by Nonaffiliated Partner Trustee.<\/p>\n
2.8 PAYMENT ON NOTES.<\/p>\n
(a) The principal of, the Premium, if any, interest on, and
\nany other amounts payable with respect to, the Notes shall be payable at the
\nprincipal office of Indenture Trustee, in lawful money of the United States
\nof America without surrender or presentation of such Note and without any
\nnotation being made thereon. The Holder (or the Person for whom such Holder
\nis a nominee) will, before selling, transferring or otherwise disposing of
\nsuch Note, present such Note to Indenture Trustee for transfer and notation
\nas provided in Section 2.4. Any payment or prepayment of amounts due on the
\nNotes in accordance with the terms thereof and hereof which is due on a date
\nthat is not a Business Day shall be payable, at the election of Nonaffiliated
\nPartner Trustee, on the next following Business Day without penalty or
\nreduction of, or increase in, the amount of interest that is payable thereon.<\/p>\n
-16-<\/p>\n
(b) Notwithstanding Section 2.8(a), if any Note is held by
\nthe original Note Purchaser, a permitted successor or assign that is an
\ninstitutional investor or a nominee thereof, Indenture Trustee shall, if
\nrequested in writing by such Holder, pay interest on such Note and pay or
\nprepay the principal thereof and the Premium, if any, thereon and shall pay
\nall other amounts due with respect to such Note, by check, duly mailed, by
\nfirst-class mail, postage prepaid, or delivered to such Holder at its address
\nappearing on the Register. Upon written notice from any Holder that is an
\noriginal Note Purchaser, a permitted successor or assign that is an
\ninstitutional investor or a nominee thereof, which notice shall be given not
\nless than 30 days before the payment or prepayment of the Notes (and Section
\n2.16 shall constitute such written notice and wire transfer instructions
\nuntil otherwise designated in the case of the Note Purchasers), Indenture
\nTrustee will pay interest on such Note and pay or prepay the principal
\nthereof and the Premium, if any thereon, by wire transfer of immediately
\navailable funds to such institution in the continental United States as such
\nHolder may designate in such notice, such wire transfers to be made on each
\ndate on which such payment or prepayment is due if, and only so long as, such
\ninstitution has facilities for the receipt of a wire transfer. Indenture
\nTrustee will transmit any such wire transfer from its offices not later than
\n1:00 p.m. (New York time) on each date on which payment or prepayment is due
\nif, and only so long as, available funds therefor have been received by
\nIndenture Trustee by 11:00 a.m. (New York time) on such date or, if Indenture
\nTrustee has not received such available funds, Indenture Trustee will
\ntransmit such wire transfer promptly upon receipt of such available funds.<\/p>\n
(c) A Holder shall have no further interest in, or other
\nright with respect to, the Indenture Estate when and if the principal amount
\nof, Premium, if any, and interest on all Notes held by such Holder and all
\nother sums payable to such Holder and secured hereunder are paid in full.<\/p>\n
2.9 PAYMENT FROM INDENTURE ESTATE ONLY; NONRECOURSE OBLIGATIONS;
\nEXCESS AMOUNTS.<\/p>\n
(a) All amounts payable by Indenture Trustee and
\nNonaffiliated Partner Trustee under the Notes, this Indenture and the
\nrelevant Indenture Supplement shall be made only from the income and proceeds
\nof the Indenture Estate and each Holder by its acceptance of its Note agrees
\nthat (i) it will look solely to such Indenture Estate for the payment of such
\namounts, to the extent <\/p>\n
-17-<\/p>\n
available for distribution to it as herein provided, and (ii) none of
\nNonaffiliated Partner Trustee, any Beneficiary, Indenture Trustee or any of
\ntheir permitted successors or assigns, is or shall be personally liable to
\nany Holder for any amount payable under such Note or this Indenture, except,
\nin the case of Nonaffiliated Partner Trustee and Indenture Trustee and any of
\ntheir permitted successors or assigns, as expressly provided in this
\nIndenture. Notwithstanding any other provision of this Indenture, including
\nSection 9, First Security shall be liable hereunder in its individual
\ncapacity for its own willful misconduct or gross negligence or, in the case
\nof the holding or transfer of funds, the failure to act with the same care as
\nit uses in the handling of its own funds.<\/p>\n
(b) First Security is entering into this Indenture solely as
\nNonaffiliated Partner Trustee under the Trust Agreement and not in its
\nindividual capacity, and in no case whatsoever shall First Security, or any
\nentity acting as successor trustee under the Trust Agreement, be personally
\nliable for, or for any loss in respect of, any statements, representations,
\nwarranties, agreements or obligations hereunder or thereunder; provided that
\nFirst Security shall be liable hereunder (i) for the performance of its
\nagreements under Sections 3.5(c), 5.5 and 5.9 of the Participation Agreement,
\nand (ii) for its own willful misconduct or gross negligence or, in the case of
\nthe holding and transfer of funds, the failure to act with the same care as
\nit uses in the handling of its own funds. If a successor Nonaffiliated
\nPartner Trustee is appointed in accordance with the terms of Section 8 of the
\nTrust Agreement and the Participation Agreement, such successor Nonaffiliated
\nPartner Trustee shall, without any further act, succeed to all of the rights,
\nduties, immunities and obligations hereunder, and its predecessor
\nNonaffiliated Partner Trustee and First Security shall be released from all
\nfurther duties and obligations hereunder, without prejudice to any claims
\nagainst such predecessor Nonaffiliated Partner Trustee or First Security, for
\nany default by such predecessor Nonaffiliated Partner Trustee or First
\nSecurity, respectively, in the performance of its obligations hereunder prior
\nto such appointment.<\/p>\n
(c) If (i) all or any part of the Trust Estate becomes the
\nproperty of, or any Beneficiary becomes, a debtor subject to the reorganization
\nprovisions of the Bankruptcy Reform Act of 1978 or any successor provision,
\n(ii) pursuant to such reorganization provisions, First Security or any
\nBeneficiary is required, by reason of First Security or any Beneficiary being
\nheld to have recourse liability to the Holders or Indenture Trustee, <\/p>\n
-18-<\/p>\n
directly or indirectly, to make payment on account of the principal of,
\nPremium, if any, or interest on the Notes and (iii) any Holder or Indenture
\nTrustee actually receives any Excess Amount (as defined below) which reflects
\nany payment by First Security or any Beneficiary on account of clause (ii)
\nabove, then such Holder or Indenture Trustee, as the case may be, shall
\npromptly refund to First Security or such Beneficiary (whichever shall have
\nmade such payment) such Excess Amount. For purposes of this Section 2.9,
\n“Excess Amount” means the amount by which any payment required to be made by
\nFirst Security or any Beneficiary under clause (ii) above exceeds the amount
\nwhich would have been received by the Holder(s) or Indenture Trustee if First
\nSecurity or such Beneficiary had not become subject to the recourse liability
\nreferred to in clause (ii) above.<\/p>\n
2.10 EXECUTION AND DELIVERY OF NOTES UPON ORIGINAL ISSUANCE.
\nNonaffiliated Partner Trustee shall issue, execute and deliver to Indenture
\nTrustee, and Indenture Trustee shall authenticate and deliver to Holders, the
\nNotes for original issuance only upon payment by Holders pursuant to the
\nParticipation Agreement of an amount equal to the aggregate original
\nprincipal amount of the Notes.<\/p>\n
2.11 SECURITY FOR AND PARITY OF NOTES. It is the intention of the
\nparties hereto that all Notes issued and Outstanding hereunder rank on a
\nparity with each other Note and, that as to each other Note, they be secured
\nequally and ratably by the collateral described in this Indenture and any
\nIndenture Supplement without preference, priority or distinction of any one
\nthereof over any other by reason of difference in time of issuance, or
\notherwise, and that each such Note be entitled to the same benefits and
\nsecurity in this Indenture and any Indenture Supplement as each other such
\nNote.<\/p>\n
2.12 APPLICATION OF PAYMENTS TO NOTES. In the case of each Note,
\neach payment of principal of, and Premium, if any, and interest on such Note,
\nshall be applied, first, to the payment of accrued but unpaid interest on
\nsuch Note (including any interest at the Late Rate on overdue principal,
\nPremium and (to the extent permitted by applicable law) interest) to the date
\nof such payment, second, the balance, if any, remaining thereafter to the
\npayment of the principal amount due and payable on such Note, and third, the
\nbalance, if any, remaining thereafter, to the payment of Premium, if any,
\nthen due and payable on such Note, provided that such Note shall not be
\nsubject to prepayment or redemption by Nonaffiliated Partner Trustee except
\nas provided in Sections 6.1 and 8.3(e).<\/p>\n
-19-<\/p>\n
2.13 INTENTIONALLY OMITTED.<\/p>\n
2.14 LATE RATE. If Nonaffiliated Partner Trustee, any Beneficiary
\nor a Person designated by any of them elects or is required to redeem,
\nprepay, pay or purchase any Note (in whole or in part) under any provision of
\nthis Indenture or any other Basic Document, and such redemption, prepayment
\nor purchase is not consummated on the date originally scheduled therefor
\n(unless, following General Partner’s election to remove the Unit or Units
\nfrom the Lien of the Indenture pursuant to Section 5.16 of the Participation
\nAgreement, to exercise its ET Right pursuant to Section 9.1 of the
\nPartnership Agreement, or to exercise its Special P.O. Right pursuant to
\nSection 9.4 of the Partnership Agreement, Nonaffiliated Partner Trustee
\nprovides written notice to Indenture Trustee and each Holder no later than
\neight Business Days before such originally scheduled prepayment date to the
\neffect that such termination or purchase will not occur and accordingly it
\nwill not be prepaying the Notes on such date), the Notes shall accrue
\ninterest at the Late Rate from such originally scheduled date for prepayment
\nto the date of payment, payable on demand.<\/p>\n
2.15 DEFINITION OF PREMIUM. As used herein “Premium” means as at any
\ndate a payment thereof is due (the “payment date”) in connection with payment
\nor prepayment in respect of any of the Notes the excess of (i) the present
\nvalue as at the payment of the Prepaid Cash Flows, discounted semiannually at
\nan annual rate which is equal to the Treasury Rate plus 0.50% over (ii) the
\naggregate principal amount of such Notes then to be paid or prepaid. To the
\nextent that the Treasury Rate plus 0.50% at the time of determination of the
\nPremium is equal to or higher than the rate of interest then borne by such
\nNotes, the Premium shall be zero.<\/p>\n
The following terms shall have the following meanings:<\/p>\n
“PREPAID CASH FLOWS” — for each date on which a payment of
\n principal or interest, or both, is scheduled to become due on the Notes,
\n an amount determined by subtracting (x) the amount of such payment
\n scheduled to become due on such date after giving effect to any
\n prepayment of principal that was originally scheduled to be paid on the
\n date as to which the determination is being made from (y) the amount of
\n such payment (exclusive of interest accrued to the date of such
\n prepayment) which would have become due on such date but for such
\n prepayment.<\/p>\n
-20-<\/p>\n
“STATISTICAL RELEASE” — the then most recently published
\n statistical release designated “H.15(519)” or any successor publication
\n which is published weekly by the Federal Reserve System and which
\n establishes yields on actively traded U.S. government securities adjusted
\n to constant maturities or, if such statistical release is not published
\n at the time of any determination hereunder, such other reasonably
\n comparable index which shall be designated by a Majority In Interest.<\/p>\n
“TREASURY RATE” — the yield to maturity of actually traded United
\n States Treasury obligations with a constant maturity (rounded to the
\n nearest month) corresponding to the remaining Weighted Average Life to
\n Maturity of the Prepaid Cash Flows as set forth on page 5 of the Telerate
\n or, if not available, on page “USD” of the Bloomberg Financial Markets
\n Screen (or, if not available, any other nationally recognized trading
\n screen reporting on-line intraday trading in United States government
\n securities) at 10:00 a.m. (New York City time) on the second Business Day
\n before the date fixed for prepayment, or in the event no such nationally
\n recognized trading screen reporting on-line intraday trading in United
\n States government securities is available, the arithmetic mean of the two
\n most recent yields under the heading “week ending” published in the
\n Statistical Release opposite the caption “Treasury Constant Maturities”
\n for the maturity (rounded to the nearest month) corresponding to the
\n Weighted Average Life to Maturity of the Prepaid Cash Flows. If no
\n maturity exactly corresponding to the remaining Weighted Average Life to
\n Maturity of the Prepaid Cash Flows shall appear therein, yields for the
\n two most closely corresponding published maturities shall be calculated
\n pursuant to the foregoing sentence and the Treasury Rate shall be
\n interpolated or extrapolated from such yields on a straight-line basis
\n (rounding to the nearest month). If such rates shall not have been so
\n published, the Treasury Rate in respect of such determination date shall
\n be calculated pursuant to the next preceding sentence on the basis of the
\n arithmetic mean of the arithmetic means of the secondary market ask
\n rates, as of approximately 3:30 p.m. (New York City time) on the last
\n Business Days of each of the two weeks preceding the payment date, for
\n the actively traded U.S. Treasury security or securities with a maturity
\n or maturities most closely corresponding to the remaining Weighted
\n Average Life to Maturity of the Prepaid Cash Flows as at such payment or
\n prepayment date, as reported by three primary United States<\/p>\n
-21-<\/p>\n
government securities dealers in New York City of national standing
\n selected in good faith by Operator.<\/p>\n
“WEIGHTED AVERAGE LIFE TO MATURITY” — with respect to the Prepaid
\n Cash Flows, as at the payment or prepayment date for the determination of
\n the Treasury Rate, the number of years obtained by dividing the then
\n Remaining Dollar-years of such Prepaid Cash Flows by the principal amount
\n of Notes then being paid or prepaid. The term “REMAINING DOLLAR-YEARS”
\n of the Prepaid Cash Flows means the product obtained by (x) multiplying
\n (A) the principal portion of each Prepaid Cash Flow (including the
\n payment at final maturity), by (B) the number of years (calculated to
\n the nearest one-twelfth) between the time of determination and the date
\n of such Prepaid Cash Flow, and (y) totaling all the products obtained in
\n the computations described in clause (x).<\/p>\n
2.16 SPECIAL RIGHTS OF HOLDERS. Notwithstanding any provision to the
\ncontrary in this Agreement, the Indenture or the Notes relating to the manner
\nand place of payment, all amounts payable to a Holder with respect to any Notes
\nheld by such Holder or a nominee for such Holder shall be paid by Indenture
\nTrustee to such Holder (without any presentment thereof and without any notation
\nof the payment being made thereon) by check, duly mailed, by first-class mail,
\npostage prepaid, or delivered to such Holder at the address for payments for
\nsuch Holder or, if a wire transfer to a bank account is designated in Schedule 1
\nto the Participation Agreement or in a written notice from such Holder to
\nNonaffiliated Partner Trustee and Indenture Trustee, by wire transfer of
\nimmediately available funds to the bank so designated for credit to the account
\nand marked for attention as so designated so long as such bank has facilities
\nfor the receipt of a wire transfer, or in any other manner or to any other
\naddress in the United States as may be designated by such Holder in a written
\nnotice from such Holder to Nonaffiliated Partner Trustee and Indenture Trustee.
\nIn the case of any wire transfer, Indenture Trustee will transfer funds from the
\noffice of Indenture Trustee not later than 1:00 p.m. New York time on the date
\nany payment or prepayment of principal, Premium, if any, or interest on the
\nNotes is due if funds therefor have been received by Indenture Trustee in cash
\nor in solvent credits acceptable to it by 11:00 a.m., New York time, or if not
\nso received by such time, Indenture Trustee shall transfer such funds promptly
\nupon its receipt of such cash or solvent credits. Each Holder agrees that, if
\nsuch Holder shall sell or transfer any Notes, such Holder will notify Indenture
\nTrustee of the name and address of the transferee and such Holder will, before
\nthe delivery <\/p>\n
-22-<\/p>\n
of such Notes, make a notation on such Notes of the date to which interest
\nhas been paid thereon and of the amount of any payments or prepayments made
\non account of the principal thereof.<\/p>\n
SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE
\n ESTATE.<\/p>\n
3.1 PAYMENT UPON DELIVERY OF UNITS. On the Commencement Date,
\nIndenture Trustee, on behalf of Nonaffiliated Partner Trustee, shall apply
\nthe proceeds of the sale of the Notes to the financing of a portion of
\nNonaffiliated Partner Trustee’s capital contribution to Partnership on the
\nCommencement Date in accordance with the provisions of the Participation
\nAgreement.<\/p>\n
3.2 PAYMENTS UPON EVENT OF LOSS, OBSOLESCENCE OR ET RIGHT OR
\nSPECIAL P.O. RIGHT; CERTAIN PREPAYMENTS.<\/p>\n
(a) Except as otherwise provided in Section 3.5, if the
\nNotes are prepaid in whole or in part in accordance with Section 6.1(a),
\n6.1(b), 6.1(c), 8.3(e)(iii) or 8.3(e)(iv), Indenture Trustee will apply on
\nthe Prepayment Date any amounts then held by it in the Indenture Estate with
\nrespect to such Notes and received by it from or on behalf of Nonaffiliated
\nPartner Trustee, Guarantor or any other Person (other than in respect of
\nExcepted Property or Other Equipment, in the following order of priority:<\/p>\n
FIRST, so much thereof as is required to pay the Prepayment Price
\n on the Outstanding Notes which are being prepaid in whole or in part
\n pursuant to Section 6.1(a), 6.1(b), 6.1(c), 8.3(e)(iii) or 8.3(e)(iv), as
\n the case may be, on the Prepayment Date shall be applied to the
\n prepayment (or purchase, in lieu of prepayment, of the Notes, if
\n applicable) of such Notes in accordance with the appropriate aforesaid
\n Section on the Prepayment Date for application in accordance with the
\n ordering set forth in Section 2.12;<\/p>\n
SECOND, so much thereof as is required to pay all other accrued
\n and unpaid Secured Obligations;<\/p>\n
THIRD, so much thereof as was received by Indenture Trustee with
\n respect to the amounts due to it pursuant to Section 9.5 shall be applied
\n to pay Indenture Trustee such amounts; and<\/p>\n
-23-<\/p>\n
FOURTH, the balance, if any, thereof remaining shall be
\n distributed to Nonaffiliated Partner Trustee to be held or distributed in
\n accordance with the Trust Agreement.<\/p>\n
3.3 APPLICATION OF PRIORITY DISTRIBUTIONS. Except as otherwise
\nprovided in Section 3.5, each Priority Distribution received by Indenture
\nTrustee from or on behalf of Nonaffiliated Partner Trustee, Guarantor or any
\nother Person together with any other amount received by Indenture Trustee
\nwith respect to interest on Priority Distributions not made on the relevant
\nDistribution Date shall be distributed by Indenture Trustee in the following
\norder of priority:<\/p>\n
FIRST, so much of such aggregate amount as is required to pay in
\n full the principal and interest then due on all Outstanding Notes shall
\n be distributed to the Holders entitled thereto for application in
\n accordance with the ordering set forth in Section 2.12; and<\/p>\n
SECOND, the balance, if any, of such aggregate amount remaining
\n thereafter shall be distributed to Nonaffiliated Partner Trustee for
\n distribution in accordance with the terms of the Trust Agreement.<\/p>\n
3.4 APPLICATION OF CERTAIN AMOUNTS UPON EVENT OF LOSS. Except as
\notherwise provided in Section 3.5, any amounts received directly by Indenture
\nTrustee from Nonaffiliated Partner Trustee or through Partnership, Service
\nTaker or Operator from any Government Authority or other Person in connection
\nwith an Event of Loss, to the extent such amounts are not at the time to be
\npaid to or retained by Partnership pursuant to Section 11 or 12 of the O&M
\nAgreement or Section 5.14 or 5.15 of the Participation Agreement (other than
\nwith respect to Excepted Property or Other Equipment, shall, except as
\notherwise provided in the next sentence, be applied in accordance with
\nSection 3.2 in reduction of Partnership’s obligations to distribute a
\nSupplemental Priority Distribution in an amount equal to Disposition Amount
\nand other amounts referred to or described in Section 5.12 of the
\nParticipation Agreement and Section 6.1(c) of the Partnership Agreement and
\nthe remainder, if any, shall, except as provided in the next sentence, be
\ndistributed to Nonaffiliated Partner Trustee to be distributed in accordance
\nwith the terms of the Trust Agreement. Any portion of any such amount
\nreferred to in the preceding sentence that is not to be so paid or retained
\nby Partnership pursuant to the O&M Agreement and the Participation Agreement,
\nsolely because a BJ Default or BJ Event of Default <\/p>\n
-24-<\/p>\n
exists, shall be held by Indenture Trustee, and at such time as no BJ Default
\nor BJ Event of Default exists, such portion shall be paid to Partnership,
\nunless Indenture Trustee (as assignee from Nonaffiliated Partner Trustee of
\ncertain rights with respect to the O&M Agreement) theretofore declares the
\nO&M Agreement to be in default or terminates the O&M Agreement pursuant to
\nSection 15 thereof, in which event such portion shall be distributed
\nforthwith upon such declaration or termination in accordance with Section 3.5.<\/p>\n
3.5 AMOUNTS DURING INDENTURE EVENT OF DEFAULT. All distributions
\nand payments (except with respect to Excepted Property) received and amounts
\nheld or realized by Indenture Trustee with respect to Nonaffiliated Partner
\nTrustee’s Partnership Interest or Partnership’s interest in any Unit subject
\nto the Lien of this Indenture while an Indenture Event of Default exists
\n(including any amounts thereafter realized by Indenture Trustee from the
\nexercise of any remedies pursuant to Section 8), as well as all
\ndistributions, payments or amounts then held or thereafter received by
\nIndenture Trustee as part of the Indenture Estate while such Indenture Event
\nof Default exists, shall be distributed by Indenture Trustee in the following
\norder of priority:<\/p>\n
FIRST, so much of such distributions, payments or amounts as is
\n required to pay Indenture Trustee all amounts then due it pursuant to
\n Section 9.5 shall be applied to pay Indenture Trustee such amounts;<\/p>\n
SECOND, so much of such distributions, payments or amounts as is
\n required to pay the expenses (including, without limitation, all fees,
\n taxes, assessments, insurance and other proper charges)(i) of any sale,
\n taking or other proceeding, (ii) of or in connection with the use,
\n operation, storage, leasing, controlling or managing the Indenture Estate
\n and of all maintenance, insurance, repairs, replacements, alterations,
\n additions or improvements of any property included in the Indenture
\n Estate, (iii) of or in connection with realizing on any of the
\n collateral in the Indenture Estate, including, in the case of each of
\n clauses (i), (ii) and (iii) all reasonable attorneys’ fees and expenses,
\n court costs and any other reasonable expenditures incurred or advances
\n made by Indenture Trustee or any Holder in the protection, exercise or
\n enforcement of any right, power or remedy or taking of any other action
\n permitted by this Indenture or by law upon such Indenture Event of
\n Default, all <\/p>\n
-25-<\/p>\n
of the foregoing to the extent incurred in accordance with
\n Section 8.3(c);<\/p>\n
THIRD, so much of such distributions, payments or amounts
\n remaining as is required to pay the principal then due and payable of all
\n of the Notes then Outstanding and accrued interest then due and payable
\n on all such Notes then Outstanding payable to the applicable Holders,
\n whether by declaration of acceleration pursuant to Section 8.2 or
\n otherwise, shall be applied to the payment of such principal and interest
\n due and payable for application in accordance with the ordering set forth
\n in Section 2.12; and in case such distributions, payments or amounts are
\n insufficient to pay in full the whole amount aforesaid, then to the
\n payment of such principal and interest, in accordance with the ordering
\n (except as to Premium) set forth in Section 2.12, without any preference,
\n priority or distinction of one such Note over another, ratably according
\n to the aggregate amount so payable for principal and interest, at the
\n date fixed by Indenture Trustee for the distribution of such
\n distributions, payments or amounts;<\/p>\n
FOURTH, the balance, if any, of such distributions, payments or
\n amounts remaining thereafter shall be distributed to Nonaffiliated
\n Partner Trustee for distribution under the Trust Agreement;<\/p>\n
except that, anything in this Section 3 to the contrary notwithstanding, after
\nIndenture Trustee has knowledge of an Indenture Event of Default (including,
\nwithout limitation, a BJ Event of Default), all amounts (other than with respect
\nto Excepted Property or Other Equipment that, but for the provisions of this
\nSection 3.5, would otherwise be distributable by Indenture Trustee to
\nNonaffiliated Partner Trustee, shall be held by Indenture Trustee as part of the
\nIndenture Estate, and if (i) such amounts shall have been retained by Indenture
\nTrustee for more than 180 days, (ii) the unpaid principal amount of all Notes
\nhave not been declared to be immediately due and payable and (iii) in the case
\nof an Indenture Event of Default arising solely out of a BJ Event of Default,
\nIndenture Trustee does not commence the exercise of any one or more of the
\navailable remedies if any, referred to in Section 6.1(d), 11.1, 11.3 or 11.4 of
\nthe Partnership Agreement, Section 5.22 of the Participation Agreement, Section
\n7.1 of the Services Agreement or Section 15.1 of the O&M Agreement (the choice
\nof which remedy or remedies to exercise to be made by Indenture Trustee in its
\nsole good faith discretion) to the extent such <\/p>\n
-26-<\/p>\n
remedy or remedies are then available and may be exercised by Indenture
\nTrustee (the determination of which remedy or remedies, if any, are then
\navailable and may be exercised by Indenture Trustee to be made by Indenture
\nTrustee in its sole good faith discretion), such amounts shall be distributed
\nto Nonaffiliated Partner Trustee in accordance with the other applicable
\nprovisions of this Section 3.<\/p>\n
3.6 AMOUNTS FOR WHICH APPLICATION IS PROVIDED IN OTHER BASIC
\nDOCUMENTS. Except as otherwise provided in this Indenture, any distribution
\nor payment received by Indenture Trustee for which provision as to the
\napplication thereof is made in another Basic Document shall be distributed to
\nthe Person for whose benefit such distributions or payments were made in
\naccordance with the terms of such Basic Document.<\/p>\n
3.7 AMOUNTS FOR WHICH NO APPLICATION IS OTHERWISE PROVIDED. Except
\nas otherwise provided in Section 3.5 or 3.6, any distribution or payment
\nreceived by Indenture Trustee for which no provision as to the application
\nthereof is made elsewhere in this Indenture or in another Basic Document
\nshall be distributed in accordance with Section 3.5, except that any
\ndistribution or payment received and amounts realized by Indenture Trustee
\nwith respect to Nonaffiliated Partner Trustee’s interest in Partnership or
\nthe Units to the extent received or realized at any time after the conditions
\nset forth in Section 10 for the satisfaction and discharge of this Indenture
\nare satisfied, as well as any other amounts remaining as part of the
\nIndenture Estate after such satisfaction, shall be distributed by Indenture
\nTrustee to Nonaffiliated Partner Trustee for distribution under the Trust
\nAgreement.<\/p>\n
3.8 EXCEPTED PROPERTY. Indenture Trustee shall deliver any
\nExcepted Property received by it to whomsoever is lawfully entitled to the
\nsame.<\/p>\n
3.9 NOTICE OF NONPAYMENT. By 2:00 p.m., New York time, on the
\nDistribution Date of any Priority Distribution, Indenture Trustee shall
\nnotify the Holders, Nonaffiliated Partner Trustee, Beneficiaries and General
\nPartner, by telephone, which notice shall be confirmed in writing by
\nfacsimile transmission, if Indenture Trustee has not received such Priority
\nDistribution; but the failure of Indenture Trustee so to notify such parties
\nshall not affect the obligations of Nonaffiliated Partner Trustee hereunder
\nor under the Notes or of Partnership under the Partnership Agreement or the
\nParticipation Agreement or give rise to any <\/p>\n
-27-<\/p>\n
liability of Indenture Trustee to such parties or any other Person for any
\nsuch failure.<\/p>\n
SECTION 4. COVENANTS OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP.<\/p>\n
4.1 Nonaffiliated Partner Trustee hereby covenants and agrees that:<\/p>\n
(a) it will, subject to Section 2.9, pay or cause to be paid
\nwhen due all amounts of principal of, Premium, if any, and interest on the
\nNotes and all other amounts due hereunder (in any case, without duplication
\nof amounts theretofore paid to Indenture Trustee in respect thereof);<\/p>\n
(b) if any responsible officer of Nonaffiliated Partner
\nTrustee has actual knowledge of an Indenture Event of Default or Indenture
\nDefault or an Event of Loss, Nonaffiliated Partner Trustee will give prompt
\nwritten notice thereof to Indenture Trustee and Operator;<\/p>\n
(c) it will not, in its capacity as Nonaffiliated Partner
\nTrustee, engage in any business or other activity (including the incurrence
\nof indebtedness for money borrowed), except as contemplated hereby or by the
\nother Basic Documents; and<\/p>\n
(d) it will not, except with respect to Excepted Property or
\nexcept as expressly permitted hereunder, declare a default, or exercise any
\nremedies under, or terminate, modify or accept a surrender of, or offer or
\nagree to any termination, modification or surrender of, the Services
\nAgreement, the O&M Agreement or the Partnership Agreement.<\/p>\n
4.2 Partnership hereby covenants and agrees that if any responsible
\nofficer of General Partner or Affiliated Partner has actual knowledge of an
\nIndenture Event of Default or Indenture Default or an Event of Loss,
\nPartnership will give prompt written notice thereof to Indenture Trustee and
\nOperator.<\/p>\n
SECTION 5. DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE
\n INDENTURE ESTATE DURING CONTINUATION OF PARTNERSHIP.<\/p>\n
5.1 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN
\nTHE INDENTURE ESTATE DURING CONTINUATION OF PARTNERSHIP. So long as
\nPartnership is in existence and the <\/p>\n
-28-<\/p>\n
Partnership Agreement, the O&M Agreement and the Services Agreement are in
\neffect:<\/p>\n
(a) MODIFICATIONS. Operator has the obligation, or the
\nright, to make certain Modifications to the Units. Any Optional Modification
\nthat is a Non-Severable Modification and any Required Modification shall
\nbecome subject to the Lien of this Indenture and the relevant Indenture
\nSupplement. Any Optional Modifications that are Severable Modifications
\nshall not become subject to the Lien of this Indenture. Indenture Trustee
\nshall promptly execute an appropriate written instrument or instruments to
\nconfirm the absence of a security interest in any Optional Modification that
\nis a Severable Modification; provided that Indenture Trustee receives a
\nwritten request from Partnership therefor addressed to Indenture Trustee and
\nNonaffiliated Partner Trustee certifying that the Modifications are Severable
\nModifications which are not Required Modifications.<\/p>\n
(b) SUBSTITUTION OF UNITS. Upon the occurrence of (y) an
\nEvent of Loss, or (z) an optional substitution of a Unit pursuant to Section
\n5.11 of the Participation Agreement, Section 7.2(d) of the Partnership
\nAgreement and Section 8.4 of the O&M Agreement, Partnership and Operator may
\nsubstitute a replacement for such Unit, upon satisfaction of the conditions
\nprovided therefor in Section 5.11 or 5.12, as the case may be, of the
\nParticipation Agreement. Any Unit substituted as permitted under Section 5.11
\nor 5.12 of the Participation Agreement shall become subject to the Lien of
\nthis Indenture. Nonaffiliated Partner Trustee and Indenture Trustee shall
\nexecute, concurrently with any such substitution pursuant to said Section
\n5.11 or 5.12, an Indenture Supplement substantially in the form of EXHIBIT B
\nwith respect to any such Unit substituted in accordance with Section 5.11 or
\n5.12 of the Participation Agreement. Upon satisfaction of the conditions
\ncontained herein and in the Participation Agreement, Indenture Trustee shall
\nexecute and deliver to Operator, Partnership and Nonaffiliated Partner
\nTrustee an instrument releasing its Lien in and to such replaced Unit and
\nshall execute for recording in public offices, at the expense of Partnership,
\nsuch instruments in writing as Nonaffiliated Partner Trustee or Operator
\nshall reasonably request and as shall be reasonably acceptable to Indenture
\nTrustee in order to make clear upon public records that such Lien with
\nrespect to such replaced Unit has been released under the laws of the
\napplicable jurisdiction.<\/p>\n
-29-<\/p>\n
5.2 POSSESSION OF UNITS. So long as no BJ Event of Default exists,
\nPartnership shall be permitted to remain in full possession, enjoyment and
\ncontrol of the Units and to manage, operate and use the same and each part
\nthereof with the rights and franchises appertaining thereto, including,
\nwithout limitation, the right to grant to Operator and Service Taker and
\ntheir respective permitted successors and assigns possession, enjoyment and
\ncontrol of the Units; provided that the possession, enjoyment, control and
\nuse thereof shall at all times be subject, insofar as Partnership is
\nconcerned, to the observance and performance of the terms of this Indenture.
\nWithout limiting the generality of the foregoing, it is expressly understood
\nand agreed that providing Services to Service Taker and the use and
\npossession of the Units by Operator under and subject to the Services
\nAgreement and the O&M Agreement, respectively, shall not constitute a
\nviolation of this Section 5.2.<\/p>\n
5.3 RELEASE OF UNITS. So long as no Indenture Default or Indenture
\nEvent of Default exists, Indenture Trustee shall execute a release in respect
\nof any Unit in the following instances:<\/p>\n
(a) in the case of a Reduction Election with respect to a
\nUnit or Units pursuant to Section 5.16 of the Participation Agreement and
\nSection 7.2(e) of the Partnership Agreement, upon receipt by Indenture
\nTrustee of (i) written notice of such Reduction Election pursuant to Section
\n5.16 of the Participation Agreement and (ii) all amounts payable to it
\npursuant to Section 6.1(b) in connection with such Reduction Election;<\/p>\n
(b) in the case of the exercise by General Partner of its ET
\nRight pursuant to Section 9.1 of the Partnership Agreement or its Special
\nP.O. Right pursuant to Section 9.4 of the Partnership Agreement, upon receipt
\nby Indenture Trustee of (i) written notice of such exercise pursuant to
\nSection 9.1 or 9.4 of the Partnership Agreement and (ii) all amounts payable
\nto it pursuant to Section 6.1(c) in connection with such exercise of the ET
\nRight or the Special P.O. Right;<\/p>\n
(c) when designated by Partnership for a cash settlement
\nafter the occurrence of an Event of Loss pursuant to Section 5.12 of the
\nParticipation Agreement, upon receipt by Indenture Trustee of (i) written
\nnotice thereof pursuant to Section 5.12 of the Participation Agreement and
\n(ii) all amounts payable to it pursuant to Section 6.1(a) in connection with
\nsuch Event of Loss; and<\/p>\n
-30-<\/p>\n
(d) in the case of a Unit to be replaced in connection with
\nan optional substitution (the “Replaced Unit”) of a Unit pursuant to Section
\n5.11 of the Participation Agreement and Section 7.2(d) of the Partnership
\nAgreement or Section 5.12 of the Participation Agreement and Section 7.2(c)
\nof the Partnership Agreement, as the case may be, upon the compliance with
\nthe terms of such Section 5.11 or 5.12, as the case may be, of the
\nParticipation Agreement and the attachment of the Lien of the Indenture to
\nthe Unit being delivered to Partnership in substitution for the Replaced Unit.<\/p>\n
Subject to the succeeding sentence, each such release shall be
\nexecuted only upon receipt by Indenture Trustee of the applicable amount
\ndescribed in this Section 5.3 and the written request of General Partner
\naccompanied by an Officer’s Certificate of General Partner setting forth the
\nbasis for such request and stating that General Partner has complied with the
\napplicable provisions of the Participation Agreement, together with such
\nadditional evidence of such compliance as Indenture Trustee may reasonably
\nrequest in writing. Upon written request of Nonaffiliated Partner Trustee,
\nin the case of Units returned to Nonaffiliated Partner Trustee, pursuant to
\nSection 5.17(b) of the Participation Agreement in connection with a Reduction
\nElection pursuant to Section 5.16 thereof, a release shall be executed upon
\nreceipt by Indenture Trustee of the amount described in Section 5.3(a).<\/p>\n
5.4 RELEASE OF UNITS – CONSENT OF HOLDERS. Partnership may sell or
\notherwise dispose of any Unit then subject to the security interest of this
\nIndenture and Indenture Trustee shall release the same from the security
\ninterest hereof, to the extent and on the terms, and upon compliance with,
\nthe conditions provided for in any written consent given thereto at any time
\nor from time to time by all Holders. The provisions of this Section 5.4 are
\nin addition to the provisions of Section 5.3.<\/p>\n
5.5 PROTECTION OF PURCHASER. No purchaser in good faith of
\nproperty purporting to be released hereunder shall be bound to ascertain the
\nauthority of Indenture Trustee to execute the release, or to inquire as to
\nany facts required by the provisions hereof for the exercise of such
\nauthority; nor shall any purchaser in good faith of any Unit be under an
\nobligation to ascertain or inquire into the conditions upon which any such
\nsale is hereby authorized.<\/p>\n
-31-<\/p>\n
SECTION 6. PREPAYMENT OF NOTES.<\/p>\n
6.1 PREPAYMENT OF NOTES UPON EVENT OF LOSS, OBSOLESCENCE, ET DATE OR
\nSPECIAL P.O. DATE.<\/p>\n
(a) If an Event of Loss occurs with respect to a Unit and
\nsuch Unit is not replaced pursuant to Section 5.12 of the Participation
\nAgreement, the principal on each Outstanding Note shall be prepaid in part,
\ntogether with interest on the principal so prepaid, at a Prepayment Price
\nequal to the sum of (1) as to principal thereof, an amount equal to the
\nproduct obtained by multiplying the aggregate Current Principal Amount of
\neach Outstanding Note as of the Prepayment Date (after deducting therefrom
\nthe related scheduled principal payment, if any, due and paid to Indenture
\nTrustee on the Prepayment Date) by a fraction, the numerator of which shall
\nbe the Equipment Value of such Unit and the denominator of which shall be the
\nEquipment Value of the Units then subject to the Lien of this Indenture
\nimmediately prior to such Prepayment Date, plus (2) as to interest, the
\naggregate amount of interest accrued and unpaid in respect of the principal
\namount to be prepaid pursuant to clause (1) above to but not including the
\nPrepayment Date after giving effect to the application of any Priority
\nDistribution or Supplemental Priority Distribution distributable in
\naccordance with Section 6.1(b) or 6.1(c) of the Partnership Agreement
\nreceived by Indenture Trustee on or prior to the date of such prepayment.
\nEach prepayment made pursuant to subclause (1) of this clause shall be (A)
\napplied to the prepayment of such Notes being prepaid so that each of the
\nremaining installments of principal of each such Note shall be reduced in the
\nproportion that the principal amount of the prepayment bears to the unpaid
\nprincipal amount of such Notes immediately before the prepayment and (B)
\nmade ratably over the Notes, without preference, priority or distinction of
\nany one such Note over any other. The Prepayment Date for Notes to be
\nprepaid, in whole or in part, pursuant to this Section 6.1(a) shall be the
\nSettlement Date related to the Event of Loss giving rise to the prepayment.<\/p>\n
(b) At any time on a Payment Date occurring after the fifth
\nanniversary of the Commencement Date, if General Partner determines that any
\nUnits then subject to the Lien of this Indenture are obsolete or surplus to the
\nneeds of Partnership in accordance with Section 5.16 of the Participation
\nAgreement and either (y) Nonaffiliated Partner Trustee has given notice to
\nIndenture Trustee pursuant to Section 5.18 of the Participation Agreement of its
\nelection to retain such Units and to prepay the <\/p>\n
-32-<\/p>\n
Notes on the Reduction Date as provided below, or (z) Nonaffiliated Partner
\nTrustee has not given such notice and Partnership has not withdrawn its
\nnotice as provided in Section 5.16 of the Participation Agreement, principal
\non each Outstanding Note shall be prepaid in part, together with interest on
\nthe principal so prepaid at a Prepayment Price equal to the sum of (1) as to
\nprincipal thereof, an amount equal to the product obtained by multiplying the
\nCurrent Principal Amount of each Outstanding Note as of the Prepayment Date
\n(after deducting therefrom the related scheduled principal payment, if any,
\ndue and paid to Indenture Trustee on the Prepayment Date) by a fraction, the
\nnumerator of which shall be the Equipment Value of such Unit or Units and the
\ndenominator of which shall be the Equipment Value of the Units then subject
\nto the Lien of this Indenture immediately before such Prepayment Date, plus
\n(2) as to interest, the aggregate amount of interest accrued and unpaid in
\nrespect of the principal amount to be prepaid pursuant to clause (1) above
\nto, but not including, the Prepayment Date after giving effect to the
\napplication of any Priority Distribution paid to Indenture Trustee on or
\nbefore the date of such prepayment, plus (3) the Premium. Each prepayment
\nmade pursuant to subclause (1) of this clause (b) shall be (A) applied to the
\nprepayment of such Notes being prepaid so that each of the remaining
\ninstallments of principal of each such Note shall be reduced in the
\nproportion that the principal amount of the prepayment bears to the unpaid
\nprincipal amount of such Notes in the aggregate immediately prior to the
\nprepayment and (B) made ratably over the Notes, without preference, priority
\nor distinction of any one such Note over any other. The Prepayment Date for
\nNotes to be prepaid pursuant to this Section 6.1(b) shall be the Payment Date
\nthat occurs on the Reduction Date.<\/p>\n
(c) Upon (i) the election of General Partner or its designee to
\nexercise its fixed price purchase option pursuant to Section 9.1 or 9.4 of the
\nPartnership Agreement or (ii) the election of the General Partner to prepay the
\nOutstanding Notes on the ET Date or the Special P.O. Date, as the case may be,
\nnotwithstanding that the General Partner or its designee has not elected to
\nexercise the ET Right, the Outstanding Notes shall be prepaid at a Prepayment
\nPrice equal to the sum of (1) Current Principal Amount thereof, plus (2) accrued
\nbut unpaid interest thereon to, but not including, the applicable Prepayment
\nDate, plus (3) if such fixed price purchase option is exercised on the Special
\nP.O. Date (but not otherwise) the Premium, plus (4) any other accrued and unpaid
\nSecured Obligations, if any. The Prepayment Date for Notes to be prepaid
\npursuant to this Section 6.1(c) shall be the Special P.O. Date or the ET Date,
\nrespectively.<\/p>\n
-33-<\/p>\n
(d) Upon the existence of the conditions described in
\nSection 8.3(e)(iii) and the request of Nonaffiliated Partner Trustee or
\nBeneficiaries and delivery of notice, all pursuant to Section 8.3(e)(iii),
\neach Outstanding Note shall be purchased on the date specified in the notice
\nat a Prepayment Price equal to the sum of (1) the Current Principal Amount
\nthereof, plus (2) accrued but unpaid interest thereon to, but not including,
\nthe applicable Prepayment Date.<\/p>\n
(e) Upon the existence of the conditions described in
\nSection 8.3(iv) and the request of Nonaffiliated Partner Trustee or
\nBeneficiaries and delivery of notice, all pursuant to Section 8.3(e)(iv),
\neach Outstanding Note shall be purchased at a Prepayment Price equal to the
\nsum of (1) the Current Principal Amount thereof, plus (2) accrued but
\nunpaid interest thereon to, but not including, the applicable Prepayment
\nDate, plus (3) the Premium.<\/p>\n
6.2 NOTICE OF PREPAYMENT TO HOLDERS. Notice of prepayment,
\nredemption or purchase with respect to any Notes contemplated by Section 6.1
\nshall be given by Indenture Trustee, in the manner provided in Section 13.1,
\nnot less than five nor more than ten Business Days before the applicable
\nPrepayment Date, to each Holder of such Note to be prepaid or purchased, at
\nsuch Holder’s address appearing in the Register.<\/p>\n
All notices of prepayment shall state:<\/p>\n
(1) the Prepayment Date;<\/p>\n
(2) whether the Notes are to be prepaid in whole or in part;<\/p>\n
(3) the Section and clause of this Indenture pursuant to which
\n the prepayment is being made;<\/p>\n
(4) that, with respect to prepayments in whole of the Notes, on
\n the Prepayment Date, the Prepayment Price will become due and payable
\n with respect to the Notes, and that, if any of the Notes are then
\n Outstanding, interest on such Notes shall cease to accrue on and after
\n such Prepayment Date;<\/p>\n
(5) that, with respect to prepayments in part of Notes on the
\n Prepayment Date, the Prepayment Price will become due and payable on such
\n Notes, and that interest with respect to that portion of the Prepayment
\n Price attributable to the <\/p>\n
-34-<\/p>\n
principal amount of such Notes shall cease to accrue on and after the
\n applicable Prepayment Date; and<\/p>\n
(6) the Prepayment Price, including in reasonable detail the
\n calculation of the estimated Premium, if any, to be paid in connection
\n therewith.<\/p>\n
6.3 DEPOSIT OF PREPAYMENT PRICE. On or before the Prepayment Date,
\nNonaffiliated Partner Trustee (or any Person on behalf of Nonaffiliated
\nPartner Trustee) shall, to the extent an amount equal to the Prepayment Price
\nwith respect to the Notes to be prepaid, redeemed or purchased on the
\nPrepayment Date shall not then be held in the Indenture Estate, deposit or
\ncause to be deposited with Indenture Trustee by 11:00 a.m. (New York time) on
\nthe Prepayment Date in immediately available funds the Prepayment Price with
\nrespect to the Notes to be prepaid or purchased.<\/p>\n
6.4 NOTES PAYABLE ON PREPAYMENT DATE. If notice of prepayment,
\nredemption or purchase is given in accordance with Section 6.2, the Notes or
\nportions thereof shall, on the Prepayment Date, become due and payable at the
\nprincipal corporate trust office of Indenture Trustee, and from and after the
\nrelated Prepayment Date (unless there is a default in the payment of the
\nPrepayment Price), all Notes then Outstanding shall cease to bear interest as
\nto any portion the principal of which is prepaid.<\/p>\n
If any Note called in whole or in part for prepayment or purchase is
\nnot so paid, the principal amount thereof shall, until paid, continue to bear
\ninterest from the applicable Prepayment Date at the Late Rate as of such
\nPrepayment Date through the date upon which such Note or such portion is paid.<\/p>\n
SECTION 7. NONAFFILIATED PARTNER TRUSTEE AND INDENTURE TRUSTEE.<\/p>\n
7.1 PREPAYMENT OF MONEYS FOR NOTE PAYMENTS HELD BY INDENTURE
\nTRUSTEE. Any money held by Indenture Trustee in trust for any payment of the
\nprincipal of, Premium, if any, or interest on any Note (but not any money
\nconstituting Excepted Property or relating to Other Equipment and not any
\nmoneys representing the balance, if any, after giving effect to applications
\npursuant to clauses “first” through “third”, of Section 3.5, which balance,
\nif any, is to be distributed upon the terms and conditions provided in clause
\n“fourth” of Section 3.5) and remaining unclaimed for more than two years and
\neleven months (or such lesser time as Indenture Trustee is satisfied, after
\n60 days written notice from Nonaffiliated Partner Trustee or General Partner
\non behalf of <\/p>\n
-35-<\/p>\n
Partnership, is one month before the escheat period provided under applicable
\nlaw) after the due date for such payment, shall be paid to Nonaffiliated
\nPartner Trustee; and the Holders entitled to payment thereon shall
\nthereafter, as unsecured general creditors, look only to Nonaffiliated
\nPartner Trustee for payment thereof, and all liability of Indenture Trustee
\nwith respect to such trust money shall thereupon cease, except that Indenture
\nTrustee, before being required to make any such repayment, shall, at the
\nwritten direction of Nonaffiliated Partner Trustee with a copy to General
\nPartner on behalf of Partnership, cause to be mailed to each such Holder
\nnotice that such money remains unclaimed and that, after a date specified
\ntherein, which shall not be less than 30 days from the date of mailing, any
\nunclaimed balance of such money then remaining will be repaid to
\nNonaffiliated Partner Trustee as provided herein.<\/p>\n
7.2 NO REPRESENTATIONS OR WARRANTIES AS TO UNITS OR DOCUMENTS.
\nNEITHER NONAFFILIATED PARTNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR OTHERWISE
\nNOR INDENTURE TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE MADE ANY
\nREPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION,
\nDESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE UNITS OR THE
\nOTHER EQUIPMENT OR AS TO THEIR TITLE THERETO, OR ANY OTHER REPRESENTATION OR
\nWARRANTY WITH RESPECT TO THE UNITS OR THE OTHER EQUIPMENT WHATSOEVER OR ANY
\nREPRESENTATION OR WARRANTY AS TO THE VALIDITY OR ENFORCEABILITY OF ANY BASIC
\nDOCUMENT, except that (i) First Security makes the representations and
\nwarranties contained in Sections 3.1(h) and 3.1(k) of the Participation
\nAgreement and Nonaffiliated Partner Trustee hereby represents and warrants
\nthat on the Commencement Date Nonaffiliated Partner Trustee received whatever
\nright, title and interest was conveyed to it by Partnership and First
\nSecurity represents, warrants and covenants that such right, title and
\ninterest and the Units are on the Commencement Date, and thereafter shall be,
\nfree of Nonaffiliated Partner Trustee Liens attributable to First Security
\nand (ii) ITC represents and warrants that it has not breached its covenant
\ncontained in Section 5.9 of the Participation Agreement.<\/p>\n
SECTION 8. DEFAULTS AND REMEDIES.<\/p>\n
8.1 INDENTURE EVENTS OF DEFAULT. The following events shall
\nconstitute “Indenture Events of Default” under this Indenture (whether any
\nsuch event is voluntary or involuntary or comes about or is effected by
\noperation of law or pursuant to or in compliance with any judgment, decree or
\norder of any court or any order, rule or regulation of any administrative or
\ngovernment body):<\/p>\n
-36-<\/p>\n
(a) default in the payment of any installment of principal,
\ninterest or Premium, if any, in respect of any Note when and as the same
\nshall become due and payable (whether on the due date thereof, a date fixed
\nfor prepayment, by acceleration or otherwise), and which is not thereafter
\npaid within five Business Days after the same becomes due and payable;<\/p>\n
(b) the existence of a BJ Event of Default;<\/p>\n
(c) default in the due observance or performance of any
\nother covenant or agreement to be observed or performed by Nonaffiliated
\nPartner Trustee (in its individual capacity or as Nonaffiliated Partner
\nTrustee) under the Notes or hereunder or to be observed or performed by
\nNonaffiliated Partner Trustee (in its individual capacity or as Nonaffiliated
\nPartner Trustee) or any Beneficiary for the benefit of any Holder under the
\nParticipation Agreement or the Trust Agreement, and any such default
\ncontinues unremedied for 30 days after Nonaffiliated Partner Trustee and
\nBeneficiaries receive notice thereof from Indenture Trustee specifying the
\ndefault and demanding that the same be remedied; except that, if such failure
\nis capable of being remedied and such remedy does not involve the payment of
\nmoney alone, no such failure shall constitute an Indenture Event of Default
\nhereunder while Nonaffiliated Partner Trustee (in its individual capacity or
\nas Nonaffiliated Partner Trustee)or any Beneficiary is diligently proceeding
\nto remedy such failure, but in no event shall such failure continue
\nunremedied for a period of the lesser of 90 days from the date of such notice
\nand the number of days remaining in the Transaction Term;<\/p>\n
(d) any representation or warranty made by Nonaffiliated
\nPartner Trustee (in its individual capacity or as Nonaffiliated Partner
\nTrustee) herein, or by Nonaffiliated Partner Trustee or any Beneficiary in
\nthe Participation Agreement or in any certificate or other statement
\nfurnished by Nonaffiliated Partner Trustee (in its individual capacity or as
\nNonaffiliated Partner Trustee) or any Beneficiary to Indenture Trustee or any
\nHolder in connection with the transactions contemplated by the Participation
\nAgreement is incorrect in any material respect as of the date of the issuance
\nor making thereof;<\/p>\n
(e) Nonaffiliated Partner Trustee, the Trust Estate or any
\nBeneficiary becomes insolvent or bankrupt or generally fails to pay, or admits
\nin writing its inability to pay, its debts as they come due, or makes a general
\nassignment for the benefit of creditors, or applies for, consents to or
\nacquiesces in the <\/p>\n
-37-<\/p>\n
appointment of a trustee, custodian or receiver or other similar official for
\nNonaffiliated Partner Trustee, Trust Estate or Beneficiary;<\/p>\n
(f) a trustee, custodian or receiver or other similar
\nofficial is appointed for Nonaffiliated Partner Trustee, the Trust Estate or
\nany Beneficiary and is not discharged within 60 days after such appointment;<\/p>\n
(g) any bankruptcy, reorganization, arrangement, insolvency
\nor liquidation case or proceeding, or other case or proceeding for relief
\nunder any bankruptcy law or similar law for the relief of debtors, is
\ninstituted by or against Nonaffiliated Partner Trustee, the Trust Estate or
\nany Beneficiary and, if instituted against Nonaffiliated Partner Trustee, the
\nTrust Estate or any Beneficiary is allowed against Nonaffiliated Partner
\nTrustee or any Beneficiary or is consented to or is not dismissed within 60
\ndays after such institution.<\/p>\n
8.2 ACCELERATION; RESCISSION AND ANNULMENT; LIMITATIONS. If an
\nIndenture Event of Default exists, Indenture Trustee by written notice to
\nNonaffiliated Partner Trustee, Partnership and each Beneficiary, may, and upon
\nwritten request of a Majority In Interest of Holders shall, declare the
\nprincipal of all the Notes to be due and payable; except that the principal of
\nall Notes, together with accrued interest thereon from the date in respect of
\nwhich interest was last paid hereunder to the date payment of such principal has
\nbeen made, and all other accrued and unpaid Secured Obligations will
\nautomatically become due and payable without any action of Indenture Trustee or
\nthe Holders in the case of an Indenture Event of Default under Section 8.1(e),
\n(f) or (g), unless such Indenture Event of Default with respect to a Beneficiary
\nis remedied or the defaulting Beneficiary transfers its Beneficial Interest
\npursuant to Section 8.3(e)(i)(4). Upon such declaration, the principal of all
\nNotes, together with accrued interest thereon from the date in respect of which
\ninterest was last paid hereunder to the date payment of such principal has been
\nmade and all other accrued and unpaid Secured Obligations shall be immediately
\ndue and payable as a result of such declaration or automatic acceleration. At
\nany time after such declaration or automatic acceleration, as the case may be,
\nand before the sale or disposition of the Indenture Estate, a Majority In
\nInterest of Holders, by written notice to Indenture Trustee, Nonaffiliated
\nPartner Trustee, Partnership and each Beneficiary, may rescind such a
\ndeclaration or automatic acceleration, as the case may be, and thereby annul its
\nconsequences if (a) an amount sufficient to pay all principal of <\/p>\n
-38-<\/p>\n
and interest (including interest at the Late Rate on overdue payments) on
\nsuch Notes, to the extent each such amount is due or past due without regard
\nto the acceleration hereof, if any, in respect of the Outstanding Notes and
\nall other sums then due and payable to Indenture Trustee has been deposited
\nwith Indenture Trustee, (b) the rescission would not conflict with any
\njudgment or decree and (c) all existing Indenture Defaults and Indenture
\nEvents of Default under this Indenture are cured or waived except nonpayment
\nof principal of, or interest on, the Notes which have become due solely
\nbecause of such acceleration. No such rescission shall affect any subsequent
\ndefault or impair any right consequent thereon.<\/p>\n
8.3 OTHER REMEDIES AVAILABLE TO INDENTURE TRUSTEE.<\/p>\n
(a) If an Indenture Event of Default exists, then and in
\nevery such case Indenture Trustee, as trustee of an express trust and as
\nassignee hereunder of Nonaffiliated Partner Trustee’s Partnership Interest or
\nas holder of a security interest in the Units or otherwise, may, and when
\nrequired pursuant to Section 9 shall, exercise (subject to the following
\nsentence and Sections 8.3(e) and 8.3(f)), any or all of the rights and powers
\nand pursue any and all of the remedies accorded to Nonaffiliated Partner
\nTrustee under the Partnership Agreement and the Participation Agreement and
\nto Partnership and Nonaffiliated Partner Trustee under the O&M Agreement, the
\nServices Agreement and this Section 8, may recover judgment in its own name
\nas Indenture Trustee against the Indenture Estate and may take possession of
\nall or any part of the Indenture Estate and may exclude Nonaffiliated Partner
\nTrustee, Partnership, any Partner, Operator, Service Taker and Beneficiaries
\nand all Persons claiming under any of them wholly or partly therefrom.
\nNotwithstanding any other provision of this Indenture or any other of the
\nBasic Documents to the contrary, Indenture Trustee shall not be entitled
\npursuant to Section 8.3(b) or otherwise to sell any of the Partnership
\nIndenture Estate or exercise other remedies against the Partnership Indenture
\nEstate or to exercise BJ Remedies (as defined below) until such time, if any,
\nas a BJ Event of Default exists. Notwithstanding any other provision of this
\nIndenture or any other of the Basic Documents, Indenture Trustee shall not be
\nentitled to exercise any remedy hereunder as a result of an Indenture Event
\nof Default that arises solely by reason of one or more events or
\ncircumstances that constitute a BJ Event of Default unless Indenture Trustee
\nas security assignee of Nonaffiliated Partner Trustee declares the O&M
\nAgreement to be in default and simultaneously, to the extent it is then
\nentitled to do so hereunder and under the Partnership <\/p>\n
-39-<\/p>\n
Agreement, O&M Agreement and Participation Agreement and is not then stayed
\nor otherwise prevented from doing so by operation of law, exercises one or
\nmore of the rights or remedies (each right or remedy, a “BJ Remedy”) in
\nSection 6.1(d), 11.1, 11.3 or 11.4 of the Partnership Agreement, Section 15.1
\nof the O&M Agreement involving a termination of the O&M Agreement or any
\nother remedy in Section 15.1 of the O&M Agreement or Section 5.22 of the
\nParticipation Agreement; except, that if Indenture Trustee is stayed or
\notherwise prevented by operation of law from exercising such BJ Remedies, it
\nshall in any event refrain from so foreclosing or otherwise exercising BJ
\nRemedies hereunder (i) for 180 days after the commencement of such stay or
\nother circumstances preventing the exercise of BJ Remedies or (ii) if
\nGuarantor or an Affiliate of Guarantor with court approval assumes (and is
\nperforming the obligations of each Bankrupt BJ Entity under) the Basic
\nDocuments to which each Bankrupt BJ Entity is a party in accordance with
\nSection 365 of the Bankruptcy Code and, if an Affiliate of Guarantor so
\nassumes, Guarantor remains liable for all its obligations under the Guaranty
\nto the same extent as if such assumption had not occurred.<\/p>\n
(b) Subject to Sections 8.3(a), 8.3(e) and 8.3(f), if an
\nIndenture Event of Default exists, Indenture Trustee may, if at the time such
\naction is lawful and subject to compliance with any mandatory legal
\nrequirements, either with or without taking possession, and either before or
\nafter taking possession, and without instituting any legal proceedings
\nwhatsoever, and having first given notice of such action by registered mail to
\nNonaffiliated Partner Trustee, Partnership and each Beneficiary once at least 15
\ndays before the date of such action, and any other notice required by law, sell
\nand dispose of the Indenture Estate, or any part thereof, or interest therein,
\nat a private sale or sales or a public auction to the highest bidder, in each
\ncase, in one lot as an entirety or in separate lots, and either for cash or on
\ncredit and on such terms as Indenture Trustee may determine, and at any place
\n(whether or not it is the location of the Indenture Estate or any part thereof)
\nand time designated in the notice above referred to. Notwithstanding any
\nprovision herein or in any other Basic Document to the contrary, Indenture
\nTrustee shall not sell any of the Partnership Indenture Estate or exercise other
\nremedies against the Partnership Indenture Estate or exercise BJ Remedies unless
\na BJ Event of Default exists. Notwithstanding any provision herein to the
\ncontrary or in any other Basic Document, Indenture Trustee shall not sell any of
\nthe Indenture Estate or exercise other remedies against the Indenture Estate
\nseeking to deprive Beneficiaries of their interest therein as a result of an
\nIndenture <\/p>\n
-40-<\/p>\n
Event of Default that arises solely by reason of one or more events or
\ncircumstances that constitute a BJ Event of Default unless a declaration of
\nacceleration has been made pursuant to Section 8.2, Indenture Trustee as
\nsecurity assignee of Nonaffiliated Partner Trustee declares the O&M Agreement
\nto be in default and Indenture Trustee is simultaneously exercising, to the
\nextent it is then entitled to do so hereunder and under the Partnership
\nAgreement, the Participation Agreement and the O&M Agreement and is not then
\nstayed or otherwise prevented from doing so by operation of law, one or more
\nBJ Remedies; and no private sale may be made to BJ USA or any of its
\nAffiliates; except, that if Indenture Trustee is so stayed or otherwise
\nprevented by operation of law from exercising such BJ Remedies, it shall in
\nany event refrain from so foreclosing or otherwise exercising remedies
\nhereunder (i) for 180 days after the commencement of such stay or other
\ncircumstances preventing the exercise of BJ Remedies or (ii) if Guarantor or
\nan Affiliate of Guarantor with court approval assumes (and is performing the
\nobligations of each Bankrupt BJ Entity under) the Basic Documents to which
\neach Bankrupt BJ Entity is a party in accordance with Section 365 of the
\nBankruptcy Code and, if an Affiliate of Guarantor so assumes, Guarantor
\nremains liable for all its obligations under the Guaranty as if such
\nassumption had not occurred. Any such sale or sales may be adjourned from
\ntime to time by announcement at the time and place appointed for such sale or
\nsales, or for any such adjourned sale or sales, without further notice, and
\nIndenture Trustee and any Holder may bid and become the purchaser at any such
\nsale. Indenture Trustee may exercise such right without possession or
\nproduction of the Notes or proof of ownership thereof, and as representative
\nof Holders may exercise such right without notice to Holders or including
\nHolders as parties to any suit or proceeding relating to foreclosure of any
\nproperty in the Indenture Estate. Nonaffiliated Partner Trustee and
\nPartnership each hereby irrevocably constitutes Indenture Trustee the true
\nand lawful attorney-in-fact of Nonaffiliated Partner Trustee (in the name of
\nNonaffiliated Partner Trustee or otherwise) and Partnership (in the name of
\nPartnership or otherwise), as the case may be, for the purpose of
\neffectuating any sale, assignment, transfer or delivery upon enforcement of
\nthe Lien created under this Indenture, whether pursuant to foreclosure or
\npower of sale or otherwise, to execute and deliver all such bills of sale,
\nassignments and other instruments as Indenture Trustee may consider necessary
\nor appropriate, with full power of substitution, Nonaffiliated Partner
\nTrustee and Partnership each hereby ratifying and confirming all that such
\nattorney or any substitute shall lawfully do by virtue hereof. Nevertheless,
\nif so requested by Indenture Trustee or any purchaser, Nonaffiliated Partner
\nTrustee <\/p>\n
-41-<\/p>\n
and Partnership each shall ratify and confirm any such sale, assignment,
\ntransfer or delivery, by executing and delivering to Indenture Trustee or
\nsuch purchaser all bills of sale, assignments, releases and other proper
\ninstruments to effect such ratification and confirmation as may be designated
\nin any such request.<\/p>\n
(c) Subject to Sections 8.3(a), 8.3(e) and 8.3(f), if an
\nIndenture Event of Default exists, Nonaffiliated Partner Trustee or Partnership,
\nor both, shall, at the request of Indenture Trustee upon enforcement of the Lien
\ncreated under this Indenture, promptly execute and deliver to Indenture Trustee
\nsuch instruments of title or other documents as Indenture Trustee may deem
\nnecessary or advisable to enable Indenture Trustee or an agent or representative
\ndesignated by Indenture Trustee, at such time and place or places as Indenture
\nTrustee may specify, to obtain possession of all or any part of the Indenture
\nEstate. If Nonaffiliated Partner Trustee or Partnership for any reason fails to
\nexecute and deliver such instruments and documents after such request by
\nIndenture Trustee, Indenture Trustee shall be entitled to a judgment for
\nspecific performance of the covenants contained in the foregoing sentence,
\nconferring upon Indenture Trustee the right to immediate possession and
\nrequiring Nonaffiliated Partner Trustee or Partnership, as the case may be, to
\nexecute and deliver such instruments and documents to Indenture Trustee.
\nSubject to Sections 8.3(a), 8.3(e) and 8.3(f), Indenture Trustee shall also be
\nentitled to pursue all or any part of the Indenture Estate wherever it may be
\nfound and may enter any of the premises of Nonaffiliated Partner Trustee or
\nPartnership or any other Person wherever the Indenture Estate may be or be
\nsupposed to be and search for the Indenture Estate and take possession of any
\nitem of the Indenture Estate pursuant to this Section 8.3(c). Subject to
\nSections 8.3(a), 8.3(e) and 8.3(f), Indenture Trustee may, from time to time, at
\nthe expense of the Indenture Estate, make all such expenditures for maintenance,
\ninsurance, repairs, replacements, alterations, additions and improvements to and
\nof the Indenture Estate, as it may deem proper. In each such case, Indenture
\nTrustee shall have the right to use, operate, store, lease, control or manage
\nthe Indenture Estate and to exercise all rights and powers of Nonaffiliated
\nPartner Trustee or Partnership relating to the Indenture Estate as Indenture
\nTrustee shall deem appropriate, including the right to enter into any and all
\nsuch agreements with respect to the use, operation, storage, leasing, control or
\nmanagement of the Indenture Estate or any part thereof; and Indenture Trustee
\nshall be entitled to collect and receive directly all tolls, rents, payments,
\ndistributions (including Priority Distributions, Supplemental Priority
\nDistributions and Special <\/p>\n
-42-<\/p>\n
Distributions other than Excepted Property), issues, profits, products,
\nrevenues and other income of the Indenture Estate and every part thereof,
\nwithout prejudice, however, to the right of Indenture Trustee under any
\nprovision of this Indenture to collect and receive cash held by, or required
\nto be deposited with, Indenture Trustee hereunder. In accordance with the
\nterms of this Section 8.3(c), such tolls, rents, payments, distributions
\n(including Priority Distributions, Supplemental Priority Distributions and
\nSpecial Distributions other than Excepted Property), issues, profits,
\nproducts, revenues and other income shall be applied to pay the expenses of
\nusing, operating, storing, leasing, controlling or managing the Indenture
\nEstate, and of all maintenance, insurance, repairs, replacements,
\nalterations, additions and improvements, and to make all payments which
\nIndenture Trustee may be required or may elect to make, if any, for taxes,
\nassessments, insurance or other proper charges upon the Indenture Estate or
\nany part thereof (including the employment of engineers and accountants to
\nexamine, inspect and make reports upon the properties and books and records
\nof Nonaffiliated Partner Trustee and Partnership) and all other payments
\nwhich Indenture Trustee may be required or authorized to make under any
\nprovision of this Indenture, including this Section 8.3(c), as well as just
\nand reasonable compensation for the services of Indenture Trustee, and of all
\npersons properly engaged and employed by Indenture Trustee.<\/p>\n
If a BJ Event of Default exists and Indenture Trustee obtains
\npossession of or title to the Units, Indenture Trustee shall not be obligated
\nto use or operate the Units or cause the Units to be used or operated
\ndirectly or indirectly by itself or through agents or other representatives
\nor to lease, license or otherwise permit or provide for the use or operation
\nof the Units by any other Person.<\/p>\n
(d) Subject to Sections 8.3(a), 8.3(e) and 8.3(f), Indenture
\nTrustee may proceed to protect and enforce this Indenture and the Notes by
\nsuit or suits or proceedings in equity, at law or in bankruptcy, and whether
\nfor the specific performance of any covenant or agreement herein contained or
\nin execution or aid of any power herein granted, or for foreclosure
\nhereunder, or for the appointment of a receiver or receivers for the
\nIndenture Estate or any part thereof, or for the recovery of judgment for the
\nindebtedness secured by the Lien created under this Indenture or for the
\nenforcement of any other proper, legal or equitable remedy available under
\napplicable law.<\/p>\n
-43-<\/p>\n
(e) (i) (1) If Partnership fails to distribute any
\nPriority Distribution distributable under the Partnership Agreement at least ten
\nBusiness Days after the Distribution Date therefor, Nonaffiliated Partner
\nTrustee or any Beneficiary, without the consent of Indenture Trustee or any
\nHolder but subject to Section 8.3(e)(i)(5), may, within the time period
\nspecified in clause (4) below, pay to Indenture Trustee for application in
\naccordance with Section 3.3, a sum equal to the amount of all (but not less than
\nall) principal and interest (other than by acceleration) then due and payable on
\nthe Outstanding Notes, together with any interest on account of such Priority
\nDistribution not being made on the Distribution Date as provided in
\nSection 4.4(b) of the Partnership Agreement.<\/p>\n
(2) If Partnership or General Partner defaults in the
\npayment or performance of any obligation hereunder or under the Partnership
\nAgreement (other than the obligation to make Priority Distributions) or the
\nParticipation Agreement, Guarantor defaults in the payment or performance of any
\nobligation under the Guaranty or the Participation Agreement, BJ USA defaults in
\nthe payment or performance of any obligation under the Participation Agreement,
\nService Taker defaults in the payment or performance of any obligation under the
\nServices Agreement or the Participation Agreement or Operator defaults in the
\npayment or performance of any obligation under the O&M Agreement or the
\nParticipation Agreement and such default constitutes a BJ Default and can be
\ncured, Nonaffiliated Partner Trustee or any Beneficiary, without the consent of
\nIndenture Trustee or any Holder, may, within the period specified in clause (4)
\nbelow, pay or perform such obligation on behalf of Partnership, General Partner,
\nGuarantor, BJ USA, Service Taker or Operator or otherwise perform such
\nobligations on behalf of Partnership, General Partner, Guarantor, BJ USA,
\nService Taker or Operator, without the necessity of giving any notice to
\nPartnership, General Partner, Guarantor, BJ USA, Service Taker or Operator, it
\nbeing understood and agreed that nothing herein contained shall be deemed or
\nconstrued to prohibit Nonaffiliated Partner Trustee or any Beneficiary from
\nexercising any such rights of Partnership before any such notice from Indenture
\nTrustee.<\/p>\n
(3) Solely for the purpose of determining whether there
\nexists an Indenture Event of Default, (i) any payment by Nonaffiliated Partner
\nTrustee or any Beneficiary pursuant to, and in compliance with, Section
\n8.3(e)(i)(1) shall, for the purposes of this Indenture, be deemed to remedy any
\ndefault by Partnership in making Priority Distributions theretofore
\ndistributable and to remedy any default by Nonaffiliated Partner Trustee in the
\npayment of any amount due and payable under the Notes, in each case only if such
\npayment pursuant to Section 8.3(e)(i)(1) is in an amount sufficient to remedy
\nsuch default, and (ii) any payment or performance by Nonaffiliated Partner<\/p>\n
-44-<\/p>\n
Trustee or any Beneficiary of any obligation of Partnership, General Partner,
\nGuarantor, BJ USA, Service Taker or Operator under the Partnership Agreement,
\nParticipation Agreement, Guaranty, Services Agreement or O&M Agreement pursuant
\nto, and in compliance with, Section 8.3(e)(i)(2) shall, for the purposes of this
\nIndenture, be deemed to remedy any default by Partnership, General Partner,
\nGuarantor, BJ USA, Service Taker or Operator in the performance in full of such
\nobligation and to remedy any related default by Nonaffiliated Partner Trustee
\nunder this Indenture.<\/p>\n
(4) While an Indenture Event of Default arising
\nsolely from a BJ Event of Default or an Indenture Event of Default with
\nrespect to a Beneficiary under Section 8.1(c), 8.1(d), 8.1(e), 8.1(f) or
\n8.1(g) exists, (x) Indenture Trustee shall give Partnership, Nonaffiliated
\nPartner Trustee and each Beneficiary at least 15 Business Days’ prior written
\nnotice of its intention to exercise any rights as assignee of Nonaffiliated
\nPartner Trustee’s or Partnership’s rights under the Guaranty, Partnership
\nAgreement, Participation Agreement, Services Agreement or O&M Agreement (such
\n15 Business Days’ prior written notice to be given without regard to how long
\na BJ Event of Default or an Indenture Event of Default with respect to a
\nBeneficiary under Section 8.1(c), 8.1(d), 8.1(e), 8.1(f) or 8.1(g) which has
\ngiven rise to such intent to so exercise rights under the Guaranty,
\nPartnership Agreement, Participation Agreement, Services Agreement or O&M
\nAgreement exists) or declare the Notes to be so due and payable for purposes
\nof this Section 8.3(e), (y) if an Indenture Default with respect to a
\nBeneficiary under Section 8.1(e), 8.1(f) or 8.1(g) exists (such Indenture
\nEvent of Default, a “Beneficiary Bankruptcy” and such Beneficiary, a
\n“Bankrupt Beneficiary”), Nonaffiliated Partner Trustee or any other
\nBeneficiary may give Indenture Trustee written notice within 15 days of such
\nBeneficiary Bankruptcy of the intention of Nonaffiliated Partner Trustee or
\nsuch Beneficiary to remedy any default by Bankrupt Beneficiary or to acquire
\nor cause to be acquired all of Bankrupt Beneficiary’s Beneficial Interest and
\nof the actions it intends to take to accomplish the same, and (z) during such
\n15-Business Day period or, if the notice required by clause (y) above was
\ngiven, during the 90-day period after the occurrence of such Beneficiary
\nBankruptcy, Indenture Trustee shall not exercise any rights as assignee of
\nNonaffiliated Partner Trustee’s or Partnership’s rights under the Guaranty,
\nPartnership Agreement, Participation Agreement, Services Agreement or O&M<\/p>\n
-45-<\/p>\n
Agreement as a result of such Indenture Event of Default and neither
\nIndenture Trustee nor the Holders shall declare the Notes to be due and
\npayable pursuant to Section 8.2 as a result of such Indenture Event of
\nDefault or exercise any remedies under Section 8 as a result of such
\nIndenture Event of Default; except that if within such 15-Business Day period
\nor 90-day period, as the case may be, Nonaffiliated Partner Trustee or any
\nnon-defaulting Beneficiary remedies any default by Partnership, General
\nPartner, Guarantor, BJ USA, Service Taker or Operator as provided in clauses
\n(1) and (2) of this Section 8.3(e) or remedies any default by any
\nBeneficiary or such defaulting Beneficiary transfers all of its Beneficial
\nInterest pursuant to Section 6.1 of the Participation Agreement, Indenture
\nTrustee shall not exercise any rights as assignee of Nonaffiliated Partner
\nTrustee’s or Partnership’s rights under the Partnership Agreement,
\nParticipation Agreement, Guaranty, Services Agreement or O&M
\nAgreement as a result of such Indenture Event of Default and neither
\nIndenture Trustee nor the Holders shall declare the Notes to be due and
\npayable pursuant to Section 8.2 as a result of such Indenture Event of
\nDefault or exercise any remedies under Section 8 as a result of such
\nIndenture Event of Default.<\/p>\n
(5) Section 8.3(e)(i)(1) shall not apply to any default
\nin making any Priority Distribution under the Partnership Agreement, if default
\nin making two consecutive Priority Distributions, or in making a total of five
\nPriority Distributions, are cured by Nonaffiliated Partner Trustee or any
\nBeneficiary pursuant to Section 8.3(e)(i)(1). Section 8.3(e)(i)(2) shall not
\napply to any default by Partnership or General Partner in the payment or
\nperformance of any obligation hereunder or under the Partnership Agreement
\n(other than the obligation to make Priority Distributions) or the Participation
\nAgreement, by Guarantor in the payment or performance of any obligation under
\nthe Guaranty or the Participation Agreement, by BJ USA in the payment or
\nperformance of any obligation under the Participation Agreement, by Service
\nTaker in the payment or performance of any obligation under the Services
\nAgreement or the Participation Agreement or by Operator in the payment or
\nperformance of any obligation under the O&M Agreement or the Partnership
\nAgreement, if such defaults are cured by Nonaffiliated Partner Trustee or a
\nBeneficiary pursuant to Section 8.3(e)(i)(2) by the expenditure of $2,500,000 or
\nmore in the aggregate.<\/p>\n
(6) Upon the exercise of any cure right under this
\nSection 8.3(e)(i), neither Nonaffiliated Partner Trustee nor any Beneficiary
\nshall retain any Lien on any part of the Indenture<\/p>\n
-46-<\/p>\n
Estate on account of any payment made or the costs and expenses incurred in
\nconnection therewith nor shall any claim of Nonaffiliated Partner Trustee or
\nany Beneficiary against Partnership, General Partner, Guarantor, Operator or
\nany other Person for the repayment thereof impair the prior right and
\nsecurity interest of Indenture Trustee in and to the Indenture Estate.<\/p>\n
(ii) Upon the exercise of any cure right under Section
\n8.3(e)(i), Nonaffiliated Partner Trustee or Beneficiaries, as the case may be,
\nshall be subrogated to the rights of Holders (1) to receive from Indenture
\nTrustee the Priority Distribution, Supplemental Priority Distribution or other
\namount with respect to which Nonaffiliated Partner Trustee or any Beneficiary
\neffected such cure (including interest on account of such Priority Distribution
\nor Supplemental Distribution not being distributed on the Distribution Date
\ntherefor or interest on account of such other amount being overdue) and (2) with
\nrespect to which Nonaffiliated Partner Trustee or any Beneficiary otherwise
\neffected such cure, and if Indenture Trustee thereafter receives such Priority
\nDistribution, Supplemental Priority Distribution or other amount and no other
\nIndenture Event of Default exists, then, notwithstanding the requirements of
\nSection 3.3, Indenture Trustee forthwith shall remit such Priority Distribution,
\nSupplemental Priority Distribution or other amount to Nonaffiliated Partner
\nTrustee or such Beneficiary, as the case may be, in reimbursement for the funds
\nso advanced by any of them; except that, if the principal of and interest on any
\nNotes have become due and payable pursuant to Section 8.2, such Priority
\nDistribution or Supplemental Distribution shall be distributed by Indenture
\nTrustee in accordance with Section 3.5. Neither Nonaffiliated Partner Trustee
\nnor any Beneficiary shall attempt to recover any such Priority Distribution,
\nSupplemental Priority Distribution or other amount paid by it on behalf of
\nGeneral Partner, Partnership, Operator, Service Taker, BJ USA or Guarantor
\npursuant to this Section 8.3(e)(ii) except by demanding of Partnership, General
\nPartner, Operator, Service Taker, BJ USA or Guarantor payment of such amount or
\nby proceeding by appropriate court action or actions, either at law or at
\nequity, to enforce performance by Partnership, General Partner, Operator,
\nService Taker, BJ USA or Guarantor of the applicable covenants or recover
\ndamages for the breach thereof. Further, upon the exercise of any cure right
\nunder Section 8.3(e)(i)(4) with respect to a defaulting Beneficiary,
\nNonaffiliated Partner Trustee or such Beneficiary effecting such remedy or
\nacquiring the defaulting Beneficiary’s Beneficial Interest, as the case may be,
\nshall be subrogated to the rights of<\/p>\n
-47-<\/p>\n
defaulting Beneficiary to receive distributions, payments and other amounts
\npayable to defaulting Beneficiary under the Basic Documents.<\/p>\n
(iii) If (1) the Notes are accelerated pursuant to Section 8.2,
\nor (2) the Notes are automatically accelerated as provided for in Section 8.2,
\nor (3) one or more BJ Event(s) of Default exists for a period of 180 days or
\nmore (and no Indenture Event of Default that does not arise solely from a BJ
\nEvent of Default exists) and the Notes are not accelerated by Indenture Trustee
\nor the Holders during such period, Nonaffiliated Partner Trustee or a
\nBeneficiary may give notice to Indenture Trustee of Nonaffiliated Partner
\nTrustee’s or a Beneficiary’s intention to purchase, or cause to be purchased by
\nanother Person designated by Nonaffiliated Partner Trustee (or prepay in lieu of
\npurchase), all of the Notes in accordance with this Section 8.3(e)(iii), which,
\nif a prepayment, shall be pursuant to Section 6.1(d). Concurrently with such
\nnotice, Nonaffiliated Partner Trustee or Beneficiary will deposit with Indenture
\nTrustee, whether or not an Indenture Event of Default then exists, an amount
\nsufficient to pay the Prepayment Price equal to the aggregate unpaid principal
\namount of all unpaid Notes then Outstanding, but without Premium, together with
\n(A) accrued but unpaid interest thereon to the date of such receipt (as well as
\nany interest on overdue principal and, to the extent permitted by applicable
\nlaw, overdue interest calculated as provided in Section 4.4(b) of the
\nPartnership Agreement) and (B) all amounts then due and payable to Indenture
\nTrustee pursuant to Section 9.5(a)(i), which funds shall be held by Indenture
\nTrustee as provided in Section 9.3. Upon the receipt of such funds, Indenture
\nTrustee will terminate any proceedings then in progress. In the event of a
\npurchase by a Beneficiary or Nonaffiliated Partner Trustee (or a designee) of
\nthe Notes pursuant to this Section 8.3(e)(iii) and upon payment to Indenture
\nTrustee of the Prepayment Price calculated pursuant to this Section 8.3(e)(iii),
\neach Holder will be deemed to sell, assign, transfer and convey to such
\nBeneficiary or Nonaffiliated Partner Trustee or its designee (without recourse
\nor warranty of any kind except as to title to the Notes being conveyed free and
\nclear of Liens attributable to such Holder) all of the right, title and interest
\nof such Holder in and to the Indenture Estate, this Indenture and all Notes held
\nby such Holder. The Registrar shall register the transfer of ownership of the
\nNotes into the name of Nonaffiliated Partner Trustee or its designee.<\/p>\n
(iv) If a BJ Event of Default exists and before (1) acceleration
\nof the Notes and (2) the expiration of the 180-day<\/p>\n
-48-<\/p>\n
period referred to in Section 8.3(e)(iii) (and no Indenture Event of Default
\nthat does not arise solely from a BJ Event of Default exists), Nonaffiliated
\nPartner Trustee or any Beneficiary may give notice to Indenture Trustee of
\nNonaffiliated Partner Trustee’s or Beneficiary’s intention to purchase, or
\ncause to be purchased by another Person designated by Nonaffiliated Partner
\nTrustee (or prepay in lieu of purchase), all of the Notes in accordance with
\nthis Section 8.3(e)(iv), which, if a prepayment, shall be pursuant to Section
\n6.1(e). Concurrently with such notice, Nonaffiliated Partner Trustee or
\nBeneficiary will deposit with Indenture Trustee, whether or not an Indenture
\nEvent of Default then exists, an amount sufficient to pay the Prepayment
\nPrice equal to the aggregate unpaid principal amount of all unpaid Notes then
\nOutstanding, together with (A) accrued but unpaid interest thereon to the
\ndate of such receipt (as well as any interest on overdue principal and, to
\nthe extent permitted by applicable law, overdue interest calculated as
\nprovided in Section 4.4(b) of the Partnership Agreement), (B) the Premium, if
\nany, as of the date of deposit and (C) all amounts then due and payable to
\nIndenture Trustee pursuant to Section 9.5(a)(i), which funds shall be held by
\nIndenture Trustee as provided in Section 9.3. Upon the receipt of such
\nfunds, Indenture Trustee will terminate any proceedings then in progress. In
\nthe event of a purchase by any Beneficiary or Nonaffiliated Partner Trustee
\nof Notes pursuant to this Section 8.3(e)(iv) and upon payment to Indenture
\nTrustee of the Prepayment Price calculated pursuant to this Section
\n8.3(e)(iv), each Holder will be deemed to sell, assign, transfer and convey
\nto Beneficiary or Nonaffiliated Partner Trustee or its designee (without
\nrecourse or warranty of any kind except as to title to the Notes being
\nconveyed free and clear of Liens attributable to such Holder) all of the
\nright, title and interest of such Holder in and to the Indenture Estate, this
\nIndenture and all Notes held by such Holder. The Registrar shall register
\nthe transfer of ownership of the Notes into the name of Nonaffiliated Partner
\nTrustee or its designee.<\/p>\n
(f) Notwithstanding any provision of this Indenture or any
\nother Basic Document to the contrary, as long as no BJ Event of Default exists,
\nneither Indenture Trustee nor Nonaffiliated Partner Trustee shall take any
\naction contrary to, or disturb, Service Taker’s rights under the Services
\nAgreement, Operator’s rights under the O&M Agreement or the rights of General
\nPartner and Affiliated Partner under the Partnership Agreement.<\/p>\n
(g) Each and every right, power and remedy herein given to
\nIndenture Trustee specifically or otherwise in this Indenture shall be
\ncumulative and shall be in addition to every <\/p>\n
-49-<\/p>\n
other right, power and remedy herein specifically given or now or hereafter
\nexisting at law, in equity or by statute, each and every right, power and
\nremedy whether specifically herein given or otherwise existing may, subject
\nto the limitations set forth herein, be exercised from time to time and as
\noften in such order as may be deemed expedient by Indenture Trustee, and the
\nexercise or the beginning of the exercise of any power or remedy shall not be
\nconstrued to be a waiver of the right to exercise at the same time or
\nthereafter any other right, power or remedy. No delay or omission by
\nIndenture Trustee or any Holder in the exercise of any right, remedy or power
\nor in pursuing any remedy shall impair any such right, power or remedy or be
\nconstrued to be a waiver of any default on the part of Nonaffiliated Partner
\nTrustee, Partnership, General Partner, Guarantor, Operator or Service Taker
\nor to be an acquiescence therein. The giving, taking or enforcement of any
\nother additional security, collateral or guaranty for the payment and
\nperformance of Secured Obligations shall not operate to impair, affect, waive
\nor prejudice the Lien of this Indenture or any rights, powers or remedies
\nhereunder. Neither Indenture Trustee nor any Holder shall be required to
\nlook to any additional security, collateral or guaranty, or exhaust any
\nremedies with respect thereto, before exercising remedies hereunder or under
\nthe Partnership Agreement, Participation Agreement, the Services Agreement,
\nthe Guaranty, or the O&M Agreement in accordance with the terms hereof or
\nthereof.<\/p>\n
8.4 WAIVER OF NONAFFILIATED PARTNER TRUSTEE AND PARTNERSHIP. To the
\nextent now or at any time hereafter enforceable under applicable law,
\nNonaffiliated Partner Trustee and Partnership each covenants that it will not
\n(i) at any time insist upon or plead, or in any manner whatsoever claim or take
\nany benefit or advantage of, any stay or extension law now or at any time
\nhereafter in force, nor claim, take or insist upon any benefit or advantage of
\nor from any law now or hereafter in force providing for the valuation or
\nappraisal of the Indenture Estate or any part thereof before any sale or sales
\nthereof to be made pursuant hereto, or to the decree, judgment or order of any
\ncourt of competent jurisdiction; nor (ii) after such sale or sales, claim or
\nexercise any right under any statute now or hereafter made or enacted by any
\nstate or otherwise to redeem the property so sold or any part thereof, and to
\nthe extent now or at any time hereafter enforceable under applicable law hereby
\nexpressly waives for itself and on behalf of each and every Person, except
\ndecree or judgment creditors of Nonaffiliated Partner Trustee acquiring any
\ninterest in or title to the Indenture Estate or any part thereof subsequent to
\nthe date of this Indenture, all benefit and advantage of any<\/p>\n
-50-<\/p>\n
such law or laws, and covenants that it will not invoke or utilize any such
\nlaw or laws or otherwise hinder, delay or impede the execution of any power
\nherein granted and delegated to Indenture Trustee, but will suffer and permit
\nthe execution of every such power as though no such law or laws had been made
\nor enacted. Nothing in this Section 8.4 shall be deemed to be a waiver by
\nNonaffiliated Partner Trustee or Partnership of its rights under the
\nexception to Section 8.3(a) and under Section 8.3(e).<\/p>\n
8.5 WAIVER OF EXISTING DEFAULTS. A Majority In Interest by notice to
\nIndenture Trustee may waive on behalf of the Holders an existing Indenture
\nDefault or Indenture Event of Default and its consequences except (a) an
\nIndenture Default or Indenture Event of Default in the payment of the principal
\nof, Premium, if any, or interest on, any Note or (b) in respect of a covenant or
\nprovision hereof which pursuant to Section 11.3 cannot be amended or modified
\nwithout the consent of the Holder affected.<\/p>\n
8.6 CONTROL BY HOLDERS. A Majority In Interest may direct the time,
\nmethod and place of conducting any proceeding for any remedy available to
\nIndenture Trustee or exercising any trust or power conferred on it by this
\nIndenture. However, Indenture Trustee may refuse to follow any direction that
\nconflicts with law or this Indenture, that is unduly prejudicial to the rights
\nof the Holders so affected, or that would subject Indenture Trustee to personal
\nliability.<\/p>\n
8.7 LIMITATION ON SUITS BY HOLDERS. A Holder may pursue a remedy
\nunder this Indenture or under a Note only if:<\/p>\n
(a) the Holder gives to Indenture Trustee written notice of a
\ncontinuing Indenture Event of Default under this Indenture;<\/p>\n
(b) a Majority In Interest make a written request to Indenture
\nTrustee to pursue the remedy;<\/p>\n
(c) such Holder or Holders offer to Indenture Trustee indemnity
\nsatisfactory to Indenture Trustee against any loss, liability or expense to be,
\nor which may be, incurred by Indenture Trustee in pursuing the remedy;<\/p>\n
(d) Indenture Trustee does not comply with the request within
\n60 days after receipt of the request and the offer of indemnity; and<\/p>\n
-51-<\/p>\n
(e) during such 60-day period, a Majority In Interest does not
\ngive Indenture Trustee a direction inconsistent with the request.<\/p>\n
A Holder may not use this Indenture to prejudice the rights of
\nanother Holder or to obtain a preference or priority over another Holder.<\/p>\n
8.8 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any other
\nprovision of this Indenture, the right of any Holder to receive payment of
\nprincipal of, Premium, if any, and interest on a Note on or after the respective
\ndue dates expressed in such Note shall not be impaired or affected without the
\nconsent of such Holder.<\/p>\n
8.9 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM. Indenture Trustee may
\nfile such proofs of claim and other papers or documents as may be necessary or
\nadvisable in order to have the claims of Indenture Trustee and of the Holders
\nallowed in any judicial proceedings relating to Partnership, Guarantor, Service
\nTaker, Operator or Nonaffiliated Partner Trustee, their respective creditors, or
\ntheir property.<\/p>\n
SECTION 9. INDENTURE TRUSTEE.<\/p>\n
9.1 RIGHTS AND DUTIES OF INDENTURE TRUSTEE.<\/p>\n
(a) Indenture Trustee accepts the trusts hereby created and
\napplicable to it and agrees to perform its duties with respect to the same but
\nonly upon the terms of this Indenture, and agrees to receive and disburse all
\nmoneys constituting part of the Indenture Estate in accordance herewith and
\napplicable law.<\/p>\n
(b) Before Indenture Trustee acts or refrains from acting, it
\nmay consult with counsel or require an Officer’s Certificate or an opinion of
\ncounsel from General Partner, Partnership or Nonaffiliated Partner Trustee after
\nwhich it will take such action or refrain from acting as it deems appropriate.
\nIndenture Trustee shall not be liable for any action it takes or omits to take
\nin good faith and in accordance herewith in reliance on a resolution of the
\nBoard of Directors of General Partner, the written advice of counsel acceptable
\nto Nonaffiliated Partner Trustee and Indenture Trustee, Officer’s Certificates
\nor opinions of counsel provided by General Partner, Partnership or Nonaffiliated
\nPartner Trustee.<\/p>\n
-52-<\/p>\n
(c) Indenture Trustee may act through agents appointed with due
\ncare and shall be responsible for the misconduct or negligence of any such
\nagent; except that Indenture Trustee shall not be responsible for the misconduct
\nor negligence of any agent appointed at the request of the Holders.<\/p>\n
(d) Indenture Trustee shall not be liable for any action it
\ntakes or omits to take which it in good faith believes to be authorized or
\nwithin its rights or powers.<\/p>\n
(e) Indenture Trustee may refuse to perform any duty or
\nexercise any right or power unless it receives indemnity satisfactory to it
\nagainst any loss, liability or expense.<\/p>\n
(f) Subject to Section 9.3, Indenture Trustee shall not be
\nliable for interest on any money received by it except as Indenture Trustee may
\notherwise agree in writing with General Partner, Partnership or Nonaffiliated
\nPartner Trustee. Money held in trust by Indenture Trustee need not be
\nsegregated from other funds except to the extent required by law.<\/p>\n
(g) Notwithstanding any other provision of this Section 9,
\nwhether or not an Indenture Event of Default under this Indenture exists,
\nIndenture Trustee shall exercise its rights and powers under this Indenture, and
\nuse the same degree of care and skill in their exercise, as a prudent person
\nwould exercise or use under the circumstances in the conduct of his or her own
\naffairs.<\/p>\n
(h) Except during the existence of an Indenture Event of
\nDefault:<\/p>\n
(i) Indenture Trustee need perform only those duties that are
\n specifically set forth in this Indenture, and no implied covenants or
\n obligations shall be read into this Indenture against Indenture Trustee.<\/p>\n
(ii) In the absence of bad faith on its part, Indenture Trustee
\n may conclusively rely, as to the truth of the statements and the
\n correctness of the opinions expressed therein, upon certificates or
\n opinions furnished to Indenture Trustee and conforming to the
\n requirements of this Indenture. However, Indenture Trustee shall examine
\n the certificates and opinions to determine whether or not they
\n substantially conform to the requirements of this Indenture.<\/p>\n
-53-<\/p>\n
(i) Indenture Trustee may not be relieved from liability for
\nits own negligent action, its own negligent failure to act or its own wilful
\nmisconduct, except that:<\/p>\n
(i) This Section 9.1(i) does not limit the effect of Section
\n 9.1(h).<\/p>\n
(ii) Indenture Trustee shall not be liable for any error of
\n judgment made in good faith by a responsible officer or officers, unless
\n it shall be proved that Indenture Trustee was negligent in ascertaining
\n the pertinent facts.<\/p>\n
(iii) Indenture Trustee shall not be liable with respect to any
\n action it takes or omits to take in good faith in accordance with the
\n direction received by it pursuant to Section 8.6.<\/p>\n
(j) Every provision of this Indenture that in any way relates
\nto Indenture Trustee is subject to Sections 9.1(g), 9.1(h) and 9.1(i).<\/p>\n
9.2 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. Indenture Trustee in its
\nindividual or any other capacity may become the owner or pledgee of Notes and
\nmay otherwise have business relationships with Nonaffiliated Partner Trustee,
\nany Beneficiary, BJ USA or an Affiliate of any thereof with the same rights it
\nwould have if it were not Indenture Trustee. Any agent may do the same with
\nlike rights.<\/p>\n
9.3 FUNDS MAY BE HELD BY INDENTURE TRUSTEE; INVESTMENTS. Any moneys
\n(including for the purpose of this Section 9.3 any cash deposited with Indenture
\nTrustee or Permitted Investments purchased by the use of such cash pursuant to
\nthis Section 9.3 or any cash constituting the proceeds of the maturity, sale or
\nother disposition of any Permitted Investment) held by Indenture Trustee
\nhereunder as part of the Indenture Estate, until paid out by Indenture Trustee
\nas herein provided, (a) subject to clause (b) below, may be carried by
\nIndenture Trustee on deposit with itself or on deposit to its account with any
\nbank, trust company or national banking association incorporated or doing
\nbusiness under the laws of the United States of America or one of the States
\nthereof having combined capital and surplus and retained earnings of at least
\n$1,000,000,000 and having a rating assigned to the long-term unsecured debt of
\nsuch institutions by Standard & Poor’s Corporation and Moody’s Investors
\nService, Inc. at least equal to AA and AA2, respectively, and Indenture Trustee
\nshall not have any <\/p>\n
-54-<\/p>\n
liability for interest upon any such moneys except as otherwise agreed in
\nwriting with Nonaffiliated Partner Trustee, General Partner or Partnership;
\nprovided, that Indenture Trustee shall not seek indemnity or reimbursement
\nfrom any Holder as a result of liability for interest, or (b) at any time
\nand from time to time at the request of General Partner acting as the agent
\nof Nonaffiliated Partner Trustee solely for purposes of this Section 9.3,
\nshall be invested and reinvested in Permitted Investments as specified in
\nsuch request (if such investments are reasonably available for purchase); and
\nsuch Permitted Investments shall be held by Indenture Trustee in trust as
\npart of the Indenture Estate until so sold; except that General Partner, as
\nagent of Nonaffiliated Partner Trustee solely for purposes of this Section
\n9.3, shall upon demand pay to Indenture Trustee the amount of any loss
\nrealized upon maturity, sale or other disposition of any such Permitted
\nInvestment. Any net income, profit, interest, dividend or gain realized upon
\nmaturity, sale or other disposition of any Permitted Investment shall be held
\nas part of the Indenture Estate and shall be applied by Indenture Trustee at
\nthe same time, on the same conditions and in the same manner as the amounts
\nin respect of which such income, profit, interest, dividend or gain was
\nrealized are required to be distributed in accordance with the provisions
\nhereof. Indenture Trustee shall not be responsible for any losses on any
\ninvestments or sales of Permitted Investments made pursuant to the procedure
\nspecified in this Section 9.3.<\/p>\n
9.4 NOTICE OF DEFAULTS.<\/p>\n
(a) If an Indenture Event of Default under this Indenture
\nexists and if it is actually known to Indenture Trustee, Indenture Trustee shall
\npromptly send written notice thereof to General Partner (on behalf of
\nPartnership), Nonaffiliated Partner Trustee, Beneficiaries and the Holders
\n(except Indenture Trustee shall not be obligated to provide such notice to any
\nsuch Person if such Person had informed Indenture Trustee of such Indenture
\nEvent of Default). In addition, if an Indenture Default under this Indenture
\nexists and if a responsible officer of Indenture Trustee has actual knowledge
\nthereof, Indenture Trustee shall promptly send written notice thereof to General
\nPartner (on behalf of Partnership), Nonaffiliated Partner Trustee, Beneficiaries
\nand the Holders. Subject to Sections 9.4(c) and 9.5, Indenture Trustee shall
\ntake or refrain from taking such action, not inconsistent with the provisions of
\nthe Basic Documents, with respect thereto as the Majority in Interest shall
\ndirect by written instruction to Indenture Trustee. If Indenture Trustee gives
\nthe Holders written notice of any event and does not receive written instruction
\nas <\/p>\n
-55-<\/p>\n
above provided within 20 days after mailing notice of such event to the
\nHolders, Indenture Trustee may, subject to the Basic Documents, take or
\nrefrain from taking such action, but shall be under no duty to, or shall have
\nno liability for a failure or refusal to, take or refrain from taking any
\naction with respect thereto as it determines to be advisable in the best
\ninterests of the Holders.<\/p>\n
(b) Notice pursuant to this Section 9.4 shall be transmitted in
\nthe manner provided in Section 13.1 to all Holders, as the names and addresses
\nof such Holders appear upon the Register.<\/p>\n
(c) Subject to the terms of, and except as otherwise provided in
\nSections 8, 9.5 and 11, upon the written instructions at any time and from time
\nto time of a Majority in Interest of the Holders (or of Holders holding at least
\n66 2\/3% of the Outstanding Notes in the case of an action to be taken pursuant
\nto that Section 11.3), Indenture Trustee shall take such of the following
\nactions as may be specified in such instructions: (i) exercise such election
\nor option, or make such decision or determination, or give such notice, consent,
\nwaiver or approval or exercise such right, remedy or power to take such other
\naction hereunder or in respect of any part or all of the Indenture Estate as
\nspecified in such instructions; (ii) take such action with respect to, or to
\npreserve or protect, the Indenture Estate (including the discharge of Liens) as
\nspecified in such instruction and as are consistent with this Indenture and the
\nother Basic Documents; and (iii) take such other action in respect of the
\nsubject matter of this Indenture as is consistent with the terms hereof and of
\nthe Basic Documents.<\/p>\n
9.5 COMPENSATION.<\/p>\n
(a) Nonaffiliated Partner Trustee shall pay to Indenture
\nTrustee, from time to time, on demand, the following amounts:(i) reasonable
\ncompensation for Indenture Trustee’s services, which compensation shall not be
\nlimited by any law on compensation of a trustee of an express trust,
\n(ii) reimbursement for all reasonable out-of-pocket expenses incurred by
\nIndenture Trustee in connection with the performance of its duties under this
\nIndenture (including the reasonable compensation and expenses of Indenture
\nTrustee’s counsel in accordance with Section 9.1(b) and any agent appointed in
\naccordance with Section 9.1(c)) and (iii) any expense, loss or liability
\nincurred by it arising out of or in connection with its acceptance or
\nadministration of the trust or trusts hereunder except (1) such expenses or
\nloss or liability <\/p>\n
-56-<\/p>\n
resulting from the negligence or wilful misconduct of Indenture Trustee or
\nthe inaccuracy of any representation or warranty of Indenture Trustee in its
\nindividual capacity in Section 3.3 of the Participation Agreement, (2) as
\notherwise provided in Section 9.9 and (3) as excluded by Sections 7.1 and
\n7.2 of the Participation Agreement from BJ USA’s indemnities under said
\nSections; except that, so long as the Partnership Agreement is in effect,
\nIndenture Trustee shall not make any claim against Nonaffiliated Partner
\nTrustee under this Section 9.5 for any claim or expense for which BJ USA is
\nliable, or for which Nonaffiliated Partner Trustee is indemnified against by
\nBJ USA, under the Participation Agreement without first making demand on BJ
\nUSA for payment of such claim or expense. Indenture Trustee shall notify
\nNonaffiliated Partner Trustee and BJ USA promptly of any claim or expense for
\nwhich it may seek indemnity.<\/p>\n
(b) To secure the payment obligations of Nonaffiliated Partner
\nTrustee pursuant to this Section 9.5, Indenture Trustee shall have a Lien prior
\nto that of the Holders on all money or property held or collected from
\nPartnership or Nonaffiliated Partner Trustee by Indenture Trustee, except that
\nheld in trust to pay the principal of, Premium, if any, and interest on, the
\nNotes.<\/p>\n
9.6 REPLACEMENT OF INDENTURE TRUSTEE.<\/p>\n
(a) The resignation or removal of Indenture Trustee and the
\nappointment of a successor Indenture Trustee shall become effective only upon
\nthe successor Indenture Trustee’s acceptance of appointment as provided in this
\nSection 9.6.<\/p>\n
(b) Indenture Trustee may resign by giving at least 30 days’
\nprior written notice to General Partner (on behalf of Partnership),
\nNonaffiliated Partner Trustee, Beneficiaries and the Holders. A Majority In
\nInterest may remove Indenture Trustee, and also may appoint a successor
\nIndenture Trustee, by giving at least 30 days’ prior written notice to Indenture
\nTrustee, Nonaffiliated Partner Trustee, Beneficiaries and General Partner (on
\nbehalf of Partnership). Nonaffiliated Partner Trustee (whether or not acting
\npursuant to instructions from Beneficiaries) may remove Indenture Trustee if:<\/p>\n
(i) Indenture Trustee fails to comply, with Section 9.8;<\/p>\n
-57-<\/p>\n
(ii) Indenture Trustee is adjudged a bankrupt or an insolvent;<\/p>\n
(iii) a receiver or public officer takes charge of Indenture
\n Trustee or its property; or<\/p>\n
(iv) Indenture Trustee becomes incapable of acting.<\/p>\n
(c) If (i) Indenture Trustee resigns or is removed, (ii) the
\nHolders have removed Indenture Trustee pursuant to the second sentence of
\nSection 9.6(b) and have not appointed a successor within 30 days or (iii) a
\nvacancy otherwise exists in the office of Indenture Trustee for any reason, then
\nNonaffiliated Partner Trustee may, subject to prior action being taken pursuant
\nto Section 9.6(d), promptly appoint a successor Indenture Trustee.<\/p>\n
(d) If a successor Indenture Trustee does not take office
\nwithin 30 days after the retiring Indenture Trustee resigns or is removed, the
\nretiring Indenture Trustee, General Partner (on behalf of Partnership),
\nBeneficiaries or a Majority In Interest may petition any court of competent
\njurisdiction for the appointment of a successor Indenture Trustee.<\/p>\n
(e) If Indenture Trustee fails to comply with Section 9.8, any
\nHolder may petition any court of competent jurisdiction for the removal of such
\nIndenture Trustee and the appointment of a successor Indenture Trustee.<\/p>\n
(f) A successor Indenture Trustee shall deliver a written
\nacceptance of its appointment to the retiring Indenture Trustee, to General
\nPartner (on behalf of Partnership), to Beneficiaries and to Nonaffiliated
\nPartner Trustee. Thereupon, the resignation or removal of the retiring
\nIndenture Trustee shall become effective, and the successor Indenture Trustee
\nshall have all the rights, powers and duties of the retiring Indenture Trustee
\nfor which the successor Indenture Trustee is to be acting under this Indenture.
\nThe retiring Indenture Trustee shall promptly transfer all property and all
\nbooks and records relating to the administration of the Indenture Estate held by
\nit as Indenture Trustee to the successor Indenture Trustee subject to the Lien
\nprovided for in Section 9.5(b). Nonaffiliated Partner Trustee shall give notice
\nof each appointment of a successor Indenture Trustee by mailing written notice
\nof such event by first-class mail to Holders.<\/p>\n
-58-<\/p>\n
9.7 SUCCESSOR INDENTURE TRUSTEE BY MERGER, ETC. If Indenture Trustee
\nconsolidates with, merges or converts into, or transfers all or substantially
\nall of its corporate trust business assets to, another corporation, the
\nsuccessor corporation, without any further act, shall be the successor Indenture
\nTrustee.<\/p>\n
9.8 ELIGIBILITY; DISQUALIFICATION. Indenture Trustee shall at all
\ntimes (including after giving effect to any of the events described in Section
\n9.7) have a combined capital and surplus of at least $100,000,000 and shall be
\nsubject to supervision or examination by Federal or state authority. If
\nIndenture Trustee publishes reports of condition at least annually, pursuant to
\nlaw or to the requirements of Federal or state supervising or examining
\nauthority, then for the purposes of this Section 9.8, the combined capital and
\nsurplus of Indenture Trustee shall be deemed to be its combined capital and
\nsurplus as set forth in its most recent report of conditions so published.<\/p>\n
If at any time Indenture Trustee ceases to be eligible in
\naccordance with this Section 9.8, Indenture Trustee shall resign immediately in
\nthe manner and with the effect specified in Section 9.6.<\/p>\n
9.9 TRUSTEE’S LIENS. Indenture Trustee in its individual capacity
\nagrees that it will at its own cost and expense promptly take such action as may
\nbe necessary to comply with the provisions of Section 5.9 of the Participation
\nAgreement.<\/p>\n
9.10 WITHHOLDING TAXES; INFORMATION REPORTING. Indenture Trustee shall
\nexclude and withhold from each distribution of principal, Premium, if any, and
\ninterest and other amounts due hereunder or under the Notes any and all
\nwithholding taxes applicable thereto as required by law (provided, however, no
\nsuch exclusion or withholding shall be made from such distribution if Indenture
\nTrustee shall have received a duly exercised and properly completed U.S.
\nInternal Revenue Service Form W-9 or 1001 or any substitute Form which may be
\napplicable). Indenture Trustee agrees (a) to act as such withholding agent
\nand, in connection therewith, whenever any present or future taxes or similar
\ncharges are required to be withheld with respect to any amounts payable in
\nrespect of the Notes, to withhold such amounts and timely pay the same to the
\nappropriate authority in the name of and on behalf of the Holders, (b) that it
\nwill file any necessary withholding tax returns or statements when due and (c)
\nthat, as promptly as possible after the payment of such amounts, it will deliver
\nto each Holder appropriate documentation showing the payment of such <\/p>\n
-59-<\/p>\n
amounts, together with such additional documentary, evidence as such Holders
\nmay reasonably request from time to time. Indenture Trustee agrees to file
\nany other information reports relating to withholding taxes as it may be
\nrequired to file under United States law.<\/p>\n
9.11 CO-TRUSTEE. At any time, for the purpose of meeting any legal
\nrequirements of any jurisdiction in which any part of the Indenture Estate may
\nat the time be located, Indenture Trustee shall have the power, subject to
\nreceipt of the prior written approval of Nonaffiliated Partner Trustee as long
\nas no Indenture Event of Default exists, and shall execute and deliver all
\ninstruments necessary, to appoint one or more Persons to act as co-trustee, or
\nco-trustees, or separate trustee or separate trustees, of all or any part of the
\nIndenture Estate, and to vest in such Person or Persons in such capacity, such
\ninterest in the Indenture Estate or any part thereof, and such rights, powers,
\nduties, trusts or obligations as Indenture Trustee may consider necessary or
\ndesirable.<\/p>\n
SECTION 10. SATISFACTION AND DISCHARGE; TERMINATION
\n OF OBLIGATIONS.<\/p>\n
10.1 SATISFACTION AND DISCHARGE OF AGREEMENT; TERMINATION OF
\nOBLIGATIONS. Subject to Section 10.2, this Indenture shall cease to be of
\nfurther force or effect, and Nonaffiliated Partner Trustee and Indenture Trustee
\nshall, except as herein provided, be deemed to have been discharged from their
\nrespective obligations with respect to the Notes (and Indenture Trustee, on
\ndemand and at the reasonable expense of Nonaffiliated Partner Trustee, shall
\nexecute proper instruments acknowledging satisfaction and discharge of this
\nIndenture in respect of the Notes upon delivery of satisfactory evidence that
\nall Notes theretofore authenticated have been fully paid or discharged), when
\nall accrued and unpaid Secured Obligations has been fully paid or there shall
\nhave been deposited with Indenture Trustee in trust for the purpose of paying
\nand discharging such accrued and unpaid Secured Obligations, an amount in cash
\nsufficient without reinvestment thereof to discharge such accrued and unpaid
\nSecured Obligations, including the principal of, and Premium, if any, and
\ninterest on the Notes to the date of such deposit (in the case of Notes which
\nhave become due and payable), or to the maturity thereof, as the case may be.<\/p>\n
10.2 SURVIVAL OF CERTAIN OBLIGATIONS. Notwithstanding Section 10.1,
\nthe obligations of Nonaffiliated Partner Trustee and Indenture Trustee contained
\nin Sections 2.1 through 2.8, 7.1, 9.9, <\/p>\n
-60-<\/p>\n
9.10, 10.3 and 10.4 and the rights, duties, immunities and privileges
\nhereunder of Indenture Trustee shall survive the discharge of this Indenture.<\/p>\n
10.3 MONEYS TO BE HELD IN TRUST. All moneys deposited with Indenture
\nTrustee pursuant to Section 10.1 shall be held in trust and applied by it, in
\naccordance with the Notes and this Indenture, to the payment to the Holders,
\nIndenture Trustee or any other Person entitled thereto, as applicable, of all
\nsums due and to become due thereon for principal, Premium, if any, and interest
\nand all other Secured Obligations, if any.<\/p>\n
10.4 MONEYS TO BE RETURNED TO NONAFFILIATED PARTNER TRUSTEE. Indenture
\nTrustee shall promptly pay or return to Nonaffiliated Partner Trustee upon
\nrequest of Nonaffiliated Partner Trustee any money held by it at any time that
\nis not required for the payment of the amounts described above in Section 10.3
\nfor which money has been deposited pursuant to Section 10.1.<\/p>\n
SECTION 11. AMENDMENTS AND WAIVERS.<\/p>\n
11.1 AMENDMENTS TO THIS INDENTURE WITHOUT CONSENT OF HOLDERS.
\nNonaffiliated Partner Trustee, Partnership and Indenture Trustee may enter into
\none or more written agreements supplemental hereto without the consent of any
\nHolder for any of the following purposes:<\/p>\n
(a) to cure any defect or inconsistency herein or in the Notes,
\nto make any change not inconsistent with the provisions hereof or to cure any
\nambiguity or correct any mistake, provided that such change does not adversely
\naffect the interests of any Holder;<\/p>\n
(b) to evidence the succession of another party as
\nNonaffiliated Partner Trustee in accordance with the terms of the Trust
\nAgreement or to evidence (in accordance with Section 9) the succession of a new
\nIndenture Trustee hereunder, the removal of Indenture Trustee hereunder or the
\nappointment of any co-trustee or co-trustees or any separate or additional
\ntrustee or trustees to Indenture Trustee or Nonaffiliated Partner Trustee;<\/p>\n
(c) to subject to the Lien of this Indenture additional
\nproperty hereafter acquired by Nonaffiliated Partner Trustee or Partnership and
\nintended to be subjected to the Lien of this Indenture;<\/p>\n
-61-<\/p>\n
(d) to correct or amplify the description of any property at
\nany time subject to the Lien of this Indenture or better to assure, convey and
\nconfirm unto Indenture Trustee any property subject or required to be subject to
\nthe Lien of this Indenture;<\/p>\n
(e) to add to the covenants of Nonaffiliated Partner Trustee or
\nPartnership for the benefit of Holders, or to surrender any rights or power
\nherein conferred upon Nonaffiliated Partner Trustee, Partnership, Beneficiaries
\nor General Partner;<\/p>\n
(f) to add to the rights of Holders;<\/p>\n
(g) to include on the Notes any legend required by law; or<\/p>\n
(h) to permit the qualification of this Indenture under the
\nTrust Indenture Act of 1939, as amended, or any similar federal statute
\nhereafter in effect, except that nothing herein contained shall permit or
\nauthorize the inclusion of the provisions referred to in Section 316(a)(2) of
\nsaid Trust Indenture Act of 1939 or any corresponding provision in any similar
\nfederal statute hereafter in effect.<\/p>\n
11.2 SUPPLEMENTS TO PARTNERSHIP AGREEMENT, GUARANTY, SERVICES AGREEMENT
\nAND O&M AGREEMENT WITHOUT HOLDER CONSENT. Indenture Trustee, from time to time
\nand at any time, subject to the restrictions contained in this Indenture, may,
\nwithout the consent of Holders, consent to any amendment of or supplement to the
\nPartnership Agreement, the Guaranty, the Services Agreement or the O&M Agreement
\nfor any one of the following purposes:<\/p>\n
(a) to adjust the Priority Distributions, Disposition Values,
\nand Disposition Amounts pursuant to Section 2.7 of the Participation Agreement,
\nsubject to all of the conditions set forth therein, if, on or before the
\neffective date of any adjustment pursuant to the provisions of this
\nSection 11.2(b), Indenture Trustee shall have received an Officer’s Certificate
\nof General Partner (on behalf of Partnership), addressed to Holders and
\nIndenture Trustee and to the effect that, after giving effect to such
\nadjustment, the amount of Priority Distributions distributable on each Payment
\nDate under the Partnership Agreement equals or exceeds the amount payable on
\nsuch date for principal and accrued interest on all the Notes, and the amounts
\nof Disposition Amount payable on any date under the Partnership Agreement or<\/p>\n
-62-<\/p>\n
Participation Agreement equals or exceeds the unpaid principal amount of all the
\nNotes and accrued interest.<\/p>\n
(b) if requested by Nonaffiliated Partner Trustee, to agree to
\nany other amendment made to the Partnership Agreement, the Services Agreement,
\nthe O&M Agreement or the Guaranty solely with respect to matters that
\nconstitute, or relate to, Excepted Property, Other Equipment or any other
\nProperty not subject to the Lien of this Indenture.<\/p>\n
11.3 AMENDMENTS WITH CONSENT OF HOLDERS.<\/p>\n
(a) With the written consent of Holders of not less than
\n66-2\/3% of the unpaid principal balance of the Notes, (x) Nonaffiliated Partner
\nTrustee and Partnership may take any action prohibited, or omit the taking of
\nany action required, by any of the provisions of this Indenture or any agreement
\nsupplemental hereto, (y) Nonaffiliated Partner Trustee, Partnership and
\nIndenture Trustee may enter into such written supplemental agreements to add any
\nprovisions to or to change or eliminate any provisions of this Indenture or of
\nany such supplemental agreements, or to modify the rights of Holders, or (z)
\nNonaffiliated Partner Trustee and Partnership may enter into such written
\nsupplemental agreements to add any provisions to or to change or eliminate any
\nprovisions of the Partnership Agreement, the Services Agreement, the O&M
\nAgreement or the Guaranty or of any supplemental agreements thereto, or to
\nmodify the obligations of Nonaffiliated Partner Trustee, Partnership, General
\nPartner, Affiliated Partner, Operator, Service Taker or Guarantor thereunder;
\nprovided, however, that, without the consent of each Holder affected thereby, an
\namendment under this Section 11.3 may not:<\/p>\n
(i) reduce any amount payable with respect to, principal,
\n Premium, if any, or interest on, any Note held by such Holder;<\/p>\n
(ii) change the date on which any principal of, Premium, if any,
\n or interest on any Note held by such Holder, is due or payable or
\n otherwise affect the terms of payment of any Note or change to a location
\n outside the United States the place of payment where, or the coin or
\n currency in which, any payment hereunder is payable;<\/p>\n
(iii) reduce the amount of any capital contribution to be
\n contributed or any Priority Distribution, Supplemental <\/p>\n
-63-<\/p>\n
Priority Distribution or Special Distribution to be distributed under the
\n Partnership Agreement so that the same is less than the scheduled payment
\n of principal of, Premium, if any, and interest on any Notes held by such
\n Holder intended to be made by Nonaffiliated Partner Trustee from such
\n distributions;<\/p>\n
(iv) create any Lien on the Indenture Estate except such as are
\n permitted by this Indenture, or deprive any Holders of the benefit of the
\n Lien on the Indenture Estate created by this Indenture;<\/p>\n
(v) reduce the percentage in principal amount of the
\n Outstanding Notes, the consent of whose Holders is required for any such
\n supplemental agreement, or the consent of whose Holders is required for
\n any waiver (of compliance with certain provisions of this Indenture or of
\n defaults hereunder or their consequences) provided for in this Indenture;
\n or<\/p>\n
(vi) make any change in Sections 8.5 through 8.8 or this Section
\n 11.3(a).<\/p>\n
(b) Promptly after the execution by Nonaffiliated Partner
\nTrustee and Indenture Trustee of any supplemental agreement or other amendment
\npursuant to Section 11.1, 11.2 or this 11.3, Indenture Trustee shall transmit by
\nfirst-class mail a notice, setting forth in general terms the substance of such
\nsupplemental agreement or other amendment, together with a conformed copy
\nthereof, to all Holders, as the names and addresses of such Holders appear on
\nthe Register. Any failure of Indenture Trustee to mail such notice, or any
\ndefect therein, shall not, however, in any way impair or affect the validity of
\nany such supplemental agreement.<\/p>\n
11.4 NOTATION ON OR EXCHANGE OF NOTES. Indenture Trustee may place an
\nappropriate notation about an amendment or waiver on any Note thereafter
\nexecuted. Indenture Trustee in exchange for any Notes may execute new Notes
\nthat reflect the amendment or waiver.<\/p>\n
11.5 INDENTURE TRUSTEE PROTECTED. Indenture Trustee need not sign any
\nsupplemental agreement or other amendment pursuant to Section 11.2 or 11.3 that
\nadversely affects its rights.<\/p>\n
11.6 OPINION OF COUNSEL CONCLUSIVE AS TO SUPPLEMENTS. Indenture
\nTrustee may receive an opinion of counsel selected by it <\/p>\n
-64-<\/p>\n
(which may be independent counsel for General Partner, Partnership or
\nNonaffiliated Partner Trustee) as conclusive evidence that any waiver,
\nconsent or supplemental agreement or other amendment executed pursuant to
\nthis Section 11 complies with the requirements of this Section 11.<\/p>\n
SECTION 12. ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS.<\/p>\n
12.1 ACTIONS TO BE TAKEN UPON EXERCISE OF CERTAIN RIGHTS. Upon any of:<\/p>\n
(a) a Reduction Election with respect to any Unit pursuant to
\nSection 5.16 of the Participation Agreement and Section 7.2(e) of the
\nPartnership Agreement on a Reduction Date, and upon payment to Indenture Trustee
\non a Prepayment Date of an amount equal to the Prepayment Price of the required
\nportion of the Outstanding Notes determined pursuant to Section 6.1(b);<\/p>\n
(b) the purchase by General Partner or its designee of the
\nPartnership Interest of Nonaffiliated Partner Trustee pursuant to Section 9.1 or
\n9.4 of the Partnership Agreement on the ET Date or the Special P.O. Date,
\nrespectively, and upon payment to Indenture Trustee on such date of an amount
\nequal to the Prepayment Price of the required portion of the Outstanding Notes
\ndetermined pursuant to Section 6.1(c);<\/p>\n
(c) the exercise by Partnership of its right to remove the Lien
\nof this Indenture with respect to a Unit on the relevant date, following an
\nEvent of Loss suffered by such Unit under circumstances where Partnership does
\nnot exercise its option to substitute replacement equipment therefor pursuant to
\nSection 5.12 of the Participation Agreement and Section 7.2(c) of the
\nPartnership Agreement, and upon payment to Indenture Trustee of an amount equal
\nto the Prepayment Price as at the Prepayment Date of the required portion of the
\nOutstanding Notes determined pursuant to Section 6.1(a);<\/p>\n
(d) the exercise of Partnership’s right to remove the Lien of
\nthis Indenture with respect to any Unit to be replaced in connection with a
\nsubstitution pursuant to Section 5.11 of the Participation Agreement and Section
\n7.2(d) of the Partnership Agreement or Section 5.12 of the Participation
\nAgreement and Section 7.2(c) of the Partnership Agreement, and upon compliance
\nwith the terms of such Section 5.11 or 5.12, as the case may be, of the
\nParticipation Agreement and the attachment of the Lien of the <\/p>\n
-65-<\/p>\n
Indenture to the Unit being delivered to Nonaffiliated Partner Trustee in
\nsubstitution for the Unit being replaced;<\/p>\n
(e) satisfaction, discharge, defeasance and termination of the
\nobligations under this Indenture in accordance with Section 10.1;<\/p>\n
then Indenture Trustee shall, without recourse or warranty (except as to the
\nabsence of Liens of Persons claiming by, through or under Indenture Trustee)
\ntransfer all of Indenture Trustee’s right, title and interest in and to such
\nUnits to the Person contemplated by the relevant provisions of the Partnership
\nAgreement and Participation Agreement, and Indenture Trustee shall execute such
\ninstruments as may reasonably be requested by General Partner, Nonaffiliated
\nPartner Trustee or any Beneficiary to evidence such termination.<\/p>\n
SECTION 13. MISCELLANEOUS.<\/p>\n
13.1 NOTICES. Unless otherwise expressly specified or permitted by the
\nterms hereof, all communication and notices provided for herein shall be in
\nwriting, and any such notice shall become effective when received (and notices
\ngiven pursuant to clause (b) below shall be deemed received three days after
\nbeing deposited in the mail). Any written notice shall be by (a) personal
\ndelivery thereof, including, without limitation, by overnight mail and courier
\nservice, (b) United States mail, certified, postage prepaid, return receipt
\nrequested or (c) facsimile transmission, in each case effective upon receipt (in
\nthe case of clause (c) as evidenced by the sender’s receipt of electronic
\nconfirmation of the addressee’s receipt), and in each case addressed to the
\nfollowing Person at its respective address set forth below or at such other
\naddress as such Person may from time to time designate by written notice to the
\nother Persons listed below:<\/p>\n
If to BJ USA:<\/p>\n
BJ Services Company U.S.A.
\n 5500 Northwest Central Drive
\n Houston, TX 77092
\n Attention: Mr. Taylor M. Whichard III
\n Facsimile: 713\/895-5420
\n Confirmation No.: 713\/895-5847<\/p>\n
If to Nonaffiliated Partner Trustee:<\/p>\n
-66-<\/p>\n
First Security Trust Company of Nevada
\n 79 South Main Street
\n Salt Lake City, Utah 84111
\n Attention: Corporate Trust Department
\n Facsimile: 801\/246-5053
\n Confirmation No.: 801\/246-5630<\/p>\n
If to any Beneficiary:<\/p>\n
To such Beneficiary at its address set forth on Schedule 1 to the
\n Participation Agreement<\/p>\n
If to Indenture Trustee:<\/p>\n
State Street Bank and Trust Company
\n 2 Avenue de Lafayette
\n Boston, MA 02111
\n Attention: Corporate Trust Department
\n Facsimile: 617\/662-1727
\n Confirmation No.: 617\/662-1462<\/p>\n
If to any Holder:<\/p>\n
To such Holder at its address set forth in the Register.<\/p>\n
13.2 GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE IN ALL
\nRESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK FOR
\nCONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN NEW YORK, INCLUDING ALL
\nMATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, EXCEPT TO THE EXTENT THAT
\nMATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
\nTHE LIEN GRANTED BY THE BASIC DOCUMENTS ARE GOVERNED BY AND CONSTRUED IN
\nACCORDANCE WITH THE UNIFORM COMMERCIAL CODE OF A JURISDICTION OTHER THAN THE
\nSTATE OF NEW YORK.<\/p>\n
13.3 NO RECOURSE AGAINST OTHERS. No director, officer, employee,
\nstockholder or Affiliate, as such, of Guarantor, General Partner, Service Taker,
\nBJ USA, Operator, Nonaffiliated Partner Trustee or any Beneficiary, as the case
\nmay be, shall have any liability for any obligations of Guarantor, General
\nPartner, Service Taker, BJ USA, Operator, Nonaffiliated Partner Trustee or any
\nBeneficiary, as the case may be, under this Indenture or for any claim based on,
\nin respect of or by reason of such obligations or their creation. Each Holder
\nby accepting a Note waives and <\/p>\n
-67-<\/p>\n
releases all such liability. The waiver and release are part of the
\nconsideration for the issue of the Notes.<\/p>\n
13.4 EXECUTION IN COUNTERPARTS. This Indenture may be executed in any
\nnumber of counterparts, and the parties hereto on separate signature pages, each
\nexecuted counterpart constituting an original but altogether only one Indenture.<\/p>\n
13.5 INDENTURE FOR BENEFIT OF NONAFFILIATED PARTNER TRUSTEE, INDENTURE
\nTRUSTEE, BENEFICIARIES AND HOLDERS. Nothing in this Indenture or the Notes,
\nwhether express or implied, shall be construed to give to any Person other than
\nNonaffiliated Partner Trustee, Indenture Trustee, Partnership, Beneficiaries and
\nthe Holders any legal or equitable right, remedy or claim under or in respect of
\nthis Indenture, other than General Partner to the extent expressly provided
\nherein.<\/p>\n
13.6 SEVERABILITY. Whenever possible, each provision of this Indenture
\nshall be interpreted in such manner as to be effective and valid under
\napplicable law, but if any provision of this Indenture shall be prohibited by or
\ninvalid under the laws of any jurisdiction, such provision, as to such
\njurisdiction, shall be ineffective to the extent of such prohibition or
\ninvalidity, without invalidating the remainder of such provision or the
\nremaining provisions of this Indenture as to such jurisdiction or in any other
\njurisdiction.<\/p>\n
13.7 NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No terms or
\nprovisions of this Indenture or the Notes may be waived, discharged or
\nterminated orally, but only by an instrument in writing signed by the party or
\nother Person against whom enforcement of the waiver, discharge or termination is
\nsought; and any waiver of the terms hereof or of any Note shall be effective
\nonly in the specific instance and for the specific purpose given.<\/p>\n
13.8 SUCCESSORS AND ASSIGNS. This Indenture shall be binding upon the
\nparties hereto and their respective successors and assigns and shall inure to
\nthe benefit of, and shall be enforceable by, the parties hereto and their
\nrespective successors and assigns as permitted by and in accordance with the
\nterms hereof and the Basic Documents. Except as expressly provided herein or in
\nthe other Basic Documents, no party hereto may assign its interests herein
\nwithout the consent of the other party hereto. Any request, notice, direction,
\nconsent, waiver or other instrument or action by any Holder shall bind the
\nsuccessors and assigns of such Holder.<\/p>\n
-68-<\/p>\n
13.9 HEADINGS AND TABLE OF CONTENTS. The headings of the Sections of
\nthis Indenture and the Table of Contents are inserted for the purposes of
\nconvenience only and shall not be construed to affect the meaning or
\nconstruction of any of the provisions hereof.<\/p>\n
13.10 NO LEGAL TITLE TO INDENTURE ESTATE IN HOLDERS. No Holder shall
\nhave legal title to any part of the Indenture Estate. No transfer, by operation
\nof law or otherwise, of any Note or other right, title and interest of any
\nHolder in and to the Indenture Estate or the trusts hereunder shall operate to
\nterminate this Indenture or the trusts hereunder or entitle any successor or
\ntransferee of such Holder to an accounting or the transfer to it of legal title
\nto any part of the Indenture Estate.<\/p>\n
13.11 CAPACITY IN WHICH ACTING. Nonaffiliated Partner Trustee acts
\nhereunder solely as trustee herein and in the Trust Agreement provided and not
\nin its individual capacity, except as otherwise expressly provided herein, in
\nthe Trust Agreement and in the Participation Agreement.<\/p>\n
13.12 DIRECTLY OR INDIRECTLY. Where any provision in this Indenture
\nrefers to action to be taken by any Person, or which such Person is prohibited
\nfrom taking, such provision shall be applicable whether such action is taken
\ndirectly or indirectly by such Person.<\/p>\n
-69-<\/p>\n
IN WITNESS WHEREOF, Nonaffiliated Partner Trustee, Partnership and
\nIndenture Trustee have caused this INDENTURE to be duly executed and delivered
\nas of the date first above written.<\/p>\n
FIRST SECURITY TRUST COMPANY OF
\n NEVADA, not in its individual capacity
\n except as expressly provided herein, but
\n solely as Nonaffiliated Partner Trustee<\/p>\n
By: \/s\/ DeAnn Madsen
\n Name: DeAnn Madsen
\n Title: Trust Officer<\/p>\n
S-1<\/p>\n
BJ SERVICES EQUIPMENT II, L.P.<\/p>\n
By: BJ Services Company, U.S.A.,
\n its General Partner<\/p>\n
By: \/s\/ T. M. Whichard
\n T. M. Whichard, Treasurer<\/p>\n
S-2<\/p>\n
STATE STREET BANK AND TRUST COMPANY,
\n as Indenture Trustee<\/p>\n
By: \/s\/ Donald E. Smith
\n Name: Donald E. Smith
\n Title: Vice President<\/p>\n
S-3<\/p>\n
EXHIBIT A
\n TO
\n INDENTURE<\/p>\n
FORM OF NON-RECOURSE NOTES<\/p>\n
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
\n OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY
\n NOT BE OFFERED OR SOLD UNLESS IT IS REGISTERED UNDER APPLICABLE
\n SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
\n AVAILABLE. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN
\n RESTRICTIONS IN SECTION 6.2 OF THE PARTICIPATION AGREEMENT.
\n ADDITIONALLY, THE HOLDER OF THIS NOTE IS OBLIGATED TO KEEP CERTAIN
\n INFORMATION CONFIDENTIAL IN ACCORDANCE WITH SECTION 9.14 OF THE
\n PARTICIPATION AGREEMENT.<\/p>\n
No. $
\n ———- ———–<\/p>\n
Maturity Date: March 17, 2012<\/p>\n
SECURED NOTE —
\n ———-<\/p>\n
(BJ SERVICES TRUST NO. 1999-1)<\/p>\n
First Security Trust Company of Nevada,
\n a Nevada banking corporation,
\n not in its individual capacity
\n but solely as Nonaffiliated
\n Partner Trustee under the
\n Trust Agreement
\n dated as of December 15, 1999<\/p>\n
FIRST SECURITY TRUST COMPANY OF NEVADA, not in its individual capacity,
\nbut solely as Nonaffiliated Partner Trustee (the “Nonaffiliated Partner
\nTrustee”) under that certain Trust Agreement dated as of December 15, 1999,
\nbetween Nonaffiliated Partner Trustee and the institutions referred to therein
\nas the “Beneficiaries” (herein as such Trust Agreement may be amended or
\nsupplemented from time to time called the “Trust Agreement”), for value
\nreceived, hereby promises to pay to __________________ or registered assigns the
\nprincipal sum of _____________________ DOLLARS, or if less, the aggregate unpaid
\nprincipal amount hereof, in installments on each Payment Date as set forth
\nherein with the<\/p>\n
final installments due and payable on the Maturity Date specified above and
\nto pay interest on the principal amount remaining unpaid from time to time at
\nthe rate of, as applicable, 8.09% per annum (computed on the basis of a
\n360-day year of twelve consecutive 30-day months), from _____________, 1999
\nor from the most recent Payment Date (as defined in the Indenture referred to
\nbelow) on which interest has been paid or duly provided for, semi-annually,
\non September 17 and March 17 in each year, commencing March 17, 2000, until
\nthe date on which the principal hereof is paid or made available for payment
\nin full; provided that if the Partnership does not elect to prepay this Note
\non the ET Date, interest shall accrue at the New Debt Rate from the ET Date
\nuntil the sooner of the date on which the principal hereof is paid or made
\navailable for payment in full or the Maturity Date; and to pay interest at
\nthe Late Rate (as defined in the Indenture referred to below) on any overdue
\nprincipal, Premium (as defined in the Indenture referred to below), if any,
\nand (to the extent permitted by applicable law) overdue interest from the due
\ndate thereof until paid, payable on demand, all pursuant to the terms of the
\nIndenture referred to below. All amounts payable by Nonaffiliated Partner
\nTrustee hereunder and under the Trust Indenture and Security Agreement dated
\nas of December 15, 1999, as amended or supplemented (herein called the
\n“Indenture”, defined terms used herein and not otherwise defined herein being
\nused herein with the same meanings as in the Indenture), among Nonaffiliated
\nPartner Trustee, BJ Services Equipment II, L.P. (“Partnership”) and State
\nStreet Bank and Trust Company, as Indenture Trustee thereunder, shall be made
\nonly from the income and proceeds of the Indenture Estate. Each Holder, by
\nits acceptance of this Note, agrees that (a) it will look solely to the
\nincome and proceeds of the Indenture Estate (never to include Excepted
\nProperty or Other Equipment) for payment of such amounts, to the extent
\navailable for distribution to the Holder hereof as provided in the Indenture
\nand (b) none of Beneficiaries, Nonaffiliated Partner Trustee nor Indenture
\nTrustee is or shall be personally liable to the Holder hereof for any amount
\npayable hereunder or under the Indenture, except, in the case of
\nNonaffiliated Partner Trustee and Indenture Trustee, as provided in the
\nIndenture.<\/p>\n
The principal of, Premium, if any, and interest on this Note shall be
\npayable in immediately available funds at the principal corporate trust office
\nof Indenture Trustee, or as otherwise directed in the manner provided in the
\nIndenture. Notwithstanding the foregoing or any provision herein to the
\ncontrary, as directed<\/p>\n
A-2<\/p>\n
in Section 2.8 of the Indenture, Indenture Trustee will pay, or cause to be
\npaid all amounts payable by Nonaffiliated Partner Trustee hereunder in United
\nStates Dollars to the Holder of this Note or a nominee therefor either (i) by
\ntransferring by wire in immediately available funds to an account maintained
\nby such Holder with an institution in the United States the amount to be
\ndistributed to such Holder or (ii) by mailing a check to such Holder at such
\naddress as such Holder shall have specified, in any case without any
\npresentment or surrender of this Note, except that the Holder shall surrender
\nthis Note to Indenture Trustee upon payment in full of the principal amount
\nof and interest on this Note and such other sums payable to such Holder under
\nthe Indenture or under this Note.<\/p>\n
This Note shall not be entitled to any benefit under the Indenture or be
\nvalid or obligatory for any purpose unless authenticated by Indenture Trustee by
\nan authorized officer or signatory of Indenture Trustee, in each case as
\nspecified in Section 2.2 of the Indenture.<\/p>\n
Reference is made to the Indenture and all supplements and amendments
\nthereto (a copy of which is on file with Indenture Trustee at its principal
\ncorporate trust office) for a more complete statement of the terms and
\nprovisions thereof, including a statement of the properties thereby conveyed,
\npledged and assigned, the nature and extent of the security, the respective
\nrights thereunder of Nonaffiliated Partner Trustee, Partnership, Indenture
\nTrustee and the Holders, and the other terms upon which the Notes are, and are
\nto be, executed and delivered, as well as for a statement of the terms and
\nconditions of the trust created by the Indenture, to all of which terms and
\nconditions in the Indenture each Holder agrees by its acceptance of this Note.<\/p>\n
Subject to the next paragraph hereof, on each Payment Date, the
\nregistered Holder hereof will be entitled to receive a payment of principal
\nequal to the amount for such Payment Date set forth in the Schedule attached
\nhereto.<\/p>\n
As more fully provided in the Indenture, the Notes are subject to
\nprepayment in whole or in part, or purchase, under the circumstances and in the
\namounts, including Premium, if any, set forth in the Indenture. Except as
\nprovided in the Indenture, the Notes may not be prepaid before maturity.<\/p>\n
A-3<\/p>\n
If an Indenture Event of Default exists, the unpaid principal amount of
\nthe Notes may, subject to the terms of the Indenture, be declared due and
\npayable in the manner and with the effect provided in the Indenture. If, and
\nonly if, such an Indenture Event of Default is caused by a BJ Event of Default,
\nIndenture Trustee may declare the Services Agreement and the O&M Agreement to be
\nin default, and may, subject to the limitations set forth in Section 8 of the
\nIndenture and Excepted Property, to the exclusion of Nonaffiliated Partner
\nTrustee, exercise one or more of the remedies of Nonaffiliated Partner Trustee
\nprovided in the Partnership Agreement, the Participation Agreement, the Services
\nAgreement and the O&M Agreement.<\/p>\n
The right of the Holder of this Note to institute action for any remedy
\nunder the Indenture, including the enforcement of payment of any amount due
\nhereon, is subject to certain restrictions specified in the Indenture.<\/p>\n
As provided in the Indenture and subject to certain limitations therein
\nset forth, this Note is transferable, and upon surrender of this Note for
\nregistration of transfer at the principal corporate trust office of Indenture
\nTrustee, duly endorsed by, or accompanied by a written instrument of transfer in
\nform satisfactory to Indenture Trustee duly executed by, the Holder of this Note
\nor his attorney duly authorized in writing, one or more new Notes of the same
\nmaturity and type and of authorized denominations and for the same aggregate
\nprincipal amount will be issued to the designated transferee or transferees.<\/p>\n
The Notes are issuable only as registered Notes.<\/p>\n
No service charge shall be made for any such registration of transfer or
\nexchange, but Indenture Trustee may require payment of a sum sufficient to cover
\nany tax or other governmental charge payable in connection therewith.<\/p>\n
Before due presentment for registration of transfer of this Note,
\nNonaffiliated Partner Trustee, Indenture Trustee and Partnership may redeem and
\ntreat the Person in whose name this Note is registered as the absolute owner
\nhereof for the purpose of receiving payment of the principal of and interest on
\nthis Note and for all other purposes whatsoever whether or not this Note be
\noverdue, and neither Nonaffiliated Partner Trustee, Indenture<\/p>\n
A-4<\/p>\n
Trustee nor Partnership shall be affected by notice to the contrary.<\/p>\n
The terms and provisions of the Indenture and the rights and obligations
\nof Nonaffiliated Partner Trustee and the rights of the Holders may be changed
\nand modified to the extent permitted by the Indenture.<\/p>\n
THE INDENTURE AND THIS NOTE SHALL BE IN ALL RESPECTS GOVERNED BY AND
\nCONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK FOR CONTRACTS ENTERED INTO AND
\nTO BE PERFORMED WITHIN NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
\nAND PERFORMANCE, EXCEPT TO THE EXTENT THAT MATTERS RELATING TO PERFECTION AND
\nTHE EFFECT OF PERFECTION OR NON-PERFECTION OF THE LIEN GRANTED BY THE BASIC
\nDOCUMENTS ARE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE UNIFORM
\nCOMMERCIAL CODE OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.<\/p>\n
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER MAKES ONE OF THE
\nREPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 3.5(e) OF THE PARTICIPATION
\nAGREEMENT.<\/p>\n
A-5<\/p>\n
IN WITNESS WHEREOF, Nonaffiliated Partner Trustee has caused this NOTE to
\nbe duly executed.<\/p>\n
_____________________________, not in
\n its individual capacity but solely as
\n Nonaffiliated Partner Trustee<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
Attest:<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
Issue Date:<\/p>\n
INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION<\/p>\n
This is one of the Notes referred to in the within-mentioned Indenture.<\/p>\n
_________________________,
\n Indenture Trustee<\/p>\n
By:
\n Authorized officer or
\n signatory<\/p>\n
SCHEDULE TO NOTE<\/p>\n
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
\n OF NOTE TO BE PAID OF NOTE REMAINING
\n PAYMENT DATE ON PAYMENT DATE TO BE PAID<\/p>\n
EXHIBIT B
\n TO
\n INDENTURE<\/p>\n
INDENTURE SUPPLEMENT NO. __ dated as of _________, ____, between First
\nSecurity Trust Company of Nevada, a Nevada banking corporation, not in its
\nindividual capacity, but solely as Nonaffiliated Partner Trustee (“Nonaffiliated
\nPartner Trustee”) under the Trust Agreement dated as of December 15, 1999
\nbetween Beneficiaries named therein and First Security Trust Company of Nevada,
\nBJ Services Equipment, L.P., a Delaware Limited Partnership (“Partnership”), and
\nState Street Bank and Trust Company, a Massachusetts trust company, as Indenture
\nTrustee (the “Indenture Trustee”) under the Trust Indenture and Security
\nAgreement dated as of December 15, 1999(together with all amendments and
\nsupplements heretofore entered into, the “Indenture”), among Nonaffiliated
\nPartner Trustee, Partnership and Indenture Trustee. Unless otherwise defined
\nherein, capitalized terms used herein shall have the meanings specified in the
\nParticipation Agreement.<\/p>\n
R E C I T A L S:<\/p>\n
A. The Indenture provides for the execution and delivery of Indenture
\nSupplements thereto substantially in the form hereof which shall particularly
\ndescribe the Units, by having attached thereto a copy of the applicable
\nPartnership Agreement Supplement and O&M Agreement Supplement and shall
\nspecifically submit such Units to the Lien of the Indenture and this Indenture
\nSupplement.<\/p>\n
B. The Indenture relates to the Units described in the copy of the
\nPartnership Agreement Supplement and O&M Agreement Supplement of even date
\nherewith attached hereto as Exhibits A and B, respectively, and made a part
\nhereof.<\/p>\n
NOW, THEREFORE, in order further to secure the prompt payment of the
\nprincipal of, Premium, if any, and interest on the Notes from time to time
\nOutstanding in accordance with the terms thereof under the Indenture (including
\nthose Outstanding under this Indenture Supplement) and to secure the payment,
\nperformance and observance by Nonaffiliated Partner Trustee and Partnership of
\nall the agreements, covenants and provisions for the benefit of the Holders and
\nIndenture Trustee contained in the Indenture and in the Basic Documents to which
\nPartnership or Nonaffiliated Partner Trustee is, respectively, a party
\n(collectively, the “Secured Obligations”) and for the uses and purposes and
\nsubject to the terms and provisions of the Indenture and this Indenture
\nSupplement,<\/p>\n
(i) Nonaffiliated Partner Trustee has granted, bargained, sold,
\n assigned, transferred, conveyed, pledged and confirmed, and does hereby
\n grant, bargain, sell, assign, transfer, convey, pledge, and confirm, unto
\n Indenture Trustee, its successors and assigns, for the security and
\n benefit of the Indenture Trustee, for itself, and for the Holders from
\n time to time a security interest in and lien on, all estate, right, title
\n and interest of Nonaffiliated Partner Trustee in, to and under (A) the
\n Partnership Agreement and Nonaffiliated Partner Trustee’s Partnership
\n Interest under the Partnership Agreement (including all instruments or
\n certificates owned or held by or established in favor of Nonaffiliated
\n Partner Trustee with respect to such Partnership Interest) and all
\n rights, authority, powers and privileges of Nonaffiliated Partner Trustee
\n as a holder of such Partnership Interest and all payments and
\n distributions thereunder of whatever kind or character and whether in
\n cash or other property, at any time made or distributable to
\n Nonaffiliated Partner Trustee thereunder or in respect thereof, whether
\n due or to become due and whether representing profits, distributions,
\n repayments of capital contributions or otherwise (including all amounts
\n of Priority Distributions, Supplemental Priority Distributions, Special
\n Distributions, Disposition Amount, ET Amount and Special P.O. Amount and
\n payments of any kind required to be made to Nonaffiliated Partner Trustee
\n thereunder), including, without limitation, the immediate and continuing
\n right of Nonaffiliated Partner Trustee to receive and collect all
\n distributions and any other payments or other amounts and the right of
\n Nonaffiliated Partner Trustee to exercise any election or option or to
\n make any decision or determination or to give or receive any notice,
\n consent, waiver or approval or to consent to any amendment, modification
\n or waiver or to make any claims or demands under or to take any other
\n action provided under or in respect of the Partnership Agreement, the
\n Services Agreement or the O&M Agreement or to accept surrender of any
\n Unit or Units, including all the rights and powers and remedies of
\n Nonaffiliated Partner Trustee to the exclusion of General Partner and any
\n other Partner, to declare the O&M Agreement and the Services Agreement to
\n be in default, to terminate such agreements and exercise all rights and
\n remedies thereunder and under the Partnership Agreement, including,
\n without limitation, the commencement, conduct and consummation of legal,
\n administrative and other proceedings as permitted thereunder or by law
\n and the liquidation of Partnership and <\/p>\n
B-2<\/p>\n
all rights and powers of Nonaffiliated Partner Trustee to the exclusion
\n of General Partner and any other Partner following a BJ Event of Default
\n to amend, modify or waive such agreements and to exercise the other
\n rights contained in Section 7 of the Partnership Agreement; and (B) all
\n other rights, remedies and other property described in Section 1.1(i) of
\n the Indenture; and<\/p>\n
(ii) Partnership has granted, bargained, sold, assigned,
\n transferred, conveyed, pledged and confirmed, and does hereby grant,
\n bargain, sell, assign, transfer, convey, pledge, and confirm, unto
\n Indenture Trustee, its successors and assigns, for the security and
\n benefit of the Indenture Trustee, for itself, and for the Holders from
\n time to time a security interest in and lien on, all estate, right, title
\n and interest of Partnership in, to and under (i) the Units and all
\n replacements thereof and substitutions therefor in which Partnership
\n shall from time to time acquire an interest under the Contribution
\n Agreements and the Partnership Agreement as more particularly described
\n in the copy of the Partnership Agreement Supplement and O&M Agreement
\n Supplement attached hereto as Exhibits A and B, respectively, and (ii)
\n all other rights, remedies and other property described in
\n Section 1.1(ii) of the Indenture.<\/p>\n
BUT SUBJECT, HOWEVER, TO THE EXCLUSIONS AND LIMITATIONS SET FORTH IN THE
\nINDENTURE, SUCH EXCLUSIONS INCLUDING, any and all Excepted Property now existing
\nor hereafter arising. It is further expressly agreed and stipulated that the
\nforegoing grant shall not include any Other Equipment, including any Replacement
\nItems.<\/p>\n
TO HAVE AND TO HOLD all and singular the aforesaid property unto
\nIndenture Trustee, its successors and assigns, in trust for the benefit and
\nsecurity of the Holders from time to time, without any preference, priority or
\ndistinction of any one Note over any other Note under the Indenture, and for the
\nbenefit and security of Indenture Trustee and for the uses and purposes and
\nsubject to the terms and provisions set forth in the Indenture.<\/p>\n
It is the intention of the parties hereto that all Notes issued and
\nOutstanding under the Indenture rank on a parity with each other Note and that,
\nas to each other Note, they be secured equally and ratably by the collateral
\ndescribed herein and in other Indenture Supplements, without preference,
\npriority or distinction <\/p>\n
B-3<\/p>\n
of any one thereof over any other by reason of difference in time of issuance
\nor otherwise.<\/p>\n
The Notes issued under this Indenture Supplement shall be designated as
\nSecured Notes. The Notes shall be substantially in the form set forth in Exhibit
\nA to the Indenture. The Notes issued under this Indenture Supplement shall be
\ndated the date of issuance thereof and shall bear interest at a rate of % per
\nannum. The principal of each Note shall be payable as indicated in Exhibit C
\nhereto.<\/p>\n
This Supplement shall be construed as supplemental to the Indenture and
\nshall form a part of it, and this Indenture Supplement is hereby incorporated by
\nreference therein and the Indenture is hereby ratified, approved and confirmed.<\/p>\n
This Supplement may be executed by Nonaffiliated Partner Trustee and
\nIndenture Trustee in separate counterparts, each of which when so executed and
\ndelivered is an original, but all such counterparts shall together constitute
\nbut one and the same Supplement.<\/p>\n
AND FURTHER, Nonaffiliated Partner Trustee and Partnership hereby
\nacknowledge that the Units referred to in the aforesaid Partnership Agreement
\nSupplement and O&M Agreement Supplement attached hereto and made a part hereof
\nhave been delivered to Partnership and are included in the property of
\nPartnership covered by all the applicable terms and conditions of the
\nPartnership Agreement, subject to the pledge or mortgage thereof under the
\nIndenture.<\/p>\n
THIS INDENTURE SUPPLEMENT AND THE NOTES SHALL BE IN ALL RESPECTS GOVERNED
\nBY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK INCLUDING ALL MATTERS
\nOF CONSTRUCTION, VALIDITY AND PERFORMANCE FOR CONTRACTS ENTERED INTO AND TO BE
\nPERFORMED WITHIN NEW YORK, EXCEPT TO THE EXTENT THAT MATTERS RELATING TO
\nPERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY
\nINTERESTS GRANTED BY THE BASIC DOCUMENTS ARE GOVERNED BY AND CONSTRUED IN
\nACCORDANCE WITH THE UNIFORM COMMERCIAL CODE OF A JURISDICTION OTHER THAN THE
\nSTATE OF NEW YORK.<\/p>\n
B-4<\/p>\n
IN WITNESS WHEREOF Nonaffiliated Partner Trustee, Partnership and
\nIndenture Trustee have caused this INDENTURE SUPPLEMENT NO. ___ to be duly
\nexecuted by their respective officers thereunto duly authorized, as of the day
\nand year first above written.<\/p>\n
,
\n not in its individual capacity but
\n solely as Nonaffiliated Partner
\n Trustee<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
S-1<\/p>\n
BJ SERVICES EQUIPMENT II, L.P.<\/p>\n
By: BJ Services Company, U.S.A.,
\n its General Partner<\/p>\n
By: \/s\/ T. M. Whichard
\n T. M. Whichard, Treasurer<\/p>\n
S-2<\/p>\n
,
\n as Indenture Trustee<\/p>\n
By:
\n Name:
\n Title:<\/p>\n
S-3<\/p>\n
EXHIBIT A
\n TO
\n INDENTURE SUPPLEMENT NO.<\/p>\n
UNITS<\/p>\n
[Attach Copy of Appropriate Partnership Agreement Supplement]<\/p>\n
EXHIBIT B
\n TO
\n INDENTURE SUPPLEMENT NO.<\/p>\n
UNITS<\/p>\n
[Attach Copy of Appropriate O&M Agreement Supplement]<\/p>\n
EXHIBIT C
\n TO
\n INDENTURE SUPPLEMENT NO.<\/p>\n
SECURED NOTES<\/p>\n
Date of Issuance:<\/p>\n
Final Maturity:<\/p>\n
Aggregate Principal $___________________
\n Amount:<\/p>\n
Payment Dates for
\n Interest:<\/p>\n
Interest Rate:<\/p>\n
APPENDIX A
\n TO
\n PARTICIPATION AGREEMENT
\n PARTNERSHIP AGREEMENT
\n GUARANTY
\n TAX INDEMNITY AGREEMENT
\n TRUST AGREEMENT
\n INDENTURE
\n SERVICES AGREEMENT
\n O&M AGREEMENT<\/p>\n
DEFINITIONS<\/p>\n
GENERAL PROVISIONS<\/p>\n
The following terms shall have the following meanings for all purposes of
\nthe Basic Documents referred to below, unless otherwise defined in a Basic
\nDocument or the context thereof otherwise requires. Such meanings shall be
\nequally applicable to both the singular and the plural forms of the terms herein
\ndefined. In case of any conflict between the provisions hereof and the
\nprovisions of the main body of any Basic Document, the provisions of the main
\nbody of such Basic Document shall control the construction of such Basic
\nDocument.<\/p>\n
Unless the context otherwise requires, (i) references to agreements shall
\nbe deemed to mean and include such agreements as amended, supplemented and
\notherwise modified from time to time, (ii) references to parties to agreements
\nshall be deemed to include the permitted successors and assigns of such parties,
\n(iii) the words “herein”, “hereof” and “hereunder” and other words of similar
\nimport refer to the Basic Document as a whole in which such words are used and
\nnot to any particular Section, Subsection or other subdivision of such Basic
\nDocument and (iv) all references in a Basic Document to Sections, Exhibits,
\nSchedules and Appendices refer to Sections, Exhibits, Schedules and Appendices
\nof such Basic Document unless otherwise indicated. The term “including” shall
\nmean “including, without limitation,” unless otherwise expressly stated.<\/p>\n
DEFINED TERMS<\/p>\n
“ADDITIONAL SERVICE PAYMENTS” — as defined in Section 3.4 of the
\nServices Agreement.<\/p>\n
“ADDITIONAL SERVICES” — as defined in Section 2.1 of the Services
\nAgreement.<\/p>\n
“ADJUSTED CAPITAL ACCOUNT” — the Capital Account maintained for each
\nPartner as of the end of each taxable year of Partnership, (a) INCREASED by
\nany amounts that such Partner is obligated to restore under the standards set
\nby Treasury Regulation Section 1.704- 1(b)(2)(ii)(c)(or is deemed obligated
\nto restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5))
\nand (b) DECREASED by (i) the amount of all losses and deductions that, as of
\nthe end of such taxable year, are reasonably expected to be allocated to such
\nPartner in subsequent years under Sections 704(e)(2) and 706(d) of the Code
\nand Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all
\ndistributions that, as of the end of such taxable year, are reasonably
\nexpected to be made to such Partner in subsequent years in accordance with
\nthe Partnership Agreement to the extent they exceed offsetting increases to
\nsuch Partner’s Capital Account that are reasonably expected to occur during
\n(or before) the year in which such distributions are reasonably expected to
\nbe made (other than increases as a result of a minimum gain chargeback
\npursuant to Section 5.2(c)(i) of the Partnership Agreement). The foregoing
\ndefinition of Adjusted Capital Account is intended to comply with the
\nprovisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
\ninterpreted consistently therewith.<\/p>\n
“ADJUSTMENT AMOUNT” — with respect to a Determination Date, Settlement
\nDate, Reduction Date, Default Payment Date, the ET Date, or the Special P.O.
\nDate, either (1) all amounts of Priority Distributions allocated pursuant to the
\nPartnership Agreement to any period prior to and including such date which are
\nunpaid as of such date (which is shown as a positive number and which shall
\nrepresent a payment obligation of the Partnership to the Nonaffiliated Partner
\nTrustee in addition to the payment of Disposition Value, ET Price or Special
\nP.O. Price on such date, as the case may be), or (2) the amounts of Priority
\nDistributions paid prior to such date and allocated pursuant to the Partnership
\nAgreement to periods after such date (which is shown as a negative number and
\nwhich shall represent a credit against the Partnership’s payment obligation to
\nNonaffiliated Partner Trustee in respect of Disposition Value, ET Price or
\nSpecial P.O. Price, as the case may be). If the difference as so calculated is
\na negative number and <\/p>\n
-2-<\/p>\n
is not otherwise netted against Disposition Value as provided in the
\ndefinition of Disposition Amount, such difference shall be netted against the
\namount of ET Price, Special P.O. Price or Fair Market Value payable therewith.<\/p>\n
“AFFILIATE” of any Person — any other Person which directly or
\nindirectly controls, or is controlled by, or is under a common control with,
\nsuch Person. The term “CONTROL” means the possession, directly or indirectly,
\nof the power to direct or cause the direction of the management and policies of
\na Person, whether through the ownership of voting securities, by contract or
\notherwise, and the term “CONTROLLED” shall have a meaning correlative to the
\nforegoing.<\/p>\n
“AFFILIATED PARTNER” — as defined in the caption of the Participation
\nAgreement.<\/p>\n
“AFTER-TAX BASIS” — (i) in the case of any amount being paid to any Tax
\nIndemnitee or Indemnified Person, an amount which, after deduction of all Taxes
\nimposed upon such Tax Indemnitee or Indemnified Person that would not have been
\nimposed but for the receipt or accrual of such amount (or the receipt or accrual
\nof amounts paid by reason of a “gross-up” provision), is equal to the amount
\nrequired to be paid under the applicable Basic Document and (ii) in the case of
\nany amount being paid by any Tax Indemnitee, an amount which, after deduction of
\nall Taxes saved by such Tax Indemnitee that would not have been saved but for
\nthe payment or accrual of the obligation to pay such amount (or the payment or
\naccrual of the obligation to pay amounts by reason of a “gross-up” provision) is
\nequal to the amount to be paid under the applicable Basic Document. All
\ncomputations for the purposes hereof shall be based on the highest applicable
\ntax rates in effect in the applicable jurisdiction on the date payment is made
\nor accrued, as the case may be.<\/p>\n
“AGREED VALUE” — of any Contributed Property — the fair market value of
\nsuch property or other consideration at the time of contribution as determined
\nby General Partner using such reasonable method of valuation as it may adopt;
\nexcept that if any Limited Partner disputes the fair market value of any
\nContributed Property as so determined by General Partner, the fair market value
\nof such Contributed Property shall be determined by a Contributed Property
\nAppraisal.<\/p>\n
-3-<\/p>\n
“APPLICABLE PERCENTAGE” — for any Unit at any time, the percentage
\ncalculated by dividing the Equipment Value for such Unit by the aggregate amount
\nof the Equipment Value of all Units.<\/p>\n
“APPRAISAL” — the report of Arthur Andersen containing the opinions
\ndescribed in Section 4.2(a) of the Participation Agreement, and otherwise in
\nform and substance reasonably satisfactory to Beneficiaries.<\/p>\n
“ASSIGNED AGREEMENTS” — the Partnership Agreement, the Contribution
\nAgreements and the Guaranty.<\/p>\n
“ATTORNEY-IN-FACT” — as defined in Section 2.3(b) of the Partnership
\nAgreement.<\/p>\n
“AVAILABLE CASH” — as defined in Section 6.1(e) of the Partnership
\nAgreement.<\/p>\n
“BANKRUPTCY” — an event described in clause (g) or clause (h) of the
\ndefinition of “BJ Event of Default.”<\/p>\n
“BANKRUPT BENEFICIARY” — as defined in Section 8.3(e)(i)(4) of the
\nIndenture.<\/p>\n
“BANKRUPT BJ ENTITY” — (a) Service Taker, if a Services Event of Default
\ndescribed in Section 6.1(d) or 6.1(e) of the Services Agreement exists,
\n(b) Operator, if an O&M Event of Default described in Section 14.1(d) or (e) of
\nthe O&M Agreement exists, (c) Partnership, if a BJ Event of Default described in
\nclause (g) or (h) of the definition thereof exists with respect to Partnership,
\n(d) Affiliated Partner, if a BJ Event of Default described in clause (g) or (h)
\nof the definition thereof exists with respect to Affiliated Partner, (e) General
\nPartner, if a BJ Event of Default described in clause (g) or (h) of the
\ndefinition thereof exists with respect to General Partner, and (f) BJ USA if a
\nBJ Event of Default described in clause (g) or (h) of the definition thereof
\nexists with respect to BJ USA.<\/p>\n
“BANKRUPTCY CODE” — the United States Bankruptcy Reform Act of 1978, as
\namended from time to time, 11 U.S.C. Section 101, et seq.<\/p>\n
“BASE SERVICES” — as defined in Section 2.1 of the Services
\nAgreement.<\/p>\n
“BASE TERM” — the period from March 15, 2000 to the Base Term Expiration
\nDate.<\/p>\n
-4-<\/p>\n
“BASE TERM EXPIRATION DATE” — means the Transaction Term Expiration
\nDate.<\/p>\n
“BASIC DOCUMENTS” — the Participation Agreement, the Contribution
\nAgreements, the Trust Agreement, the Notes, the Partnership Agreement (including
\neach Partnership Agreement Supplement), the O&M Agreement (including each O&M
\nAgreement Supplement), the Services Agreement, the Guaranty, the Indenture
\n(including each Indenture Supplement) and each Tax Indemnity Agreement.<\/p>\n
“BENEFICIAL INTEREST” — the interest of a Beneficiary under the Trust
\nAgreement.<\/p>\n
“BENEFICIARIES’ AGREEMENTS” — the Basic Documents to which the
\nBeneficiaries are or will be a party.<\/p>\n
“BENEFICIARIES’ CERTIFICATE” — as defined in Section 2.4(a) of the
\nParticipation Agreement.<\/p>\n
“BENEFICIARY” — each Person listed as a Beneficiary in Schedule 1 to the
\nParticipation Agreement and each Person that becomes a Beneficiary pursuant to
\nSection 6.1 of the Participation Agreement.<\/p>\n
“BENEFICIARY BANKRUPTCY” — as defined in Section 8.3(e)(i)(4) of the
\nIndenture.<\/p>\n
“BJ CREDIT AGREEMENT” — the Amended and Restated Credit Agreement dated
\nas of August 7, 1996, among BJ Services Company, BJ Services Company, U.S.A.,
\nBJ Service International, Inc., BJ Services Company Middle East, Nowsco Well
\nService Ltd. and the other Subsidiary Borrowers from time to time parties
\nthereto, Bank of America National Trust and Savings Association, individually,
\nas U.S. Agent, as Letter of Credit Issuing Bank and as Swing Loan Bank, Bank of
\nAmerica Canada, individually and as Canadian Agent, The Chase Manhattan Bank,
\nindividually and as Senior Co-Agent, Bank of Montreal, Royal Bank of Canada,
\nToronto-Dominion (Texas), Inc., Credit Lyonnais New York Branch and Wells Fargo
\nBank (Texas), National Association, each individually and as Co-Agent, and the
\nother financial institutions from time to time parties thereto as amended from
\ntime to time.<\/p>\n
“BJ DEFAULT” — an event which with notice or the lapse of time or both
\nwould become a BJ Event of Default.<\/p>\n
-5-<\/p>\n
“BJ ENTITY” — means BJ Services Company or any wholly owned direct or
\nindirect Subsidiary thereof.<\/p>\n
“BJ EVENT OF DEFAULT” — any one or more of the following if continuing
\nat the time of determination:<\/p>\n
(a) a Services Event of Default under Section 6.1(b), (c), (d),
\n (e) or (f) of the Services Agreement;<\/p>\n
(b) an O&M Event of Default under Section 14.1(b), (c), (d),
\n (e) or (f) of the O&M Agreement;<\/p>\n
(c) a Guarantor Event of Default;<\/p>\n
(d) General Partner or Affiliated Partner fails to make any
\n capital contribution under the Partnership Agreement or pay any other
\n amount under Sections 5.12, 5.16, 5.17, 5.18 or 5.22 of the Participation
\n Agreement or Partnership fails to make and\/or General Partner fails to
\n cause Partnership to make any Priority Distribution, Supplemental
\n Priority Distribution or Special Distribution, in each case, within 5
\n Business Days after the same becomes payable or distributable;<\/p>\n
(e) Partnership, General Partner, Affiliated Partner or BJ USA
\n fails to make any payment or distribution (other than as described in
\n clause (d) above) under any Basic Document, other than the O&M Agreement
\n and the Services Agreement (except that any failure to pay or distribute
\n to Nonaffiliated Partner Trustee (in its individual or trust capacity) or
\n any Beneficiary when due or distributable any amount constituting
\n Excepted Property shall not constitute a BJ Event of Default before the
\n discharge of the Lien of the Indenture in accordance with the terms
\n thereof) after the same becomes due or distributable and such failure
\n continues unremedied for 30 days after receipt by Partnership, General
\n Partner, Affiliated Partner or BJ USA, as the case may be, of written
\n notice of such failure from Nonaffiliated Partner Trustee, any
\n Beneficiary, Indenture Trustee or any Holder;<\/p>\n
(f) any representation made by Partnership, General Partner,
\n Affiliated Partner or BJ USA in any Basic Document, other than the O&M
\n Agreement and the Services Agreement, or in any other document or
\n certificate furnished by Partnership, General Partner, Affiliated Partner
\n or BJ USA (or a Responsible Officer of Partnership, General Partner,
\n Affiliated Partner or BJ USA) pursuant to the Basic Documents, <\/p>\n
-6-<\/p>\n
other than the O&M Agreement and the Services Agreement, was untrue or
\n incorrect in any material respect as of the date of making thereof;<\/p>\n
(g) Partnership, General Partner, Affiliated Partner or BJ USA
\n (i) commences a voluntary case or other proceeding seeking liquidation,
\n reorganization or other relief with respect to itself or its debts under
\n any bankruptcy, insolvency or other similar law now or hereafter in
\n effect, or seeking the appointment of a trustee, receiver, liquidator,
\n custodian or other similar official of it or any substantial part of its
\n property, or (ii) consents to any such relief or to the appointment of or
\n taking possession by any such official in any voluntary case or other
\n proceeding commenced against it, or (iii) generally fails to pay, or
\n admits in writing its inability to pay, its debts as they come due, or
\n (iv) makes a general assignment for the benefit of creditors, or
\n (v) takes any corporate action to authorize or in furtherance of any of
\n the foregoing;<\/p>\n
(h) an involuntary case or other proceeding is commenced
\n against Partnership, General Partner, Affiliated Partner or BJ USA
\n seeking liquidation, reorganization or other relief with respect to it or
\n its debts under any bankruptcy, insolvency or other similar law now or
\n hereafter in effect, or seeking the appointment of a trustee, receiver,
\n liquidator, custodian or other similar official of it or any substantial
\n part of its property, and such involuntary case or other proceeding
\n remains undismissed and unstayed for a period of 60 days;<\/p>\n
(i) any Event of Dissolution under Section 11 of the
\n Partnership Agreement; or<\/p>\n
(j) Partnership, General Partner, Affiliated Partner or BJ USA
\n fails to observe or perform any of its covenants or agreements (other
\n than those described in the foregoing clauses of this definition) to be
\n observed or performed by it under any Basic Document, other than the O&M
\n Agreement and the Services Agreement, and the failure continues
\n unremedied for 30 days after notice from Nonaffiliated Partner Trustee,
\n any Beneficiary, Indenture Trustee or any Holder to Partnership, General
\n Partner, Affiliated Partner or BJ USA, as the case may be, specifying the
\n failure and demanding the same to be remedied; except that, if the
\n failure is capable of being remedied and the remedy does not involve the
\n payment of money <\/p>\n
-7-<\/p>\n
alone, no such failure shall constitute a BJ Event of Default so long
\n as Partnership, General Partner, Affiliated Partner or BJ USA, as the
\n case may be, is diligently proceeding to remedy the failure, but in no
\n event shall the failure continue unremedied for a period in excess of
\n the lesser of (i) 120 days from the notice referred to above and (ii)
\n the remaining number of days in the Transaction Term or until the
\n Maturity Date, as the case may be; provided, however, that
\n notwithstanding anything to the contrary contained herein (including,
\n without limitation, in this definition of BJ Event of Default) or in
\n any of the Basic Documents, none of the foregoing events or
\n circumstances shall constitute a BJ Event of Default to the extent the
\n same arise from, or with respect to or relate solely to any Other
\n Equipment or Replacement Items.<\/p>\n
“BJ REMEDY” — as defined in Section 8.3(a) of the Indenture.<\/p>\n
“BJ SERVICES COMPANY” — BJ Services Company, a Delaware corporation, and
\nthe parent corporation of BJ USA.<\/p>\n
“BJ USA” — as defined in the caption of the Participation Agreement.<\/p>\n
“BJ USA AGREEMENTS” — the Basic Documents to which BJ USA is or will be
\na party.<\/p>\n
“BOOKS AND RECORDS” — books and records of account in which are entered
\nall matters relating to Partnership, including all income, expenditures, assets
\nand liabilities thereof.<\/p>\n
“BUSINESS DAY” — any day other than a Saturday, Sunday or a day on which
\ncommercial banking institutions are authorized or required by law, regulation or
\nexecutive order to be closed in San Francisco, California, New York, New York,
\nHouston, Texas, the city and state (if different from the foregoing) in which
\nthe principal corporate trust office of Nonaffiliated Partner Trustee is
\nlocated, or, until the Lien of the Indenture is discharged, the city and state
\n(if different from the foregoing) in which the principal corporate trust office
\nof Indenture Trustee is located.<\/p>\n
“CAPITAL ACCOUNT” — the capital account established and maintained for
\neach Partner as provided in Section 5.1 of the Partnership Agreement.<\/p>\n
-8-<\/p>\n
“CAPITAL CONTRIBUTION” — the Net Agreed Value of Contributed Property
\nthat a Partner contributes to the Partnership pursuant to Section 4.1, 4.2, 4.3,
\n6.1, 7.5 or 9.1 of the Partnership Agreement.<\/p>\n
“CARRYING VALUE” — with respect to any Property, the Agreed Value of
\nsuch Property reduced (but not below zero) by all depreciation, amortization
\nand cost recovery deductions charged to the Capital Accounts. The Carrying
\nValue of any Property shall be adjusted from time to time in accordance with
\nSection 5.1(d) of the Partnership Agreement and to reflect changes, additions
\nor other adjustments to the Carrying Value for dispositions and acquisitions
\nof Properties, as deemed appropriate by the Partners.<\/p>\n
“CLAIMS” — as defined in Section 7.2(a) of the Participation Agreement.<\/p>\n
“CLEANUP” — all actions required to: (1) cleanup, remove, treat or
\nremediate Hazardous Substances in the indoor or outdoor environment; (2)
\nprevent the Release of Hazardous Substances so that they do not migrate,
\nendanger or threaten to endanger public health or welfare of the indoor or
\noutdoor environment; (3) perform pre-remedial studies and investigations and
\npost-remedial monitoring and care; or (4) respond to any government requests
\nfor information or documents in any way relating to cleanup, removal,
\ntreatment or remediation or potential cleanup, removal, treatment or
\nremediation of Hazardous Substances in the indoor or outdoor environment.<\/p>\n
“CLOSING” — as defined in Section 2.4(a) of the Participation Agreement.<\/p>\n
“CODE” — the Internal Revenue Code of 1986, as amended from time to
\ntime, or any successor law.<\/p>\n
“COMMENCEMENT DATE” — as defined in Section 2.4(a) of the Participation
\nAgreement as the same may be postponed pursuant to Section 2.8 thereof.<\/p>\n
“COMMITMENT” — with respect to a Beneficiary, its obligation to make an
\ninvestment in Nonaffiliated Partner pursuant to Section 2.2(a) of the
\nParticipation Agreement.<\/p>\n
“COMPETITOR” — any Person who is engaged, or an Affiliate of a Person
\nwho is engaged, or any Person who has an interest in a partnership, joint
\nventure, corporation, trust, limited liability <\/p>\n
-9-<\/p>\n
company, association, or unincorporated organization that is engaged in
\nproviding maintenance or stimulation services for oil and natural gas wells;
\nEXCEPT that in no event shall any Note Purchaser or any bank, bank holding
\ncompany, savings and loan association, fraternal benefit society, pension,
\nretirement or profit sharing trust or fund, insurance company, securities
\nbroker or securities dealer or any leasing company or other financial
\ninstitution or any Affiliate of any of the foregoing, be (i) deemed a
\nCompetitor or (ii) restricted from any purchase of or holding an ownership
\ninterest in any security of a Competitor for passive investment purposes.<\/p>\n
“CONFIRMATION” — as defined in Section 2.4(c) of the Participation
\nAgreement.<\/p>\n
“CONSOLIDATED STOCKHOLDERS’ EQUITY” — the par or stated value of the
\nstock of the Guarantor and its Subsidiaries plus paid-in capital plus retained
\nearnings, all as shown on the consolidated balance sheet of Guarantor and its
\nSubsidiaries prepared in accordance with GAAP.<\/p>\n
“CONSOLIDATED SUBSIDIARY” — at any time, any Subsidiary the accounts of
\nwhich, in accordance with GAAP, would be consolidated with those of Guarantor in
\nits consolidated financial statements if such statements were prepared as of
\nsuch date.<\/p>\n
“CONTRIBUTED PROPERTY” — each item of Property, in such form as may be
\npermitted by the Delaware Act, contributed to Partnership.<\/p>\n
“CONTRIBUTED PROPERTY APPRAISAL” — with respect to any Contributed
\nProperty, the determination of fair market value by an appraiser selected by the
\nPartners, or, if the Partners cannot agree upon an appraiser, then the General
\nPartner and the Affiliated Partner shall together appoint one appraiser and the
\nNonaffiliated Partner shall appoint one appraiser, and such appraisers shall
\nselect a single appraiser, which appraiser shall determine the fair market value
\nof such Contributed Property; except that the Agreed Value of any property
\ndeemed contributed to the Partnership for federal income tax purposes upon
\ntermination and reconstitution thereof pursuant to Section 708 of the Code shall
\nbe determined in accordance with Section 5.1(d) of the Partnership Agreement.<\/p>\n
“CONTRIBUTION AGREEMENT” — the Contribution and Conveyance Agreement
\ndated as of December 15, 1999, and each other <\/p>\n
-10-<\/p>\n
Contribution and Conveyance Agreement dated the date that any Replacement
\nUnit or any other Unit or Replacement Item becomes property of Partnership
\npursuant to the Partnership Agreement (and, except as to Other Equipment or
\nReplacement Items, becomes subject to the Lien of the Indenture, if the
\nIndenture is in effect), from BJ USA or Affiliated Partner to Partnership
\ncovering the Units and Other Equipment delivered to Partnership before, and
\nowned by Partnership on, the Commencement Date or such Replacement Unit or
\nany other Unit and Other Equipment, as the case may be, substantially in the
\nform of EXHIBIT C to the Participation Agreement.<\/p>\n
“CO-REGISTRAR” — as defined in Section 2.3 of the Indenture.<\/p>\n
“CURRENT PRINCIPAL AMOUNT” — with respect to a Note as of any relevant
\ndate, the original principal amount of such Note reduced by the amount of
\nprincipal paid with respect to such Note on or before such date.<\/p>\n
“CUSTOMERS” — as defined in Recital A of the Participation Agreement.<\/p>\n
“DEBT” — the indebtedness evidenced by the Notes.<\/p>\n
“DEBT RATE” — with respect to any Note, a rate of interest equal to
\n8.09% per annum (computed on the basis of a year of 360 days consisting of
\ntwelve 30-day months).<\/p>\n
“DEFAULT PAYMENT DATE” — as defined in Section 5.22 of the
\nParticipation Agreement.<\/p>\n
“DELAWARE ACT” — the Delaware Revised Uniform Limited Partnership Act,
\n6. Del. C. 1953, Section 17-101 ET SEQ., as amended from time to time, and any
\nsuccessor thereto.<\/p>\n
“DETERMINATION DATE” — each of the dates set forth on SCHEDULE 5 to the
\nParticipation Agreement.<\/p>\n
“DISCOUNT RATE” — a per annum rate equal to the Debt Rate.<\/p>\n
“DISPOSITION AMOUNT” — for any Unit as of any Determination Date, a
\nSettlement Date, Reduction Date, Default Payment Date, the ET Date, or the
\nSpecial P.O. Date the sum of (1) the amount (which may be a positive or negative
\nnumber) of the Adjustment Amount for such Unit (determined by multiplying the
\nAdjustment Amount as at such date by the Applicable Percentage) as at such date,
\nplus <\/p>\n
-11-<\/p>\n
(2) the amount of the Disposition Value as at such date. Anything contained
\nin the Trust Agreement or the Participation Agreement to the contrary
\nnotwithstanding, the Disposition Amount for such Unit on the date of payment
\nthereof (both before and after any adjustment pursuant to Section 2.7 of the
\nParticipation Agreement), under any circumstances and in any event, will be
\nan amount which will be at least sufficient to pay in full as of the date of
\npayment thereof, the portion of the unpaid principal of the Notes which is
\nrelated to such Unit, together with all unpaid interest accrued to the date
\non which such amount is paid in accordance with the terms thereof.<\/p>\n
“DISPOSITION VALUE” — for any Unit as of any Determination Date, the
\namount determined by multiplying the Equipment Value for such Unit by the
\npercentage set forth in SCHEDULE 5 to the Participation Agreement opposite the
\nDetermination Date on which such Disposition Value is being determined.<\/p>\n
“DISTRIBUTION” — a Priority Distribution, a Supplemental Priority
\nDistribution or a Special Distribution.<\/p>\n
“DISTRIBUTION DATE” — each date listed on SCHEDULE 1 to the Partnership
\nAgreement.<\/p>\n
“DISTRIBUTION PERIOD” — the six-month period beginning on the day
\nfollowing a Distribution Date and ending on the next succeeding Distribution
\nDate.<\/p>\n
“ECONOMIC LIFE” — as defined in Section 4.2(a)(iii) of the Participation
\nAgreement.<\/p>\n
“ENVIRONMENTAL CLAIM” — any claim, action, cause of action,
\ninvestigation or notice (written or oral) by any Person alleging potential
\nliability (including, without limitation, potential liability for investigatory
\ncosts, Cleanup costs, government response costs, natural resources damages,
\nproperty damages, personal injuries, or penalties) arising out of, based on or
\nresulting from (a) the presence, or Release into the indoor or outdoor
\nenvironment, of any Hazardous Substances at any location, whether or not owned
\nor operated by Partnership, BJ USA or Operator or (b) circumstances forming the
\nbasis of any violation, or alleged violation, of any Environmental Law.<\/p>\n
“ENVIRONMENTAL LAW” — any and all Federal, state, local or municipal
\nlaws, rules, orders, regulations, statutes, ordinances, codes, decrees or
\nrequirements of any Government Authority <\/p>\n
-12-<\/p>\n
regulating, relating to or imposing liability standards of conduct concerning
\nany Hazardous Substances or pollution or environmental protection, as now or
\nmay at any time hereafter be in effect, including, without limitation, the
\nClean Water Act, the Comprehensive Environmental Response, Compensation and
\nLiability Act, the Superfund Amendments and Reauthorization Act of 1986, the
\nEmergency Planning and Community Right to Know Act, the Resource Conservation
\nand Recovery Act, the Safe Drinking Water Act, and the Toxic Substances
\nControl Act, together, in each case, with each amendment, supplement or other
\nmodification thereto, and the regulations promulgated thereunder and all
\nsubstitutions therefor.<\/p>\n
“EQUIPMENT VALUE” — (a) for any Unit owned by Partnership on the
\nCommencement Date, the amount for such Unit specified on the Appraisal as of the
\nCommencement Date and as set forth on Schedule 3 to the Participation Agreement,
\n(b) for any item of Other Equipment owned by the Partnership on the Commencement
\nDate, the amount for such item of Other Equipment set forth on Schedule 3 to the
\nParticipation Agreement, and (c) for any Unit or item of Other Equipment
\ncontributed to Partnership on any other date, the Fair Market Value of such Unit
\nor item of Other Equipment, as applicable, as certified by General Partner
\npursuant to Section 5.13 of the Participation Agreement or as otherwise
\ndetermined in accordance with the definition of “Fair Market Value”, in each
\ncase, determined as of the date of contribution.<\/p>\n
“ERISA” — the Employee Retirement Income Security Act of 1974, as
\namended from time to time, or any successor law.<\/p>\n
“ERISA AFFILIATE” — any corporation or trade or business that:<\/p>\n
(a) is a member of the same controlled group of corporations
\n (within the meaning of section 414(b) of the Code) as BJ USA; or<\/p>\n
(b) is under common control (within the meaning of section
\n 414(c) of the Code) with BJ USA.<\/p>\n
“ERISA PLAN” — as defined in Section 3.4(i) of the Participation
\nAgreement.<\/p>\n
“ET AMOUNT” — the ET Price plus the Adjustment Amount (which may be a
\npositive or negative number) as of the ET Date.<\/p>\n
“ET DATE” — as set forth on Schedule 8 to the Participation Agreement.<\/p>\n
-13-<\/p>\n
“ET PRICE” — an amount equal to the product of the percentage set
\nforth for the ET Date on Schedule 8 to the Participation Agreement multiplied
\nby the Equipment Value of the Units then owned by Partnership.<\/p>\n
“ET RIGHT” — as defined in Section 9.1 of the Partnership Agreement.<\/p>\n
“EVENT OF DISSOLUTION” — as defined in Section 11.1 of the Partnership
\nAgreement.<\/p>\n
“EVENT OF LOSS” — as defined in Section 11.1 of the O&M Agreement.<\/p>\n
“EXCEPTED PROPERTY” —<\/p>\n
(a) any indemnity payable to Nonaffiliated Partner Trustee,
\n Indenture Trustee, any Beneficiary or their respective directors,
\n officers, employees, agents, successors, assigns (other than Indenture
\n Trustee as assignee) or affiliates pursuant to Section 7 of the
\n Participation Agreement;<\/p>\n
(b) any proceeds of insurance payable to Nonaffiliated Partner
\n Trustee or any Beneficiary under insurance maintained by Nonaffiliated
\n Partner Trustee or any Beneficiary in addition to the insurance required
\n to be maintained by Operator pursuant to the terms of the O&M Agreement,,
\n any proceeds of insurance to the extent payable in respect of Other
\n Equipment and any proceeds of liability insurance policies carried for
\n the benefit of Nonaffiliated Partner Trustee or any Beneficiary by or
\n Operator pursuant to Section 12 of the O&M Agreement or by any other
\n Person;<\/p>\n
(c) the Tax Indemnity Agreement and all payments or advances
\n required to be made thereunder by or to Guarantor;<\/p>\n
(d) any rights against BJ USA, General Partner, Operator,
\n Service Taker, Partnership or Guarantor acquired by subrogation to the
\n rights of Indenture Trustee pursuant to cure of defaults of BJ USA,
\n General Partner, Operator, Service Taker, Partnership or Guarantor, and
\n any amounts payable by BJ USA, General Partner, Operator, Service Taker,
\n Partnership or Guarantor to reimburse Nonaffiliated Partner Trustee or
\n any Beneficiary for payments made by it in respect of their <\/p>\n
-14-<\/p>\n
obligations under the Basic Documents, so long as such cures and
\n payments are made in accordance with the Indenture;<\/p>\n
(e) any amounts payable to any Beneficiary by a transferee as
\n the purchase price for all or any portion of its interest permitted by
\n Section 6.1 of the Participation Agreement;<\/p>\n
(f) all right, title and interest of Nonaffiliated Partner
\n Trustee or any Beneficiary in any collateral that has been released from
\n the security interest and assignment of the Indenture whether by
\n satisfaction of the obligations of Nonaffiliated Partner Trustee
\n hereunder and under the Notes or otherwise pursuant to terms of the
\n Indenture;<\/p>\n
(g) any Taxes payable to Partnership or Nonaffiliated Partner
\n pursuant to the Participation Agreement;<\/p>\n
(h) the rights of Nonaffiliated Partner Trustee, Indenture
\n Trustee and any Beneficiary to pursue legal remedies to compel payment by
\n BJ USA, General Partner, Operator, Service Taker or Partnership of any of
\n the amounts referred to in the foregoing clauses (i)through (g) or
\n enforce the agreements of BJ USA, General Partner, Operator, Service
\n Taker or Partnership related thereto, except that the rights referred to
\n in this clause (h) shall not be deemed to include the exercise of any
\n remedies in the Partnership Agreement, the Services Agreement, the O&M
\n Agreement or the Participation Agreement other than the right to proceed
\n by appropriate court action or actions, either at law or in equity, to
\n enforce performance by BJ USA, General Partner, Operator, Service Taker
\n or Partnership of the applicable covenants or to recover damages for the
\n breach thereof;<\/p>\n
(i) the right to consent or withhold consent to any amendment,
\n modification or waiver of the Partnership Agreement, the O&M Agreement,
\n the Participation Agreement or the Services Agreement or any other
\n document solely in respect of Excepted Property;<\/p>\n
(j) the right to consent or withhold consent to declaration by
\n Indenture Trustee of a BJ Event of Default solely in respect of Excepted
\n Property; and<\/p>\n
-15-<\/p>\n
(k) any Form K-1 (or similar substitute form) required or
\n permitted to be given to Nonaffiliated Partner Trustee or Partnership.<\/p>\n
“EXCESS AMOUNT” — as defined in Section 2.9(c) of the Indenture.<\/p>\n
“EXPENSES” — as defined in Section 4.4(b) of the Partnership Agreement.<\/p>\n
“EXPIRATION DATE” — as defined in Section 2.8(b) of the Participation
\nAgreement.<\/p>\n
“FAIR MARKET RENTAL VALUE” or “FAIR MARKET VALUE” — with respect to all
\nUnits and Other Equipment (or portions thereof for purposes of Section 5.13 of
\nthe Participation Agreement) with respect to which a determination is being
\nmade, the cash rent or cash price obtainable for such Units or Other Equipment
\n(or portions thereof for purposes of Section 5.13 of the Participation
\nAgreement) in an arm’s-length lease or sale between an informed and willing
\nlessee or purchaser\/user (including, without limitation, BJ USA and any lessee
\nor buyer in possession of the Units or Other Equipment which is the subject of
\nthis transaction and including a purchaser\/user in possession and other than a
\ndealer in used equipment of a type similar to the Units or Other Equipment)
\nunder no compulsion to lease or purchase, as the case may be, and an informed
\nand willing lessor or seller, under no compulsion to lease or sell, as the case
\nmay be. Except for determinations for the purposes of Section 5.22 of the
\nParticipation Agreement, Fair Market Rental Value and Fair Market Value shall be
\ndetermined upon the assumption that each Unit or item of Other Equipment is in
\nthe condition and repair required under the O&M Agreement, free of any Liens
\nother than Nonaffiliated Partner Liens, and in service. For purposes of Section
\n5.22 of the Participation Agreement, determinations of Fair Market Rental Value
\nand Fair Market Value shall be determined upon the assumption that each Unit is
\nto be leased or sold on an “as-is, where-is” basis. If the parties are unable
\nto agree upon a Fair Market Rental Value or a Fair Market Value within 30 days
\nafter receipt of General Partner’s certification as to Fair Market Value
\npursuant to Section 5.13 of the Participation Agreement or, unless Nonaffiliated
\nPartner otherwise consents, if Fair Market Rental Value or Fair Market Value is
\nto be determined for the purposes of Section 5.22 of the Participation
\nAgreement, such value shall be determined by the following appraisal procedure,
\ndeterminations under which shall be conclusively binding on all parties:<\/p>\n
-16-<\/p>\n
(I) If the appraisal procedure is used for any purpose other than
\nSection 5.22 of the Participation Agreement, Nonaffiliated Partner Trustee,
\nwithin 10 days after the 30-day period after receipt of General Partner’s
\ncertification as to Fair Market Value pursuant to Section 5.13 of the
\nParticipation Agreement, will provide BJ USA the names of appraisers that would
\nbe satisfactory to Nonaffiliated Partner Trustee, and Nonaffiliated Partner
\nTrustee and BJ USA will consult with the intent of selecting a mutually
\nacceptable appraiser. If a mutually acceptable appraiser is selected, the Fair
\nMarket Rental Value and\/or the Fair Market Value, as the case may be, shall be
\ndetermined by such appraiser and set forth in a written appraisal that is in
\ncompliance with the “Uniform Standards of Professional Appraisal Practice” of
\nthe Appraisal Standards Board of the Appraisal Foundation. If BJ USA and
\nNonaffiliated Partner Trustee are unable to agree upon a single appraiser within
\n10 days after Nonaffiliated Partner Trustee provides BJ USA with the names of
\nappraisers, either party can file with the American Arbitration Association to
\nprovide a list of qualified and certified appraisers of recognized standing and
\nknowledgeable in equipment of the type then owned by the Partnership within 15
\ndays of such filing. Within 10 days of receipt of such list, Nonaffiliated
\nPartner Trustee and BJ USA shall list in order of preference their respective
\nchoices for appraisers and the appraiser that is most preferred by both
\nNonaffiliated Partner Trustee and BJ USA (or, if two appraisers are preferred
\nequally by Nonaffiliated Partner Trustee and BJ USA, the appraiser that is most
\npreferred by both parties but chosen by Nonaffiliated Partner Trustee) shall
\nperform the appraisal and set forth Fair Market Rental Value or Fair Market
\nValue in a written appraisal that is in compliance with the “Uniform Standards
\nof Appraisal Practice” of the Appraisal Foundation. BJ USA shall bear the cost
\nof all appraisers.<\/p>\n
(II) If the appraisal procedure is used for the purpose of Section 5.22
\nof the Participation Agreement, Nonaffiliated Partner Trustee shall select an
\nindependent appraiser of recognized standing and knowledgeable in equipment of
\nthe type then owned by the Partnership. Such appraisal shall be made within 15
\ndays of appointment. BJ USA shall bear the cost of such appraisal.
\nNotwithstanding any of the foregoing, for the purposes of Section 5.22 of the
\nParticipation Agreement, the Fair Market Rental Value or the Fair Market Value,
\nas the case may be, shall be zero with respect to any Unit if Nonaffiliated
\nPartner Trustee theretofore has not been able to recover possession of such Unit
\nin accordance with the terms of Section 15.1(b) of the O&M Agreement.<\/p>\n
-17-<\/p>\n
“FINAL DETERMINATION” — (i) a decision, judgment, decree or other
\norder by any court of competent jurisdiction, which decision, judgment,
\ndecree or other order has become final (I.E., the earliest of when all
\nallowable appeals by either party to the action (or with respect to any
\nBeneficiary, only such appeals as are required by Section 7 of the Tax
\nIndemnity Agreement or Section 7 of the Participation Agreement) are
\nexhausted or the time for filing such appeal expires), (ii) a closing
\nagreement entered into under Section 7121 of the Code (or any successor
\nprovision) or any other binding settlement agreement entered into in
\nconnection with an administrative or judicial proceeding, in any case with
\nthe consent of BJ USA (in the case of the Tax Indemnity Agreement, subject to
\nthe conditions of Section 7(d)), or (iii) the expiration of the time for
\ninstituting an initial suit with respect to a claimed deficiency or for
\ninstituting a claim for refund or if such a claim was filed, the expiration
\nof the time for instituting suit with respect thereto.<\/p>\n
“FIRST SECURITY” — as defined in Section 3.1 of the Participation
\nAgreement.<\/p>\n
“GAAP” — generally accepted accounting principles, consistently
\napplied, as set forth in the opinions and pronouncements of the Accounting
\nPrinciples Board of the American Institute of Certified Public Accountants
\nand statements and pronouncements of the Financial Accounting Standards Board
\nor in such other statements by such other entity as may be approved by a
\nsignificant segment of the accounting profession.<\/p>\n
“GENERAL PARTNER” — BJ USA, as general partner of Partnership.<\/p>\n
“GOVERNMENT ACTIONS” — all consents, approvals or authorizations of,
\nor filings, registrations or qualifications with, or the giving of notice or
\ntaking of any other action with respect to, any Government Authority.<\/p>\n
“GOVERNMENT AUTHORITY” — any applicable Federal, state, county,
\nmunicipal or other United States Federal, state or local government, judicial
\nor regulatory authority, agency, board, body, commission, instrumentality,
\ncourt arbitrator, panel of arbitrators or quasi-government authority.<\/p>\n
“GUARANTOR” — as defined in the caption of the Participation
\nAgreement.<\/p>\n
-18-<\/p>\n
“GUARANTOR AGREEMENT” — the Basic Documents to which Guarantor is or
\nwill be a party.<\/p>\n
“GUARANTOR DEFAULT” — an event which with notice or the lapse of time
\nor both would become a Guarantor Event of Default.<\/p>\n
“GUARANTOR EVENT OF DEFAULT” — the following events (whether any such
\nevent is voluntary or involuntary or comes about or is effected by operation
\nof law or pursuant to or in compliance with any judgment, decree or order of
\nany court or of any order, rule or regulation of any administrative or
\ngovernment body):<\/p>\n
(a) Guarantor fails to make any payment under the Guaranty
\n when due (except that any failure to pay to Nonaffiliated Partner
\n Trustee (in its individual or trust capacity) or any Beneficiary when
\n due any amounts constituting Excepted Property shall not constitute a
\n Guarantor Event of Default before the discharge of the Lien of the
\n Indenture in accordance with the terms thereof);<\/p>\n
(b) Guarantor fails to make any other payment under the
\n Basic Documents (except that any failure to pay any amount owed by
\n Guarantor under the Tax Indemnity Agreement or any failure of
\n Guarantor to pay to Nonaffiliated Partner Trustee (in its individual
\n or trust capacity) or any Beneficiary when due any amount constituting
\n Excepted Property shall not constitute a Guarantor Event of Default
\n before the discharge of the Lien of the Indenture in accordance with
\n the terms thereof) after the same becomes due and such failure
\n continues unremedied for 30 days after receipt by Guarantor of written
\n notice of such failure from Nonaffiliated Partner Trustee, any
\n Beneficiary, Indenture Trustee or any Holder;<\/p>\n
(c) any representation made by Guarantor in any Basic
\n Document or in any other document or certificate furnished by
\n Guarantor (or a Responsible Officer of Guarantor) pursuant to the
\n Basic Documents (other than the representations set forth in the Tax
\n Indemnity Agreement) was untrue or incorrect in any material respect
\n as of the date of making thereof;<\/p>\n
(d) Guarantor (i) commences a voluntary case or other
\n proceeding seeking liquidation, reorganization or other relief with
\n respect to itself or its debts under any bankruptcy, insolvency or
\n other similar law now or hereafter in effect, or seeking the
\n appointment of a trustee, receiver, liquidator, custodian or other
\n similar official of it or any substantial <\/p>\n
-19-<\/p>\n
part of its property, or (ii) consents to any such relief or to the
\n appointment of or taking possession by any such official in any
\n voluntary case or other proceeding commenced against it, or (iii)
\n generally fails to pay, or admits in writing its inability to pay, its
\n debts as they come due, or (iv) makes a general assignment for the
\n benefit of creditors, or (v) takes any corporate action to authorize
\n or in furtherance of any of the foregoing;<\/p>\n
(e) an involuntary case or other proceeding is commenced
\n against Guarantor seeking liquidation, reorganization or other relief
\n with respect to it or its debts under any bankruptcy, insolvency or
\n other similar law now or hereafter in effect, or seeking the
\n appointment of a trustee, receiver, liquidator, custodian or other
\n similar official of it or any substantial part of its property, and
\n such involuntary case or other proceeding remains undismissed and
\n unstayed for a period of 60 days; or<\/p>\n
(f) Guarantor fails to observe or perform any of its
\n covenants or agreements (other than those described in the foregoing
\n clauses of this definition) to be observed or performed by Guarantor
\n under the Guaranty or any other Basic Document (other than the Tax
\n Indemnity Agreement) and the failure continues unremedied for 30 days
\n after notice from Nonaffiliated Partner Trustee, any Beneficiary,
\n Indenture Trustee or any Holder to Guarantor, specifying the failure
\n and demanding the same to be remedied; except that, if the failure is
\n capable of being remedied and the remedy does not involve the payment
\n of money alone, no such failure shall constitute a Guarantor Event of
\n Default so long as Guarantor is diligently proceeding to remedy the
\n failure, but in no event shall the failure continue unremedied for a
\n period in excess of the lesser of (i) 120 days from the notice
\n referred to above and (ii) the remaining number of days in the
\n Transaction Term or until the Maturity Date, as the case may be;
\n provided, however, that none of the foregoing events shall constitute
\n a Guarantor Event of Default to the extent the same arise solely from
\n or with respect to any Other Equipment or Replacement Items.<\/p>\n
“GUARANTY” — the Guaranty dated as of December 15, 1999, from
\n Guarantor.<\/p>\n
“HAZARDOUS SUBSTANCES” — (i) petroleum product, petroleum, crude oil
\nor any fraction thereof, asbestos, radon, explosives, <\/p>\n
-20-<\/p>\n
radioactive materials, hazardous wastes or substances (including
\npolychlorinated biphenyls), or toxic wastes or substances; (ii) any other
\nwastes, materials or pollutants defined as or included in the definition of
\n“hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely
\nhazardous waste,” “restricted hazardous waste” or “toxic substances” as
\ndefined under any applicable Environmental Laws; or (iii) any other
\npollutants or contaminants which are regulated under any Environmental Law.<\/p>\n
“HOLDERS” — as the case may be, (I) each Note Purchaser, or if such
\nNote Purchaser transfers its interest in accordance with the Basic Documents,
\nthe transferee of such Note Purchaser, or (ii) each Person to whom a
\nRefunding Note is issued.<\/p>\n
“INCOME TAXES” — as defined in Section 7.1(c)(i) of the Participation
\nAgreement.<\/p>\n
“INDEMNIFIED PERSON” — as defined in Section 7.2(b) of the
\nParticipation Agreement.<\/p>\n
“INDENTURE” or “TRUST INDENTURE” — the Trust Indenture and Security
\nAgreement dated as of December 15, 1999 among Nonaffiliated Partner Trustee,
\nin the capacities described therein, Partnership and Indenture Trustee. Such
\nterms shall include each Indenture Supplement entered into pursuant to the
\nIndenture.<\/p>\n
“INDENTURE DEFAULT” — an Indenture Event of Default or an event which
\nwith notice or the lapse of time or both would become an Indenture Event of
\nDefault.<\/p>\n
“INDENTURE ESTATE” — as defined in the Granting Clause of the
\nIndenture.<\/p>\n
“INDENTURE EVENT OF DEFAULT” — as defined in Section 8.1 of the
\nIndenture.<\/p>\n
“INDENTURE SUPPLEMENT” — (i) an Indenture Supplement substantially in
\nthe form of Exhibit B to the Indenture, among Nonaffiliated Partner Trustee,
\nin the capacities described therein, Partnership and Indenture Trustee, dated
\nthe Commencement Date or the date that any Replacement Unit or any other Unit
\nis subjected to the Lien and security interest of the Indenture, and covering
\nthe Units related to the Commencement Date or such Replacement Unit or such
\nother Unit, as the case may be, or (ii) any supplement or amendment entered
\ninto from time to time among Nonaffiliated <\/p>\n
-21-<\/p>\n
Partner Trustee, in the capacities described therein, Partnership and
\nIndenture Trustee.<\/p>\n
“INDENTURE TRUSTEE” — State Street Bank and Trust Company, a
\nMassachusetts trust company, as trustee under the Indenture.<\/p>\n
“INDENTURE TRUSTEE AGREEMENTS” — the Basic Documents to which ITC
\nand\/or Indenture Trustee are or will be a party.<\/p>\n
“INFLATION RATE” — as defined in Section 4.2(a)(vi) of the
\nParticipation Agreement.<\/p>\n
“INITIAL CASH” — cash contributed to Partnership by Nonaffiliated
\nPartner on the Commencement Date.<\/p>\n
“INITIAL OPERATING PAYMENT” — as defined in Section 3.2(a) of the O&M
\nAgreement.<\/p>\n
“INITIAL OTHER EQUIPMENT” — the Other Equipment described in the
\nPartnership Agreement Supplement and O&M Agreement Supplement on the
\nCommencement Date.<\/p>\n
“INITIAL PARTNERSHIP AGREEMENT” — the Agreement of Limited
\nPartnership of BJ Services Equipment II, L.P. dated as of December 10, 1999
\nbetween General Partner, as general partner thereof, and Organizational
\nLimited Partner, as limited partner thereof.<\/p>\n
“INITIAL UNITS” — the Units described in the Indenture Supplement,
\nPartnership Agreement Supplement and O&M Agreement Supplement on the
\nCommencement Date.<\/p>\n
“INSURED AMOUNT LEVEL” — an amount equal to 18.7% of the aggregate
\nEquipment Value of the Units owned by the Partnership on the ET Date.<\/p>\n
“INSURED RISKS AND LOSSES” — such risks and losses as are specified
\nin the O&M Agreement.<\/p>\n
“INTERESTS” — as defined in Section 3.5(d) of the Participation
\nAgreement.<\/p>\n
“INTERIM TERM” — the period from the Commencement Date until March
\n15, 2000.<\/p>\n
-22-<\/p>\n
“INVESTMENT GRADE” — as defined in Section 12.2 of the O&M Agreement.<\/p>\n
“INVESTMENTS” — with respect to any Person, any direct or indirect
\npurchase or other acquisition by such Person of stock or other securities of
\nany other Person, or any direct or indirect loan, advance or capital
\ncontribution by such Person to any other Person; including, without
\nlimitation, any direct or indirect contribution by such Person of property to
\na joint venture, partnership or other business entity in which such Person
\nretains an interest.<\/p>\n
“ITC” — as defined in Section 3.3 of the Participation Agreement.<\/p>\n
“LATE RATE” — with respect to the portion of any payment that would
\nbe required to be distributed to the Holders pursuant to the Indenture or
\notherwise under the Basic Documents, Nonaffiliated Partner (whether directly
\nor pursuant to the Indenture), Beneficiaries or Nonaffiliated Partner
\nTrustee, in its individual capacity, the rate per annum (calculated on the
\nbasis of a 360-day year consisting of twelve 30-day months) equal to the
\nlesser of (a) 2% over the Debt Rate or the New Debt Rate, as applicable, and
\n(b) the maximum interest rate from time to time permitted by law.<\/p>\n
“LIEN” — any mortgage, pledge, security interest, lien, encumbrance,
\nlease, disposition of title or other charge of any kind on a Unit or any part
\nthereof.<\/p>\n
“LIMITED PARTNERS” — Affiliated Partner and Nonaffiliated Partner and
\n“Limited Partner” means any of the Limited Partners.<\/p>\n
“LIQUIDATOR” — the Person or committee approved pursuant to the
\nprovisions of Sections 11.3(a) and (b) of the Partnership Agreement who
\nperforms the functions described therein.<\/p>\n
“MAJORITY IN INTEREST” — as of a particular date of determination,
\nwith respect to any action or decision of the Holders, the Holders of more
\nthan 50% in aggregate principal unpaid amount of the Outstanding Notes, if
\nany.<\/p>\n
“MATERIAL ADVERSE EFFECT” — an adverse effect on the business,
\nproperties, financial condition or results of operation of Partnership, BJ
\nUSA, Affiliated Partner, Guarantor or Operator, taken as a whole, that would
\nmaterially jeopardize the ability of <\/p>\n
-23-<\/p>\n
Partnership, BJ USA, Affiliated Partner, Guarantor or Operator to perform
\ntheir obligations set forth in the Basic Documents.<\/p>\n
“MATURITY DATE” — with respect to the Notes, the date specified as
\nthe maturity therefor in the Indenture.<\/p>\n
“MINIMUM SERVICES PAYMENT” — as defined in Section 3.3 of the
\nServices Agreement.<\/p>\n
“MODIFICATION” — as defined in Section 9.2 of the O&M Agreement.<\/p>\n
“MULTIEMPLOYER PLAN” — any “multiemployer plan” (as defined in
\nsection 3 of ERISA) in respect of which BJ USA or any ERISA Affiliate is an
\n“employer” (as defined in section 3 of ERISA).<\/p>\n
“NET AGREED VALUE” — (a) in the case of any Contributed Property, the
\nAgreed Value of such Contributed Property reduced by the total amount in the
\naggregate of any and all liabilities either assumed by Partnership upon such
\ncontribution or to which such Contributed Property is subject when
\ncontributed, and (b) in the case of any Property distributed to a Partner,
\nPartnership’s Carrying Value of such Property at the time such Property is
\ndistributed, reduced by the total amount in the aggregate of any and all
\nindebtedness either assumed by such Partner upon such distribution or to
\nwhich such Property is subject at the time of distribution, in either case,
\nas determined under Section 752 of the Code.<\/p>\n
“NET ECONOMIC RETURN” — The applicable Beneficiary’s initial (a)
\nanticipated net after-tax yield for each of the periods beginning with the
\nCommencement Date through the end of the Transaction Term and the
\nCommencement Date through the ET Date, reflected in the computations of
\nPriority Distributions, and ET Price set forth in SCHEDULES 4 and 8 to the
\nParticipation Agreement and Schedules 2 (and each subschedule thereto) and 4
\nto the Trust Agreement, (b) anticipated aggregate after-tax cash flow
\ncomputed utilizing the multiple investment sinking fund method of analysis
\nand the same assumptions (including, without limitation, the Tax Assumptions)
\nas used by the applicable Beneficiary in making the computations of Priority
\nDistributions and ET Price set forth in SCHEDULES 4 and 8 to the
\nParticipation Agreement and Schedules 2 (and each subschedule thereto) and 4
\nto the Trust Agreement and (c) the anticipated net after-tax book yield
\nthrough the Base Term.<\/p>\n
-24-<\/p>\n
“NET EQUITY OF THE PARTNERSHIP” — as of any date, the amount by which
\nthe fair market value of the Property of Partnership as of such date, as
\ndetermined in the reasonable judgment of the General Partner using such
\nreasonable method of valuation as it may choose, exceeds the aggregate
\nliabilities of the Partnership as of such date, as determined in accordance
\nwith GAAP.<\/p>\n
“NET INCOME” — for any Taxable Period, the excess, if any, of
\nPartnership’s items of income and gain for such Taxable Period over
\nPartnership’s items of loss and deduction for such Taxable Period. The items
\nincluded in the calculation of Net Income shall be determined in accordance
\nwith Section 5.1(b) of the Partnership Agreement, but shall not include any
\nitems specially allocated under Section 5.2(c) or Section 5.2(d) of the
\nPartnership Agreement.<\/p>\n
“NET LOSS” — for any Taxable Period, the excess, if any, of
\nPartnership’s items of loss and deduction for such Taxable Period over
\nPartnership’s items of income and gain for such Taxable Period. The items
\nincluded in the calculation of Net Loss shall be determined in accordance
\nwith Section 5.1(b) of the Partnership Agreement, but shall not include any
\nitems specially allocated under Section 5.2(c) or Section 5.2(d) of the
\nPartnership Agreement.<\/p>\n
“NET SALES PROCEEDS” — the proceeds realized from any sale of any one
\nor more of the Units or items of Other Equipment, less the expenses related
\nto such sale.<\/p>\n
“NEW DEBT RATE” — with respect to the Notes, a per annum rate of
\ninterest (computed on the basis of a year of 360 days consisting of twelve
\n30-day months) determined by the Holders of 100% of the aggregate principal
\namount of the outstanding Notes in their sole and absolute discretion.<\/p>\n
“NONAFFILIATED PARTNER” — as defined in the caption of the
\nPartnership Agreement.<\/p>\n
“NONAFFILIATED PARTNER LIENS” — any Lien on the Units or other
\nportions of the Trust Estate arising as a result of (i) claims against
\nNonaffiliated Partner Trustee (in its individual capacity), Indenture Trustee
\n(in its individual capacity) or any Beneficiary, not related to the
\ntransactions contemplated by the Basic Documents or which are not indemnified
\nagainst by BJ USA pursuant to the Participation Agreement or the Tax
\nIndemnity Agreement, or (ii) acts or omissions of Nonaffiliated Partner
\nTrustee (in its individual capacity), Indenture Trustee (in its <\/p>\n
-25-<\/p>\n
individual capacity) or any Beneficiary, not related to the transactions
\ncontemplated by the Basic Documents or in breach of any covenant or agreement
\nof such Person set forth in any of the Basic Documents or which are not
\nindemnified against by BJ USA pursuant to the Participation Agreement or the
\nTax Indemnity Agreement, or (iii) taxes imposed against Nonaffiliated Partner
\nTrustee (in its individual capacity or as Nonaffiliated Partner Trustee),
\nIndenture Trustee (in its individual capacity) or any Beneficiary or the
\nTrust Estate which are not indemnified against by BJ USA pursuant to the
\nParticipation Agreement or under the Tax Indemnity Agreement, or (iv) claims
\nagainst Nonaffiliated Partner, Indenture Trustee or any Beneficiary arising
\nout of the transfer (whether voluntary or involuntary) by Nonaffiliated
\nPartner Trustee, Indenture Trustee (without the consent of BJ USA and
\nNonaffiliated Partner Trustee), or any Beneficiary (without the consent of BJ
\nUSA and Indenture Trustee) of all or any portion of their respective
\ninterests in Partnership, the Units, the Indenture Estate, the Trust Estate
\nor the Basic Documents, other than a transfer pursuant to Section 9 or 11 of
\nthe Partnership Agreement, Section 5.12, 5.13, 5.16, 5.17, 5.18 or 5.22 of
\nthe Participation Agreement, Section 7.1 of the Services Agreement or Section
\n15.1 of the O&M Agreement or in connection with or with respect to an
\nIndenture Event of Default.<\/p>\n
“NONAFFILIATED PARTNER TRUSTEE” — First Security Trust Company of
\nNevada, a Nevada banking corporation, not in its individual capacity but
\nsolely as Nonaffiliated Partner Trustee under the Trust Agreement.<\/p>\n
“NONAFFILIATED PARTNER TRUSTEE INDENTURE ESTATE” — as defined in
\nSection 1.1 of the Indenture.<\/p>\n
“NONAFFILIATED PARTNER TRUSTEE AGREEMENTS” — the Basic Documents to
\nwhich Nonaffiliated Partner Trustee, either in its individual capacity or as
\nNonaffiliated Partner Trustee, is or will be a party.<\/p>\n
“NONAFFILIATED PARTNER TRUSTEE’S NET ECONOMIC RETURN” — the weighted
\naverage of the aggregate Net Economic Return of all Beneficiaries.<\/p>\n
“NONRECOURSE LIABILITY” — as defined in Treasury Regulation Sections
\n1.704-2(b)(3) and 1.752-1(a)(2).<\/p>\n
-26-<\/p>\n
“NONREPLACEMENT ELECTION” — as defined in Section 7.2(c) of the
\nPartnership Agreement.<\/p>\n
“NON-SEVERABLE MODIFICATION” — any Modification that is not a
\nRequired Modification or that is not readily removable without causing damage
\nto any Unit.<\/p>\n
“NOTE PURCHASERS” — the Note Purchasers named in the Participation
\nAgreement.<\/p>\n
“NOTES” — at any time (i) the secured notes of Nonaffiliated Partner
\nTrustee issued under and pursuant to the Participation Agreement and the
\nIndenture, including any Notes issued in exchange therefor or replacement
\nthereof pursuant to the Indenture, or (ii) any Refunding Notes, if any shall
\nbe issued.<\/p>\n
“NOTICE OF DELIVERY” — as defined in Section 2.4(a) of the
\nParticipation Agreement.<\/p>\n
“NOTICES” — all notices, communications or approvals that are
\nrequired or may be sent or given pursuant to the Basic Documents.<\/p>\n
“O&M AGREEMENT” — the Operating and Maintenance Agreement dated as of
\nDecember 15, 1999 between Partnership and Operator. Such term shall include
\neach O&M Agreement Supplement entered into pursuant to the O&M Agreement.<\/p>\n
“O&M AGREEMENT SUPPLEMENT” — (i) an O&M Agreement Supplement
\nsubstantially in the form of Exhibit A to the O&M Agreement, between
\nPartnership and Operator, dated the Commencement Date or the date that any
\nReplacement Unit or any other Unit or any Replacement Item or Other Equipment
\nis subjected to the O&M Agreement, and covering the Units or Other Equipment
\nrelated to the Commencement Date or such Replacement Unit or such other Unit
\nor such Replacement Items, as the case may be, or (ii) any supplement or
\namendment entered into from time to time between Partnership and Operator.<\/p>\n
“O&M DEFAULT” — an event which with notice or the lapse of time or
\nboth would become an O&M Event of Default.<\/p>\n
“O&M EVENT OF DEFAULT” — as defined in Section 14.1 of the O&M
\nAgreement.<\/p>\n
“O&M\/PARTNERSHIP EVENT OF DEFAULT” — as defined in Section 14.2 of
\nthe O&M Agreement.<\/p>\n
-27-<\/p>\n
“OBLIGATIONS” — as defined in Section 1 of the Guaranty.<\/p>\n
“OBLIGOR” — as defined in Section 1 of the Guaranty.<\/p>\n
“OFFICER’S CERTIFICATE” — a certificate signed (i) in the case of BJ
\nUSA, General Partner, Service Taker, Operator, Affiliated Partner or
\nGuarantor, by a Responsible Officer, (ii) in the case of any other
\ncorporation, by the President, any Vice President, any Assistant Vice
\nPresident, the Treasurer or an Assistant Treasurer, (iii) in the case of a
\npartnership, by the President, any Vice President, the Treasurer or an
\nAssistant Treasurer of a corporate general partner, and (iv) in the case of a
\ncommercial bank or trust company, by the President, any Vice President, any
\nTrust Officer or any other officer customarily performing the functions
\nsimilar to those performed by the persons who at the time shall be such
\nofficers, or to whom any corporate trust matter is referred because of his
\nknowledge of and familiarity with the particular subject.<\/p>\n
“ONE-TIME SERVICES PAYMENT” — as defined in Section 3.2 of the
\nServices Agreement.<\/p>\n
“OPERATING CAPACITY” — as defined in Section 2.1 of the Services
\nAgreement.<\/p>\n
“OPERATING PAYMENT DATE” — as defined in Section 3.2(a) of the O&M
\nAgreement.<\/p>\n
“OPERATING PAYMENTS” — as defined in Section 3.2(a) of the O&M
\nAgreement.<\/p>\n
“OPERATOR” — as defined in the caption of the Participation Agreement.<\/p>\n
“OPTIONAL MODIFICATION” — as defined in Section 9.2 of the O&M
\nAgreement.<\/p>\n
“ORGANIZATIONAL LIMITED PARTNER” — as defined in the caption of the
\nPartnership Agreement.<\/p>\n
“OTHER AVAILABLE CASH” — as defined in Section 6.1(e) of the
\nPartnership Agreement.<\/p>\n
“OTHER EQUIPMENT” — collectively the heavy duty truck tractors and
\ntruck trailers, in each case with the equipment installed thereon on the
\nCommencement Date, each tractor or trailer, as the case may be, configured to
\noperate on a standalone basis or in <\/p>\n
-28-<\/p>\n
conjunction with Other Equipment or Units and provide any of the Services, or
\na combination thereof, and the other items of equipment, all as more
\nparticularly described under the heading “Other Equipment” in Schedule 3 to
\nthe Participation Agreement and in each Partnership Agreement Supplement,
\nIndenture Supplement and O&M Agreement Supplement and including expressly all
\nReplacement Items, together with any and all appliances, Parts, instruments,
\naccessories, furnishings, other equipment, accessions, additions,
\nimprovements, substitutions and replacements from time to time incorporated
\nor installed in or on any item thereof (other than any Severable
\nModifications that are not Required Modifications) and any and all
\nappliances, parts, instruments, accessories, furnishings and other equipment
\n(other than Units) title to which vests in, and which is the property of,
\nPartnership pursuant to the terms of the Partnership Agreement.<\/p>\n
“OUTSTANDING” — when used with respect to the Notes, as of any date
\nof determination, all Notes theretofore executed and delivered and
\nauthenticated under the Indenture other than:<\/p>\n
(a) Notes theretofore canceled by Indenture Trustee or
\n delivered to Indenture Trustee for cancellation pursuant to Section
\n 2.7 of the Indenture or otherwise;<\/p>\n
(b) Notes for whose payment (but only to the extent of such
\n payment) or prepayment money in the necessary amount has been
\n theretofore deposited with Indenture Trustee in trust for the Holders
\n with respect to such Notes; except that if such Notes are to be
\n redeemed or prepaid, notice of such redemption or prepayment has been
\n duly given pursuant to the Indenture or provision therefor
\n satisfactory to Indenture Trustee has been made; and<\/p>\n
(c) Notes in exchange for or in lieu of which other Notes
\n have been authenticated, executed and delivered pursuant to the
\n Indenture;<\/p>\n
except that in determining whether the Holders of the requisite aggregate
\nprincipal amount of Notes Outstanding have given any request, demand,
\nauthorization, declaration, direction, notice, consent or waiver under the
\nIndenture, Notes owned by or pledged to BJ USA, Guarantor, Operator,
\nAffiliated Partner, Nonaffiliated Partner Trustee or any Beneficiary or any
\nAffiliate of any thereof shall be disregarded and deemed not to be
\nOutstanding, except that, in determining whether Indenture Trustee shall be
\nprotected in relying upon any such request, demand, authorization,
\ndeclaration, <\/p>\n
-29-<\/p>\n
direction, notice, consent or waiver, only Notes which Indenture Trustee
\nknows to be so owned or so pledged shall be disregarded, (unless all Notes
\nare so owned or pledged). The foregoing exception shall not negate the
\nprohibitions set forth in Section 5.3 of the Participation Agreement.<\/p>\n
“PARTICIPANTS” — the Note Purchasers and Beneficiaries.<\/p>\n
“PARTICIPATING PARTY” — as defined in the recitals of the Guaranty.<\/p>\n
“PARTICIPATION AGREEMENT” — the Participation Agreement, dated as of
\nDecember 15, 1999, among BJ USA, Partnership, Operator, Affiliated Partner,
\nNonaffiliated Partner Trustee, in the capacities described therein,
\nGuarantor, Beneficiaries, Note Purchasers and Indenture Trustee, in the
\ncapacities described therein.<\/p>\n
“PARTNER TRANSFEREE” — any Person or entity, other than a Partner, to
\nwhom a Transferor Partner purports to Transfer its Partnership Interest.<\/p>\n
“PARTNERS” — General Partner, Affiliated Partner and Nonaffiliated
\nPartner, and “Partner” means any of the Partners.<\/p>\n
“PARTNERSHIP” — BJ Services Equipment II, L.P., a Delaware limited
\npartnership, which was established pursuant to the Initial Partnership
\nAgreement.<\/p>\n
“PARTNERSHIP AGREEMENT” — the Amended and Restated Agreement of
\nLimited Partnership of BJ Services Equipment II, L.P., dated as of December
\n15, 1999 among General Partner, Affiliated Partner, Organizational Limited
\nPartner and Nonaffiliated Partner Trustee, which amends and restates the
\nInitial Partnership Agreement. Such term shall include each Partnership
\nAgreement Supplement entered into pursuant to the Partnership Agreement.<\/p>\n
“PARTNERSHIP AGREEMENT SUPPLEMENT” — (i) a Partnership Agreement
\nSupplement, substantially in the form of Exhibit A to the Partnership
\nAgreement, dated the Commencement Date or the date that any Replacement Unit
\nis contributed to Partnership by General Partner or Affiliated Partner, among
\nGeneral Partner, Affiliated Partner and Nonaffiliated Partner, covering the
\nUnits owned by Partnership on the Commencement Date or related to such
\nReplacement Unit, or (ii) any supplement or amendment entered into from time
\nto <\/p>\n
-30-<\/p>\n
time among General Partner, Affiliated Partner and Nonaffiliated Partner.<\/p>\n
“PARTNERSHIP INDENTURE ESTATE” — is defined in Section 1.1(ii) of the
\nGranting Clause of the Indenture.<\/p>\n
“PARTNERSHIP INTEREST” — a Partner’s ownership interest in
\nPartnership and such Partner’s rights and obligations under the Partnership
\nAgreement.<\/p>\n
“PARTNERSHIP TAX RETURN” — the Federal Partnership Information Return
\n(together with all schedules required to be attached thereto) filed as IRS
\nForm 1065, or any successor form.<\/p>\n
“PARTS” — as defined in Section 8.3 of the O&M Agreement.<\/p>\n
“PAYMENT AMOUNT” — with respect to the Notes, the total amount of the
\npayment of principal due and payable on each Payment Date, expressed as a
\npercentage and set forth in the appropriate Indenture Supplement. As to any
\nsingle Note, “PAYMENT AMOUNT” — the portion of total Payment Amount set
\nforth therein in dollar or percentage terms.<\/p>\n
“PAYMENT DATE” — with respect to both payments of principal and
\ninterest for Notes, each March 15 and September 15, beginning on the first
\nsuch date to occur after the initial issuance of Notes.<\/p>\n
“PAYMENT MONTH” — as defined in Section 3.3 of the Services Agreement
\nor Section 3.2(a) of the O&M Agreement.<\/p>\n
“PAYMENTS” — (i) in the O&M Agreement, the Operating Payments made by
\nService Taker to Operator and (ii) in the Services Agreement, Minimum Service
\nPayments and Additional Service Payments.<\/p>\n
“PBGC” — as defined in Section 3.2(t)(ii)(C) of the Participation
\nAgreement.<\/p>\n
“PENSION PLAN” — at any time, any “employee pension benefit plan” (as
\ndefined in Section 3 of ERISA) maintained at such time by BJ USA or any ERISA
\nAffiliate for employees of BJ USA or such ERISA Affiliate, excluding any
\nMultiemployer Plan.<\/p>\n
“PERMITTED INVESTMENTS” — (i) direct obligations of the United States
\nof America and agencies thereof for which the full faith and <\/p>\n
-31-<\/p>\n
credit of the United States is pledged, (ii) obligations fully guaranteed by
\nthe United States of America, (iii) certificates of deposit issued by, or
\nbankers’ acceptances of, or time deposits with, any bank, trust company or
\nnational banking association (which may be Indenture Trustee) incorporated or
\ndoing business under the laws of the United States of America or one of the
\nStates thereof having combined capital and surplus and retained earnings of
\nat least $1,000,000,000 and having a rating assigned to the long-term
\nunsecured debt of such institutions by Standard & Poor’s Corporation and
\nMoody’s Investors Service, Inc. at least equal to AA and AA2, respectively,
\nand (iv) commercial paper of companies, banks, trust companies or national
\nbanking associations (in each case excluding BJ USA and its Affiliates)
\nincorporated or doing business under the laws of the United States of America
\nor one of the States thereof and in each case having a rating assigned to
\nsuch commercial paper by Standard & Poor’s Corporation or Moody’s Investors
\nService, Inc. (or, if neither such organization shall rate such commercial
\npaper at any time, by any nationally recognized rating organization in the
\nUnited States of America) equal to the highest rating assigned by such
\norganization; except that if all of the above investments are unavailable,
\nthe entire amount to be invested may be used to purchase Federal Funds from
\nan entity described in clause (iii) above and no investment shall be eligible
\nas a “Permitted Investment” unless the final maturity or date of return of
\nsuch investment is 90 days or less from the date of purchase thereof.<\/p>\n
“PERMITTED LIENS” — with respect to any Unit: (i) the interests of
\nPartnership under the Amended and Restated Partnership Agreement; (ii) the
\ninterest of Operator under the O&M Agreement and the interest of Service
\nTaker under the Services Agreement; (iii) any Liens thereon for taxes,
\nassessments, levies, fees and other government and similar charges not due
\nand payable or the amount or validity of which is being contested in good
\nfaith by appropriate proceedings so long as (a) there exists no material risk
\nof sale, forfeiture or loss of, or loss or interference with use or
\npossession of, or diminution of value, utility or useful life of, any Unit or
\nany interest therein, or any risk of interference with the payment of
\nPriority Distributions, Supplemental Priority Distributions, Special
\nDistributions or any other amounts payable under the Basic Documents, (b)
\nsuch contest would not result in, or increase the risk of, the imposition of
\nany criminal liability on any Indemnified Person, (c) such contest would not
\nmaterially and adversely affect the rights, titles and interests of
\nNonaffiliated Partner Trustee, Partnership or Indenture Trustee in or to any
\nUnit or any interest therein, and <\/p>\n
-32-<\/p>\n
(d) appropriate reserves with respect thereto are maintained in accordance
\nwith GAAP; (iv) any Liens of mechanics, suppliers, vendors, materialmen,
\nlaborers, employees, repairmen and other like Liens arising in the ordinary
\ncourse of Partnership’s business securing obligations which are not due and
\npayable or the amount or validity of which is being contested in good faith
\nby appropriate proceedings so long as (a) there exists no material risk of
\nsale, forfeiture or loss of, or loss or interference with use or possession
\nof, or diminution of value, utility or useful life of, any Unit or any
\ninterest therein, or interference with the payment of Priority Distributions,
\nSupplemental Priority Distributions, Special Distributions or any other
\namounts payable under the Basic Documents, (b) such contest would not result
\nin, or increase the risk of, the imposition of any criminal liability on any
\nIndemnified Person, (c) such contest would not materially and adversely
\naffect the rights, titles and interests of Nonaffiliated Partner Trustee,
\nPartnership or Indenture Trustee in or to any Unit or any interest therein,
\nand (d) appropriate reserves with respect thereto are maintained in
\naccordance with GAAP; (v) the Lien of the Indenture, and the respective
\nrights of the Holders, Indenture Trustee, Beneficiaries, Partnership and
\nNonaffiliated Partner Trustee under the Basic Documents; (vi) Liens arising
\nout of any judgment or award against Partnership with respect to which an
\nappeal or proceeding for review is being taken in good faith and with respect
\nto which there shall have been secured a stay of execution pending such
\nappeal or proceeding for review so long as (a) there exists no material risk
\nof sale, forfeiture or loss of, or loss or interference with the use or
\npossession of, or diminution of value, utility or useful life of, any Unit or
\nany interest therein, or any risk of interference with the payment of
\nPriority Distributions, Supplemental Priority Distributions, Special
\nDistributions or any other amounts payable under the Basic Documents, (b)
\nsuch contest would not result in, or increase the risk of, the imposition of
\nany criminal liability on any Indemnified Person, (c) such contest would not
\nmaterially and adversely affect the rights, titles and interests of
\nPartnership, Nonaffiliated Partner Trustee or Indenture Trustee in or to any
\nUnit or any interest therein, and (d) appropriate reserves with respect
\nthereto are maintained in accordance with GAAP; and (vii) salvage rights of
\ninsurers under insurance policies maintained by Operator pursuant to Section
\n12 of the O&M Agreement.<\/p>\n
“PERSON” — an individual, partnership, joint venture, corporation,
\ntrust, limited liability company, association or unincorporated organization,
\nand a government or agency or political subdivision thereof.<\/p>\n
-33-<\/p>\n
“PREMIUM” — as defined in Section 2.15 of the Indenture.<\/p>\n
“PREPAYMENT DATE” — the date on which the Notes are to be prepaid or
\nredeemed (or purchased in lieu of prepayment or redemption, as applicable)
\npursuant to Section 6.1, 8.3(e)(iii) or 8.3(e)(iv) of the Indenture, which
\ndate, unless otherwise stated in the Indenture, shall be a Payment Date.<\/p>\n
“PREPAYMENT PRICE” — the price at which the Notes are to be prepaid
\nor redeemed (or purchased in lieu of prepayment or redemption, where
\napplicable), determined as of the applicable Prepayment Date, pursuant to
\nSection 6.1 or 8.3(e) of the Indenture, as the case may be.<\/p>\n
“PRIORITY DISTRIBUTION” — the amounts to be paid (but not allocated)
\nin accordance with Schedule 1 to the Partnership Agreement, Schedule 4 to the
\nParticipation Agreement and Schedule 2 to the Trust Agreement, which under
\nany circumstances and in any event, will be an amount at least sufficient to
\npay in full as of the date of payment thereof, the principal amount of and
\ninterest on the Notes due on such date, including, without limitation,
\ninterest on the Notes at the New Debt Rate from and after the ET Date.<\/p>\n
“PROPERTY” — all assets owned directly, indirectly or beneficially by
\nPartnership at any date of determination, including, without limitation, all
\ncash, all personal property, and any item thereof.<\/p>\n
“PROPOSED REMOVED UNITS” — as defined in Section 5.16 of the
\nParticipation Agreement.<\/p>\n
“REASONABLE BASIS” — a “reasonable basis” determined in accordance
\nwith the principles of ABA Formal Opinion No. 85-352, or in the case guidance
\nis provided by the Treasury Department under Section 6662(d)(2)(B)(ii) of the
\nCode which provides a different determination thereof, which is applicable
\nand which overrides ABA Formal Opinion No. 85-532, such different
\ndetermination shall be utilized.<\/p>\n
“REBUILD” — with respect to a Unit or item of Other Equipment,
\nreplacement of all hoses (hydraulic, water or other), air lines, bearings,
\nrings, wiring and other normal wear components with new components and
\nrefurbishment to the level necessary to bring the Unit to manufacturers’
\nspecified operational performance standards for the Unit or item of Other
\nEquipment.<\/p>\n
-34-<\/p>\n
“RECAPTURE INCOME” — any gain recognized by Partnership (computed
\nwithout regard to any adjustment required by Section 734 or 743 of the Code)
\nupon the disposition of any Property of Partnership, which gain is
\ncharacterized as ordinary income because it represents the recapture of
\ndeductions previously taken with respect to such Property.<\/p>\n
“REDUCTION DATE” — as defined in Section 5.16 of the Participation
\nAgreement or in Section 3.6 of the Services Agreement, as applicable.<\/p>\n
“REDUCTION ELECTION” — as defined in Section 5.16 of the
\nParticipation Agreement.<\/p>\n
“REFUNDED DEBT” — as of the ET Date, the sum of (1) Current Principal
\nAmount of any Outstanding Notes issued under the Indenture, plus (2) accrued
\nbut unpaid interest thereon, plus (3) any other accrued and unpaid Secured
\nObligations.<\/p>\n
“REFUNDING DEBT” — Indebtedness incurred by Nonaffiliated Partner to
\nrefinance the Refunded Debt on the ET Date as provided in Section 2.9 of the
\nParticipation Agreement.<\/p>\n
“REFUNDING NOTES” — means any promissory note issued by Nonaffiliated
\nPartner evidencing Refunding Debt pursuant to Section 2.9 of the
\nParticipation Agreement.<\/p>\n
“REGISTER” — as defined in Section 2.3 of the Indenture.<\/p>\n
“REGISTRAR” — as defined in Section 2.3 of the Indenture.<\/p>\n
“REGULATORY CHANGE” — any change after the date of the Indenture in
\nFederal, state or foreign law or regulations or the adoption or making after
\nsuch date of any interpretation, directive or request applying to a class of
\nfinancial institutions including any Holder of or under any Federal, state or
\nforeign law or regulation (whether or not having the force of law and whether
\nor not failure to comply therewith would be unlawful) by any court or
\ngovernment or monetary authority charged with the interpretation or
\nadministration thereof.<\/p>\n
“REIMBURSED EXPENSE” — as defined in Section 3.2(b) of the O&M
\nAgreement.<\/p>\n
“RELEASE” — any release, spill, emission, discharge, leaking,
\npumping, injection, deposit, disposal, discharge, dispersal, <\/p>\n
-35-<\/p>\n
leaching or migration into the indoor or outdoor environment (including,
\nwithout limitation, ambient air, surface water, groundwater and surface or
\nsubsurface strata) or into or out of any property, including the movement of
\nHazardous Substances through or in the air, soil, surface water, groundwater
\nor property.<\/p>\n
“REMAINING PARTNERSHIP INTEREST” — Nonaffiliated Partner Trustee’s
\nPartnership Interest less the sum of (i) the aggregate Equipment Value of all
\nUnits purchased from Partnership pursuant to Section 5.12(ii) of the
\nParticipation Agreement, sold pursuant to Section 5.17 of the Participation
\nAgreement or retained pursuant to Section 5.18 of the Participation
\nAgreement, and (ii) the Equipment Value of all Other Equipment.<\/p>\n
“REPLACED UNIT” — as defined in Section 5.3 of the Indenture.<\/p>\n
“REPLACEMENT ITEM” — an item of equipment that meets the standards of
\nSection 5.11 or 5.12, as the case may be, of the Participation Agreement, is
\nsubject to the Partnership Agreement and is operated and maintained under the
\nO&M Agreement and is not a Replacement Unit.<\/p>\n
“REPLACEMENT PARTS” — Parts replaced in accordance with Section 8.3
\nof the O&M Agreement.<\/p>\n
“REPLACEMENT UNIT” — an item of equipment that meets the standards
\nof Section 5.11 or 5.12, as the case may be, of the Participation Agreement,
\nis subject to the Partnership Agreement and the Lien of the Indenture and is
\noperated and maintained under the O&M Agreement.<\/p>\n
“REQUIRED MODIFICATION” — as defined in Section 9.1 of the O&M
\nAgreement.<\/p>\n
“RESIDUAL VALUE INSURANCE” — an insurance policy providing for the
\npayment to the Partnership of any excess, as of the Transaction Term
\nExpiration Date, of the Insured Amount Level over the aggregate value of all
\nUnits (including Replacement Units) but excluding the Other Equipment owned
\nby the Partnership on such date.<\/p>\n
“RESPONSIBLE OFFICER” — with respect to BJ USA, Affiliated Partner,
\nOperator or Guarantor, the President, the Treasurer, the Chief Executive
\nOfficer, the Chief Financial Officer, the Chief Accounting Officer or the
\nGeneral Counsel.<\/p>\n
-36-<\/p>\n
“SECURED OBLIGATIONS” — as defined in the Granting Clause of the
\nIndenture.<\/p>\n
“SECURITIES ACT” — the Securities Act of 1933, as amended, or any
\nsuccessor law.<\/p>\n
“SENIOR FINANCIAL OFFICER” — with respect to BJ USA, the Chief
\nFinancial Officer, the Chief Accounting officer or the Treasurer.<\/p>\n
“SERVICE PAYMENT” — all Minimum Service Payments and Additional
\nService Payments.<\/p>\n
“SERVICE TAKER” — BJ USA, as Service Taker under the Services
\nAgreement.<\/p>\n
“SERVICES” — as defined in Section 2.1 of the Services Agreement.<\/p>\n
“SERVICES AGREEMENT” — the Services Agreement dated as of December
\n15, 1999 between Service Taker and Partnership.<\/p>\n
“SERVICES DEFAULT” — a Services Event of Default or an event which
\nwith notice or lapse of time or both would become a Services Event of Default.<\/p>\n
“SERVICES EVENT OF DEFAULT” — as defined in Section 6.1 of the
\nServices Agreement.<\/p>\n
“SERVICES\/PARTNERSHIP EVENT OF DEFAULT” — as defined in Section 6.2
\nof the Services Agreement.<\/p>\n
“SERVICES PAYMENT DATE” — as defined in Section 3.3 of the Services
\nAgreement.<\/p>\n
“SETTLEMENT DATE” — as defined in Section 5.12 of the Participation
\nAgreement.<\/p>\n
“SEVERABLE MODIFICATION” — any Modification other than a
\nNon-Severable Modification.<\/p>\n
“SPECIAL DISTRIBUTION” — as defined in Section 6.1(d) of the
\nPartnership Agreement.<\/p>\n
“SPECIAL DISTRIBUTION DATE” — as defined in Section 6.1(d) of the
\nPartnership Agreement.<\/p>\n
-37-<\/p>\n
“SPECIAL P.O. AMOUNT” — the Special P.O. Price plus the Adjustment
\nAmount (which may be a positive or negative number) as of the Special P.O.
\nDate, with respect to the Units.<\/p>\n
“SPECIAL P.O. DATE” — means March 15, 2006.<\/p>\n
“SPECIAL P.O. PRICE” — as defined in Section 9.4 of the Partnership
\nAgreement.<\/p>\n
“SPECIAL P.O. RIGHT” — as defined in Section 9.4 of the Partnership
\nAgreement.<\/p>\n
“SUBSIDIARY” of any Person — any Person of which more than 50% of the
\nvoting stock or other equity interests (in case of Persons other than
\ncorporations) is owned or controlled, directly or indirectly, by such Person,
\nor one or more Subsidiaries of the Person or a combination thereof. Unless
\nthe context otherwise clearly requires, references in the Basic Documents to
\na “Subsidiary” refer to a Subsidiary of Guarantor. “Subsidiaries” of
\nGuarantor shall include all Consolidated Subsidiaries (except to the extent
\notherwise specifically provided in the Basic Documents).<\/p>\n
“SUBSTITUTION ELECTION” — as defined in Section 7.2(d) of the
\nPartnership Agreement.<\/p>\n
“SUPPLEMENTAL CONTRIBUTIONS” — as defined in Section 4.4(c) of the
\nPartnership Agreement.<\/p>\n
“SUPPLEMENTAL PRIORITY DISTRIBUTIONS” — as defined in Section 6.1(c)
\nof the Partnership Agreement.<\/p>\n
“TAX ADJUSTMENT” — as defined in Section 5.1(e) of the Partnership
\nAgreement.<\/p>\n
“TAX ASSUMPTIONS” — as defined in Section 1.1 of the Tax Indemnity
\nAgreement.<\/p>\n
“TAX COUNSEL” — Mayer, Brown & Platt or any other independent firm of
\nattorneys nationally recognized as being expert in tax matters selected by
\nBeneficiaries and reasonably acceptable to BJ USA.<\/p>\n
“TAX INDEMNITEE” — as defined in Section 7.1(a) of the Participation
\nAgreement.<\/p>\n
-38-<\/p>\n
“TAX INDEMNITY AGREEMENT” — each Tax Indemnity Agreement, dated as of
\nDecember 15, 1999, between BJ USA and each Beneficiary.<\/p>\n
“TAX MATTERS PARTNER” — the Partner designated as such from time to
\ntime pursuant to Section 8.6 of the Partnership Agreement.<\/p>\n
“TAXABLE PERIOD” — a calendar year (or short period) for which a
\nPartnership Tax Return is required to be filed for the Partnership; except
\nthat the Partnership’s first Taxable Period shall begin on the Commencement
\nDate and shall end on December 31, 1999 (or any earlier date marking the end
\nof the period including the Commencement Date for which a Partnership Tax
\nReturn is required to be filed for the Partnership).<\/p>\n
“TAXES” — as defined in Section 7.1(b) of the Participation Agreement.<\/p>\n
“THIRD PARTY CLAIM” — any claim, demand, action, cause of action,
\njudgment, assessment, compromise, settlement or decree, made by or in favor
\nof any party other than the Partnership or its partners in respect of any
\npersonal injury or property damage.<\/p>\n
“TOTAL EQUIPMENT VALUE” — the Equipment Value with respect to the
\nUnits only up to a maximum of $120,000,000.<\/p>\n
“TRANSACTION COSTS” — as defined in Section 2.6(a) of the
\nParticipation Agreement.<\/p>\n
“TRANSACTION TERM” — unless earlier terminated, the Interim Term and
\nthe Base Term.<\/p>\n
“TRANSACTION TERM EXPIRATION DATE” — as defined in Section 4.2(a)(ii)
\nof the Participation Agreement.<\/p>\n
“TRANSFER” — a sale, assignment, transfer, contribution, mortgage or
\nother encumbrance of a Partnership Interest, or a sufferance of any third
\nparty to sell, assign, transfer, contribute, mortgage, charge or otherwise
\nencumber a Partnership Interest, or a contract to do or permit any of the
\nforegoing, whether voluntarily or by operation of law.<\/p>\n
“TRANSFEREE” — as defined in Section 6.1(a) of the Participation
\nAgreement.<\/p>\n
-39-<\/p>\n
“TRANSFEROR PARTNER” — any Partner desiring to Transfer its
\nPartnership Interest or any portion thereof pursuant to the provisions of
\nSection 10 of the Partnership Agreement.<\/p>\n
“TREASURY REGULATIONS” — proposed, temporary and final treasury
\nregulations promulgated under the Code as of the effective date hereof and
\nany successor provisions thereto.<\/p>\n
“TRUST” — BJ Services Trust No. 1999-1, as provided in Section 11.12
\nof the Trust Agreement.<\/p>\n
“TRUST AGREEMENT” — the Trust Agreement dated as of December 15, 1999
\namong Beneficiaries and First Security.<\/p>\n
“TRUST ESTATE” — as defined in Section 2.2 of the Trust Agreement.<\/p>\n
“TRUST EXPENSES” — as defined in Section 6.1 of the Trust Agreement.<\/p>\n
“TRUST TAX MATTERS PARTNER” — as defined in Section 12.7 of the Trust
\nAgreement.<\/p>\n
“TRUSTEE” — each of Nonaffiliated Partner Trustee or Indenture
\nTrustee and “TRUSTEES” — Nonaffiliated Partner Trustee and Indenture
\nTrustee, collectively.<\/p>\n
“TRUSTEE DOCUMENTS” — as defined in Section 2.1 of the Trust
\nAgreement.<\/p>\n
“U.C.C.” — the Uniform Commercial Code in effect in the applicable
\njurisdiction.<\/p>\n
“U.S.” — United States of America.<\/p>\n
“UNANIMOUS CONSENT” — as defined in Section 7.4 of the Partnership
\nAgreement.<\/p>\n
“UNIT” — one of the Units.<\/p>\n
“UNITS” — collectively the heavy duty truck tractors and truck
\ntrailers, in each case with the equipment installed thereon on the
\nCommencement Date, each tractor or trailer, as the case may be, configured to
\noperate on a standalone basis or in conjunction with other Units or Other
\nEquipment and to provide any of the Services, or a combination thereof, and
\nthe other items of equipment, all as <\/p>\n
-40-<\/p>\n
more particularly described under the heading “Units” in Schedule 3 to the
\nParticipation Agreement and each Partnership Agreement Supplement, Indenture
\nSupplement and O&M Agreement Supplement together with any Replacement Units
\nand all appliances, Parts, instruments, accessories, furnishings, other
\nequipment, accessions, additions, improvements, substitutions and
\nreplacements from time to time incorporated or installed in or on any item
\nthereof (other than any Severable Modifications that are not Required
\nModifications) and any and all appliances, parts, instruments, accessories,
\nfurnishings and other equipment (other than Other Equipment) title to which
\nvests in, and which is the property of, Partnership pursuant to the terms of
\nthe Partnership Agreement.<\/p>\n
“UNREALIZED GAIN” attributable to any item of Property — as of any
\ndate of determination, the excess, if any, of (a) the fair market value of
\nsuch Property as of such date (as determined under Section 5.1(d) of the
\nPartnership Agreement) over (b) the Carrying Value of such Property as of
\nsuch date (before any adjustment to be made pursuant to Section 5.1(d) of the
\nPartnership Agreement as of such date).<\/p>\n
“UNREALIZED LOSS” attributable to any item of Property — as of any
\ndate of determination, the excess, if any, of (a) the Carrying Value of such
\nProperty as of such date (before any adjustment to be made pursuant to
\nSection 5.1(d) of the Partnership Agreement as of such date) over (b) the
\nfair market value of such Property as of such date (as determined under
\nSection 5.1(d) of the Partnership Agreement).<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6906,8935],"corporate_contracts_industries":[9415,9413],"corporate_contracts_types":[9560,9566],"class_list":["post-41349","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bj-services-co","corporate_contracts_companies-state-street-corp","corporate_contracts_industries-financial__banks","corporate_contracts_industries-energy__services","corporate_contracts_types-finance","corporate_contracts_types-finance__indenture"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41349"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41349"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41349"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}